Title: HARVELL v. GOODYEAR TIRE & RUBBER CO.

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

HARVELL v. GOODYEAR TIRE & RUBBER CO.  HARVELL v. GOODYEAR TIRE & RUBBER CO. 2006 OK 24 164 P.3d 1028 Case Number: 102128 Decided: 04/25/2006 As Corrected: May 9, 2006 As Corrected: July 3, 2007 THE SUPREME COURT OF THE STATE OF OKLAHOMA LORI HARVELL, Individually and on behalf of herself and all others similarly situated, Plaintiff/Appellee, v. THE GOODYEAR TIRE & RUBBER COMPANY, Defendant/Appellant. APPEAL FROM THE DISTRICT COURT OF SEQUOYAH COUNTY Honorable John C. Garrett, Trial Judge ¶0 In July of 2004, Lori Harvell brought her car in for service at a Goodyear Auto Service Center in Tulsa, Oklahoma. After performing a diagnostic check, the service center presented Harvell with an invoice which included a charge for shop supplies. Although Harvell disputed the necessity of the charge, she paid the fee in order to retrieve her car. On August 26, 2004, Harvell filed a class action lawsuit against the Goodyear Tire & Rubber Company, seeking certification of a national class action of consumers who had paid Goodyear a shop supply fee regardless of whether shop supplies were used. The trial court, Honorable John C. Garrett, certified the class and Goodyear appealed. We retained the cause and hold that the trial court abused its discretion in certifying the class. TRIAL COURT REVERSED; CAUSE REMANDED. Harry Scoufos, Thomas W. Condit, Sallisaw, Oklahoma, for Appellee. William K. Orendorff, Sallisaw, Oklahoma, and P. Jefferson Ballew, Adrienne E. Dominguez, Dallas, Texas, for Appellant. KAUGER, J: ¶1 The only issue presented FACTS ¶2 On July 28, 2004, the plaintiff/appellee, Lori Harvell (Harvell/customer) noticed that the check engine light in her car was on. After spotting a Goodyear Auto Service Center (service center) a few blocks away, she pulled into the service center to get her car checked. After performing a diagnostic check on the vehicle, the service center recommended that she replace the spark plugs and told her that her brakes were worn. Rather than have the spark plugs or the brakes replaced at that time, she drove home. ¶3 The service center presented the customer with two copies of an invoice. One was an estimate invoice, the other was an actual invoice for the services performed. Although an estimate invoice is typically given to customers before any work is done, it was not given to Harvell before the service center checked her car. The actual invoice itemized the charges as $36.50 for labor, $0.00 for parts, $2.56 for shop supplies for a total of $39.28 which included $.22 for taxes on the $2.56 shop supply charge. The shop supply charge also appeared on the estimate invoice. ¶4 When the customer questioned the cashier about the shop supply fee, she was told not to worry about it, that it was just part of the bill. She asked whether she would get her car back if she failed to pay the $2.56 charge, and was told that she had to pay it. Harvell paid the invoice. ¶5 On August 26, 2004, the customer filed a class action lawsuit against the defendant/appellant, the Goodyear Rubber & Tire Company (Goodyear), seeking certification of a national class action of consumers who, in approximately 37 states, had paid Goodyear a shop supply fee since 1998. ¶6 A hearing for class certification was held on March 29, 2005. On stipulation of the parties, the trial court admitted deposition testimony, affidavits, and exhibits into evidence. The evidentiary materials show, among other things, that the shop supply fee was initiated ¶7 On April 14, 2005, the trial court issued an order granting the customer's motion for class certification. The trial court found that the four requirements of THE TRIAL COURT ABUSED ITS DISCRETION IN CERTIFYING THE CLASS. ¶8 Title ¶9 A trial court's class certification order is reviewed for abuse of discretion. ¶10 The party who seeks certification has the burden of proving each of the requisite elements for class action. ¶11 To resolve whether the prerequisites for class-certification are met, we need not reach the merits of the claim. ¶12 The customer argues that because she proved that the four elements required pursuant to ¶13 A factor weighing heavily in this case is the geographic dispersion of the class members and the consequent, potential applicability of the law of multiple jurisdictions. This factor is important because we have previously held that where the substantive law of multiple jurisdictions may apply, common issues of law or fact generally do not predominate as required by i. Breach of Contract Claim ¶14 The trial court analyzed the applicability of the law of multiple jurisdictions in terms of the most significant relationship test of the Restatement (Second) Conflicts of Law §§ 6 and 188 (1971). ¶15 The place of performance of any alleged contract for each person charged a supply fee for the service of vehicles is the state in which the vehicle was serviced. ¶16 Goodyear's standard procedure requires that each customer receive and sign an estimate, notifying each customer that some or all of the shop supply fee is for profit. The customer ordinarily signs the estimate before any work is done. Apparently, Harvell is not the typical customer because she alleges that she was not given an estimate until after the work was completed. The existence of a contract and a determination of what the material terms of the contract were differ with each class member's interaction with each service center. These individualized determinations, coupled with the application of the law of 37 states, precludes a finding of predominance and defeats the purpose of certifying a class. The trial court would be overwhelmed with the burden of an unmanageable class. ii. Unjust Enrichment Claim ¶17 To determine which state's law governs, Harvell argues that the most significant relationship test of Restatement (Second) of Conflicts §148 (1971), ¶18 Unjust enrichment is a condition which results from the failure of a party to make restitution in circumstances where it is inequitable; i.e. the party has money in its hands that, in equity and good conscience, it should not be allowed to retain. ¶19 In the present case, regardless of whether we apply a significant relationship analysis or whether the principle of lex loci contractus, the result is the same. Any representations upon which a customer relied and any enrichment received occurred in the state where the services were rendered. The unjust enrichment sought by Harvell is an equitable remedy aimed at recovering unspecified amounts of money which Goodyear received, unrelated to the actual shop supplies used. ¶20 Any enrichment related to the services rendered by Goodyear occurred in the state in which the alleged contract for service was signed and performed. Therefore, the law of each state where the services were rendered governs any claim for unjust enrichment. The elements of unjust enrichment claims differ markedly from state to state. ¶21 Additionally, for each class member, a decision as to whether unjust enrichment is applicable will depend heavily on the services rendered, the amount of supply fee charged, the supplies used (if any), the cost of the shop supplies, and whether a customer agreed to pay the cost, even if it might have been purely for profit. The success of a claim for unjust enrichment depends on the particular facts and circumstances of each case and hinges on whether a customer actually received few or no miscellaneous supplies. These factual particularities make class certification imprudent because the claims and defenses of each class member involve a specific finding of cost, profit, and equitable unfairness which necessarily requires individualized findings of fact for each member of the class. For all of these reasons, there is a lack of predominance of common legal and factual issues and the trial court abused its discretion in certifying the claim for unjust enrichment which fails to meet the statutory requirement of predominance under iii. Ohio Consumer Sales Practices Act Claims ¶22 The consumer alleges that Goodyear violated the Ohio Consumer Sales Practices Act (the Act).40 Goodyear argues that the trial court erred in certifying a class action based on the alleged violation of the Act because the Act is inapplicable to the class. ¶23 The Act generally prohibits unfair, unconscionable, and deceptive sales.41 Section 1345.04 of the Act imposes liability only when an offending act or practice takes place within the state of Ohio.42 Courts have generally determined that the focus of the inquiry concerning application of such an Act to out-of-state consumers is whether the offending consumer transaction occurred with the state.43 ¶24 While Goodyear may have developed the shop supply fees from its corporate offices in Ohio, in our view any unfair, deceptive or unconscionable conduct toward a consumer occurred where the transaction occurred -- when a customer brought an automobile in for service to a service center and was charged a shop supply fee. Accordingly, the Ohio Act is inapplicable to transactions occurring in states other than Ohio. iv. Appropriateness of Final Injunctive or Declaratory Relief. ¶25 In addition to finding predominance, the trial court determined that the class should be certified under 12 O.S. §2023(B)(2). Section (B)(2) allows certification when the class representative can show that the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive or corresponding declaratory relief with respect to the class as a whole.44 Under this section, the customer argues that injunctive or declaratory relief is an appropriate basis for certifying the class. Goodyear insists that because all of the asserted claims seek predominately monetary damages, subsection (B)(2) is inapplicable. ¶26 We have not previously addressed a class certification under §2023(B)(2). However, Oklahoma's class action scheme closely parallels Rule 23, of the Federal Rules of Civil Procedure and we find it illustrative.45 Under Rule 23(b)(2) of the Federal Rules of Civil Procedure46 the injunctive or declaratory relief must be the primary remedy requested for class members,47 and the defendant's behavior must be generally applicable to the class as a whole.48 The award of some monetary damages is not precluded by the requirement, provided that monetary relief is secondary or incidental to the primary injunctive or declaratory relief sought.49 ¶27 To determine certification under subsection (2), the court considers not merely the relief sought by the plaintiffs, but whether the crux of the action is for monetary damages.50 Certification is improper if the merits of the claim turn on the defendant's individual dealings with each plaintiff.51 Certification is generally reserved for cases in which broad, class-wide injunctive or declaratory relief is necessary to address a group-wide injury such as in discrimination or civil rights suits, even though some damages may also be awarded.52 ¶28 The present action is not similar to those types of actions. Even though Harvell also seeks an injunction against the continued practice of charging the fees, the crux of her class action is compensation sought for the allegedly fraudulently charged shop supply fees.53 This case focuses squarely on a claim for compensatory money damages. A determination of the damages would require individualized determinations for each class member of the fees charged compared with the services rendered, to determine whether the fees did in fact correlate to the supplies used. Accordingly, certification pursuant to §2023(B)(2) is also an abuse of discretion. CONCLUSION ¶29 A trial court's class certification order is reviewed for abuse of discretion.54 An abuse of discretion occurs when a court bases its decision on an erroneous conclusion of law or where there is no rational basis in evidence for the ruling.55 If the record does not demonstrate that the requisites for class action have been met, the trial court has abused it discretion.56 ¶30 The trial court certified a class action on a common law breach of contract claim, a common law claim of unjust enrichment and a violation of the Ohio Consumer Sales Practices Act, finding that the requirements of numerosity, commonality, typicality, and representation as well as two alternative requirements of appropriateness of injunctive or declaratory relief or predominance of common questions of law or fact and superiority of class action adjudication had been met. We have determined that neither of the predominance requirements or the alternative requirements of appropriateness of injunctive or declaratory relief were satisfied and that the Ohio Act is inapplicable. Accordingly, the trial court abused its discretion in certifying the class action. TRIAL COURT REVERSED; CAUSE REMANDED. ¶31 WATT, C.J., WINCHESTER, V.C.J., LAVENDER, HARGRAVE, OPALA, KAUGER, and TAYLOR, JJ. - Concur. ¶32 EDMONDSON, J., and COLBERT, J., Concur in Part and Dissent in Part. FOOT