Court Opinion

ID: 7920946
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:22:40.377483+00
Date Added: 2024-06-11T16:33:02.652986
License: Public Domain

BATTAGLIA, J.,
dissenting, in which HARRELL, J., joins.
The majority has developed a paradigm that will contribute to confusion among trial courts regarding class certification, tender of damages, and the appropriateness of punitive damages when compensatory damages cannot be awarded, so I respectfully dissent. The better approach to resolving the issues in this case is to determine whether Mr. Frazier was entitled to punitive damages, and then, whether the class action should have been dismissed, because the appropriate focus is whether the entire relief sought by Mr. Frazier had been tendered by Crystal Ford.
The parties disagree as to whether Crystal Ford’s tender was sufficient to moot the claims, focusing on the tender’s effect on Mr. Frazier’s demand for punitive damages under his common law fraud count.
Mr. Frazier contends before us that the tender of only the compensatory damages demanded did not provide him with the full relief to which he was entitled, and so, it was not *168sufficient to render his causes of action moot. He argues that punitive damages were not rendered unavailable by the lack of an award of compensatory damages in this case, because Crystal Ford’s admission that it had committed the alleged wrongs by tendering the requested compensatory damages obviated the need for a formal award.
Crystal Ford responds by arguing that Mr. Frazier was afforded all of the compensatory damages he sought in his complaint, such that he could not be awarded any more compensatory damages by a trier of fact, rendering punitive damages unavailable as a matter of law. Crystal Ford asserts that, because of the unavailability of punitive damages, it tendered to Mr. Frazier all the relief to which he was entitled and “tender of payment by a defendant of the amount sought as damages in litigation entitles the defendant to dismissal, as the plaintiffs claim has been rendered moot by the tender,” relying on A.A. Allen Revivals, Inc. v. Campbell, 353 F.2d 89 (5th Cir.1965) (per curiam).
Resolution in cases involving the issue of whether the tender of relief after suit is filed renders a complaining party’s claims moot depends on whether the tender is of all or less than all of the relief to which the complaining party is entitled. Cases are legion that post-suit tender of all the relief a party is entitled to in a complaint is sufficient to moot the case. E.g. Holstein v. City of Chicago, 29 F.3d 1145 (7th Cir.1994); A.A. Allen Revivals, Inc. v. Campbell, 353 F.2d 89 (5th Cir.1965) (per curiam); Yu v. International Business Machines Corp., 314 Ill.App.3d 892, 247 Ill.Dec. 841, 732 N.E.2d 1173 (2000). In Holstein v. City of Chicago, 29 F.3d 1145 (7th Cir.1994), for example, the Court of Appeals for the Seventh Circuit consolidated two appeals, one by Brian Grove and the other by Robert Holstein, from dismissals of claims for costs associated with allegedly improper towing by the City of Chicago. Id. at 1146. Mr. Grove’s car was towed on two successive evenings while he was attending baseball games; he contested the validity of the tows at an administrative hearing, pursuant to a local ordinance, but lost. Id. Thereafter, Mr. Grove filed a class action complaint seeking to have the towing statute and *169the post-tow hearing procedures declared unconstitutional and for the return of the fees paid for the towing and storage. Id. at 1146-47. After Mr. Grove filed suit, the City informed him that it had determined that the tows were inappropriate and tendered to him all the costs he paid as a result of the improper tows; Mr. Grove, however, rejected the tender. Id. The federal district court judge granted summary judgment to the City then, based on mootness. Id. at 1147.
The Seventh Circuit agreed. In so holding, the Court stated, “Grove may not spurn this offer of all the damages he is owed and proceed to trial. See Alliance to End Repression v. City of Chicago, 820 F.2d 873, 878 (7th Cir.1987). ‘Once the defendant offers to satisfy the plaintiffs entire demand, there is no dispute over which to litigate, and a plaintiff who refuses to acknowledge this loses outright, under Fed.R.Civ.P. 12(b)(1), because he has no remaining stake.”’ Id. at 1147, quoting Rand v. Monsanto Co., 926 F.2d 596, 598 (7th Cir. 1991).
In A.A Allen Revivals v. Campbell, A.A. Allen Revivals filed a complaint against the United States to recover taxes erroneously collected, seeking a refund of the taxes paid with interest. 353 F.2d 89, 90 (5th Cir.1965) (per curiam). After the complaint had been filed, the Government tendered to A.A. Allen Revivals the full amount of the taxes collected with interest, which A.A. Allen Revivals did not accept. Id. The trial judge then dismissed the complaint as moot because A.A. Allen had received the relief it sought in its complaint. Id. The Court of Appeals for the Fifth Circuit affirmed, holding that the tender of the full amount sought in the complaint was sufficient to justify dismissal of the action. Id.
In Yu v. International Business Machines Corp., 314 Ill. App.3d 892, 247 Ill.Dec. 841, 732 N.E.2d 1173 (2000), the Illinois intermediate appellate court considered the dismissal of a complaint of a health care practitioner who had purchased a medical device in 1996 believing that it was “year 2000(Y2K) compliant,” when, in fact, it was not. Id., 247 Ill.Dec. 841, 732 N.E.2d at 1175. After being notified that the upgrade to *170make the device “year 2000(Y2K) compliant” would cost him more than $2,000, Dr. Yu filed a class action suit against the manufacturer for compensatory damages for breach of warranty and violations of the Illinois consumer protection statute. Id. After suit was filed, the manufacturer tendered Dr. Yu a free copy of the software upgrade, which he accepted. Id., 247 Ill.Dee. 841, 732 N.E.2d at 1176. The suit was then dismissed as moot, id., 247 Ill.Dec. 841, 732 N.E.2d at 1177, and the Illinois intermediate appellate court affirmed, reasoning that Dr. Yu could not point to any damages caused by the alleged problem other than the money he would have had to spend to upgrade his software, thereby rendering moot his case. Id., 247 Ill.Dec. 841, 732 N.E.2d at 1178-79.
Conversely, it is also well-established that tender made following the filing of a lawsuit, which is less than the full relief to which a complaining party is entitled, is not sufficient to render the case moot. In Greisz v. Household Bank, the plaintiff purchased a furnace-air conditioner using a credit card issued by Household Bank. 176 F.3d 1012 (7th Cir.1999). When Ms. Greisz received her statement, it listed the purchase price of the unit as $1,070 more than she believed it should have been. Id. at 1035. Ms. Greisz refused to pay any part of the charge and filed suit, alleging various violations of federal and state law on behalf of herself and a putative class. Id. The United States District Court dismissed all of her claims except part of one count under the Truth in Lending Act, Section 1632(a) of Title 15, United States Code, that entitled her to $1,000 in damages if she could prove a violation of the Act. Id. at 1039-40. Thereafter, the bank tendered to her $1,200 and reasonable costs and attorneys’ fees. Ms. Greisz spurned this offer, and the District Court granted summary judgment to the bank and dismissed the action on the ground that its tender eliminated the case or controversy. Id. at 1014.
The Seventh Circuit affirmed, holding that, because Ms. Greisz did not allege any injury related to the alleged violations of the Truth in Lending Act, she was entitled to only statutory damages in the amount of $1,000 and reasonable *171costs and attorneys’ fees, and the bank’s tender of more than Ms. Greisz could have recovered even were she to have been completely successful eliminated any actual controversy for the court to adjudicate. The Court noted, however, that the Bank’s tender only related to the relief for one claim in the complaint, and so the dismissal was not actually proper because it was not “an offer to settle Greisz’s entire case against the bank,” but affirmed the trial court’s ruling because the plaintiff waived that argument by not raising it. Id. at 1016 (emphasis in original).
In the instant case, the question before us is whether Crystal Ford’s tender of compensatory damages rendered punitive damages under Mr. Frazier’s fraud claim unavailable as a matter of law. The Court of Special Appeals answered this question in the affirmative, relying on our jurisprudence that punitive damages must have a foundation in an award of compensatory damages and on the fact that, because it was undisputed that Mr. Frazier received all of the compensatory damages that he sought in his complaint, “there were no further compensatory damages that Frazier could recover at a trial in the instant case.” Frazier v. Castle Ford, Ltd., 200 Md.App. 285, 296, 27 A.3d 583, 589 (2011).
Punitive damages, under the Count of common law fraud, are governed by various basic principles. Their purpose is to punish a defendant for certain tortious conduct committed with actual malice, Ellerin v. Fairfax Savings, F.S.B., 337 Md. 216, 241-42, 652 A.2d 1117, 1129-30 (1995), and they are not available, absent an award of compensatory damages. Caldor, Inc. v. Bowden, 330 Md. 632, 661, 625 A.2d 959 (1993); see also Philip Morris Inc. v. Angeletti, 358 Md. 689, 773, 752 A.2d 200, 246 (2000); Shabazz v. Bob Evans Farms, Inc., 163 Md.App. 602, 639, 881 A.2d 1212, 1233-34 (2005). Clearly, the tender in the present case was not an “award” as a result of a court approved settlement,1 nor was any judgment regarding *172the compensatory damages ever entered in favor of Mr. Frazier at any time, by any court.2 Each party agrees that Crystal Ford paid Ford Warranty an amount of money sufficient to extend Mr. Frazier’s warranty to the date alleged to be the end date, resulting in Ford sending Mr. Frazier a check for the costs of his car repair except for the agreed-upon deductible. At the motions’ hearing in this case, Mr. Frazier’s attorney conceded that the tender represented all of the compensatory damages sought:
THE COURT: What damages is your client alleging at the present time? Because my understanding is that he has been, everything that he asked for in the complaint, other than attorneys’ fees, have been addressed, because he received his extended warranty, the repair bill that he had incurred when he didn’t have the extended warranty coverage was paid, minus the $100 deductible.
FRAZIER’ S COUNSEL: Yes.
In analyzing the impact of a defending party’s tender of compensatory damages on a demand for punitive damages, I find persuasive the reasoning of the Illinois intermediate appellate court in a series of cases regarding tender, to include: Hayman v. Autohaus on Edens, Inc., 315 Ill.App.3d 1075, 248 Ill.Dec. 721, 734 N.E.2d 1012 (2000), Jones v. William Buick, Inc., 337 Ill.App.3d 339, 271 Ill.Dec. 716, 785 N.E.2d 910 (2003), and Bates v. William Chevrolet/Geo, Inc., 337 Ill.App.3d 151, 271 Ill.Dec. 402, 785 N.E.2d 53 (2003).
In Hayman, Mr. Hayman leased a car from Autohaus with the option to purchase the car at the end of the lease term for *173a fixed price; when he exercised the option to purchase, the price was $299 more than the figure on the lease contract. 248 Ill.Dec. 721, 734 N.E.2d at 1013. Mr. Hayman entered into the purchase contract without noticing the discrepancy but upon returning home and comparing the contracts, he immediately demanded a refund of the $299. Id. Autohaus informed him that the additional money was a service fee and he could either keep the car and get no refund or return it for a full refund. Id. Mr. Hayman immediately began preparations to file suit; Autohaus, however, reversed its position two days after Mr. Hayman made the demand and tendered the $299 fee in refund while permitting him to keep the car. Mr. Hayman spurned this offer and filed a class action complaint against the dealership in which he alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and common-law fraudulent misrepresentation and demanded attorneys’ fees and punitive damages, id., but the trial judge granted Autohaus’s motion to dismiss, reasoning that Mr. Hayman lacked compensatory damages and, therefore, could not state a cause of action. Id., 248 Ill.Dec. 721, 734 N.E.2d at 1013-14.
On appeal, Mr. Hayman argued that the tender was not sufficient to moot his claims, because he had also demanded attorneys’ fees, interest, and punitive damages, all of which could have been supported by the causes of action he plead. Id., 248 Ill.Dec. 721, 734 N.E.2d at 1014. The court first noted that Mr. Hayman was only appealing the dismissal of his common-law fraud and conversion counts, not his counts under the Illinois Consumer Fraud and Deceptive Business Practices Act, under which he was not entitled to attorneys’ fees. Id.
With respect to Mr. Hayman’s demand for punitive damages, the court first noted that Autohaus’s tender was a complete refund for the entire amount demanded and, therefore, “there was no controversy.” Id. The court then reasoned that “[bjecause full payment, not a compromise, was offered to Hayman, thus mooting the controversy, the plaintiff had no right to recover compensatory damages in the trial court” and “[pjunitve damages ‘are in addition to compensatory damages *174and cannot be allowed unless actual damage is shown.’ ” Id., 248 Ill.Dec. 721, 734 N.E.2d at 1015. Thus, the court held that punitive damages were not available to Mr. Hayman.
The court’s analysis regarding the effect of tender on punitive damages, however, is quite different than that employed when it has considered the effect of tender on attorneys’ fees. In Bates v. William Chevrolet/Geo, Inc., 337 Ill.App.3d 151, 271 Ill.Dec. 402, 785 N.E.2d 53 (2003) and Jones v. William Buick, Inc., 337 Ill.App.3d 339, 271 Ill.Dec. 716, 785 N.E.2d 910 (2003), cases in which the Illinois intermediate appellate court held that dismissal was not proper because the tender of only compensatory damages was not sufficient to render moot the entire case, because of the pending demand for attorneys’ fees. In Jones, Ms. Jones purchased a car from William Buick with a down payment of $500, the balance to be financed by a lender found by William Buick; Ms. Jones was able to take immediate possession of the car. 271 Ill.Dec. 716, 785 N.E.2d at 911. Shortly after entering into the contract, Ms. Jones lost her job, and the lender found by William Buick withdrew its offer to finance the car. Id. Ms. Jones returned the car and demanded the return of the down payment via a demand letter from her attorney. Id.
William Buick refunded the $500, but Ms. Jones had already initiated the process of filing suit under the Illinois consumer protection act and for common law fraud, and did so shortly after receiving the check. Id., 271 Ill.Dec. 716, 785 N.E.2d at 912. The trial court dismissed her claims as moot, given William Buick’s tender of the down payment. Id. On appeal, William Buick relied upon Hayman v. Autohaus on Edens, Inc., 315 Ill.App.3d 1075, 248 Ill.Dec. 721, 734 N.E.2d 1012 (2000), for the principle that once William Buick tendered the down payment, Ms. Jones had no injury and the claim was moot. 271 Ill.Dec. 716, 785 N.E.2d at 912. The Illinois intermediate appellate court disagreed and held that, because Ms. Jones had filed her claim under the Illinois Consumer Fraud and Deceptive Business Practices Act, she was entitled to attorneys’ fees if she were to prevail at trial, and William Buick did not tender the full amount of relief requested by *175Ms. Jones, such that summary judgment was not appropriate. Id., 271 Ill.Dec. 716, 785 N.E.2d at 913.
Likewise, in Bates v. William Chevrolet/Geo, Inc., 337 Ill. App.3d 151, 271 Ill.Dec. 402, 785 N.E.2d 53 (2003), the same court again considered a tender that did not include attorneys’ fees. Id., 271 Ill.Dec. 402, 785 N.E.2d at 62. In that case, Ms. Bates had filed suit alleging common law fraud and a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act related to her purchase and financing of a car, id., 271 Ill.Dec. 402, 785 N.E.2d at 62, and the defending party, William Chevrolet, allegedly tendered to her a check for all the compensatory damages she requested, but it was returned unopened. Id., 271 Ill.Dec. 402, 785 N.E.2d at 62. After trial, the jury awarded Ms. Bates compensatory and punitive damages. Id., 271 Ill.Dec. 402, 785 N.E.2d at 55. On appeal, William Chevrolet asserted that it had tendered the compensatory damages to plaintiffs counsel, but “counsel perhaps failed to inform the plaintiff of the offer.” Id., 271 Ill.Dec. 402, 785 N.E.2d at 62. It argued that since the alleged tender of compensatory damages was an offer of the “ ‘full amount’ owed to plaintiff, there remained no actual controversy and the suit was rendered moot.” Id. The court disagreed, holding that, because the suit was filed under the Illinois Consumer Fraud and Deceptive Business Practices Act, the plaintiff was entitled to attorneys’ fees, so the alleged tender was not for the full amount of relief to which she was entitled and the case should not have been dismissed as moot. Id.
The distinction drawn by the intermediate appellate court of Illinois between punitive damages and attorneys’ fees — that attorneys’ fees can accrue after the filing of a suit, while punitive damages do not — is meaningful.3 Once post-filing of *176suit tender of compensatory damages is accomplished, attorneys’ fees can accrue continuously until the matter is fully resolved, thus presenting a cognizable harm sufficient to prevent a case from having been rendered moot by post-suit tender of compensatory damages, unlike punitive damages. See, e.g., Bates, 271 Ill.Dec. 402, 785 N.E.2d at 62 (“Defendant failed to tender the attorney fees recoverable under section 10a(c) of the Consumer Fraud Act, and thus, failed to tender the ‘full amount’ owed to plaintiff.”). Punitive damages, thus, should not be available as a matter of law as a result of the pre-trial tender in the present case.4
The next step in my analysis is Mr. Frazier’s challenge to the denial of class certification. Crystal Ford’s Motion to Deny Class Certification was granted primarily on the ground that the mootness of Mr. Frazier’s individual claim required the dismissal of the class claims.
Courts are split as to whether a motion to certify a class is sufficient to prevent the entire action from becoming moot when the named representative’s claims become moot or whether actual certification of a class is necessary, although the latter, in my estimation, clearly provides the better foundation for identifying class members and their interests. See, e.g., Wheatley v. Board of Education of Township High School District 205, 99 Ill.2d 481, 77 Ill.Dec. 115, 459 N.E.2d 1364 (1984) (holding that because no class was certified at the time the individual claims were dismissed, the class action was *177properly dismissed); Hayman v. Autohaus on Edens, Inc., 315 Ill.App.3d 1075, 248 Ill.Dec. 721, 734 N.E.2d 1012, 1015 (2000) (holding that because no class was certified at the time tender rendered moot Hayman’s claims, dismissal of the entire suit was warranted); DeCoteau v. Nodak Mutual Insurance Company, 636 N.W.2d 432, 437 (N.D.2001) (“When a named plaintiffs individual claim becomes moot before a class has been properly certified or certification has been denied, courts generally hold dismissal of the action is required.”). The rationale for this rule is that the interests of the putative class are not actually before the court until a motion for certification has been granted. See Sosna v. Iowa, 419 U.S. 393, 399, 95 S.Ct. 553, 557, 42 L.Ed.2d 532, 540 (1975) (“When the District Court certified the propriety of the class action, the class of unnamed persons described in the certification acquired a legal status separate from the interest asserted by appellant.”).
The Court of Appeals for the Second Circuit addressed the question of whether a representative plaintiffs claims being rendered moot prior to certification being granted also rendered the entire class action suit moot, in Comer v. Cisneros, 37 F.3d 775 (2nd Cir.1994). In that case, Jessie Comer and three others filed a class action suit alleging that the public housing and assistance programs in Buffalo, New York were discriminatory. In addressing the question of whether the class action was rendered moot by the defending parties’ voluntary cessation of the alleged discriminatory activity prior to certification of the class, the court stated that, “in general, if the claims of the named plaintiffs become moot prior to class certification, the entire class action becomes moot. In contrast, class certification will preserve an otherwise moot claim.” Id. at 798 (citations omitted).
The Second Circuit noted that the United States Supreme Court identified two instances in which this general rule does not apply: when an intervenor steps in and when the claims are “so inherently transitory that the trial court will not have even enough time to rule on a motion for class certification before the proposed representative’s individual interest ex*178pires.” Id. at 799 (internal quotation marks and citation omitted). The court went on to hold that the claims were not actually moot because the alleged harm was “capable of repetition but evading review,” id. at 800-01, but the general rule of law holds true: where a representative plaintiffs claim has been rendered moot before certification is granted, dismissal of the entire action is warranted unless the claims fall into either of the enunciated exceptions. See also Tucker v. Phyfer, 819 F.2d 1030, 1033 (11th Cir.1987) (“In a class action, the claim of the named plaintiff, who seeks to represent the class, must be live both at the time he brings suit and when the district court determines whether to certify the putative class. If the claim is not live, the Court lacks a justiciable controversy and must dismiss the claim as moot.”); Sannon v. United States, 631 F.2d 1247, 1252 (5th Cir.1980) (holding that the dismissal of a class action suit after the representative plaintiffs claims became moot was proper, noting that, “ ‘[b]e-cause the class action was never properly certified nor the class properly identified by the District Court,’ the decision that the claims of the purported representative were moot dictated the dismissal of the uncertified ‘class’ action as well,” quoting Bd. of School Comm’rs v. Jacobs, 420 U.S. 128, 130, 95 S.Ct. 848, 850, 43 L.Ed.2d 74, 78 (1975) (per curiam)).
In the present case, no class had been certified prior to the tender of compensatory damages, so that the class claims were, in my view, properly dismissed.
The more appropriate line to draw in the sand with respect to the tender of relief to the named plaintiff in a class action suit is that dismissal of the action is appropriate, if the class has not been certified before the claim has been rendered moot. Essential to my view is that, from a jurisdictional standpoint, the interests of the putative class are only before the court once certification has been granted; thus, allowing a named plaintiff to continue a suit when he or she has no personal interest before the court, and the class’s interests are also not before the court, leads to the absurd result of allowing a court to continue to adjudicate a case that presents no actual controversy. I dissent.
*179Judge HARRELL has authorized me to state that he joins this dissenting opinion.

. Crystal Ford relies on Consolidated Construction Services, Inc. v. Simpson, 372 Md. 434, 813 A.2d 260 (2002) to support its argument that Mr. Frazier was not awarded compensatory damages at trial as a *172result of its tender. In Consolidated Construction Services, we were confronted with an attorney who purported to have an attorneys’ lien on settlement funds held in an escrow account. We held that the plain meaning of the statutory language, at the relevant time, of "a judgment or award that a client receives as a result of legal services that the attorney at law performs,” did not include settlement funds as property to which an attorneys’ lien could attach.

. The effect of reducing a tender to judgment is explored in ABN Amro Verzekeringen BV v. Geologistics Americas, Inc., 485 F.3d 85 (2nd Cir.2007), and may be an avenue to avoid the consequence of mootness.

. While I need not write on the issue of attorneys' fees, I would note that, under my analysis, it would be appropriate to award attorneys’ fees to Mr. Frazier, because he achieved a definite result, including for members of the putative class: Crystal Ford reformed their warranties. The majority, however, purports to remand this case to the Circuit Court for further proceedings, while at the same time awarding counsel fees. The award is without foundation, because the case is not conclud*176ed. It is at the conclusion of those proceedings that attorneys’ fees should be awarded, not after the majority determines the case should continue. When we have permitted attorneys’ fees when a remand has occurred, the attorneys fees have been awarded for claims that have had finality. Hoffman v. Stamper, 385 Md. 1, 48-49, 867 A.2d 276, 304-05 (2005) (upholding an award of attorneys’ fees, despite remanding the case, because the only claims that survived on remand did not allow for an award of attorneys’ fees).

. While I am cognizant of the fact that punitive damages are intended to punish the defendant and to deter future wrongful conduct, a defendant that acknowledges its wrong ways and chooses to pay compensatory damages without an adjudication of liability does not require further retribution.