The exact number of class members need not be pleaded or proved. See Gomez v. Comerford,
833 F.Supp. 702, 706 (N.D. Ill. 1993). However, the impracticability of joinder must be positively
shown and not merely speculative. Kohn v. Mucia, 776 F.Supp. 348, 352 (N.D. Ill. 1991). Roman
has relied solely on speculation in an attempt to establish numerosity. Essentially, Roman asserts that
because First Franklin is so large, it must have issued many loans secured by real estate containing two
dwellings. Roman offers no evidence to substantiate this theory. In fact, he does not even estimate
how many loans of this type were issued by First Franklin. Moreover, Roman simply speculates that
if many of these loans were issued then at least 20-40 must have been deficient in TILA disclosures.
Roman has failed to establish that the class is so numerous that joinder is impracticable.>
In. Rule 23(b)

Even if Roman met all Rule 23(a) requirements, class certification would not necessarily be
appropriate. Class certification cannot be granted when questions involving individual class members
predominate over common questions of law and fact. See Fed.R.Civ.P. 23(b)(3). First Franklin
contends individual questions of law predominate because it must be determined whether each class
member’s loan falls under TILA protection. The TILA is applicable when a !oan is primarily used for
consumer purposes, but not when the loan is used for business purposes.

Roman’s proposed class definition assumes it is easily discernible whether the class members’
loans are subject to the TILA. However, according to the Federal Reserve Board’s official state
commentary to regulation Z, merely providing TILA disclosures is not determinative of whether the

loan was used for business or consumer purposes. Instead, the commentary sets out five factors that

>The court need not reach Rule 23(a)’s requirements of typicality, commonality, and adequate
representation.


1998). However, “the boundary between a class determination and the merits may not always be
easily discernible.” Retired Chicago Police Association v. City of Chicago, 7 F.3d 584, 599 (7° Cir.
1993) (internal citations omitted). The importance of class certification is heightened in TILA cases,
“where the small amounts of money involved and the difficult financial situations of many of the
litigants may inhibit individualized litigation.” Williams v. Chartwell Financial Services, Ltd., 204¥F.3d
748, 760 (7" Cir. 2000).

In order to establish that class certification is justified, a plaintiff must satisfy the four
requirements of Fed.R.Civ.P. 23(a). These requirements include: (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.
Fed.R.Civ.P. 23(a). In addition, the plaintiff must meet one of the requirements of Fed.R.Civ.P. 23(6).
As applied to this case, Rule 23(b) requires that common questions of law and fact predominate over
questions involving individual members, and that a class action is superior to other forms of
adjudication. Fed.R.Civ.P. 23(b)(3).

I. Rule 23(a)

Roman contends the requirement of numerosity is satisfied for the following reasons: (1) he
is claiming acommon TILA violation; (2) First Franklin has a large number of loans, many of which
are secured by real estate containing at least two dwellings; and (3) a mortgage company of First
Franklin’s size is going to have more than 20-40 loans with the violation Roman alleges. Roman does

not purport to know the number of putative class members.


should be considered in making this determination. The factors include: (1) The relationship of the
borrower’s primary occupation to the acquisition; the more closely related, the more likely it is to be
business purpose; (2) the degree to which the borrower will personally manage the acquisition; the
more personal involvement there is, the more likely itis to be business purpose; (3) the ratio of income
from the acquisition to the total income of the borrower; the higher the ratio, the more likely it is to
be business purpose; (4) the size of the transaction; the larger the transaction, the more likely it is to
be business purpose; and (5) the borrower’s statement of purpose for the loan. See Commentary §
226.3(a)-4. First Franklin asserts that applying these five factors to each possible member of the
putative class requires highly fact intensive inquiries and that class certification would result in an
undetermined number of mini-trials.* As this court has previously held, “Where liability determinations
are both individual and fact-intensive,” class certification under Rule 23(b)(3) is improper.” McGarvey
v. Citibank (South Dakota) N.A., No. 95 C 123, 1995 WL 404866, at *6 (N.D. IIL. July 5, 1995).
CONCLUSION

Indelfe Roman’s motion for class certification is denied.

ENTER:

Suzdnne B. Conlon
April 2, 2001 United States District Judge

*Roman’s contention that examining First Franklin’s records will answer the question of
whether the loans were for business or consumer purposes is questionable. He offers no basis for his
assumptions that each loan file “will probably have a borrower’s affidavit” and that the lender will
have documents showing the purpose of each loan.

5


‘Minatz Onder Foot (067)

United States District Court, Northern District of Illinois

Name of Assigned Judge
or Magistrate Judge

Suzanne B. Conlon

Sitting Judge if Other
than Assigned Judge

CASE NUMBER 00 C 7228 DATE 4/2/2001
CASE INDELFE ROMAN vs. FIRST FRANKLIN FINANCIAL, et al.
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature of
the motion being presented.)
MOTION:

DOCKET ENTRY:

Notified counsel by telephone

Docketing to mail notices

Mail AO 450 form,

Copy to judge/magistrate judge.

courtroom
deputy’s
initials

SB

( im Filed motion of [ use listing in “Motion” box above.]
(2) o Brief in support of motion due
(3) o Answer brief to motion due___. Reply to answer brief due
(Ca) o Ruling/Hearing on set for at
(5) a Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Qa Pretrial conference[held/continued to] [set for/re-set for] on ___ set for at.
(7) Oo Trial[set for/re-set for] on at
(8) a [Bench/Jury trial] [Hearing] held/continued to___at
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) CGeneral Rule 21 CFRCP4I1(a)(1) 0 FRCP41(a)(2).
ao) ff {Other docket entry] Indelfe Roman’s motion for class certification [2-1] is denied. ENTER
MEMORANDUM OPINION AND ORDER.
(2. Crab

ql) {For further detail see order attached to the original minute order.]

No notices required, advised in open court,

No notices required umber of notices
v Notices mailed by judge’s staff.

APRS

3 dated

2m

doctfetiny deputy initials

4n2n2001

date mailed notice

jad

Date/time received in
central Clerk’s Office

nailing deputy initia



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
INDELIFE ROMAN, )
Plaintiff, } No. 00 C 7228
v. } Suzanne B. Conlon, Judge
FIRST FRANKLIN FINANCIAL }
“ORP :

CORTON, OPN ON RTO DOCKETED
CORPORATION OF ILLINOIS, ) MAR 0 3 2003

Defendants. }

MEMORANDUM OPINION AND ORDER

Indelfe Roman (“Roman”) sues First Franklin Financial Corporation (“First Franklin”) for
failure to disclose an alleged personal property security interest taken by means of a mortgage, in
violation of the Truth in Lending Act, 15 U.S.C. § 1601 ef seg. (TILA), and its implementing
Regulation Z, 12 C.F.R. 226.1.' Roman moves for class certification, pursuant to Fed.R.Civ.P. 23.

BACKGROUND

I. Allegations in the complaint

Roman resides in and owns a two-flat building in Chicago. First Franklin is a Delaware
corporation with its principle place of business in San Jose, California. The corporation has several
offices in Ilinois. First Franklin provides mortgage brokers with various products and services, but

focuses on its “proprietary risk-based direct access loan programs.” Cmplt. at { 8.

‘Defendants Equicredit Corporation of Illinois (“Equicredit”) and Option One Mortgage
Corporation (“Option One”) were dismissed from this action.

Qe


On November 24, 1999, Roman obtained a $70,000 mortgage loan from First Franklin for the
purpose of refinancing his building. In connection with the loan, Roman signed a note, a mortgage,
a 1-4 family rider and assignment of rents (“the rider”), a TILA statement, and a HUD-1 settlement
statement. Roman alleges the TILA disclosure statement (1) misrepresented that the only security
interest taken was in real property and (2) failed to disclose that the lender had taken a security interest
in certain personal property by means of the rider.

Il. Class definition

Roman seeks to represent a class of all persons who satisfy the following requirements: (1)
they obtained a residential mortgage secured by real estate that held two dwellings; (2) their family
members or themselves resided in one or more of the dwellings; (3) their transaction was documented
as being subject to the TILA; (4) their note and mortgage were originated by or assigned to First
Franklin; (5) their mortgage included the rider, which created a security interest in personal property
at the mortgaged premises; (6) their TILA statement does not disclose the security interest in personal
property created by the rider; and (7) their mortgage is dated on or after one year prior to the filing
of this action.”

DISCUSSION
I. Class certification standard

Courts have broad discretion in determining whether class certification is appropriate. Keele

v. Wexler, 149 F.3d 589, 592 (7" Cir. 1998). In assessing a certification motion, the court does not

consider the merits of the case. Dbamer v. Bristol-Myers Squibb Co., 183 F.R.D. 520, 525 (N.D. Ill.

2Because Option One and Equicredit were dismissed from this action, Roman’s motion is
moot to the extent it requests certification of a B and C class.

2