Case Title: Michael Banker v. Circuit City Stores, Inc.

Citation: 

Docket Number: 1070424

State: alabama

Court: Alabama Supreme Court

Date: 2008-09-05T00:00:00Z

Document:
REL: 09/05/2008
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 SPECIAL TERM, 2008
_________________________
1070424
_________________________
Michael Banker
v.
Circuit City Stores, Inc.
Appeal from Mobile Circuit Court
(CV-01-1084)
LYONS, Justice.
Michael Banker appeals pursuant to § 6-5-642, Ala. Code
1975, from the order of the Mobile Circuit Court denying his
motion for nationwide class certification in an action pending
1070424
2
in that court against Circuit City Stores, Inc.  We affirm the
order denying class certification.
I. Facts and Procedural History
On August 28, 2000, Banker purchased a Sony CPDE400
computer monitor from a Circuit City store in Mobile for
$549.99.  Packed with the monitor was a document evidencing a
one-year manufacturer's warranty from Sony.  The same day
Banker also purchased from Circuit City a three-year service
plan for the monitor for $139.99; this service plan, known as
the "Computer Support Plus" ("the CSP"), is provided by
Circuit City on a variety of computer products. 
Banker's sales receipt from his purchases on August 28,
2000, stated that "this sales receipt and the accompanying
terms and conditions constitute your SERVICE CONTRACT."  The
"accompanying terms and conditions" are found in a brochure
known as the service guide for the CSP, which Circuit City
instructed its sales representatives to give to customers who
purchase the CSP.  The service guide states that the CSP
"provide[s] for the repair or replacement (if non-repairable)
of the Products(s) resulting from failures that occur during
normal usage."  The service guide also states:
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3
"Coverage on your Product(s) begins at 12:01
a.m. on the effective date specified by your sales
receipt or, if your Product has a manufacturer's
warranty of more than one year, this Contract
coverage will begin one year following your purchase
date.  However, damage to your Products(s) caused by
power surge will be covered under this Contract from
the Product purchase date.  Coverage ends at 11:59
p.m. on the ending date specified by your sales
receipt."  
Thus, the CSP that Banker purchased provided coverage for
repairs for damage caused by power surges for four years
beginning with the date of purchase, and it provided coverage
for repairs resulting for normal usage of the product for
three years after the expiration of the manufacturer's
warranty or 12 months of ownership, whichever is less.  
Banker's sales receipt from Circuit City dated August 28,
2000, states that "Computer Support Plus for the SONY CPDE400
starts 08/28/03 and expires 08/28/04."  However, the service
guide for the CSP states: "If there is a conflict between the
terms of this Contract and information communicated either
orally or in writing by one or more of our employees or
agents, this Contract shall control."  In a deposition Banker
testified that he does not recall whether he received the
service guide for the CSP or any document that explained the
coverage of the CSP other than his sales receipt.
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4
Banker experienced problems with the monitor during his
first year of ownership, and he contacted Circuit City on or
about January 24, 2001, to request a replacement monitor.
Banker believed that the CSP was a three-year warranty on the
monitor that began with the date of purchase and that the CSP
required Circuit City to replace the monitor at any instance
of a malfunction during his first three years of ownership.
In a deposition Banker testified that he believed the CSP
constituted a three-year warranty because "the salesperson
told [him]."  Banker stated that the salesperson for Circuit
City stated that "instead of having a one-year warranty, [he
could] get a three-year warranty for this price.  [Banker]
said okay"; he further stated that his understanding was that
"instead of having a one-year warranty, [he] would have a
three-year warranty." 
When Banker first requested a replacement monitor from
Circuit City, Circuit City referred Banker to Sony because the
monitor was then under the manufacturer's warranty from Sony.
Banker contacted Sony, and Sony representatives informed
Banker that the monitor was covered by a three-year
manufacturer's warranty.  Circuit City asserts that it
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5
believed that the monitor came with a one-year manufacturer's
warranty because Sony had placed a one-year warranty in the
box containing the monitor.  In a deposition a designated
representative for Circuit City stated that "the fact that the
product had a three-year warranty was the mistake, not the
fact that it had a three year and we thought it had a one-year
warranty."
After Banker spoke with a Sony representative he again
requested a replacement monitor from Circuit City.  Circuit
City asserts that, although, it says, it was not obligated to
replace the monitor, it subsequently gave Banker a replacement
monitor.  Banker accepted the new monitor from Circuit City.
Banker then requested that Circuit City refund the $139.99 he
had paid for the CSP.  Circuit City refused to refund the
purchase price of the CSP because, it said, Banker had already
received the full benefit of the CSP by receiving a new
monitor from Circuit City.  
Banker then sued Circuit City in the Mobile Circuit Court
on March 30, 2001, alleging fraud and fraudulent suppression.
However, Banker amended his complaint six times and ultimately
dismissed the claims of fraud and fraudulent suppression and
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6
asserted claims against Circuit City alleging breach of
contract, unjust enrichment, and violation of the Magnuson-
Moss Warranty-Federal Trade Commission Improvement Act, 15
U.S.C. § 2301 et seq. ("the MMWA").  Banker contends that the
CSP violates the disclosure requirements of the MMWA because,
he says, important terms and conditions of the CSP are not
fully, clearly, and conspicuously disclosed in simple and
readily understood language.  Banker also contends that
Circuit City violated the MMWA because, he says, "[n]either
the Circuit City sales receipt nor its CSP brochure
sufficiently disclosed the fact that the Circuit City extended
warranty would primarily run concurrently and be duplicative
of the manufacturer's warranty."  Banker also claimed that
Circuit City's failure to disclose the term, duration, and
scope of the CSP constituted a breach of contract.  Lastly,
Banker claimed that Circuit City was unjustly enriched by the
amount he paid for the CSP because, he said, the "payments
were for the provision of three years extended service
contract coverage and Circuit City provided less than three
years of extended warranty coverage." 
1070424
7
Banker moved for the trial court to certify him as the
representative for a nationwide class of individuals who had
purchased the CSP from Circuit City in connection with the
purchase of any computer product.  Banker defined the proposed
class as follows:
"All persons who from January 1, 2000 to the
date this action is certified purchased a consumer
product and Circuit City's service plan, [Computer]
Support Plus (hereinafter 'CSP') where either:
"• The dates of coverage of the CSP
either create an overlap in coverage with
the manufacturer's warranty, OR
"• The dates of coverage of the CSP
create 
gaps 
in 
coverage 
between 
the
warranty and the service plan, OR
"• The dates and scope of coverage of
the CSP are not fully, clearly, and
conspicuously disclosed to the consumer and
its terms and conditions are not presented
in simple and readily understood language."
On November 16, 2007, the trial court entered an order
denying Banker's motion for class certification and stating
the following reasons for its denial:  Banker had failed to
show that his claims are typical of his proposed class; Banker
was not an adequate class representative and his proposed
class is not ascertainable; and Banker had not met his burden
under Rule 23(b)(3), Ala. R. Civ. P., of showing that common
1070424
8
questions 
of 
fact 
predominate over the individualized
questions that must be addressed for each class member.  
II. Standard of Review
It is a well-settled principle that "'[t]his Court
applies an abuse-of-discretion standard of review to a trial
court's class-certification order, but we will review de novo
the question whether the trial court applied the correct legal
standard in reaching its decision to certify a class.'"  Alfa
Life Ins. Corp. v. Hughes, 861 So. 2d 1088, 1094 (Ala.
2003)(quoting Smart Prof'l Photocopy Corp. v. Childers-Sims,
850 So. 2d 1245, 1248 (Ala. 2002)).  In Atlanta Casualty Co.
v. Russell, 798 So. 2d 664, 666 (Ala. 2001), this Court
further stated: 
"The trial court is endowed with a substantial
amount of discretion in determining whether to
certify a class, and [an appellate court] will not
disturb its determinations without a showing of
abuse.  Ex parte Holland, 692 So. 2d 811, 814 (Ala.
1997).  In determining whether certification [or the
refusal to certify] was proper, we consider whether
the party seeking certification produced substantial
evidence satisfying the requirements of Rule 23(a),
Ala. R. Civ. P."  
III. Analysis
In order to maintain an action as a class action, a
plaintiff must establish the prerequisites of Rule 23(a), Ala.
1070424
9
R. Civ. P., as well as one of the requirements set forth in
Rule 23(b).  Alfa Life Ins. Corp. v. Hughes,  861 So. 2d 1088,
1094 (Ala. 2003).  Rule 23(a), "Prerequisites to a Class
Action," provides:
"One or more members of a class may sue or be sued
as representative parties on behalf of all only if
(1) the class is so numerous that joinder of all
members is impracticable, (2) there are questions of
law or fact common to the class, (3) the claims or
defenses of the representative parties are typical
of the claims or defenses  of the class, and (4) the
representative parties will fairly and adequately
protect the interests of the class."
Banker asserts that he has met the prerequisites of Rule 23(a)
and that class certification in this cause is proper under
Rule 23(b)(2) or Rule 23(b)(3).  Rule 23(b) provides:  
"(b) Class Actions Maintainable. An action may
be maintained as a class action if the prerequisites
of subdivision (a) are satisfied, and in addition:
"....
"(2) the party opposing the class has acted or
refused to act on grounds generally applicable to
the 
class, 
thereby 
making 
appropriate 
final
injunctive 
relief 
or 
corresponding 
declaratory
relief with respect to the class as a whole; or
"(3) the court finds that the questions of law
or fact common to the members of the class
predominate 
over any questions affecting only
individual members, and that a class action is
superior to other available methods for the fair and
efficient adjudication of the controversy. The
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10
matters pertinent to the findings include: (A) the
interest of members of the class in individually
controlling the prosecution or defense of separate
actions; (B) the extent and nature of any litigation
concerning the controversy already commenced by or
against members of the class; (C) the desirability
or undesirability of concentrating the litigation of
the claims in the particular forum; (D) the
difficulties likely to be encountered in the
management of a class action."
Section 6-5-641(e), Ala. Code 1975, provides, in pertinent
part: "When deciding whether a requested class is to be
certified, the court shall determine, by employing a rigorous
analysis, 
if 
the 
party 
or 
parties 
requesting 
class
certification have proved its or their entitlement to class
certification under Ala. R. Civ. P. 23." 
Banker 
contends 
that 
he 
has 
satisfied 
all 
the
requirements of Rule 23 for entitlement to class certification
of his claims.  Because this issue is dispositive of this
appeal, we will first address whether Banker demonstrated that
his claims of a violation of the MMWA, breach of contract, and
unjust enrichment are typical of the claims of the putative
class.  See Rule 23(a)(3), Ala. R. Civ. P.  This Court has
held that "'"[t]he essence of the typicality requirement is
that the relationship between the injury to the class
representatives and the conduct affecting the entire class of
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11
plaintiffs must be sufficient for the court to properly
attribute a collective nature to the challenged conduct."'"
Avis Rent A Car Sys., Inc., v. Heilman, 876 So. 2d 1111, 1117
(Ala. 2003) (quoting Atlanta Cas. Co. v. Russell, 798 So. 2d
at 668, quoting in turn Warehouse Home Furnishing Distribs.,
Inc. v. Whitson, 709 So. 2d 1144, 1149 (Ala. 1997)).
The trial court found that Banker's claims were not
typical of the putative class because, it reasoned, Banker was
not injured by his purchase of the CSP in that Circuit City
provided him with a new monitor.  The order of the trial court
states:
"[Banker] asserts that he was injured, but in
reality 
mistakenly 
believed--based 
solely 
upon
alleged 
oral 
representations--that 
the
manufacturer's warranty had been superseded by the
CSP and that Circuit City would replace the product
if it malfunctioned for three years following its
purchase. Put simply, [Banker] entered into a
bargain, misunderstood the terms, received exactly
what he believed the benefit of his bargain to be,
and then demanded and now demands a refund of
consideration. The Court has difficulty perceiving
what constitutes [Banker's] 'injury,' and counsel's
argument at the hearing that the 'violation ...
occurred when he bought a warranty that was unclear'
does not answer how Mr. Banker was injured, if at
all, and how that injury is similar to any injury
suffered by the class. (Transcript at 50).  Logic
dictates that it is not. [Banker] has not suggested
how [he] was deprived of any benefit of his
perceived bargain, or how he was deprived of
1070424
12
anything under the terms of the CSP. By the CSP's
terms, the most [Banker] would be entitled to was a
'new or factory reconditioned Product.' (CSP at ¶ 6)
[Banker] received a new monitor about which he has
no complaints."  
Banker asserts that his damages are not related to
whether Circuit City satisfied the terms of the CSP; rather,
he asserts, his damages are the cost of the CSP.  Banker
asserts that he and all other members of the putative class
have been harmed by Circuit City's alleged failure to provide
"proper disclosures ... concerning the CSP service contract so
that he could make an informed decision, at the point of sale,
as to whether or not to purchase the CSP."  Banker's brief at
p. 39.  Banker contends that the only differences among the
members of the putative class would be the various products
purchased and the amount each member paid for his or her CSP.
Banker contends that his claims are typical of all the members
of the putative class because Circuit City uses a form
document 
for 
the 
CSP; 
therefore, 
he 
says, 
documents
substantially similar to the documents he received form the
basis of the claims of all members of the putative class.
Banker further contends that this case is analogous to
Keele v. Wexler, 149 F.3d 589, 592 (7th Cir. 1998), in which
1070424
13
the United States Court of Appeals for the Seventh Circuit
affirmed a class-certification order.  In Keele, Karen Keele
had written a personal check to a Wal-Mart discount store for
$85.26; the check was later dishonored by Keele's bank.  149
F.3d at 590.  Wal-Mart retained a law firm that subsequently
sent Keele a debt-collection letter stating that Keele must
pay the law firm the amount of the dishonored check, a $20.00
service charge, and a $12.50 collection fee.  149 F.3d at 590.
Keele subsequently paid the law firm the amount of the
dishonored check and the service charge, but not the
collection fee.  149 F.3d at 591.  Keele sought class
certification for claims against the law firm of violations of
the Fair Debt Collection Practices Act ("the FDCPA") and the
Colorado Fair Debt Collection Practices Act ("the CFDCPA").
149 F.3d at 592.  Relevant to Banker's argument, Keele claimed
that the CFDCPA prohibited the law firm from seeking a
collection fee from Wal-Mart debtors in Colorado, and the
trial court certified a class as to this claim.  149 F.3d at
592.  
On appeal, the law firm argued that Keele's claim that
the law firm could not seek a collection fee from Wal-Mart
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14
debtors was not typical of the class because she never paid
the collection fee.  149 F.3d at 592.  The Court of Appeals
for the Seventh Circuit held that Keele's claim was typical of
the claims of the class.  149 F.3d at 595.  That court held:
"By mailing the form letters seeking the $12.50
collection fee, the [law firm] engaged in the same
course of conduct towards Keele and the members of
classes A and B. These individuals are now suing the
[law firm] under the FDCPA and CFDCPA, alleging
violations of the same statutory sections under the
same legal theory."
149 F.3d at 595.  Banker contends that just as Keele's non-
payment of the collection fee was immaterial to her class-
action claim that the law firm illegally sought to recover
collection fees from Wal-Mart debtors, his receipt of a new
monitor from Circuit City is immaterial to whether Circuit
City violated the disclosure requirements of the MMWA.
Circuit City contends that the trial court properly found
that Banker failed to meet his burden of proving that his
claims are typical of those of the putative class.  See Rule
23(a)(3), Ala. R. Civ. P.  Circuit City contends that Banker
failed to show how he was injured because, it says, Banker
received the full benefit of the CSP and proof of injury and
damage are necessary to allegations of violations of the MMWA,
1070424
"Federal cases construing the Federal Rules of Civil
1
Procedure are persuasive authority in construing the Alabama
Rules of Civil Procedure, which were patterned after the
Federal Rules of Civil Procedure."  Ex parte Novartis Pharms.
Corp., 975 So. 2d 797, 300 n.2 (Ala. 2007).  
15
unjust enrichment, and breach of contract.  Circuit City first
notes that the United State Supreme Court has interpreted
subsection (3) of Rule 23(a), Fed. R. Civ. P., to require a
class representative to "'"possess the same interest and
suffer the same injury" as the class members.'"  General Tel.
Co. of the Southwest v. Falcon, 457 U.S. 147, 156 (1982)
(quoting East Texas Motor Freight Sys., Inc. v. Rodriguez, 431
U.S. 395 (1977), quoting in turn Schlesinger v. Reservists
Comm. to Stop the War, 418 U.S. 208, 216 (1974)).   Circuit
1
City contends that because Banker received the full benefit of
what he thought he had purchased, he has not suffered the same
alleged injury as other putative class members and therefore
that his claims cannot be typical of the claims of the
putative class.  Circuit City further notes that in Rodriguez,
431 U.S. at 403-04, the United States Supreme dealt with
whether named plaintiffs were representative of a class and
held that the named plaintiffs "lacked the qualifications to
be hired as line drivers.  Thus, they could have suffered no
1070424
16
injury as a result of the alleged discriminatory practices,
and they were, therefore, simply not eligible to represent a
class of persons who did allegedly suffer injury."  (Footnote
omitted.)
Circuit City also contends that Banker's reliance on
Keele is misplaced because, he says, unlike the FDCPA, the
MMWA does not provide for statutory damages.  Rather, the MMWA
provides for only compensatory and equitable relief, for which
individualized proof of damage is required.  Circuit City
notes that in Keele the Seventh Circuit stated that the "FDCPA
does not require proof of actual damages as a precursor to the
recovery of statutory damages."  149 F.3d at 593 (footnote
omitted).  Although Keele's claim regarding the collection fee
was made pursuant to the CFDCPA, the Seventh Circuit also
noted that its "legal discussion of the FDCPA is equally
applicable to the CFDCPA" because the CFDCPA is patterned
after the FDCPA.  149 F.3d at 594 n. 6.
We agree that Keele is distinguishable from the present
case because the MMWA requires proof of injury to recover
under its provisions.  See 15 U.S.C. § 2310(d).  Subsection
(d) of the MMWA, titled "Civil action by consumer for damages,
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17
etc.; jurisdiction; recovery of costs and expenses; cognizable
claims," provides that "a consumer who is damaged by the
failure of a supplier, warrantor, or service contractor to
comply with any obligation under this chapter, or under a
written warranty, implied warranty, or service contract, may
bring suit for damages and other legal and equitable relief
...."  15 U.S.C. § 2310(d)(1) (emphasis added).  Thus, the
MMWA does not provide that a consumer may recover statutory
damages.
Banker has not been damaged by Circuit City's alleged
violation of the disclosure requirements of the MMWA or by
Circuit City's alleged breach of contract, nor has Circuit
City been unjustly enriched; Banker accepted a new monitor
from Circuit City without any reservations or conditions.
Banker asserts that his damages and the damages of every
member of the putative class is the cost of the CSP.  Yet
Banker has received more than three times his cost of the
CSP--$139.99--by accepting a new monitor from Circuit City,
which was worth $549.99.  We note that Banker also alleges
that because of Circuit City's alleged failure to provide
proper disclosures about the terms and conditions of the CSP
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18
he was unable to make an informed decision about purchasing
the CSP.  However, had Banker been given the information he
claims he lacked, the most he could have saved was $139.99,
the amount of the CSP, which he presumably would have declined
to purchase.  And, once again, Banker is faced with the
undisputed fact that he unconditionally accepted a benefit
from Circuit City substantially in excess of the amount he
claims he could have saved by not purchasing the CSP.
Likewise, because Circuit City has conferred upon Banker a
benefit in excess of his claimed out-of-pocket loss, which
Banker accepted unconditionally before he commenced his
action, his status is not typical of other putative class
members who might have claims against Circuit City for
disgorgement of sums as to which Circuit City has allegedly
been unjustly enriched.  We are not here dealing with the
effect of a pre-suit tender of compensatory damages in the
context of a fraud claim because Banker dismissed the fraud
count of his complaint.  Likewise we are not dealing with the
payment of compensatory damages by a third party because it is
undisputed that the replacement monitor was furnished by
Circuit City, not Sony.  
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19
We conclude that the trial court did not exceed its
discretion in finding that Banker failed to sustain his burden
of showing that his claims are typical of the claims of the
putative class.  Banker's claims of violations of the MMWA,
breach of contract, and unjust enrichment are not typical of
the putative class because Banker has not suffered any damage
from the alleged wrongful conduct out of which the claims of
the putative class arise. 
IV. Conclusion 
Because we find that Banker's claims are not typical of
the claims of the putative class, we pretermit consideration
of all other arguments by Banker and Circuit City.  We affirm
the order denying class certification.
AFFIRMED.
Cobb, C.J., and Stuart, Bolin, and Murdock, JJ., concur.