Court Opinion

ID: 2690285
Source: CourtListenerOpinion
Date Created: 2014-08-01 20:41:08.264194+00
Date Added: 2024-06-11T08:29:00.886167
License: Public Domain

[Cite as Cullen v. State Farm Mut. Auto. Ins. Co., 137 Ohio St.3d 373, 2013-Ohio-4733.]

     CULLEN, APPELLEE, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE
                                COMPANY, APPELLANT.
     [Cite as Cullen v. State Farm Mut. Auto. Ins. Co., 137 Ohio St.3d 373,
                                    2013-Ohio-4733.]
Class actions—Civ.R. 23—Certification issues overlapping with issues on merits
        of claims—Burden of proof for certification—Declaratory judgments.
 (No. 2012-0535—Submitted February 26, 2013—Decided November 5, 2013.)
              APPEAL from the Court of Appeals for Cuyahoga County,
                              No. 95925, 2011-Ohio-6621.
                                  __________________
                               SYLLABUS OF THE COURT
1. A trial court must conduct a rigorous analysis when determining whether to
        certify a class pursuant to Civ.R. 23 and may grant certification only after
        finding that all of the requirements of the rule are satisfied; the analysis
        requires the court to resolve factual disputes relative to each requirement
        and to find, based upon those determinations, other relevant facts, and the
        applicable legal standard, that the requirement is met.
2. In resolving a factual dispute when a requirement of Civ.R. 23 for class
        certification and a merit issue overlap, a trial court is permitted to examine
        the underlying merits of the claim as part of its rigorous analysis, but only
        to the extent necessary to determine whether the requirement of the rule is
        satisfied. (Ojalvo v. Bd. of Trustees of Ohio State Univ., 12 Ohio St.3d
        230, 466 N.E.2d 875 (1984), clarified.)
3.   A party seeking certification pursuant to Civ.R. 23 bears the burden of
        demonstrating by a preponderance of the evidence that the proposed class
        meets each of the requirements set forth in the rule.
                             SUPREME COURT OF OHIO

4. Claims for declaratory relief that merely lay a foundation for subsequent
       determinations regarding liability or that facilitate an award of damages do
       not meet the requirement for certification set forth in Civ.R. 23(B)(2).
                              ___________________
       O’DONNELL, J.
       {¶ 1} State Farm Mutual Automobile Insurance Company appeals from a
judgment of the Eighth District Court of Appeals affirming class certification of
claims brought by Michael Cullen alleging that State Farm failed to disclose all
benefits available to policyholders who made claims for damaged windshields.
This case clarifies the standards to apply when an appellate court reviews
certification of a class action pursuant to Civ.R. 23.
       {¶ 2} A class action is an exception to the general rule that litigation is
conducted by and on behalf of the named parties only, and therefore, to justify a
departure from this rule, the representative of the putative class is required to
affirmatively demonstrate that each requirement of Civ.R. 23 has been satisfied.
When determining whether to certify a class, a trial court must conduct a rigorous
analysis, and it may grant certification only after resolving all relevant factual
disputes and finding that sufficient evidence proves that all requirements of
Civ.R. 23 have been satisfied.
       {¶ 3} Here, the appellate court affirmed certification of the class
pursuant to Civ.R. 23(B)(2) and (3). However, because the declaratory relief at
issue here is incidental to an individualized claim for monetary damages, Cullen
has not met the requirement for certification set forth in Civ.R. 23(B)(2). In
addition, because individual questions predominate over the questions common to
the proposed class, Cullen has not proven that this action satisfies Civ.R.
23(B)(3). Accordingly, we reverse the judgment of the court of appeals and
remand the matter to the trial court for further proceedings consistent with this
opinion.

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                               January Term, 2013

                         Facts and Procedural History
       {¶ 4} In 2003, Michael Cullen contacted his automobile insurance
carrier, State Farm, to report damage to the windshield of his car. After speaking
with his agent, Cullen spoke to a representative from Lynx Services, L.L.C., a
company that began handling windshield claims for State Farm in 1996. As a
result of that conversation, Twinsburg Glass & Mirror repaired his windshield.
       {¶ 5} In 2005, Cullen sued State Farm, requesting class certification and
a declaratory judgment that State Farm’s practices were illegal and violated
obligations owed by fiduciaries pursuant to Ohio law. In addition, Cullen asserted
claims for breach of contract, bad faith, and breach of fiduciary duty and sought
compensatory and punitive damages. The complaint defined the class to include
all State Farm policyholders on or after February 18, 1990, and alleged that State
Farm had denied them full payment on windshield claims because, instead of
replacing windshields, it repaired some windshields with a chemical compound
that it knew or should have known was “only temporary, not entirely translucent,
and incapable of restoring the windshield to its preaccident condition” and that
State Farm was not “paying the insured to replace the glass,” less any deductible.
As a result of State Farm’s alleged breach, Cullen and the class demanded
“damages in an amount to be determined at trial under principles of Ohio
common law” or that State Farm be ordered to “tender benefits sufficient to
replace the windshields in accordance with policy requirements.”
       {¶ 6} The trial court held a hearing on the certification issue. Although
Cullen could not remember speaking to a representative of Lynx or whether he
had been offered the choice of replacing his windshield or receiving the cash
value of a new windshield, less his deductible, he asserted that State Farm agents
and representatives failed to disclose to policyholders making “glass-only” claims
that the policies contained a benefit referred to as the “cash-out” option.
According to Cullen, although the State Farm policy promised its insureds the

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option of receiving a cash payment of the replacement cost of the windshield, less
any deductible, it prepared a script for representatives to induce policyholders to
repair their windshields without disclosing the cash-out option.        State Farm
referred to the outline it provided to its agents and representatives handling glass-
only claims as a “word track,” arguing that it gave them discretion to respond to
questions asked by insureds.
       {¶ 7} The trial court concluded that Cullen and the class satisfied the
requirements of Civ.R. 23(A) and (B)(2) and (3), specifically finding that the
class satisfied Civ.R. 23(B)(2) because “it appear[ed] that the same practices
which the Named Plaintiff experienced [were] still ongoing” and it further
determined that a declaratory judgment and injunctive relief were “potential
available remedies which can be issued on a class wide [sic] basis in the event
that [Cullen] prevails upon the merits of his claim.” In finding that Cullen and the
class met the requirements for certification pursuant to Civ.R. 23(B)(3), the trial
court explained:

       The Court is sufficiently convinced that Plaintiffs’ claims for relief
       are founded squarely upon standardized policies and practices
       which had been adopted and employed by State Farm throughout
       Ohio on a systematic basis during the Class Period. Given that the
       maximum individual recoveries will be relatively modest, separate
       lawsuits are not realistic. And it is doubtful that the Ohio judicial
       system could afford full and fair relief to thousands of aggrieved
       insureds on a case-by-case basis. A class action is thus the most
       preferable and superior method for adjudicating the common
       questions of law and fact, which the Court concludes, predominate
       over any individual questions which may exist.

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                                January Term, 2013

       {¶ 8} The trial court defined the class as follows:

               All persons and business entities covered under an Ohio
       motor vehicle insurance policy issued by [State Farm] who made a
       “Glass Only” physical damage comprehensive coverage claim on
       or after January 1, 1991 for cracked, chipped or damaged
       windshields and received a chemical filler or patch repair, or
       payment thereof, instead of a higher amount for actual cash value
       or replacement cost of the windshield. The lesser of the amount of
       the actual cash value or the replacement cost of the windshield for
       each claim must exceed the insured’s applicable deductible.

The trial court further divided the class into two subclasses: those insureds who
had their claims administered by Lynx and those who did not.
       {¶ 9} State Farm appealed, and the Eighth District Court of Appeals
affirmed the order certifying the class pursuant to Civ.R. 23(B)(2) and (3), but it
reversed that portion of the decision defining the class and remanded with
instructions to the trial court to redefine it. The court of appeals explained:

               For claims handled using a common script or word track,
       the trial court did not err in certifying the class in this case.
       Individual questions do not predominate because the script used by
       Lynx and developed by State Farm establishes class-wide
       treatment under Cullen’s theory that State Farm breached its
       contracts with insureds by dissuading individuals from replacing
       their windshields and not informing them of their option to receive
       a check for the value of the windshield less their deductible. For
       claims made prior to the use of a common script, Cullen argues

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          that the policy language simplifies the case to a showing that the
          policy in question required State Farm to restore vehicles to their
          preloss condition and that a windshield repair cannot do so. The
          theory, while dubious, does provide a means to resolve the case on
          a class-wide basis for these members. Therefore, the trial court did
          not err in certifying this class. However, the class definition must
          be restricted to exclude those who had their windshields replaced
          after repair.

2011-Ohio-6621, 970 N.E.2d 1043, at ¶ 56.
          {¶ 10} We accepted State Farm’s discretionary appeal regarding the class
certification and the standards that apply to a review of an order certifying a class
pursuant to Civ.R. 23(B)(2) and (B)(3).
                                     Class Actions
          {¶ 11} A class action is “an exception to the usual rule that litigation is
conducted by and on behalf of the individual named parties only,” Califano v.
Yamasaki, 442 U.S. 682, 700-701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979), and
“[t]o come within the exception, a party seeking to maintain a class action ‘must
affirmatively demonstrate his compliance’ with Rule 23,” Comcast Corp. v.
Behrend, ___ U.S. ___, 133 S.Ct. 1426, 1432, 185 L.Ed.2d 515 (2013), quoting
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, 131 S.Ct. 2541, 2551-2552, 180
L.Ed.2d 374 (2011).
          {¶ 12} Civ.R. 23 provides seven requirements for maintaining a class
action:

          “(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

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                                January Term, 2013

       joinder of all members is impracticable; (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 met.”

Stammco, L.L.C. v. United Tel. Co. of Ohio, 125 Ohio St.3d 91, 2010-Ohio-1042,
926 N.E.2d 292, at ¶ 6, quoting Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67,
71, 694 N.E.2d 442 (1998), citing Civ.R. 23(A) and (B) and Warner v. Waste
Mgt., 36 Ohio St.3d 91, 521 N.E.2d 1091 (1988).
       {¶ 13} This appeal does not challenge the determination of the trial court
that Cullen and the class met the requirements of Civ.R. 23(A), but rather focuses
on whether the class met the requirements of Civ.R. 23(B)(2) and (3), which
allow a class action in either of the following situations:

               (2) the party opposing the class has acted or refused to act
       on grounds generally applicable to the class, thereby making
       appropriate final injunctive relief or corresponding declaratory
       relief with respect to the class as a whole; or
               (3) the court finds that the questions of law or fact common
       to the members of the class predominate over any questions
       affecting only individual members, and that a class action is
       superior to other available methods for the fair and efficient
       adjudication of the controversy.       The matters pertinent to the
       findings include: (a) the interest of members of the class in
       individually controlling the prosecution or defense of separate
       actions; (b) the extent and nature of any litigation concerning the

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       controversy already commenced by or against members of the
       class; (c) the desirability or undesirability of concentrating the
       litigation of the claims in the particular forum; (d) the difficulties
       likely to be encountered in the management of a class action.

       {¶ 14} Because Civ.R. 23 is virtually identical to Fed.R.Civ.P. 23, we
have recognized that “federal authority is an appropriate aid to interpretation of
the Ohio rule.” Marks v. C.P. Chem. Co., Inc., 31 Ohio St.3d 200, 201, 509
N.E.2d 1249 (1987). In Marks, we reviewed certification of a class action against
the manufacturer, distributor, and installers of foamed-in-place insulation which
allegedly emitted dangerous levels of formaldehyde. In the complaint, the class
representative sought injunctive and declaratory relief ordering future diagnostic
testing for every class member. The trial court denied certification pursuant to
Civ.R. 23(B)(2) and (B)(3), and the court of appeals reversed. We reinstated the
trial court’s decision that Civ.R. 23(B)(2) did not permit class certification,
relying on decisions of federal circuit courts construing Fed.R.Civ.P. 23(b)(2) and
holding that “this provision is inapplicable where the primary relief requested is
damages.” Marks at 203, citing Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2d
Cir.1968), vacated on other grounds, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d
732 (1974), and School Dist. of Lancaster v. Lake Asbestos of Quebec, Ltd., 789
F.2d 996 (3d Cir.1986). We also reversed the appellate court’s determination that
the class action could proceed pursuant to Civ.R. 23(B)(3), because individual
questions—such as the products used, the manner of their storage and installation,
and defects in the structures where installed, which affected the emission of
formaldehyde—predominated over common ones.
                    The Rigorous Analysis of the Trial Court
       {¶ 15} In Comcast, 133 S.Ct. at 1432, 185 L.Ed.2d 515, quoting Wal–
Mart, 131 S.Ct. at 2551-2552, 180 L.Ed.2d 374, the court stated that Civ.R. 23

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                                 January Term, 2013

“ ‘does not set forth a mere pleading standard.’ * * * Rather, a party must not only
‘be prepared to prove that there are in fact sufficiently numerous parties, common
questions of law or fact,’ typicality of claims or defenses, and adequacy of
representation, as required by Rule 23(a). * * * The party must also satisfy
through evidentiary proof at least one of the provisions of Rule 23(b).” And this
court has held that a party seeking certification pursuant to Civ.R. 23 bears the
burden of demonstrating by a preponderance of the evidence that the proposed
class meets each of the requirements set forth in the rule. Warner v. Waste Mgt.,
36 Ohio St.3d at 94, 521 N.E.2d 1091; see also Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).
       {¶ 16} Moreover, a trial court must conduct a rigorous analysis when
determining whether to certify a class pursuant to Civ.R. 23 and may grant
certification only after finding that all of the requirements of the rule are satisfied;
the analysis requires the court to resolve factual disputes relative to each
requirement and to find, based upon those determinations, other relevant facts,
and the applicable legal standard, that the requirement is met. State ex rel. Davis
v. Pub. Emps. Retirement Bd., 111 Ohio St.3d 118, 2006-Ohio-5339, 855 N.E.2d
444, at ¶ 20, citing Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d at 70, 694 N.E.2d
442 (1998); see also Comcast, 133 S.Ct. at 1432, 185 L.Ed.2d 515, Wal-Mart,
131 S.Ct. at 2551, 180 L.Ed.2d 374, and Initial Pub. Offering Sec. Litigation, 471
F.3d 24, 40-41 (2d Cir.2006) (“In re IPO”).
       {¶ 17} In Ojalvo v. Bd. of Trustees of Ohio State Univ., 12 Ohio St.3d
230, 233, 466 N.E.2d 875 (1984), we stated, “Class action certification does not
go to the merits of the action.” (Emphasis sic.) However, deciding whether a
claimant meets the burden for class certification pursuant to Civ.R. 23 requires the
court to consider what will have to be proved at trial and whether those matters
can be presented by common proof.              7AA Wright, Miller & Kane, Federal
Practice and Procedure, Section 1785 (3d Ed.2005). Thus, Wal-Mart instructs

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that in resolving a factual dispute when a requirement of Civ.R. 23 for class
certification and a merit issue overlap, a trial court is permitted to examine the
underlying merits of the claim as part of its rigorous analysis, but only to the
extent necessary to determine whether the requirement of the rule is satisfied.
Wal-Mart at 2551-2552; Ellis v. Costco Wholesale Corp., 657 F.3d 970, 981 (9th
Cir.2011).
       {¶ 18} In Comcast, the Supreme Court reiterated that “it ‘may be
necessary for the court to probe behind the pleadings before coming to rest on the
certification question,’ and that certification is proper only if ‘the trial court is
satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been
satisfied.’ ” Comcast, 133 S.Ct. at 1432, 185 L.Ed.2d 515, quoting Wal-Mart,
131 S.Ct. at 2541, quoting Gen. Tel. Co. of the Southwest v. Falcon, 457 U.S.
147, 160-161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). The court noted that “[t]he
same analytical principles govern Rule 23(b)” and explained that “[s]uch an
analysis will frequently entail ‘overlap’ with the merits of the plaintiff’s
underlying   claim”    because    “ ‘ “class   determination   generally    involves
considerations that are enmeshed in the factual and legal issues comprising the
plaintiff’s cause of action.” ’ ” Comcast at 1432, quoting Wal-Mart at 2551,
quoting Gen. Tel. Co. of the Southwest at 160.
                                 Standard of Review
       {¶ 19} “A trial judge has broad discretion in determining whether a class
action may be maintained and that determination will not be disturbed absent a
showing of an abuse of discretion.” Marks, 31 Ohio St.3d 200, 509 N.E.2d 1249,
syllabus; see also Howland v. Purdue Pharma L.P., 104 Ohio St.3d 584, 2004-
Ohio-6552, 821 N.E.2d 141, at ¶ 17. A trial court, however, abuses its discretion
when its decision is “unreasonable, arbitrary, or unconscionable.”         Wilson v.
Brush Wellman, Inc., 103 Ohio St.3d 538, 2004-Ohio-5847, 817 N.E.2d 59, at
¶ 30. This standard applies to the ultimate decision of the trial court, Marks,

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syllabus, as well as to its determination regarding each requirement of the rule.
See In re IPO, 471 F.3d at 40-41.
        {¶ 20} However, as we clarified in Eastley v. Volkman, 132 Ohio St.3d
328, 2012-Ohio-2179, 972 N.E.2d 517, “[i]n a civil case, in which the burden of
persuasion is only by a preponderance of the evidence, rather than beyond a
reasonable doubt, evidence must still exist on each element (sufficiency) and the
evidence on each element must satisfy the burden of persuasion (weight).” Id. at
¶ 19.
                            Certification of the Class
                                    Civ.R. 23(B)(2)
        {¶ 21} Civ.R. 23(B)(2) provides that class treatment may be maintained
when “the party opposing the class has acted or refused to act on grounds
generally applicable to the class, thereby making appropriate final injunctive
relief or corresponding declaratory relief with respect to the class as a whole.”
Claims for individualized relief are not compatible with Civ.R. 23(B)(2), because
the relief sought must affect the entire class at once. Wal-Mart, 131 S.Ct. at
2557-2558, 180 L.Ed.2d 374. Thus, the Supreme Court clarified in Wal-Mart that
Fed.R.Civ.P. 23(b)(2)

        applies only when a single injunction or declaratory judgment
        would provide relief to each member of the class. It does not
        authorize class certification when each individual class member
        would be entitled to a different injunction or declaratory judgment
        against the defendant.      Similarly, it does not authorize class
        certification when each class member would be entitled to an
        individualized award of monetary damages.

(Emphasis sic.) 131 S.Ct. at 2557.

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          {¶ 22} For these reasons, certification depends on “what type of relief is
primarily sought, so where the injunctive relief is merely incidental to the primary
claim for money damages, Civ.R. 23(B)(2) certification is inappropriate.” Wilson
v. Brush Wellman, Inc., 103 Ohio St.3d 538, 2004-Ohio-5847, 817 N.E.2d 59, at
¶ 17.
          {¶ 23} In the instant case, the court of appeals appears to have relied on
our decision in Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67, 694 N.E.2d 442,
which it viewed as holding that when the Civ.R. 23(A) prerequisites have been
met and injunctive or declaratory relief has been requested, the action should be
allowed to proceed pursuant to subdivision (B)(2), without the need for
conducting a rigorous analysis. However, Hamilton does not allow a court to
dispense with the more rigorous analysis of whether a class should be certified.
Instead, Hamilton directs that “[t]he trial court is required to carefully apply the
class action requirements and conduct a rigorous analysis into whether the
prerequisites of Civ.R. 23 have been satisfied.” Id. at 70. We did not create an
exception to this requirement for actions brought pursuant to Civ.R. 23(B)(2), but
rather we emphasized that certification of a class is not permitted by Civ.R.
23(B)(2) when the primary relief sought is damages, not injunctive or declaratory
relief.
          {¶ 24} Furthermore, Hamilton is distinguishable from this case on its
facts. There, the class sought to enjoin the practice of overcharging interest and
misamortizing loans. We concluded that without injunctive or declaratory relief,
the class would not be able to recover for ongoing injuries caused to each class
member by continuing practices. In contrast, the proposed Cullen class seeks a
declaration “establishing that State Farm’s practices as herein described are illegal
and/or violative of the terms of the standard policies and the obligations owed by
fiduciaries under Ohio law,” as well as one “establishing the damages and
remedies that are due to them.” This does not allege that any ongoing practice

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continues to injure all class members, some of whom, like Cullen himself, are no
longer State Farm policyholders and could not be injured by future actions taken
by State Farm. And for any current policyholders to be harmed by this practice,
they necessarily would have to suffer another damaged windshield that State
Farm repaired rather than replaced.
       {¶ 25} As the Supreme Court explained in Wal-Mart, “The key to the
(b)(2) class is ‘the indivisible nature of the injunctive or declaratory remedy
warranted—the notion that the conduct is such that it can be enjoined or declared
unlawful only as to all of the class members or as to none of them.’ ” (Emphasis
added.) 131 S.Ct. at 2557, 180 L.Ed.2d 374, quoting Nagareda, Class
Certification in the Age of Aggregate Proof, 84 N.Y.U.L.Rev. 97, 132 (2009). In
this case, claimants have not demonstrated that all class members would benefit
from the declaratory relief sought because, for example, some of the class
members are not currently policyholders.
       {¶ 26} The appellate court also relied on Allison v. Citgo Petroleum
Corp., 151 F.3d 402 (5th Cir.1998), for the proposition that certification of a class
pursuant to Civ.R. 23(B)(2) is permissible when “the relief sought includes
money damages that require individualized analyses as to the proper amount, but
that relief flows from the declaratory judgment sought.” Cullen, 2011-Ohio-6621,
970 N.E.2d 1043, at ¶ 50. But in Wal-Mart, the court questioned the Fifth
Circuit’s conclusion that the federal analogue to Civ.R. 23(B)(2) permits
certification when the monetary damages sought are “incidental to requested
injunctive or declaratory relief.” 131 S.Ct. at 2560.
       {¶ 27} Even if Civ.R. 23(B)(2) did allow certification when the monetary
damages are only incidental to the declaratory relief, the damages in this case are
not merely incidental to the declaratory relief but, rather, are the primary relief
sought. The effect of a declaration on members of the proposed class could
establish liability, thereby allowing an individualized award of monetary damages

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to each class member. However, claims for declaratory relief that merely lay a
foundation for subsequent determinations regarding liability or that facilitate an
award of damages do not meet the requirement for certification as set forth in
Civ.R. 23(B)(2). Kartman v. State Farm Mut. Auto. Ins. Co., 634 F.3d 883, 893
(7th Cir.2011) (“this case is unsuitable for class certification: An injunction would
not provide ‘final’ relief as required by Rule 23(b)(2). An injunction is not a final
remedy if it would merely lay an evidentiary foundation for subsequent
determinations of liability”); Richards v. Delta Air Lines, Inc., 453 F.3d 525, 530
(D.C.Cir.2006).
         {¶ 28} Accordingly, Cullen’s action seeking a declaration that State
Farm’s practices are illegal and violated fiduciary obligations merely lays a
foundation for a subsequent individual determination of liability and does not
satisfy the requirements for class certification pursuant to Civ.R. 23(B)(2).
                                   Civ.R. 23(B)(3)
         {¶ 29} Certification pursuant to Civ.R. 23(B)(3) requires the trial court to
make two findings: first, “that the questions of law or fact common to the
members of the class predominate over any questions affecting only individual
members” and, second, “that a class action is superior to other available methods
for the fair and efficient adjudication of the controversy.” This inquiry requires a
court to balance questions common among class members with any dissimilarities
between them, and if the court is satisfied that common questions predominate, it
then should “consider whether any alternative methods exist for resolving the
controversy and whether the class action method is in fact superior.” Ealy v.
Pinkerton Govt. Servs., Inc., 4th Cir. No. 12-1252, 2013 WL 980035, *7 (Mar. 14,
2013).
         {¶ 30} “For common questions of law or fact to predominate, it is not
sufficient that such questions merely exist; rather, they must present a significant
aspect of the case.     Furthermore, they must be capable of resolution for all

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                                January Term, 2013

members in a single adjudication.” Marks, 31 Ohio St.3d at 204, 509 N.E.2d
1249. “ ‘To meet the predominance requirement, a plaintiff must establish that
issues subject to generalized proof and applicable to the class as a whole
predominate over those issues that are subject to only individualized proof.’ ”
Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 544 (6th Cir.2012), quoting
Randleman v. Fid. Natl. Title Ins. Co., 646 F.3d 347, 352-353 (6th Cir.2011),
citing Beattie v. CenturyTel, Inc., 511 F.3d 554, 564 (6th Cir.2007).
        {¶ 31} Rather than determining that Cullen proved compliance with
Civ.R. 23(B)(3) by a preponderance of the evidence, the appellate court
hypothesized that “if Cullen’s theory of the case is believed, the use of a common
plan to steer claimants to opt for repair rather than replacement or disclosure of a
cash payment for the value of the glass, less deductible, is a significant class-wide
issue.” (Emphasis added.) 2011-Ohio-6621, 970 N.E.2d 1043, at ¶ 21. Thus, in
reviewing the question of whether State Farm violated a duty to fully disclose all
pertinent benefits and coverages pursuant to Ohio Adm.Code 3901-1-54(E)(1),
the court did not evaluate the evidence presented to the trial court but noted only
that “Cullen argues that this was not done.” (Emphasis added.) Id. at ¶ 22. And
although the appellate court recognized that these issues were “hotly contested by
the parties,” it concluded that “none of these issues need be decided at this time
because class certification is not akin to a motion for summary judgment.” Id. at
¶ 24.
        {¶ 32} Similarly, when deciding whether the pre-1997 policies obligated
State Farm to restore the claimant’s vehicle to preloss condition and whether
expert testimony could establish that repair of a windshield will never return it to
preloss condition, the appellate court declined to consider the merits of the
claim—even though the court described this theory of recovery as “dubious”—but
presumed that this theory “provide[s] a means to resolve the case on a class-wide
basis for these members.” Id. at ¶ 56.

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       {¶ 33} Most importantly, the crux of Cullen’s class action is that the
insurance policies at issue provided policyholders with the option of a cash
payment in lieu of repair or replacement of the windshield, but the appellate court
did not determine whether the policies provided any such benefit, deciding that
“[t]his goes to the heart of the merits of the case and is inappropriate at this point.
Class certification does not address the merits of the claim.” 2011-Ohio-6621,
970 N.E.2d 1043, at ¶ 55. The appellate court further noted, “The trial court
examined these issues and determined that Cullen has raised a colorable claim
sufficient to satisfy the Civ.R. 23 standards. That was not an abuse of discretion.”
(Emphasis added.) Id. at ¶ 26.
       {¶ 34} A colorable claim does not satisfy the requirements of Civ.R. 23.
Nor can compliance with the rule be presumed from allegations in a complaint.
Rather, in this instance, Cullen had to demonstrate, and the trial court had to find,
that questions common to the class in fact predominate over individual ones, and
proof of predominance necessarily overlaps with proof of the merits in this case.
Because the appellate court rejected any consideration of the underlying merits, it
did not review whether the trial court conducted a rigorous analysis or whether
sufficient evidence supported the trial court’s findings.
       {¶ 35} Further, the appellate court did not even consider whether any of
State Farm’s defenses to liability raise individualized issues not susceptible of
generalized proof. For example, State Farm asserts that it is not liable if an
individual class member knowingly chose windshield repair—but individual
consent and knowledge cannot be proven with common evidence. And if a
windshield repair could return a vehicle to preloss condition—a question that
neither the trial nor the appellate court resolved—State Farm’s liability would be
subject to individual examinations of each vehicle, not common questions.
       {¶ 36} Rather than remand this matter to the court of appeals to consider
these issues, our review of the record reveals that individual issues overwhelm the

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                                  January Term, 2013

questions common to the class, and the trial court therefore abused its discretion
in certifying the class action.
        {¶ 37} First, this putative class action is premised on State Farm’s alleged
failure to disclose policy benefits through Lynx by using a script to steer insureds
toward windshield repair. However, the class includes claims made beginning in
1991, even though Lynx began administering claims in 1997, and prior to that
time individual State Farm agents handled windshield claims. But even after
Lynx began to administer claims, policyholders had various individual, unscripted
conversations with Lynx representatives, insurance agents, and repair-shop
personnel, and there is no common proof of what any individual policyholder
knew when consenting to windshield repair. Determining whether State Farm
breached any obligations to insureds necessarily entails an individualized inquiry
into each of these communications.
        {¶ 38} Second, different versions of the policy covered putative class
members on claims that span a period greater than 20 years. The policy in effect
from 1991 to March 31, 1998, stated that State Farm would “pay for loss” to the
policyholder’s vehicle and that it had the right to settle the loss by paying the
actual cash value of the property at the time of the loss, as determined by
agreement or appraisal. State Farm could also pay to repair or replace the
damaged property, and the policy limited its liability to the lower of the actual
cash value or the costs to repair or replace the property. But even if, as Cullen
contends, this language allowed class members to elect to receive the actual cash
value of the windshield, the policy provides that “[a]ctual cash value is
determined by the market value, age and condition at the time the loss occurred.
Any deductible amount that applies is then subtracted.”      Significant individual
questions therefore exist concerning the market value, age, and condition of a
particular windshield, the costs of repairing or replacing it, and the amount of the
deductible in establishing State Farm’s liability to any given class member.

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                              SUPREME COURT OF OHIO

       {¶ 39} Policies issued between April 1, 1998, and August 31, 2005,
contained the same language as the prior policies, but they also stated: “If we
offer to pay for repair of the damaged windshield glass instead of replacement of
the windshield and you agree to have such repair made, we will pay the full cost
of repairing the windshield regardless of your deductible.” Thus, in addition to
the individual questions regarding the actual cash value of the windshield
compared to the costs of its repair or replacement, this version of the policy
introduces new individualized questions concerning whether the policyholder
knowingly chose and consented to repair in exchange for State Farm’s waiver of
the deductible.
       {¶ 40} State Farm later removed the deductible waiver for windshield
repairs from subsequent policies, but individual questions regarding the actual
cash value of a particular windshield and the costs to repair or replace it remain
under this third variation of the policy.
       {¶ 41} Third, the covered automobile, and therefore the value of the
windshield compared to the cost of repairing or replacing it, varied. Multiple
replacement windshields were available to glass shops over the decades-long
period that the proposed class spans, and the costs of these windshields and the
materials and labor needed to install them differed. State Farm adjusted the price
it would pay based on the “market designation” assigned to each county, and
these designations changed over time. The features of the covered windshield,
such as tinting and rain sensors, also affected value and replacement cost. Thus,
the costs to repair or replace a particular windshield varied by make, model, and
year of the covered vehicle and by time and place of repair.
       {¶ 42} Fourth, expert testimony presented in this case does not provide
common proof that repairs failed to return all windshields to preloss condition.
Cullen proffered the opinion of Craig Carmody that “[w]indshield repair fails to
restore the windshield glass to an acceptable condition in terms of appearance and

                                            18
                                January Term, 2013

functionality in all cases.” But Carmody claimed to have examined only 17 to 22
repaired windshields, and it does not appear that his theories on glass repair have
been thoroughly tested, peer-reviewed, evaluated for rate of error (including
sampling error), or generally accepted in the scientific community. See generally
Terry v. Caputo, 115 Ohio St.3d 351, 2007-Ohio-5023, 875 N.E.2d 72, ¶ 24-25,
citing Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct.
2786, 125 L.Ed.2d 469 (1993). However, even if the trial court found Carmody
qualified as an expert witness and his theories scientifically reliable, his opinion
that a repair fails to restore the windshield to preloss condition does not establish
that common questions predominate.
       {¶ 43} Although Carmody testified that a repaired windshield will
eventually fail, he could not say whether that failure would occur during the life
of the vehicle or even during a ten-year period.        Although he asserted that
repaired windshields were more prone to failure, Carmody agreed that “you’d
have to look at each of those windshields” to determine whether the PVB
interlayer of laminated glass had been compromised and affected the function of
the glass, causing it to fail. He also knew of no report of or statistics regarding
windshield repairs causing delamination and spalling of glass, and he admitted
that there is “no strong data” showing that the strength of repaired glass does not
equal the original strength of laminated glass; moreover, he understood that one
study found Ultra Bond resin to be as strong as glass and that the type of resin
used in the repair “has some effect on the quality of the repair in addition to the
other variables.”
       {¶ 44} Thus, Carmody acknowledged “the huge variation that occurs in
any repair, even in controlled conditions.” And notably, in examining Cullen’s
windshield with a microscope, Carmody could not determine that the repair had
failed or that the crack had spread, and his assertions that a repaired windshield

                                         19
                            SUPREME COURT OF OHIO

could delaminate and spall did not apply to Cullen’s windshield, because the one-
tenth-inch chip in it had not penetrated the PVB interlayer.
       {¶ 45} Carmody also criticized a repaired windshield as not being as
transparent as new glass. But he acknowledged that the transparency of repaired
glass could “depend on the repair” and could be affected by real-world conditions,
such as windshield-wiper abrasion and exposure to UV light and chemicals in the
air. He also agreed that repair can restore transparency to windshield damage,
and he did not know whether tests had shown that repairs can restore windshields
to the transparency required by safety standards.
       {¶ 46} Cullen’s other proffered expert, Gary Derian, admitted that he had
no expertise in windshield repair and relied on Camody’s glass analysis in
forming his opinion that repairing a windshield failed to restore it to preloss
condition, both aesthetically and from a safety standpoint. But he acknowledged
that determining whether the resin in a repaired windshield had degraded and
failed required individually examining that windshield and that performance
varied based on the type of resin used and conditions such as “temperature,
humidity, cleanliness, preparation.” When asked “whether or not the color of a
resin changes over time,” Derian indicated that a change could not be assumed:
“One would want to inspect and determine how much in cases of that, that
particular [resin].” And when asked how he would decide whether a repaired
windshield violated established standards, Derian responded, “[I]t would have to
be done on a car by car basis with an automobile engineer present at each repair.”
       {¶ 47} Both Carmody and Derian asserted that the repair could not restore
a windshield to preloss condition, but neither had sufficient evidentiary
foundation for those opinions. Derian relied on Carmody’s report, and Carmody
in turn based his opinion on an unscientific sample of at most 22 vehicles in
addition to a single study questioning whether resin should be used to repair
longer cracks. Neither Carmody nor Derian performed any tests on repaired

                                         20
                               January Term, 2013

windshields to quantify the strength, durability, and transparency of repairs, and
neither knew of any tests or studies that proved their opinions and methods.
       {¶ 48} Thus, this expert testimony raises more individual questions than it
resolves, and deciding whether State Farm breached any duty to restore
policyholders’ windshields to preloss condition will require an individual
inspection of each class member’s windshield to determine the preloss and
postrepair conditions, and these individualized issues necessarily predominate
over any questions common to the class.
       {¶ 49} Our analysis conforms with Avery v. State Farm Mut. Auto. Ins.
Co., 216 Ill.2d 100, 138, 296 Ill.Dec. 448, 835 N.E.2d 801 (2005), where the
Supreme Court of Illinois considered a claim for breach of contract that depended
on restoring an automobile to its preloss condition and held that “[a] necessary
first step in making this showing would be to examine each class member’s
vehicle to determine its preloss condition.”      It further explained that “the
determination of the preloss condition of each subclass member’s vehicle would
require the individual examination of hundreds of thousands, if not millions, of
vehicles. Undoubtedly, these examinations would overwhelm any question
common to the subclass, rendering it impossible for such questions to
predominate.” Id. For this reason, the court concluded, “a claim for breach of the
preloss condition promise cannot be maintained as a class action.” Id.
       {¶ 50} In sum, the determination of preloss and postrepair condition, the
preloss value and the costs to repair or replace a particular windshield, and the
individual knowledge and consent of each class claimant entail inspection of tens
of thousands of automobiles and an individualized assessment of the damages
each class member sustained, if any. For these reasons, this action does not
satisfy the predominance requirement of Civ.R. 23(B)(3).

                                        21
                            SUPREME COURT OF OHIO

                                   Conclusion
       {¶ 51} Review of the certification of a class action requires the appellate
court to determine whether the trial court conducted a rigorous analysis that
resolved all relevant factual disputes and found by a preponderance of the
evidence that the requirements of Civ.R. 23 have been satisfied. In making this
determination, some consideration of the underlying merits of the cause of action
may be necessary.
       {¶ 52} Here, this action does not satisfy the requirements for class
certification pursuant to Civ.R. 23(B)(2), because the declaratory relief sought is
at best only incidental to an award of monetary damages, and the trial court
abused its discretion in granting class certification pursuant to Civ.R. 23(B)(3),
because a rigorous analysis of the evidence presented by the parties demonstrates
that individual questions predominate over issues common to the class.
       {¶ 53} Accordingly, we reverse the judgment of the appellate court and
remand this matter to the trial court for further proceedings consistent with this
opinion.
                                                                Judgment reversed
                                                             and cause remanded.
       O’CONNOR, C.J., and KENNEDY and MCFARLAND, JJ., concur.
       LANZINGER, J., concurs in paragraph three of the syllabus and in the
judgment.
       PFEIFER and O’NEILL, JJ., dissent.
       MATTHEW W. MCFARLAND, J., of the Fourth Appellate District, sitting for
FRENCH, J.
                              __________________
       O’NEILL, J., dissenting.
       {¶ 54} This is not a difficult class to define, and this case represents a
perfect opportunity to breathe life into class actions in Ohio.      Class actions

                                        22
                                January Term, 2013

promote judicial economy and allow resolution of issues that are economically
unsolvable via individual actions. It goes without saying that one lawsuit that
resolves one question is preferable to one thousand lawsuits on the same question.
For the following reasons, I must respectfully dissent.
       {¶ 55} The majority’s analysis fails to differentiate between the factual
showing that plaintiffs must make to be entitled to class certification and the
factual showing that plaintiffs must make to survive a motion for summary
judgment. While it may be difficult to separate them in some cases, here it is not.
Civ.R. 23(B)(3) requires that “the questions of law or fact common to the
members of the class predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for the fair
and efficient adjudication of the controversy.” The theory justifying certification
of the class in this case is twofold. First, it is alleged that State Farm had an
obligation to disclose to its policyholders that it would pay the actual cash value
or replacement cost of a windshield, less the policy deductible, in the same
circumstances in which it would pay for the cheaper and less reliable repair of a
windshield. In addition, it is alleged that State Farm and its subcontractor Lynx
Services used a common plan, including failure to disclose other options, to steer
policyholders away from replacement toward the less costly and less reliable
repair option.
       {¶ 56} Insofar as the plaintiffs have limited their class definition to those
policyholders who were damaged by these two actions, they have formulated a
class definition that satisfies Civ.R. 23, and their case should be permitted to
proceed in accordance with the appellate court’s decision. And given the fact that
State Farm had already lost a motion for summary judgment before class
certification was even addressed, the argument that the manageability of the class
was not explored by the trial court is not supported by the record. Perhaps it is this
unusual process that inspires the majority to shoehorn the merits of the case into

                                         23
                              SUPREME COURT OF OHIO

its review of the class certification, under the guise of the “rigorous analysis” a
trial court is required to undertake prior to certifying a class. But in so doing, the
majority fails to accord the trial court the deference to which it is entitled.
        {¶ 57} The majority first faults the appellate court for failing to determine
whether the policies in fact provided the option of a cash payout in lieu of repair
or replacement of the windshield, and then faults the trial court for its decision
that “ ‘Cullen has raised a colorable claim sufficient to satisfy the Civ.R. 23
standards.’ * * * (Emphasis added.)” Majority opinion at ¶ 33, quoting the court
of appeals, 2011-Ohio-6621, 970 N.E.2d 1043, at ¶ 26. The majority boldly
asserts that “Cullen had to demonstrate, and the trial court had to find, that
questions common to the class in fact predominate over individual ones * * *.”
Majority opinion at ¶ 34. This holding is irreconcilable with our prior cases, most
notably Ojalvo v. Bd. of Trustees of Ohio State Univ., 12 Ohio St.3d 230, 466
N.E.2d 875 (1984), syllabus, in which we held, “A court abuses its discretion in
denying certification of a class action * * * when it requires a certainty that a
common issue of fact ‘probably exists’ based on the merits of the class claim
* * *.” The majority has not “clarified” Ojalvo, majority opinion at paragraph two
of the syllabus, so much as it has overruled it.
        {¶ 58} And ironically, the appellate court noted that the trial court had
gone too far into the facts of the case at the certification stage by finding that “a
cash-payout option was available and that State Farm failed to disclose that
option.” 2011-Ohio-6621, 970 N.E.2d 1043, at ¶ 55. In its rush to end this
litigation, the majority faults the appellate court for failing to do something that it
had no duty to do under our prior cases, and something that the trial court did in
fact do, at State Farm’s request. The majority has reached the opposite conclusion
on this factual issue from the trial court, but the different perspectives are readily
explained. The majority of this court did not have the benefit of the ten-hour

                                           24
                                  January Term, 2013

certification hearing that the trial court did. That is precisely why we generally
defer to the findings of trial courts.
        {¶ 59} Our review in these matters is for an abuse of discretion. Such an
abuse does not exist in this case. The class certification of the trial court was not
unreasonable, arbitrary, or unconscionable. It should be upheld. Accordingly, I
respectfully dissent.
        PFEIFER, J., concurs in the foregoing opinion.
                                __________________
        Bashein & Bashein Co., L.P.A., W. Craig Bashein, and John P. Hurst; and
Paul W. Flowers Co., L.P.A., and Paul W. Flowers, for appellee.
        Baker & Hostetler, L.L.P., Mark A. Johnson, Joseph E. Ezzie, Robert J.
Tucker, and Michael K. Farrell, for appellant.
        Carpenter, Lipps & Leland, L.L.P., Michael H. Carpenter, and Katheryn
M. Lloyd, urging reversal for amici curiae Nationwide Property and Casualty
Insurance Company, Nationwide Mutual Fire Insurance Company, Nationwide
Mutual Insurance Company, Nationwide Insurance Company of America,
Nationwide Assurance Company, and Nationwide General Insurance Company.
        Thompson Hine, L.L.P., and Stephen J. Butler; and Severson & Werson
and Jan T. Chilton, urging reversal for amicus curiae American Financial Services
Association.
        Thompson Hine, L.L.P., Elizabeth B. Wright, Brian A. Troyer, and
Stephanie M. Chmiel, urging reversal for amici curiae Washington Legal
Foundation and Ohio Chemistry Technology Council.
        Vorys, Sater, Seymour & Pease, L.L.P., Philip F. Downey, Robert N.
Webner, and Robert J. Krummen, urging reversal for amici curiae Grange
Indemnity Insurance Company and Grange Mutual Casualty Company.

                                          25
                            SUPREME COURT OF OHIO

       Vorys, Sater, Seymour & Pease, L.L.P., Thomas E. Szykowny, and
Michael Thomas, urging reversal for amicus curiae National Association of
Mutual Insurance Companies and Ohio Insurance Institute.
       Bricker & Eckler, L.L.P., Kurtis A. Tunnell, and Anne Marie Sferra; and
Shook, Hardy & Bacon, L.L.P., Victor E. Schwartz, Mark A. Behrens, and Cary
Silverman, urging reversal for amicus curiae Ohio Alliance for Civil Justice.
       Shook, Hardy & Bacon, L.L.P., Victor E. Schwartz, Mark A. Behrens, and
Cary Silverman, urging reversal for amici curiae Ohio Chamber of Commerce,
Ohio Alliance for Civil Justice, Chamber of Commerce of the United States of
America, and American Tort Reform Association.
                           ______________________

                                        26