Case Title: In re Consol. Mtge. Satisfaction Cases

Citation: 2002-Ohio-6720

Docket Number: 20011912

State: ohio

Court: Ohio Supreme Court

Date: 2002-12-18T00:00:00Z

Document:
[Cite as In re Consol. Mtge. Satisfaction Cases, 97 Ohio St.3d 465, 2002-Ohio-6720.] 
 
 
IN RE CONSOLIDATED MORTGAGE SATISFACTION CASES. 
[Cite as In re Consol. Mtge. Satisfaction Cases, 97 Ohio St.3d 465, 2002-Ohio-
6720.] 
Civil procedure — Class actions — Civ.R. 23(B)(3), applied — Trial court did 
not act unreasonably, arbitrarily, or unconscionably in certifying a class 
action in cases brought by mortgagors against their respective lenders 
for alleged violations of R.C. 5301.36. 
(No. 2001-1912 — Submitted September 24, 2002 — Decided December 18, 
2002.) 
APPEAL from the Court of Appeals for Hamilton County, No. C-010137. 
__________________ 
 
FRANCIS E. SWEENEY, SR., J. 
{¶ 1} This case involves motions for class certification in 12 cases 
brought by appellants-mortgagors1 against their respective lenders.  The 
mortgagors in each case allege that the lenders violated R.C. 5301.36, which 
requires a mortgagee to record the satisfaction of a residential mortgage with the 
appropriate county recorder within 90 days of the date of the satisfaction.  R.C. 
5301.36(B).  Each mortgagor seeks recovery of $250 in damages as permitted by 
R.C. 5301.36(C). 
{¶ 2} Ostensibly to deal with the high volume of separate claims on its 
docket invoking R.C. 5301.36, the trial court consolidated a number of cases.  
Appellants-mortgagors moved for class certification in 12 of the consolidated 
                                          
 
1. 
Appellants named in this case are June McDonald, Edmond Weeden, Algie Weeden, 
John E. Nolan, Brenda Parchman, Jordan Godbold, David Fluker, Patricia Schultz, Thomas P. 
Tressler III, Anna Hutchinson, Jeffrey Bley, Octavia Gray, Clarissa Boyd, Peter Kabengele, 
Blanche Kabengele, Christopher W. Godley, Steven Breckheimer, Deborah Breckheimer, Edward 
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cases, and the trial court granted the motions.  The trial court defined the certified 
classes in each action as follows:  (1) persons who were in the past mortgagors on 
any residential mortgage upon which the defendants were the mortgagees at the 
time the indebtedness secured by said mortgage was paid in full; (2) persons who 
paid in full the amounts due and owing under the residential mortgage during 
specified periods and who are otherwise entitled to a release or satisfaction of 
mortgage; and (3) persons whose satisfaction of mortgage was not recorded 
within 90 days of the mortgage being paid in full by the mortgagor. 
{¶ 3} Appellees, which are the mortgagees,2 appealed the certification of 
the classes.  The First District Court of Appeals reversed the trial court.  The 
cause is before this court upon the allowance of a discretionary appeal. 
{¶ 4} We are asked to determine whether the certification of the classes 
by the trial court was proper based on the law and facts before it.  In particular, 
we are called upon to discern whether appellants met the predominance 
requirement for certifying a class, found in Civ.R. 23(B)(3).  For the reasons 
discussed below, we hold that appellants have met the mandates of Civ.R. 
23(B)(3), and therefore the trial court acted appropriately when it certified the 
classes. 
{¶ 5} At the outset, we are mindful that a trial judge is given broad 
discretion when deciding whether to certify a class action.  Marks v. C.P. Chem. 
Co., Inc. (1987), 31 Ohio St.3d 200, 31 OBR 398, 509 N.E.2d 1249, syllabus; 
Schmidt v. Avco Corp. (1984), 15 Ohio St.3d 310, 312-313, 15 OBR 439, 473 
N.E.2d 822.  Moreover, “[a]bsent a showing of abuse of discretion, a trial court’s 
                                                                                                                   
Busch, Cora Busch, Mary R. Scott, Ronald Kellerman, Carolyn Kellerman, Gregory Badger, and 
Thomas Theim. 
2. 
Appellees named in this case are Star Bank, Nationsbanc Mortgage Corporation, 
Huntington National Bank, Beneficial Ohio, Inc. (a.k.a. Beneficial Mortgage Co. of Ohio), Fleet 
Mortgage Corporation, First Union Home Equity Corporation, Countrywide Home Loans, 
Associates Financial Services Corporation, Capstead, Inc., Provident Bank, Union Savings Bank, 
and Guardian Savings Bank. 
January Term, 2002 
 
3 
determination as to class certification will not be disturbed.”  Id.  An abuse of 
discretion connotes more than a mere error of law or judgment, instead requiring a 
finding that the trial court’s decision was unreasonable, arbitrary, or 
unconscionable.  Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 
481, 450 N.E.2d 1140.  In the case at bar, the court of appeals found that the trial 
court had abused its discretion because appellants had failed to satisfy the 
predominance requirement of Civ.R. 23(B)(3). 
{¶ 6} Seven prerequisites must be met before a court may certify a case 
as a class action pursuant to Civ.R. 23:  (1) an identifiable class must exist and the 
definition of the class must be unambiguous; (2) the named representatives must 
be members of the class; (3) the class must be so numerous that joinder of all 
members is impractical; (4) there must be questions of law or fact common to the 
class; (5) the claims or defenses of the representative parties must be typical of the 
claims or defenses of the class; (6) the representative parties must fairly and 
adequately protect the interests of the class; and (7) one of the three Civ.R. 23(B) 
requirements must be satisfied.  Warner v. Waste Mgt., Inc. (1988), 36 Ohio St.3d 
91, 96-98, 521 N.E.2d 1091.  Here, there is no dispute that appellants have 
satisfied the first six of these requirements.  However, the parties disagree as to 
whether one of the three Civ.R. 23(B) requirements has been fulfilled by 
appellants, namely that found in Civ.R. 23(B)(3). 
{¶ 7} Civ.R. 23(B)(3) states that in order to certify a class in an action 
for damages, two findings must be made by the trial court.  First, it must find that 
questions of law or fact common to the members of the class predominate over 
any questions affecting only individual members; and second, the court must find 
that a class action is superior to other available methods for the fair and efficient 
adjudication of the controversy. 
{¶ 8} While Civ.R. 23(B)(3) sets forth the general rule, clear guidance as 
to its meaning and application has been elusive.  Schmidt, 15 Ohio St.3d at 313, 
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15 OBR 439, 473 N.E.2d 822.  However, we have held that “it is not sufficient 
that common questions merely exist; rather, the common questions must represent 
a significant aspect of the case and they must be able to be resolved for all 
members of the class in a single adjudication.  And, in determining whether a 
class action is a superior method of adjudication, the court must make a 
comparative evaluation of the other procedures available to determine whether a 
class action is sufficiently effective to justify the expenditure of judicial time and 
energy involved therein.”  Id. 
{¶ 9} Appellees contend, and the court of appeals found, that class 
certification is inappropriate because to determine liability under R.C. 5301.36, 
“each [appellant] must establish his status as a residential mortgagor, the fact and 
the date of the satisfaction of the indebtedness, and the date that the satisfaction of 
the mortgage was recorded.”  Thus, the appellate court concluded that the 
standard for compliance with the predominance requirement of Civ.R. 23(B)(3) 
could not be met because “[t]he proof of these elements requires a separate 
evidentiary showing on the part of each [appellant].”  It reasoned that “there is not 
a single element in the instant case that can be resolved for all members of a given 
class in a single adjudication, [and] [t]he proof of a claim on the part of one of the 
representative parties would simply have no bearing on the entitlement to relief of 
any other member of the class.” 
{¶ 10} Respectfully, we reject the conclusion of the court of appeals.  
Clearly, the claims brought by each plaintiff invoke a common question of law:  
whether a particular lender violated its duty to record a satisfaction of mortgage.  
In resolving this common question, the trial court of course will be presented with 
different evidence relating to each lender’s failure to record a satisfaction of a 
residential mortgage.  While appellees assert that sifting through these facts in a 
class action suit will be arduous, we are not compelled to agree.  The mere 
existence of different facts associated with the various members of a proposed 
January Term, 2002 
 
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class is not by itself a bar to certification of that class.  If it were, then a great 
majority of motions for class certification would be denied.  Civ.R. 23(B)(3) gives 
leeway in this regard and permits class certification where there are facts common 
to the class members. 
{¶ 11} In answering the common legal question, the trial court will need 
to gather evidence relating to each mortgagor-mortgagee relationship.  For 
example, evidence will need to be presented concerning each appellant’s date of 
indebtedness and date of mortgage satisfaction.  As noted by appellants, it is 
possible that the facts surrounding each claim can be systematically obtained in a 
single adjudication through the use of bank records and databases.  The facts to be 
presented are not so complicated that use of the class action tool would be unduly 
cumbersome.  Instead, the nature of this evidence demonstrates that there is 
factual commonality among class members. 
{¶ 12} We find that the trial court is in the best position to consider the 
feasibility of gathering and analyzing class-wide evidence.  Since the trial court’s 
ruling did not exceed the bounds of reasonableness, we find that it acted within its 
discretion in resolving that there are common questions of fact among class 
members that can be presented in an efficient fashion.  Thus, we find that it 
properly could conclude that appellants have satisfied the first requirement of 
Civ.R. 23(B)(3). 
{¶ 13} We next must consider whether a class action is the superior 
method to be utilized in achieving a fair and efficient adjudication of this 
controversy.  When evaluating “the utility and propriety of employing the class 
action device,” Schmidt, 15 Ohio St.3d at 314, 15 OBR 439, 473 N.E.2d 822, 
there are four factors to consider:  “(a) the interest of the 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 
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concentrating the litigation of the claims in the particular forum; and (d) the 
difficulties likely to be encountered in the management of the class action.”  
Civ.R. 23(B)(3).  Analysis of these factors ensures that the policy objectives of 
Civ.R. 23(B) are given weight and permits a court to balance the efficiency and 
economy of the class action device against the need to ensure the fair 
representation of the interests of otherwise unrelated entities.  Schmidt at 314, 15 
OBR 439, 473 N.E.2d 822. 
{¶ 14} With respect to the first factor, appellants assert that, as opposed to 
bringing each suit individually, they have an interest in grouping their actions due 
to the very nature of the remedy sought.  Since appellants each seek only $250 
under R.C. 5301.36, they argue that as individual plaintiffs they do not have the 
financial wherewithal to undertake the expense of litigation to recover such a 
paltry sum.  They contend that, as a certified class of mortgagors, they can spread 
the cost of an action and more readily attack the practices of the lenders.  This 
argument is persuasive and is a factor to be weighed in favor of class certification. 
{¶ 15} As to the second and third factors listed above, it is apparent that in 
the forum of Hamilton County there are many claims concerning violations of 
R.C. 5301.36.  Twelve separate classes were certified by the trial court, with each 
containing an abundance of members with separate but similar claims.  The 
desirability of the class action is evident, since allowing a separate action for each 
affected mortgagor would severely clog the docket of the common pleas court.  
While this reason alone is not sufficient to certify a class action, it is entitled to 
some consideration. 
{¶ 16} As to the fourth factor, we are certain that there will be some 
difficulties incurred in the management of these class actions.  However, we are 
convinced that the trial court gave adequate thought to the problems that might 
arise and determined that any risk was overpowered by the circumstances 
supporting class action certification.  Thus, our review of the relevant factors 
January Term, 2002 
 
7 
leads us to conclude that the class action is the superior method for the fair and 
efficient adjudication of the controversies.  Appellants have met the second 
requirement of Civ.R. 23(B)(3). 
{¶ 17} In a situation such as the one at bar, the class action is the 
preferable method for dealing with evidence of a party’s recurring malfeasance 
because the ability to avoid duplication of a court’s time, effort, and resources is 
an important and relevant consideration.  We liken the case at hand to our 
previous decision in Cope v. Metro. Life Ins. Co. (1998), 82 Ohio St.3d 426, 696 
N.E.2d 1001.  The plaintiffs in that case alleged that an insurance company 
improperly targeted existing policyholders, sold them replacement insurance as 
new insurance, and intentionally omitted mandatory disclosure warnings.  In 
certifying the class in that case, we reasoned that “a wide variety of claims may be 
established by common proof in cases involving similar form documents or the 
use of standardized procedures and practices.”  Id. at 430, 696 N.E.2d 1001.  “ 
‘Frequently numerous consumers are exposed to the same dubious practice by the 
same seller so that proof of the prevalence of the practice as to one consumer 
would provide proof for all.  Individual actions by each of the defrauded 
consumers are often impracticable because the amount of individual recovery 
would be insufficient to justify bringing a separate action; thus an unscrupulous 
seller retains the benefits of its wrongful conduct.’ ”  Id. at 429, 696 N.E.2d 1001, 
quoting Vasquez v. Superior Court of San Joaquin Cty. (1971), 4 Cal.3d 800, 808, 
94 Cal.Rptr. 796, 484 P.2d 964. 
{¶ 18} The rationale applied in Cope applies with equal force here.  
Individual plaintiffs in this case have been grouped with other plaintiffs to present 
suits against the same lenders.  These lenders presumably have utilized 
standardized procedures for recording satisfactions of residential mortgages, 
procedures that are allegedly faulty.  While of course we take no stand on the 
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merits of the allegations by appellants, Cope is instructive on the issue of class 
certification. 
{¶ 19} We conclude that the predominance requirement of Civ.R. 
23(B)(3) can be satisfied in this case and that the trial court did not act 
unreasonably, arbitrarily, or unconscionably in certifying the classes.  The 
judgment of the court of appeals was in error, and the trial court’s order to certify 
the classes in this case is reinstated. 
Judgment reversed 
and cause remanded. 
 
MOYER, C.J., DOUGLAS, RESNICK and PFEIFER, JJ., concur. 
 
COOK, J., dissents. 
 
LUNDBERG STRATTON, J., dissents. 
__________________ 
 
COOK, J., dissenting. 
{¶ 20} Like Justice Lundberg Stratton, I would affirm the judgment of the 
court of appeals that the trial court abused its discretion in finding that the 
plaintiffs had met the predominance requirement for certifying a class as required 
by Civ.R. 23(B)(3). 
__________________ 
 
LUNDBERG STRATTON, J., dissenting. 
{¶ 21} Because I believe that the trial judge abused his discretion in 
finding that questions of law or fact common to the members of the class 
predominated over questions affecting only individual members, I respectfully 
dissent. 
{¶ 22} In a class action seeking damages, the court must find that 
common questions of law or fact predominate over questions that are particular to 
members of the class.  Hamilton v. Ohio Sav. Bank (1998), 82 Ohio St.3d 67, 79, 
694 N.E.2d 442.  In finding that common issues predominate over individual 
January Term, 2002 
 
9 
issues, the trial court stated that “[t]he gravamen of every complaint within each 
class is the same and relates to the violation of R.C. 5301.36.”  In support of the 
trial court’s holding, the majority states that “[t]he mere existence of different 
facts associated with the various members of a proposed class is not by itself a bar 
to certification of that class.  If it were, then a great majority of motions for class 
certification would be denied.”  I disagree. 
{¶ 23} ”‘[A] claim will meet the predominance requirement when there 
exists generalized evidence which proves or disproves an element on a 
simultaneous, class-wide basis, since such proof obviates the need to examine 
each class member’s individual position.”‘ (Emphasis added.)  Cope v. Metro. 
Life Ins. Co. (1998), 82 Ohio St.3d at 429-430, 696 N.E.2d 1001, quoting 
Lockwood Motors, Inc. v. Gen. Motors Corp. (D.Minn.1995), 162 F.R.D. 569, 
580.  Thus, common issues do not predominate for purposes of certifying a class 
action where individualized proof is required in order for each class member to 
recover.  Accordingly, “where no one set of operative facts establishes liability” 
and “individual issues outnumber common issues,” a court “should properly 
question the appropriateness of a class action for resolving the controversy.”  
Sterling v. Velsicol Chem. Corp. (C.A.6, 1988), 855 F.2d 1188, 1197. 
{¶ 24} In the case at bar, there are evidentiary issues that require 
individualized proof for each plaintiff, including identification of each mortgagee 
(complicated by assignments and reassignments), determination of each 
mortgage’s payoff date, determination of whether each mortgage was satisfied or 
could be satisfied if it was an open-ended mortgage, determination of the 
transmittal dates of each satisfaction to the recorder, and determination of when 
the recorder actually recorded the satisfaction after receipt, among other factual 
issues.  These factual determinations are specific to each plaintiff, require case-
by-case adjudications, and defeat the predominance needed for class certification.  
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See, e.g., Gutansky v. Advance Mtg. Corp. (1981), 102 Ill.App.3d 496, 58 Ill.Dec. 
180, 430 N.E.2d 122.  Accordingly, I respectfully dissent. 
__________________ 
 
Murdock, Goldenberg, Schneider & Groh, L.P.A., John C. Murdock, 
Jeffrey S. Goldenberg and Theresa Groh; Zelle, Hofmann, Voelbel, Mason & 
Gette, L.L.P., and Eric Berg, for appellants. 
 
Taft, Stettinius & Hollister, L.L.P., and Timothy C. Sullivan, for appellee 
Firstar Bank, N.A. 
 
Jones, Day, Reavis & Pogue, Shawn J. Organ and Brian G. Selden, for 
appellee Nationsbanc Mortgage Corporation. 
 
Porter, Wright, Morris & Arthur, L.L.P., and Jennifer T. Mills, for 
appellee Huntington National Bank. 
 
Janik & Dorman, L.L.P., Andrew J. Dorman and Barry R. Murner, for 
appellee Beneficial Ohio, Inc. 
 
Porter, Wright, Morris & Arthur, L.L.P., and David P. Shouvlin, for 
appellee Fleet Mortgage Corporation. 
 
Kegler, Brown, Hill & Ritter, and Robert G. Cohen; J. Preston Turner, for 
appellee First Union Home Equity Bank, N.A.. 
 
Thompson Hine, L.L.P., Stephen J. Butler and Carey L. Allen; and Jan T. 
Chilton, for appellees Countrywide Home Loans and Associates Financial 
Services Corporation. 
 
Schroeder, Maundrell, Barbiere & Powers, and Christopher Moore; Briggs 
and Morgan, P.A., and Mark G. Schroeder, for appellee Capstead, Inc. 
 
Keating, Meuthing & Klekamp, P.L.L., James E. Burke, Gregory M. Utter 
and Douglas L. Hensley, for appellees Provident Bank, Union Savings Bank, and 
Guardian Savings Bank. 
 
Chester Willcox & Saxbe, L.L.P., and J. Craig Wright, for amicus curiae, 
National Association of Consumer Advocates. 
January Term, 2002 
 
11 
 
Janet L. Phillips Co., L.P.A., and Janet L. Phillips, for amicus curiae, Ohio 
Academy of Trial Lawyers. 
__________________