Opinion ID: 1760838
Heading Depth: 1
Heading Rank: 4

Heading: Conflict of InterestLack of Damages

Text: We now turn to McGinnis's remaining arguments concerning adequacy. These arguments concern the second element of the adequacy requirementthat there be no evidence of collusion or conflicting interest between the representative and the class. Advance America does not assert that there is evidence of collusion between McGinnis and the class. Rather, Advance America asserts that there is evidence of conflicting interest between McGinnis and the class. Advance America first asserts that McGinnis's lack of damages undermines her incentive to prosecute the case vigorously. McGinnis entered into six transactions with Servicing between September 1, 2006, and February 2, 2007. Each transaction was governed by a separate customer agreement, and McGinnis paid separate fees for all six transactions totaling $143.71. Pursuant to the last customer agreement, dated January 3, 2007, Servicing paid to McGinnis $250 in return for a personal check in the amount of $278.91, which was to be cashed on February 2, 2007. On the advice of counsel, McGinnis stopped payment on this check prior to February 2, 2007, and Servicing never received the total amount due of $278.91. Advance America contends that, although McGinnis paid a total of $143.71 in fees over the course of her business relationship with Servicing, she received and still owes to Servicing $250 for the January 3, 2007 advance. Advance America points out that McGinnis admitted that she had received more money from Servicing than she paid. Therefore, Advance America contends that McGinnis has suffered no monetary damages and has a conflict of interest with the class members who paid back the full amounts of their advances due to Servicing, in that she does not have the same incentive to prosecute the case as vigorously as class members who did not default on their customer agreements and who may have different claims for damages. McGinnis contends that she has suffered the same types of damages as every class member and has demonstrated that she will vigorously prosecute this case. She states that the record contains undisputed evidence that Advance America exacted usurious interest from her on at least five separate instances, and that this proves that she and the class have usury claims and claims under the DTPA. Citing article 19, section 13 of the Arkansas Constitution, McGinnis states that she is entitled to double damages and a declaration that the loans are void. She states that the declaration is important to her and other class members, in light of Advance America's aggressive efforts to collect payment from those who stopped paying the usurious interest. Advance America, by asserting that McGinnis has not suffered any monetary damages, has attempted to defeat class certification by delving into the merits of the case. The circuit court's proper focus in deciding whether to certify a class is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met. See Direct Gen. Ins. Co. v. Lane, 328 Ark. 476, 944 S.W.2d 528 (1997). It is totally immaterial whether the petition will succeed on the merits or even if it states a cause of action. See id. At this point, we do not know if McGinnis will prevail on the merits of her case, but that is irrelevant at this stage of the proceeding. Even if McGinnis ultimately fails to make her case as to damages, the question before the circuit court was whether the claims of McGinnis and the class members arise from the same wrong allegedly committed by Advance America. Here, it is clear that the claims of McGinnis and the class members arise from the same wrong allegedly committed by Advance Americathat Advance America charged a usurious rate of interest in violation of the Arkansas Constitution and engaged in deceptive trade practices in violation of the DTPA. McGinnis testified in her deposition that she wanted to pursue the lawsuit because she believed Advance America charged usurious interest rates in violation of the Arkansas Constitution and that she believed Advance America should be held accountable for its alleged wrongdoing. The alleged injury sufferedbeing charged interest at a usurious rateis the same for McGinnis and all class members. Even assuming McGinnis suffered no monetary damages, she is not precluded from representing the class, as she allegedly suffered the same injury.