Opinion ID: 1759925
Heading Depth: 3
Heading Rank: 2

Heading: Fraudulent-Suppression Claim

Text: To establish a claim of fraudulent suppression, the plaintiff must produce substantial evidence showing: (1) that the defendant had a duty to disclose an existing material fact; (2) that the defendant suppressed that existing material fact; (3) that the defendant had actual knowledge of the fact; (4) that the defendant's suppression of the fact induced the plaintiff to act or to refrain from acting; and (5) that the plaintiff suffered actual damage as a proximate result. State Farm Fire & Cas. Co. v. Slade, 747 So.2d 293, 323-24 (Ala.1999). UFCU argues that Grayson failed to produce sufficient evidence indicating that UFCU owed a duty to any putative class member to disclose or that any class member was induced to secure an automobile loan by UFCU's actions. Additionally, UFCU claims that the trial court would be forced to make a detailed inquiry as to each and every class member to determine whether UFCU owed that member a duty to disclose and whether UFCU had induced each individual to act. This, UFCU maintains, makes the class unmanageable. We agree. In Ex parte Government Employees Insurance Co., 729 So.2d 299 (Ala.1999), the trial court was asked to certify a class in an action brought by certain policyholders alleging suppression. In holding that the claim was unsuited for class-action certification, this Court stated: Alabama caselaw emphasizes that in a case alleging fraudulent suppression the trial court must examine the facts to determine whether the defendant had a duty to disclose; this element of duty to disclose, applicable in the case alleging suppression, is analogous to the element of reliance applicable in the case alleging a misrepresentation. Mack v. General Motors Acceptance Corp., 169 F.R.D. 671, 677 (M.D.Ala.1996). `The impact of this law, however, on the class certification decision, is fatal.' Id. The district court in Mack determined that before it could determine the threshold liability of the defendant, GMAC, to a particular class member, it would have to examine all of the facts and circumstances relating to that individual class member to determine if under Alabama law the defendant had had a duty to disclose. Id. In the ordinary fraud action, there must be proof of reliance. Id. at 678. Resolving the issue of reliance would require the court to examine the representations made by [the defendant insurer] to each of its policyholders regarding the uninsured-motorist coverage and the medical-payments provision. Id. `There is a seemingly endless permutation of facts which the court will have to examine to determine the validity of each class member's claim.' Id. It would be overly time-consuming and factually overwhelming to resolve each class member's reliance or lack thereof. To make this essential fraud analysis in this present case would require the court to examine over 36,000 individual policy claims to determine, in each individual situation, the presence of `reliance' or a `duty to disclose.' Government Employees Ins. Co., 729 So.2d at 305. Similarly, the trial court in this case will be required to examine the circumstances of each individual class member in order to determine whether UFCU undertook a duty to disclose the nature of the $2.50 filing fee to each member. Such inquiries are individual issues that are inappropriate for class certification. Compass Bank v. Snow, 823 So.2d at 674. Additionally, as noted in Part II.A., Grayson failed to demonstrate that common questions regarding reliance predominate over individualized questions. In the same vein, Grayson has thus failed show that common questions regarding the analogous issue, whether the putative class members were induced to act, predominate over individual questions. See Household Retail Servs., 744 So.2d at 879 (holding that class certification was inappropriate in an action alleging suppression where the plaintiff failed to demonstrate that the class had relied on the defendant's nondisclosure). Because Grayson presented no evidence indicating that UFCU had a duty to disclose and has failed to prove that the putative class members were induced by UFCU to act, the trial court exceeded its discretion in certifying the suppression claim for class-action treatment.