Court Opinion

ID: 4227420
Source: CourtListenerOpinion
Date Created: 2017-12-11 17:18:50.426699+00
Date Added: 2024-06-11T14:42:52.480306
License: Public Domain

[Cite as Gembarski v. Partssource, Inc., 2017-Ohio-8940.]

                                   IN THE COURT OF APPEALS

                               ELEVENTH APPELLATE DISTRICT

                                     PORTAGE COUNTY, OHIO

EDWARD F. GEMBARSKI, ON BEHALF                          :   OPINION
OF HIMSELF AND ALL OTHERS
SIMILARLY SITUATED,                                     :
                                                            CASE NO. 2016-P-0077
                 Plaintiff-Appellee,                    :

        - vs -                                          :

PARTSSOURCE, INC.,                                      :

                 Defendant-Appellant.                   :

Civil Appeal from the Portage County Court of Common Pleas, Case No. 2013 CV
0001.

Judgment: Affirmed.

Thomas J. Connick, Connick Law, LLC, 25550 Chagrin Blvd., #101, Beachwood, OH
44122 (For Plaintiff-Appellee).

Jeffrey J. Wedel, Stephen S. Zashin, and Helena Oroz, Zashin & Rich Co., L.P.A.,
Ernst & Young Tower, 950 Main Avenue, 4th Floor, Cleveland, OH 44113 (For
Defendant-Appellant).

CYNTHIA WESTCOTT RICE, P.J.

        {¶1}     Appellant, PartsSource, Inc., appeals from the judgment of the Portage

County Court of Common Pleas, granting a motion to certify class action filed by

appellee, Edward F. Gembarski. At issue is whether a class defined as all current and

former employees who earned commissions from the sales of medical equipment and

whose earned commissions were subject to rescission if the accounts were not paid
within a ninety-day period satisfies the requirements of Civ.R. 23 for certification. We

affirm the trial court’s judgment.

          {¶2}   On October 1, 2012, appellee filed a class-action complaint for damages

against appellee in the Summit County Court of Common Pleas. Appellee filed an

answer and the case was transferred to the Portage County Court of Common Pleas by

stipulation of the parties. On September 22, 2015, appellee filed a motion to certify

class action and a motion to modify/amend class definition.        Appellee opposed the

motion. On March 31, 2016, the motion to modify/amend class definition was granted

On May 2, 2016, appellant filed a brief in opposition to appellee’s motion to certify class

action and, on June 23, 2016, a class certification hearing was held before the

magistrate.

          {¶3}   On September 30, 2016, the magistrate issued findings of fact and

conclusions of law. The following are taken from the magistrate’s findings:

          {¶4}   “Mr. Gembarski was an Account Representative, i.e., salesman, who sold

medical replacement parts. PartsSource is in the business of selling medical equipment

replacement parts.

          {¶5}   “Mr. Gembarski was paid by commission only.       He did not receive a

salary.

          {¶6}   “There were allegedly at least 75 persons who were in the same position

as Mr. Gembarski and earned their commissions in the same manner he did. Other

employees have placed that number, to their knowledge, at anywhere between 45-65.

          {¶7}   “Commissions are allegedly earned when a part is sold and then delivered

to a customer, and then paid to the Account Manager within 30 days therefrom on the

                                             2
next commission statement.        Then, that money actually went into the Account

Manager’s paycheck and allegedly became their personal property.

       {¶8}   “PartsSource allegedly took back the commissions allegedly earned by

Plaintiff and the putative class, and that money has never been returned. And this

same alleged wrongful taking of the alleged earned commissions happened to Mr.

Gembarski as well as approximately 75-120 other Account Managers. Mr. Gembarski

has personal knowledge of the list of Account Managers PartsSource regularly sent out

advising that they were having their commissions pulled, and whose complaints were

exactly the same as Mr. Gembarski’s.

       {¶9}   The court certified the class and defined the same as follows: “All current

and/or former PartsSource, Inc. Account Managers and/or employees who are or ever

have been subject to Defendant PartsSource, Inc.’s policy and wrongful practice of

reducing, withholding or deducting, i.e. taking back or ‘pulling’ earned commissions on

sales of medical equipment and/or supplies.”

       {¶10} Appellant filed objections to the magistrate’s decision, which were

opposed by appellee. Ultimately, the trial court overruled appellant’s objections and

adopted the magistrate’s decision. Appellant now appeals and assigns three errors for

our review. Its first assignment of error provides:

       {¶11} “The trial court abused its discretion by adopting the magistrate’s findings,

which adopted appellee’s proposed findings verbatim, over appellant’s objection where

the record does not contain competent and credible evidence supporting those

findings.”

                                             3
       {¶12} “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.” Cullen v. State Farm Mut. Auto. Ins. Co., 137 Ohio St.3d 373,

2013-Ohio-4733, paragraph one of the syllabus.

       {¶13} The Ohio Supreme Court has identified seven prerequisites for

maintaining a class action derived from Civ.R. 23:

       {¶14} “(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 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.” Hamilton v. Ohio Savings

Bank, 82 Ohio St.3d 67, 71 (1998).

       {¶15} Moreover, “Civ.R. 23(B)(3) states that in order to certify a class in an

action for damages, two findings must be made by the trial court. First, it must find that

questions of law or fact common to the members of the class predominate over any

questions affecting only individual members; and second, the court must find that a

class action is superior to other available methods for the fair and efficient adjudication

of the controversy.” In re Consol. Mgte. Satisfaction Cases, 97 Ohio St.3d 465, 2002-

                                             4
Ohio-6720, ¶7. “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.        Cullen, supra, at paragraph three of the

syllabus.

       {¶16} “A trial judge has broad discretion in determining whether a class action

may be maintained and that determination will not be disturbed absent an abuse of

discretion.” Marks v. C.P.Chem. Co., Inc., 31 Ohio St.3d 200 (1987), syllabus. The

abuse of discretion standard “applies to the ultimate decision of the trial court, * * * as

well as to its determination regarding each requirement of the rule.” Cullen, supra, at

¶19. Nevertheless, as in a general civil case, where “the burden of persuasion is only

by a preponderance of the evidence, * * * evidence must still exist on each element

(sufficiency) and the evidence on each element must satisfy the burden of persuasion

(weight).” Id. at ¶19, citing Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179,

¶19.

       {¶17} Under its first assignment of error, appellant contends the trial court erred

by adopting, verbatim, appellee’s proposed findings of fact and conclusions of law,

despite the submission being “replete with verbatim errors, misstated testimony, and

other inaccuracies.” Appellant incorporates by reference its “forty-two objections, filed

with the trial court on October 4, 2016,” but, “in interest of brevity,” provides illustrative

examples of errors in the magistrate’s decision.

       {¶18} First, appellant challenges the magistrate’s finding that appellee seeks

certification “of a class of Account Managers who sold medical equipment and/or parts

for Defendant PartsSource,” and, in a footnote, observed that “Account Managers,

                                              5
Sales Representatives and Customer Service Representatives are used, at times,

interchangeably herein.” Appellant counters that, at the certification hearing, appellee

testified that the proposed class included account managers, senior account managers,

and strategic account managers, but not product managers. Appellant also notes that

Charles Koch, its Chief Administrative Officer, testified that different categories of

employees were compensated differently so that the titles were not interchangeable.

        {¶19} We find the objection fails to identify a recognizable error. The class

certified by the trial court includes any of appellant’s employees who received

commissions from the sale of medical equipment and/or supplies and who were subject

to an allegedly improper policy of having earned commissions rescinded. Membership

in the class does not depend on job title, responsibilities, or overall compensation

package. Moreover, Koch testified by deposition that there were a variety of titles that

were applied to salespersons who were, nonetheless, paid by commission.1

        {¶20} Appellant next asserts the magistrate erred when it found that appellee

was employed with it through 2011 when, in fact, he was employed through 2012.

Appellant acknowledges that the trial court recognized this objection as valid and

corrected the error, but counters that if the court had conducted a thorough review of

the Magistrate’s Decision before adopting it, there would have been no need to raise an

objection.

1. He attested: “I don’t know exactly what [title] we use today, but we started with, we called it a
customer sales rep or representative, CSR. As the company grew, it became obvious that the title was a
little confusing to our customers, so we made a change to account manager. We may even have senior
account managers. It just provided a more significant title for that position as people like Ed [Gembarski],
whatever, interacted with our customers.

                                                     6
       {¶21} Appellant also maintains the magistrate erred when it identified appellee

as an Account Representative, not acknowledging that he held other positions and/or

titles during his employment with it.

       {¶22} These objections are inconsequential to the ultimate issue of class

certification. As such, any error is harmless as a matter of law.

       {¶23} Next, appellant argues the magistrate erred in finding that at least 75

persons “were in the same position as Mr. Gembarski and earned their commissions in

the same manner he did.” Appellant counters that appellee testified that he only had

personal knowledge of six other employees’ compensation plans and, therefore,

speculated about the actual number.

       {¶24} We discern no error in the foregoing.        The magistrate’s finding fairly

reflects appellee’s testimony, which was based on complaints he heard from

approximately 50 or 60 other salespersons (“100 percent” of them) who had

commissions “pulled back.”      The magistrate also cited the deposition testimony of

Daniel Brenner, the Director of Customer Implementation for appellant, who estimated

that there were between 45 and 65 persons who sell medical parts for commission at

any given time. Koch in his deposition testimony referred to “140 or so sales reps” who

had received reduced commissions over a number of years. The magistrate’s finding is

therefore adequately supported by the record.

       {¶25} Appellant next contends the magistrate’s finding that a salesperson’s

“money actually went into the Account Manager’s paycheck and allegedly became their

personal property” is based only on appellee’s opinion. We do not agree.

                                            7
       {¶26} The magistrate properly conditioned the status of the money that went into

a salesperson’s paycheck by the use of the qualifying adverb “allegedly.” That such

money became the salesperson’s personal property was not only Gembarski’s opinion,

but that of Brenner and Koch as well. The point at which a commission is actually

earned is, of course, one of the ultimate factual issues to be decided in this case. For

the purpose of class certification, the magistrate is not deciding the ultimate issues of

the case, but merely describing appellee’s theory of recovery.             Such analysis is

expressly sanctioned by the Ohio Supreme Court. See Stammco, L.L.C. v. United Tel.

Co. of Ohio, 136 Ohio St.3d 231, 2013-Ohio-3019, syllabus. (“At the certification stage

in a class-action lawsuit, a trial court must undertake a rigorous analysis, which may

include probing the underlying merits of the plaintiff’s claim, but only for the purpose of

determining whether the plaintiff has satisfied the prerequisites of Civ.R. 23.”)

       {¶27} With respect to appellant’s remaining 37 objections, we decline to

consider them as they have not been properly raised before this court. “Parties cannot

simply incorporate by reference arguments they made to the trial court in their appellate

brief.” Deutsche Bank Natl. Trust Co. v. Taylor, 9th Dist. Summit No. 28069, 2016-

Ohio-7090, ¶14, fn. 1, citing App.R. 16(A)(7) (“[t]he appellant shall include in its brief * *

* [a]n argument containing the contentions of the appellant with respect to each

assignment of error presented for review”) and App.R. 12(A)(2) (“[t]he court may

disregard an assignment of error presented for review if the party raising it * * * fails to

argue the assignment separately in the brief, as required under App.R. 16(A)”); see also

Kulikowski v. State Farm Mut. Ins. Co., 8th Dist. Cuyahoga No. 80103, 2002-Ohio-5460,

                                              8
(“the Rules of Appellate Procedure do not permit parties to ‘incorporate by reference’

arguments from other sources.”)

         {¶28} Appellant’s first assignment of error lacks merit.

         {¶29} For its second assignment of error, appellant asserts:

         {¶30} “The trial court abused its discretion in adopting the magistrate’s finding of

fact and conclusion of law which by improperly engaging in a merits based inquiry,

certifying a proposed class that is unascertainable and ordering PartsSource to

ascertain the putative class members.”

         {¶31} “An identifiable class must exist before certification is permissible” and

“[t]he definition of the class must be unambiguous.” Warner v. Waste Mgt., Inc., 36

Ohio St.3d 91 (1988), paragraph two of the syllabus. “[T]he requirement that there be a

class will not be deemed satisfied unless the description of it is sufficiently definite so

that it is administratively feasible for the court to determine whether a particular

individual is a member.” (Citation omitted.) Hamilton, supra, at 71-72. “Thus, the class

definition must be precise enough ‘to permit identification within a reasonable effort.’” Id.

at 72, quoting Warner, supra, at 96.

         {¶32} The magistrate deemed the identifiable class requirement satisfied as the

“[c]lass definition identifies all Account Managers who have been subject to the taking

back or pulling of alleged earned commissions” and appellant “is able to determine the

identity of all Account Managers who had their alleged earned commissions pulled from

them.”

         {¶33} Appellant maintains that the defined class is improper because it is

conclusory, i.e., it presumes that its “policy or practice” was “wrongful” or even “illegal”

                                              9
and that the retained commissions had been “earned.” Appellant further challenges the

ascertainability of the class on the grounds that its business records are inadequate to

determine which salespersons are members of the class: “While [appellant] can identify

employees who earned commissions, as well as employees who had commissions

pulled, its business records do not, and could not, show the alleged exposure to any

alleged wrongful conduct.” We do not agree.

         {¶34} As noted above, the defining characteristic of the proposed class is that it

includes salespersons who have had commissions withheld, regardless of whether,

ultimately, the commissions were withheld rightfully or wrongfully. The defined class is

not conclusory but properly fixed according to a neutral criterion, i.e., appellant’s policy

of withholding commissions. Hamilton, supra, at 73 (“where possible [the class] should

be defined upon the basis of the manner in which the defendant acted toward an

ascertainable group of persons.” (Citation omitted.)

         {¶35} It is important to note that there was evidence before the magistrate that

appellant’s policy was a uniform policy and, thus, a suitable criterion for defining the

class.    Jeffrey Dalton, appellant’s Chief Operating Officer, testified as follows by

deposition:

         {¶36} Q. The policy of PartsSource to, as [the job description] says, “to reduce

the commissions earned” in that paragraph, the policy of PartsSource to reduce the

commissions earned for amounts on a[n] invoice that are not collected within 90 days,

that is applied uniformly, is it not, to all account managers and sales representatives

who sell medical parts on a commission basis?

         {¶37} A. Yes.

                                             10
        {¶38} * * *

        {¶39} Q. This over 90 policy was instituted unilaterally by PartsSource, correct?

        {¶40} A. Correct.

        {¶41} Q. You understand what I mean by the term “unilaterally?”

        {¶42} A. All account managers.

        {¶43} Q. Well, that’s uniformly. But yeah, it’s all account managers.2

        {¶44} Similar testimony was given by Brenner, the Director of Customer

Implementation:

        {¶45} Q. And you said, and I’m quoting you, if the customer does not pay within

90 days you will lose the commission on that sale.

        {¶46} A. Yes.

        {¶47} Q. And that’s the commission you earned from the previous month or

whatever month before * * *[,] correct?

        {¶48} A. Yes. Yeah, that’s - - I think you worded that correctly. It sounds right.

Yeah.

        {¶49} Q. And that was a policy across the board for all sales representatives

who sold on commission, correct?

        {¶50} A. As far as I know, yes.

        {¶51} Appellant also argues that being subject to the withholding policy is not a

definite criterion because some commissions were ultimately reinstated to the

salespersons, depending on a variety of circumstances in which the customer ultimately

paid the invoice. This, plus the fact that different employees had different compensation

2. Dalton disputed the assertion that the withholding policy was instituted unilaterally.

                                                      11
plans, requires “the trial court to resolve the merits of every putative class member’s

claim before determining whether the person is a class member.”

       {¶52} These considerations, which more properly apply to the element of

commonality, do not compromise the identifiability of the class. “The mere existence of

different facts associated with the various members of a proposed class is not by itself a

bar to certification of that class.” Consol. Mgte. Satisfaction Cases, supra, at ¶10; see

also Hamilton, supra, at 81-82 (“‘a trial court should not dispose of a class certification

solely on the basis of disparate damages,’” particularly “where * * * damages may be

calculated by a mathematical formula”) (citation omitted); Rimedio v. SummaCare, Inc.,

9th Dist. Summit No. 21828, 2004-Ohio-4971, ¶21 (affirming the certification of a class

comprising all SummaCare providers subject to a ten percent withhold of service fees

despite the fact that “some of the physicians were solo practicioners, while some were

working for partnerships” and “not all of the physicians signed their contracts at the

same time [whereas] some knew of the withholds before signing, while others did not.”)

       {¶53} Finally, appellant contends the magistrate relied on impermissible

evidence, i.e., “Disc A,” a “spreadsheet that [appellant] produced in response to a

discovery response in August 2013 * * * reflect[ing] only commission amounts during a

limited period of time that the Company did not reimburse, without any indication of

whether customers ultimately paid on those transactions.” (Emphasis sic.) Appellant

contends that Disc A cannot show whether salespersons who had “earned

commissions” rescinded actually received “appropriate reimbursement under the terms

of their specific compensation plans” and that appellee impermissibly raised Disc A as

evidence in his reply brief in support of class certification.

                                              12
       {¶54} We see nothing impermissible about the magistrate’s consideration of

Disc A. Contrary to appellant’s characterization, appellee’s use of Disc A is not a “new

argument” but evidence duly produced during discovery and introduced into evidence

as an attachment to the reply brief prior to the certification hearing, the contents of

which were thoroughly discussed in Koch’s deposition testimony.           The magistrate

properly described the contents of Disc A as “the identities of well over one hundred

(100) Account Managers who have had their alleged earned commissions pulled and

whose money has not been returned to them.” There was no claim that Disc A resolved

issues of damages or ultimate liability.

       {¶55} Appellant’s second assignment of error lacks merit.

       {¶56} Appellant’s third assignment of error provides:

       {¶57} “The trial court abused its discretion in summarily concluding that appellee

satisfied Civ.R. 23’s seven prerequisites, where the record does not contain competent

and credible evidence supporting that conclusion, and where such conclusion is against

the manifest weight of the evidence.”

       {¶58} Under its third assignment of error, appellant contends that appellee failed

to satisfy Civ.R. 23’s remaining prerequisites for class certification. As noted above, the

prerequisites are (1) identifiability (which we have previously determined to be

adequate); (2) class membership (which, again, we have concluded was met); (3)

numerosity; (4) commonality; (5) typicality; (6) adequacy of representation; and (7) one

of the three Civ.R. 23(B) requirements must be met. Hamilton, supra.

       {¶59} With respect to numerosity, appellant claims “Gembarski has never

proffered any evidence-based indication of the number of people in the proposed class.”

                                            13
For purposes of certification, it is sufficient that the evidence discussed above supports

the finding of a class of at least 75 persons. While the “courts have not specified

numerical limits for the size of a class action * * * ‘[i]f the class has more than forty

people in it, numerosity is satisfied.’” (Citation omitted.) Warner, supra, at 97; see also

Maas v. The Penn Cent. Corp., 11th Dist. Trumbull No. 2006-T-0067, 2007-Ohio-2055,

¶53 (“generally, if a proposed class consists of more than forty individuals, numerosity is

met.”)

         {¶60} With respect to commonality, appellant contends that appellee’s “claims

are not susceptible to class-wide determinations.” On the contrary, we agree with the

magistrate that all class claims arise from “the same nucleus of operative facts

surrounding the alleged wrongful withholding, and refusal to return, of alleged earned

commissions.”     That appellant engaged in the alleged conduct is undisputed and

constitutes a common nucleus of fact similar to all salespersons affected by it. “Courts

generally have given a permissive application to the commonality requirement,”

construing it “to require a ‘common nucleus of operative facts.’” Warner, supra, at

paragraph three of the syllabus.

         {¶61} With respect to typicality, appellant contends appellee’s complaint

proposed a class of persons subject to “the plan” whereas the class as certified

comprises persons subject to a purported “policy and wrongful practice.”        Appellant,

however, cites no authority for the proposition that the certified class must conform to

the class proposed in the complaint. Rather, the Ohio Supreme Court has itself on

several occasions directed the modification of the class definition to fit the

circumstances of the case. See e.g. Warner, supra, at 99 (“[o]n remand, we direct the

                                            14
trial court to modify the scope of the class, consider the creation of subclasses in this

action, bifurcate trials on liability issues, and exclude the individual defendants-

appellants from this action until they are given a proper certification hearing.”);

Baughman v. State Farm Mut. Auto. Ins. Co., 88 Ohio St.3d 480, 484 (2000) (“the

definition of the class that appellants seek to have certified is hereby modified” to reflect

the factual record.)

       {¶62} Appellant additionally contends that appellee fails to satisfy the typicality

and the adequacy requirements because he is “only one of three employees who did

not sign an arbitration agreement.” Appellant relies on the Ninth Appellate District’s

decision in Rimedio, supra, where the court held the typicality requirement was not met

where the sole class representative had waived his right to arbitration and

approximately half of the putative class was subject to arbitration.

       {¶63} In this case, appellant did not assert the arbitration defense in its answer

to the complaint and, indeed, did not assert the defense until after mediation failed and

appellee filed his motion for class certification.       The magistrate determined that

appellant had waived the defense because, after three years of litigation and having

notice of the matters at issue in the class action, not the least of which was class

certification, it never asserted, let alone sought to pursue, arbitration. The magistrate

found appellant’s dereliction was manifestly inconsistent with its right to arbitrate and/or

assert that right as a defense to the class certification. Under the circumstances, the

magistrate’s conclusion was not an abuse of discretion.

       {¶64} The right to arbitrate can be waived. EMCC Inv. Ventures, LLC v. Rowe,

11th Dist. Portage No. 2011-P-0053, 2012-Ohio-4462, ¶33. “‘When the defendant [files]

                                             15
its answer in [a] suit without demanding arbitration, it, in effect, [agrees] to the waiver.’”

Hoffman v. Davidson, 11th Dist. Trumbull No. 3909, 1988 WL 32967, *2 (Mar. 11,

1988), quoting Mills v. Jaguar–Cleveland Motors, Inc., 69 Ohio App.2d 111, 113 (8th

Dist.1980). In Hogan v. Cincinnati Fin. Corp., 11th Dist. Trumbull No.2003-T-0034,

2004-Ohio-3331, this court stated:

       {¶65} “To prove waiver, the opposing party merely needs to show: (1) that the

party waiving the right knew of the existing right of arbitration and (2) that the party

acted inconsistently with that right. * * * ‘Active participation in a lawsuit * * * evidencing

an acquiescence to proceeding in a judicial rather than arbitration forum has been found

to support a finding of waiver.’ Griffith [v. Linton, 130 Ohio App.3d 746, 751 (10th

Dist.1998)].” Hogan, supra, at ¶23-24.

       {¶66} Appellant was aware of its right to assert the arbitration defense from the

inception of the underlying class action. After all, a class action cannot proceed without

certification of a class and, in his complaint, appellee specified the details, including

appellant’s alleged misconduct and harm suffered by potential class members, that

would be used to qualify the potential putative class members for certification. Although

appellee was not a party to the arbitration provision, an issue going to typicality and

adequacy, appellant had notice that other potential class members who suffered from

the harm alleged in the complaint would be bound by the arbitration clause.                We

maintain appellant’s failure to assert the arbitration defense in its answer, or a

supplement thereto, or seek to enforce the right to arbitration at some point prior to its

opposition to the certification was fundamentally inconsistent with its right to assert the

defense. We therefore conclude the magistrate was not unreasonable in concluding

                                              16
appellant waived the arbitration defense to the typicality and adequacy elements of

class certification. Accordingly, we hold the trial court did not abuse its discretion in

adopting the magistrate’s decision.

       {¶67} Because we hold the trial court was correct in concluding the arbitration

defense was waived, we additionally conclude the typicality requirement was met. To

wit, we discern no express conflict between appellee and other class members. See

Marks v. C.P. Chemical Co., Inc. 31 Ohio St.3d 200, 202 (1987). And the allegations

arose from a common nucleus of operative facts; namely, appellant’s taking account

managers’ alleged earned commissions and failing to return those commissions to the

employees.    Similarly, appellee meets the adequacy requirement to the extent his

interests are not antagonistic to the other class members. Id. at 203. In effect, appellee

can fairly and adequately protect the interests of the class. Id.

       {¶68} Finally,    appellant    contends      appellee    failed   to   meet    the

predominance/superiority requirements of Civ.R. 23.        Civ.R. 23(B)(3) states a class

action may be maintained if:

       {¶69} “the court finds that the questions of law or fact common to class members

predominate over any questions affecting only individual members, and that a class

action is superior to other available methods for fairly and efficiently adjudicating the

controversy. The matters pertinent to these findings include:

       {¶70} “(a) the class members’ interests in individually controlling the prosecution

or defense of separate actions;

       {¶71} “(b) the extent and nature of any litigation concerning the controversy

already begun by or against class members;

                                            17
         {¶72} “(c) the desirability or undesirability of concentrating the litigation of the

claims in the particular forum; and

         {¶73} “(d) the likely difficulties in managing a class action.”

         {¶74} Here, the magistrate determined the differences in individual class-

member’s contracts, as well as potential statute-of-limitations problems with individual

claims, were insufficient to undermine the conclusion that there were adequate

questions of law and/or fact that predominate the class as a whole. The magistrate

further determined the class action was superior to other methods of fair and efficient

adjudication of the controversy because (1) no other person within the putative class

expressed an interest in separately prosecuting the allegations in this matter; (2)

appellee is the only current or former employee to have commenced suit relating to the

alleged wrongdoing; (3) appellee sought out the forum in which the case was being

prosecuted, without objection, thereby suggesting the concentration of the litigation was

desirable; and (4) there would be no significant difficulty in managing the class action

because each class member has a claim arising from the same nucleus of operative

facts and legal theories – “all of which can be resolved in a single stroke under the class

action mechanism.” The foregoing findings are reasonable and, as a result, the trial

court did not abuse its discretion in adopting the magistrate’s decision certifying the

class.

         {¶75} Appellant’s final assignment of error is without merit.

         {¶76} For the reasons discussed in this opinion, the judgment of the Portage

County Court of Common Pleas is affirmed.

                                               18
COLLEEN MARY O’TOOLE, J., concurs with a Concurring Opinion,

DIANE V. GRENDELL, J., dissents with a Dissenting Opinion.

                              _______________________

COLLEEN MARY O’TOOLE, J., concurs with a Concurring Opinion.

       {¶77} I concur with the majority’s well-reasoned decision.     I write separately

simply to point out that the issue of whether appellee satisfies the typicality and

adequacy requirements for certifying a class action, since he was not party to an

arbitration agreement with appellant, whereas other members of the proposed class

were, has been foreclosed by the May 26, 2017 decision in Natl. Labor Relations Bd. v.

Alternative Entertainment, Inc., 858 F.3d 393 (6th Cir.2017), which appellee filed with

this court as supplemental authority. In that case, the NLRB sought enforcement of its

decision and order regarding James DeCommer, a former technician for Alternative

Entertainment, Inc.    Id. at 396.    DeCommer’s employment agreement specifically

contained both an arbitration clause, and a waiver of the right to seek relief by way of

class action.   Id. at 397.    In relevant part, the Sixth Circuit found this waiver of

DeCommer’s right to pursue a class action for employment based relief violated the

National Labor Relations Act. Id. at 400-408. The Sixth Circuit recognized its decision

complied with prior decisions by the Seventh and Ninth Circuits, but conflicted with the

position taken by the Fifth and Eighth Circuits. Id. at 401.

       {¶78} Applying Alternative Entertainment, Inc. to this case effectively negates

any argument that the arbitration clauses in the balance of the contracts of the proposed

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class members mean they cannot pursue a class action. Thus, appellee is typical of the

class, and adequately represents it, even though he was not subject to arbitration.

       {¶79} While the Sixth Circuit’s decision is not controlling over this court, it is

highly persuasive. I think it would be unwise to set up a conflict between the Ohio

courts and the federal courts on this issue.        That would merely encourage forum

shopping.

       {¶80} I respectfully concur.

                              _______________________

DIANE V. GRENDELL, J., dissents with a Dissenting Opinion.

       {¶81} I respectfully dissent. The law is well-settled that a named plaintiff fails to

satisfy the typicality/adequacy requirement of Civil Rule 23(A)(3) where the members of

the putative class he or she seeks to represent are subject to an arbitration agreement

to which the named plaintiff is not subject. Rimedio v. SummaCare, Inc., 9th Dist.

Summit No. 21828, 2004-Ohio-4971, ¶ 25-27; Rimmer v. Citifinancial, Inc., 2013-Ohio-

5732, 6 N.E.3d 621, ¶ 22-25 (8th Dist.); also Tan v. Grubhub, Inc., N.D.Cal. No. 15-cv-

05128-JSC, 2016 WL 4721439, * 3 (July 19, 2016) (cases cited).

       {¶82} Gembarski, in contrast to the class he proposes to represent, is not

subject to an arbitration agreement.             Accordingly, he does not satisfy the

typicality/adequacy requirement.

       {¶83} The majority, however, adopts the lower court’s unreasonable position that

PartsSource “waived the arbitration defense to the typicality and adequacy elements of

class certification.” It is difficult to fathom how this is so given that PartsSource raised

the issue of arbitration in its Brief in Opposition to Plaintiff’s Motion to Modify/Amend

                                            20
Class Definition. The majority concludes, nonetheless, that PartsSource “was aware of

its right to assert the arbitration defense from the inception of the underlying class

action” and, therefore, its “failure to assert the arbitration defense in its answer, or a

supplement thereto, or seek to enforce the right to arbitration at some point prior to its

opposition to the certification was fundamentally inconsistent with its right to assert the

defense.” Supra at ¶ 66.

       {¶84} The majority is incorrect to assert that PartsSource should have raised the

defense in its answer or “a supplement thereto.”            The present action was filed by

Gembarski as the only proposed class representative.                Unlike a majority of the

proposed and unnamed class members, Gembarski was not and had never been

subject to an arbitration agreement.           There is no rational justification for why

PartsSource should have raised the defense of binding arbitration at this point in the

litigation against a party who is not subject to arbitration. Compare Smith v. Bayer

Corp., 564 U.S. 299, 313, 131 S.Ct. 2368, 180 L.Ed.2d 341 (2011) (it would be a “novel

and surely erroneous argument [to suggest] that a nonnamed class member is a party

to the class-action litigation before the class is certified”) (citation omitted).

       {¶85} Preliminarily, it should be noted that, on account of Ohio’s “strong public

policy in favor of arbitration,” the party asserting waiver bears a “heavy burden of

proving waiver” which should not be lightly inferred. (Citation omitted.) U.S. Bank Natl.

Assn. v. Allen, 2016-Ohio-2766, 52 N.E.3d 1237, ¶ 14 (3d Dist.). To find waiver, the

courts generally require that the party possessing the right to arbitrate act inconsistently

with that right. EMCC Invest. Ventures, LLC v. Rowe, 11th Dist. Portage No. 2011-P-

0053, 2012-Ohio-4462, ¶ 34.

                                               21
       {¶86} PartsSource has not acted inconsistently with its right to arbitrate. In its

Answer, PartsSource denied that Gembarski’s action could be maintained as a class

action, specifically denying that Gembarski’s claims were typical of the proposed class

and that he could fairly and adequately protect the class. It would have been premature

for PartsSource to plead affirmative defenses that had no relevance to Gembarski’s

claims, such as the right to arbitrate, considering that Gembarski, as a non-party to the

arbitration agreements, could neither have compelled or been compelled to arbitrate. In

any event, PartsSource did expressly reserve “the right to plead additional defenses as

discovery reveals such defenses to be available.” Morris v. Morris, 189 Ohio App.3d

608, 2010-Ohio-4750, 939 N.E.2d 928, ¶ 32 (10th Dist.) (“an arbitration defense,

pursuant to R.C. 2711.02, is not an affirmative defense under Civ.R. 8(C),” and “is not

mandated by Civ.R. 8(C) to avoid waiver”); Rimedio, 2004-Ohio-4971, at ¶ 14

(“[a]ppellants could not have waived the right to assert the arbitration clause against the

unnamed class members”).

       {¶87} The majority’s position is anomalous because the specific issue before the

trial court was Gembarski’s suitability as a class representative, not whether

PartsSource could have potentially raised the arbitration defense against hitherto

putative class members.

       {¶88} This anomaly has been recognized by federal courts addressing similar

situations, holding that a proposed class representative lacks standing to even raise the

issue of waiver with respect to putative class members.3 “[F]undamentally, the named

plaintiffs lack standing to assert any rights the unnamed putative class members might

3. “Class actions are governed by Ohio Civ.R. 23. Given the similarity between the rules, federal case
law interpreting F.R.C.P. 23 is persuasive when interpreting the Ohio rule.” West v. Carfax, Inc., 11th
Dist. Trumbull No. 2008-T-0045, 2009-Ohio-6857, ¶ 10.

                                                  22
have to preclude [a defendant] from moving to compel arbitration because the named

plaintiffs have no cognizable stake in the outcome of that question.” In re Checking

Account Overdraft Litigation, 780 F.3d 1031, 1039 (11th Cir.2015).

                 Absent class certification, there is no justiciable controversy

                 between [a defendant] and the unnamed putative class members.

                 Furthermore, because the unnamed putative class members are

                 not yet before the court, any claims that they might have against [a

                 defendant] necessarily exist only by hypothesis. In the absence of

                 both live claims and cognizable plaintiffs, the District Court’s

                 pronouncement purporting to definitively foreclose the arbitration of

                 the hypothetical claims that might be raised in the future by

                 hypothetical plaintiffs cannot be regarded as anything but an

                 impermissible “advisory opinion[ ] on [an] abstract proposition[ ] of

                 law.” Hall [v. Beals], 396 U.S. [45,] 48, 90 S.Ct. [200,] 202 [(1969)].

Id. at 1037; Conde v. Open Door Marketing, LLC, 223 F.Supp.3d 949, 960

(N.D.Cal.2017) (“[p]laintiffs are not personally affected by the arbitration agreements at

issue because they have not signed agreements that contain similar terms,” and

“therefore have no interest in the enforceability of the arbitration agreement itself, and

lack the ability to challenge the agreements on behalf of individuals who did sign such

agreements”); Tan, 2016 WL 4721439, at * 6 (the named plaintiff “has no standing to

challenge the applicability or enforceability of the arbitration and class action waiver

provisions * * * because, in light of his decision to opt out, they do not apply to him”)

(cases cited).

                                               23
      {¶89} Contrary to the position of the concurring judge, Natl. Labor Relations Bd.

v. Alternative Entertainment, Inc., 858 F.3d 393 (6th Cir.2017), does not foreclose the

issue of whether Gembarski satisfies the typicality and adequacy requirements for class

certification. That case held “that an arbitration provision requiring employees covered

by the NLRA individually to arbitrate all employment-related claims is not enforceable.”

Id. at 408.   Not only has Gembarski not signed an arbitration agreement, but the

arbitration agreements signed by the unnamed putative plaintiffs did not contain

provisions requiring that employment-related claims be arbitrated individually.     The

relevance of Alternative Entertainment is difficult to discern. In any case, by applying

the majority’s logic, it could be argued that, if the arbitration agreements to which

Gembarski was not a party did contain such provisions, PartsSource has waived the

right to enforce these hypothetical provisions by not raising the issue in its answer or

supplement thereto. With or without class action waiver clauses, Gembarski does not

satisfy the typicality and adequacy requirements.

      {¶90} For the foregoing reasons, I respectfully dissent and would reverse the

decision of the court below.

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