Court Opinion

ID: 4228676
Source: CourtListenerOpinion
Date Created: 2017-12-14 08:42:45.648857+00
Date Added: 2024-06-11T14:16:04.409767
License: Public Domain

STATE OF MICHIGAN

                             COURT OF APPEALS

ERMA ROGERS REVOCABLE TRUST, by                                      UNPUBLISHED
DAVID PLUMLEY, Trustee, on Behalf of                                 December 12, 2017
Themselves and All Others Similarly Situated,

               Plaintiff-Appellee,

v                                                                    No. 332495
                                                                     Wayne Circuit Court
ERICKSON RETIREMENT COMMUNITIES,                                     LC No. 14-006796-CK
REDWOOD CAPITAL INVESTMENTS, INC.,
SENIOR CAMPUS LIVING, INC., and SENIOR
CAMPUS SERVICES, LLC,

               Defendants,

and

HENRY FORD VILLAGE, INC., REDWOOD-
ERC MANAGEMENT, LLC, and LIFE CARE
SERVICES, LLC,

               Defendants-Appellants.

Before: GLEICHER, P.J., and GADOLA and O’BRIEN, JJ.

PER CURIAM.

        Plaintiff, David Plumley, as trustee of his mother’s revocable trust, filed this action
against defendants alleging that they engaged in false and misleading actions that defrauded
plaintiff’s mother and many other residents of defendant Henry Ford Village, Inc. (“HFV”) who
had entered into residential agreements before December 1, 2000, for independent living units.
Plaintiff asked the trial court to certify a class action consisting of all residents of HFV who did
not receive a full refund of their entrance deposits on their individual units as advertised and
promised by defendants. Following a hearing, the trial court certified a class action consisting of
“[a]ll persons, and the representatives of their estates, who entered into Residence and Care
Agreements with [HFV] prior to December 1, 2000 who have received less than a 100 percent
full refund [as adjusted for agreed outstanding charges] of their entrance deposit and persons
subject to declaratory relief.” Defendants HFV, Redwood-ERC Management, LLC, and Life

                                                -1-
Care Services, LLC (Defendants), filed for leave to appeal the trial court’s order, which this
Court granted.1 We affirm.

       In 1999, plaintiff’s mother signed a Residence and Care Agreement with HFV, which
required her to pay an entrance deposit of $125,000. The agreement provided that the entrance
deposit was fully refundable after the unit was vacated, less any outstanding fees or charges
owed to HFV. The agreement provided that the entrance deposit would be repaid upon “the
subsequent occupancy of the Continuing Care Unit by another Resident.”

        Plaintiff alleges that after his mother died in 2013, HFV was unwilling to market the unit
for less than $125,000, a price the market could not support, unless plaintiff agreed to accept a
reduced refund, at a suggested amount of $93,000, which would enable defendants to market the
unit at a more competitive and attractive price for a new resident. According to plaintiff, he was
advised that if he did not agree to accept a reduced refund, there was a risk that the unit would
not be occupied by a new resident and that plaintiff would not receive the refund. Defendants
sent plaintiff a form amendment to his mother’s original agreement, but plaintiff refused to sign
it and insisted that he was entitled to a full refund of the entrance deposit in accordance with his
mother’s original agreement.

        In May 2014, plaintiff filed this action and alleged claims for breach of contract, fraud in
the inducement, breach of the duty of good faith and fair dealing, violation of the Michigan
Living Care Disclosure Act (LCDA), MCL 554.801 et seq., and conversion. Plaintiff also
requested that the trial court certify this matter as a class action to include all other
similarly-situated residents, both past and current, who had been similarly impacted by HFV’s
practices regarding the payment and refund of entrance deposits and its marketing of the
residential units. Effective August 1, 2014, defendants adopted a new standardized pricing
policy, whereby it established the same prices for all units based on size and layout. The price of
plaintiff’s mother’s unit was reduced to $117,000 under this policy, but it still had not been
occupied by a new resident at the time this action was filed.

        Following a hearing, the trial court granted plaintiff’s request for class certification, but
modified plaintiff’s proposed class and defined the class as “[a]ll persons, and the representatives
of their estates, who entered into Residence and Care Agreements with Henry Ford Village prior
to December 1, 2000 who have received less than a 100 percent full refund of their entrance
deposit and persons subject to declaratory relief.” Defendants argue that the trial court erred in
certifying this litigation as a class action.

        “We review for clear error the trial court’s factual findings regarding class certification,
and review for an abuse of discretion the trial court’s discretionary decisions.” Duskin v Dep’t of
Human Servs, 304 Mich App 645, 651; 848 NW2d 455 (2014). A finding is clearly erroneous if,
after reviewing the entire record, we are definitely and firmly convinced that the trial court made

1
 Erma Rogers Revocable Trust v Erickson Retirement Communities, unpublished order of the
Court of Appeals, entered September 2, 2016 (Docket No. 332495).

                                                -2-
a mistake.” Id. To the extent that the parties’ arguments involve the proper interpretation and
application of the court rules, we review those issues de novo. Id.

        Defendants first argue that the trial court applied an incorrect legal standard in deciding
plaintiff’s motion for class certification. In support of this argument, defendants rely on an
isolated statement in the trial court’s opinion wherein it remarked that “plaintiff properly states a
claim upon which relief can be granted.” Defendants argue that this statement demonstrates that
the trial court erroneously applied a standard applicable to motions for summary disposition
under MCR 2.116(C)(8). We reject this argument because review of the trial court’s opinion as a
whole reveals that the court followed and applied MCR 3.501(A)(1) to determine if plaintiff
satisfied the requirements for pursuing this matter as a class action.

        Defendants also complain that the trial court improperly based its decision on disputed
allegations. In Duskin, 304 Mich App at 652, this Court discussed the level of proof necessary to
meet the requirements for class certification, stating:

               Michigan requires the party seeking class certification to establish each
       prerequisite for class certification. The party’s pleadings will only be sufficient to
       support certification if the facts are “uncontested or admitted by the opposing
       party.” The court should not question the actual merits of the case. However, the
       proponent of certification must make “an adequate statement of basic facts to
       indicate that each prerequisite is fulfilled.” [Footnotes omitted.]

In Duskin, 304 Mich at 652, this Court followed Henry v Dow Chem Co, 484 Mich 483, 496-
499; 772 NW2d 301 (2009), in which our Supreme Court addressed whether trial courts are
required to follow the federal courts’ “rigorous analysis” for evaluating requests for class
certification or whether courts are only required to follow MCR 3.501(A). Our Supreme Court
stated:

               We agree with Dow that a certifying court may not simply “rubber stamp”
       a party’s allegations that the class certification prerequisites are met. However,
       the federal “rigorous analysis” requirement does not necessarily bind state courts.
       We believe that the plain language of MCR 3.501(A) provides sufficient guidance
       for class certification decisions in Michigan. Given that MCR 3.501(A)(1)
       expressly conditions a class action on satisfaction of the prerequisites, a party
       seeking class certification is required to provide the certifying court with
       information sufficient to establish that each prerequisite for class certification in
       MCR 3.501(A)(1) is in fact satisfied. A court may base its decision on the
       pleadings alone only if the pleadings set forth sufficient information to satisfy the
       court that each prerequisite is in fact met. The averments in the pleadings of a
       party seeking class certification are only sufficient to certify a class if they satisfy
       the burden on the party seeking certification to prove that the prerequisites are
       met, such as in cases where the facts necessary to support this finding are
       uncontested or admitted by the opposing party.

              If the pleadings are not sufficient, the court must look to additional
       information beyond the pleadings to determine whether class certification is

                                                 -3-
       proper. However, when considering the information provided to support class
       certification, courts must not abandon the well-accepted prohibition against
       assessing the merits of a party’s underlying claims at this early stage in the
       proceedings. Similar to the federal district courts, state courts also have broad
       discretion to determine whether a class will be certified.

               Certifying courts must be mindful that, when it is necessary to look
       beyond a party’s assertions to determine whether class certification is proper, the
       courts shall analyze any asserted facts, claims, defenses, and relevant law without
       questioning the actual merits of the case. We believe the above analysis strikes
       the appropriate balance between the need to ensure that the class certification
       prerequisites are sufficiently satisfied and the need to preserve a trial court’s
       discretion in making class certification decisions. [Henry, 484 Mich at 502-504.]

In this case, contrary to defendants’ assertion, the trial court did not rely solely on the pleadings.
Rather, it clearly considered evidence beyond the pleadings to find that class certification was
appropriate. Such an analysis is consistent with Henry, and we find no error.

        Defendants next argue that the trial court’s definition of the class is overly broad because
it includes current residents. Defendants maintain that these residents have no claim at this time
because they have not vacated their units and, thus, have no present right to a refund. In its
opinion granting class certification, the trial court included current residents who signed
agreements before December 1, 2000, under which they were entitled to a full refund of their
entrance deposits, because MCR 3.501(A)(2)(b) allows for class actions based on injunctive
relief. The trial court further decided that the class could be expanded to include individuals who
suffer damages after the case commences.

       MCR 3.501(A)(2)(b) provides:

               (2) In determining whether the maintenance of the action as a class action
       will be superior to other available methods of adjudication in promoting the
       convenient administration of justice, the court shall consider among other matters
       the following factors:

                                               * * *

               (b) whether final equitable or declaratory relief might be appropriate with
       respect to the class; . . .

Because the basis for plaintiff’s class action is the existence of common questions concerning
defendants’ liability for breach of contract and fraud with regard to the Residence and Care
Agreements, and these claims arose from defendants’ practices of inducing residents who were
entitled to a full refund of their entrance deposits to agree to accept a lesser refund so that their
units could be marketed, it was appropriate to allow current residents to join the class action.
Even though these residents had not yet suffered damages, it was permissible to add them to the
class because declaratory or injunctive relief was available to them for the same legal questions
that formed the basis of the class action.

                                                 -4-
       Defendants argue that because they adopted standardized pricing in 2014, current
residents are no longer harmed by the alleged practices at issue in this case. However, plaintiff’s
complaint was that defendants did not market the vacated units at the fair market price. Plaintiff
presented evidence that, despite defendants’ adoption of standardized pricing, units were still not
being marketed according to real estate market conditions, and residents continued to sign
amendments to obtain favorable marketing of their units. Therefore, it was appropriate to
include within the class all current residents who may be affected by agreements entered into
before December 1, 2000.

        Defendants argue that this case is analogous to Duskin, but that case is factually
distinguishable. Duskin, 304 Mich App at 653-654, involved a discrimination action, and the
proposed class included all male minority employees, including individuals who were not denied
promotions and, therefore, suffered no harm. This Court held that objective criteria was required
to support the definition of the class, which could not be satisfied where there was no way to
accurately measure how many employees who had not applied for promotions declined to do so
due to discrimination. Id. In contrast, the class in this case is defined by objective criteria,
namely, residents who are subject to an agreement in effect before December 1, 2000, and who
had not received a full refund.

        Defendants also argue that the class improperly includes members who had signed
amendments to their Residence and Care Agreements to accept discounted refunds. Defendants
argue that amendments to the original agreements are enforceable and, therefore, those
individuals do not have claims. However, the heart of plaintiff’s action is that defendants
refused to honor the terms of the original agreement to provide full entrance deposit refunds.
Plaintiff alleges that defendants engaged in fraudulent and misleading practices by inducing
residents to amend their agreements to accept less than a full refund in exchange for defendants’
cooperation in making reasonable efforts to re-let the members’ units. The fact that some
residents signed amended agreements and agreed to accept reduced refunds does not foreclose
their participation in the class of litigants who may have been harmed by defendants’ alleged
conduct at issue in this case. Indeed, one who claims fraud may still continue to exercise rights
under a contract and claim damages for differences between the contract actually entered and the
contract as represented. See Elson v Harris, 356 Mich 175, 178-180; 96 NW2d 767 (1959).2

       Defendants also argue that because plaintiff did not sign an amended agreement, he is not
a proper representative of residents who signed amended agreements. Plaintiff’s claims,
however, seek not only to enforce the original agreements for a full refund, but also to challenge
defendants’ practices of marketing units for sale. Plaintiff alleges that defendants’ practice of

2
  We also note that defendants’ argument that these residents are required to tender back the
amount paid to them under the amended agreement is misplaced because former residents are not
necessarily seeking to rescind their agreements to vacate their properties, and the amended
agreements are not releases for the claims asserted in this action. See Stefanac v Cranbrook Ed
Community, 435 Mich 155, 165-167; 458 NW2d 56 (1990); Gloeser v Moore, 283 Mich 425,
431; 278 NW 72 (1938); Dorgan v Birney, 272 Mich 145, 153; 261 NW 278 (1935).

                                                -5-
inducing residents to sign amended agreements in exchange for defendants’ cooperation in
marketing the residents’ units itself violates obligations under the residents’ original agreements.
Plaintiff’s theory is that defendants’ improper and allegedly fraudulent practices caused
economic harm to residents who signed an amended agreement (and thus received a reduced
refund), as well as residents who refused to sign an amended agreement, because defendants
refused to market all of the residents’ units in good faith. Although plaintiff and residents who
signed an amended agreement may have been harmed in different ways, the alleged cause of that
harm was based on the same underlying conduct for both groups of residents. Therefore, the trial
court did not err in concluding that plaintiff was also affected by defendants’ practice of
requesting residents to sign amended agreements. Accordingly, plaintiff was a proper
representative of the class.

        Defendants also argue that residents who vacated their units after defendants adopted
standardized pricing on August 1, 2014, should not be part of the class because their
implementation of a standardized pricing plan evidences good-faith marketing of all units.
According to defendants, under this new plan, deposits paid by new residents are based on a
standard formula, relying on the size or floor plan of the units, not the amount paid by the
previous resident of each unit. However, it is unclear how this method of doing business
eliminates the possibility that defendants may still not be properly paying full refunds to
residents who entered into agreements before December 1, 2000. We are not convinced that the
trial court erred by failing to exclude from the class those residents who entered into agreements
before December 1, 2000, but vacated their units after August 1, 2014.

        Next, defendants argue that plaintiff failed to establish all requirements for a class action
set forth in MCR 3.501(A)(1), which provides:

               One or more members of a class may sue or be sued as representative
       parties on behalf of all members in a class action only if:

               (a) the class is so numerous that joinder of all members is impracticable;

               (b) there are questions of law or fact common to the members of the class
       that predominate over questions affecting only individual members;

              (c) the claims or defenses of the representative parties are typical of the
       claims or defenses of the class;

               (d) the representative parties will fairly and adequately assert and protect
       the interests of the class; and

                (e) the maintenance of the action as a class action will be superior to other
       available methods of adjudication in promoting the convenient administration of
       justice.

       Plaintiff sought to define the class to include residents who signed Residence and Care
Agreements before December 1, 2000. Plaintiff presented evidence that there were 223 former
residents who signed agreements before December 1, 2000, and had vacated HFV since May
2008, and 839 current residents, many of who signed agreements before December 1, 2000. The

                                                -6-
trial court agreed that it would be impracticable to join these residents in a single action.
Although the trial court redefined the class to include only those residents who entered into
Residence and Care Agreements before December 1, 2000, and who either did not receive a full
refund or were subject to declaratory relief, it found that “there are still a sufficient number of
former residents who did not receive full refunds of their entrance deposits, or who may be
threatened with the same conduct, to satisfy the criteria for establishing numerosity under MCR
3.501(A)(1)(a).” Defendants argue that plaintiff did not meet his burden of proving numerosity
because the number of potential members did not take into account adjustments to the class. We
disagree.

          In Zine v Chrysler Corp, 236 Mich App 261, 287-288; 600 NW2d 384 (1999), this Court
stated:

                 There is no particular minimum number of members necessary to meet the
          numerosity requirement, and the exact number of members need not be known as
          long as general knowledge and common sense indicate that the class is large.
          Because the court cannot determine if joinder of the class members would be
          impracticable unless it knows the approximate number of members, the plaintiff
          must adequately define the class so potential members can be identified and must
          present some evidence of the number of class members or otherwise establish by
          reasonable estimate the number of class members. [Citations omitted.]

        Although the number of members in the trial court’s redefined class is unclear, plaintiff
was not required to identify the number of affected individuals with specificity. Initially,
plaintiff identified a group of 223 former residents who signed agreements before December 1,
2000. According to HFV’s executive director, a “high majority” of residents received full
refunds. But even if the group of 223 former residents is substantially reduced, the trial court
also included within the class current residents who signed agreements before December 1, 2000,
and were still residing in their units. Plaintiff presented evidence that there were 839 current
residents at HFV. Again, the number of current residents who signed agreements before
December 1, 2000, is unclear. However, we are satisfied that plaintiff sufficiently demonstrated
a potential class large enough that joinder is not practical. In Rodriguez v Berrybrook Farms,
Inc, 672 F Supp 1009, 1013 (WD Mich, 1987), the court explained that a class between 21 and
40 may be sufficient for a class action, while more than 40 typically is sufficient. The court
stated:

                  It is well settled that while there are no “magic numbers” which
          automatically signify the existence or non-existence of a class action, the general
          rule of thumb is that plaintiffs should be so numerous so as to make it
          impracticable to bring them all before the court. Rule 23(a)(1). See e.g., Dale
          Electronics, Inc. v. RCL Electronics, Inc., 53 F.R.D. 531 (D.N.H. 1971). See also
          Moore, Moore’s Federal Practice, ¶ 23.05[1], at 23-151; 13-155 (2d Ed. 1985)
          (citing modern trend and noting number under 21 usually not enough; between 21
          and 40 mixed response; and where numbers are over 40 and in excess of one
          hundred always satisfactory). [Id.]

                                                  -7-
        While a plaintiff cannot rely on speculation, it is not necessary to know the exact size of
the class. As explained in Rodriquez, 672 F Supp at 1013:

               Plaintiffs need only demonstrate that it is extremely inconvenient or
       difficult to join the members of the class. Wright & Miller, Federal Practice
       Procedure, § 1672 at 573. Further, mere speculation as to the number of parties
       involved is insufficient to satisfy Rule 23(a)(1). See Weathers v. Peters Realty
       Corporation, 499 F.2d 1197 (6th Cir. 1974). Still, where the exact size of a class
       is not known, but common sense indicates that the number is large, courts have
       sometimes taken judicial notice of the size of the class and assumed that joinder is
       impracticable. Cf. Bartelson v. Dean Witter & Co., 86 F.R.D. 657 (E.D.Pa.
       1980); see also Evans v. United States Pipe & Foundry Co., 696 F.2d 925 (11th
       Cir. 1983) (plaintiffs not required to show exact size of class and doubts should be
       resolved in favor of certifying the class).

        Here, plaintiff was only required to provide common sense estimates of the class size.
Plaintiff presented evidence of the number of current residents, as well as former residents who
had signed agreements before December 1, 2000. That evidence supports the trial court’s
determination that “there are still a sufficient number of former residents who did not receive full
refunds of their entrance deposits, or who may be threatened with the same conduct, to satisfy
the criteria for establishing numerosity under MCR 3.501(A)(1)(a).”

        Another requirement that must be shown by a plaintiff seeking to pursue a class action is
that “there are questions of law or fact common to the members of the class that predominate
over questions affecting only individual members.” MCR 3.501(A)(1)(b). The requirement of
commonality concerns

       whether there “is a common issue the resolution of which will advance the
       litigation.” Sprague v General Motors Corp, 133 F3d 388, 397 (CA 6, 1998), cert
       den 524 US 923; 118 S Ct 2312; 141 L Ed 2d 170 (1998). It requires that “the
       issues in the class action that are subject to generalized proof, and thus applicable
       to the class as a whole, must predominate over those issues that are subject only to
       individualized proof.” [A&M Supply Co v Microsoft Corp, 252 Mich App 580,
       599; 654 NW2d 572 (2002) (citation and quotation marks omitted).]

Yet there is no requirement that all questions necessary for ultimate resolution be common to the
members of the class. Id.

        In this case, the trial court found that the class members’ claims involved the same
general facts and theories related to a common scheme by defendants to lease units to residents
promising a full refund upon reoccupancy. Plaintiff relied on theories of breach of contract,
fraud, breach of the duty of good faith and fair dealing, violation of the LCDA, and conversion.
The trial court found that the proofs regarding reliance did not foreclose a class action because
defendants used standard forms that did not significantly vary in content over the years. In
addition, the trial court found that, although the element of damages would be individualized for
each resident, the common liability issues predominated over the assessment of individual
damages.

                                                -8-
        We agree with the trial court that plaintiff demonstrated that his claims can be decided on
a class-wide basis considering that the claims were based on theories that defendants used
substantially similar residential agreements for their residents and, thereafter, used a common
scheme or method of trying to get residents to (1) agree to amend their original agreements or (2)
risk not having their units marketed in a fair manner, thereby causing residents to either not
receive full refunds or have their refunds significantly delayed. In both scenarios, plaintiff’s
theories of liability were based on defendants’ common practices.

        Defendants attempt to identify differences among the potential class members, such as
differences in the types of units HFV provides, the different management companies that were
involved over the years, and the different times when units were marketed. We agree with
plaintiff that these differences do not materially impact plaintiff’s claims. To reiterate, plaintiff’s
claims involve HFV’s agreements that promised full refunds to residents, and HFV’s common
practice of allegedly breaching those agreements by not honoring that term and inducing
residents to agree to accept a lesser refund in order to have their units marketed at a lower price
so that the residents could receive a lesser refund on a timely basis. While differences in
individual units or the times when units were vacated may be factors in calculating damages,
those differences do not impact the common liability issues in this litigation. Because the
common issues regarding defendants’ liability predominate over individual claims, plaintiff met
his burden in proving commonality. This conclusion is supported by an examination of each of
plaintiff’s individual claims.

        Plaintiff’s fraud claim is based on generalized allegations common to all residents of the
class, not just his mother. He is relying on defendants’ use of standardized agreements,
amendments, and advertising practices. Reliance can be established on a class-wide basis
because of the use of standardized documents that have not significantly varied over the years.
See Stanich v Travelers Indemnity Co, 249 FRD 506, 518 (ND Ohio, 2008) (“Where there are
uniform presentations of allegedly misleading information, or common omissions throughout the
entire class, especially through form documents, courts have found that the element of reliance
may be presumed class-wide, thereby obviating the need for an individualized inquiry of each
class member’s reliance.”). Because this case involved the use of form documents that did not
significantly vary in their terms over the years, plaintiff’s fraud claim was suitable for class-wide
adjudication.

         Plaintiff’s claim for breach of contract was based on HFV’s continuous practice of not
fairly marketing units unless a resident agreed to an amendment to accept less than a full refund,
which was a practice common to all residents. Plaintiff’s claim for breach of the duty of good
faith and fair dealing was based on defendants’ alleged practice of not fairly marketing a unit for
re-letting unless a resident agreed to an amendment to accept a lesser refund, which, again, was
common to all residents. Therefore, it was appropriate to adjudicate these claims in a class-wide
action.

        Plaintiff’s complaint included additional allegations that defendants violated the LCDA
by making misleading statements to residents and in HFV’s advertising materials regarding a
resident’s right to receive a full refund. Again, similar to plaintiff’s claims for fraud and breach
of contract, plaintiff is relying on the form agreements and HFV’s advertising materials to show
that residents were led to believe that entrance deposits would be fully refunded when, in reality,

                                                 -9-
defendants were not actually following that practice. Again, this claim is appropriate for a class
action because it is based on evidence common to the class members. Similarly, plaintiff’s
conversion claim involves the same facts related to defendants’ common practice of not paying
full refunds, resulting in the improper retention of deposits that were owed to residents.
Accordingly, it was also appropriate to adjudicate the conversion claim in a class-wide action.

       Defendants argue that class certification was improper because an award of damages to
each class member would need to be individualized, thereby requiring numerous “mini trials”
and making class action litigation unmanageable. We disagree.

        A class action is not foreclosed even if separate trials on damages may be necessary,
especially if it is possible to use a method or formula to determine actual damages or injury to
each class member. A&M Supply, 252 Mich App at 600-601. For those members who signed
amendments, a formula for determining their potential damages is possible based on the entrance
deposits they paid and the amounts they actually received for discounted refunds. It appears that
damages that flow from the fraud claims, claims for breach of good faith and fair dealing,
conversion, or violation of the LCDA would be subject to a similar formula for determining
damages. While an assessment of damages would be performed on an individual basis, once the
issues regarding liability are resolved, damages for tort or fraud claims likely would be imposed
on a class-wide basis, and any claims based on actual damages could be calculated using the
amounts in each resident’s original agreement and the amounts set forth in any amendment
entered into by a resident. Defendants have not shown that it is inappropriate to resolve the
common claims on a class-wide basis merely because damages must be assessed on an individual
basis.

        Another requirement for an action to be pursued on a class-wide basis is that the plaintiff
must show that “the claims or defenses of the representative parties are typical of the claims or
defenses of the class.” MCR 3.501(A)(1)(c). In Mich Ass’n of Chiropractors v Blue Cross Blue
Shield of Mich, 300 Mich App 551, 573; 834 NW2d 148 (2013), this Court explained the
typicality requirement as follows:

               Commonality and typicality “tend to merge. Both serve as guideposts for
       determining whether under the particular circumstances maintenance of a class
       action is economical and whether the named plaintiff’s claim and the class claims
       are so interrelated that the interests of the class members will be fairly and
       adequately protected in their absence.” Gen Tel Co of the Southwest v Falcon,
       457 US 147, 157 n 13; 102 S Ct 2364; 72 L Ed 2d 740 (1982). However, they are
       separate elements. Typicality is established when “the claims or defenses of the
       representative parties are typical of the claims or defenses of the class [.]” MCR
       3.501(A)(1)(c). When the allegations merely make a bare statement that the
       requirement is met, the trial court must independently determine that the plaintiffs
       can sufficiently support “their allegations that their legal remedial theories were
       typical of those of the class.” Henry, 484 Mich at 506 n 40.

       In this case, the trial court ruled as follows:

                                                 -10-
               Plaintiff’s claims are typical of the proposed members of the class for two
       reasons. First, Plaintiff’s claim is based on the same legal theory as the other
       class members. Plaintiff’s legal theories include breach of contract, fraud,
       misrepresentation, and violations of the Michigan Living Care Disclosure Act.
       Second, Plaintiff’s claims also arise from the same alleged course of conduct
       regardless of whether Plaintiff or the proposed class members signed the
       amendments to the Residence and Care Agreements. This conduct includes
       allegations that Defendants wrongfully misled prospective tenants to believe that
       the entrance deposit would be 100 percent refundable, attempts to fraudulently
       deceive former residents to believing they were required to surrender a portion of
       their entrance deposit, and refusal to provide former residents with the full
       amount of the entrance deposit refund. Therefore, the claims of the Plaintiff are
       typical of the proposed members of the class.

              Defendant’s [sic] assert that Plaintiff’s claim is not typical of the class
       because Plaintiff’s unit at Henry Ford Village is distinguishable from other
       proposed class members with respect to the unit’s characteristics and timing of
       sale. However, this argument is primarily aimed at the individualized calculation
       of damages. As stated above, individualized calculations of damages do not
       preclude class certification. Plaintiff’s claims are typical of the class members
       because they are based on the same legal theories and arise from the same alleged
       conduct.

        Defendants argue that plaintiff’s claims are not typical of those of other class members
because he did not sign an amendment to accept a discounted refund. Although defendants
correctly observe that the class consists of two different types of residents—those who agreed to
accept a discounted refund and those who chose not to amend their original agreement—this
difference does not materially alter the nature of plaintiff’s claims for both types of residents.
Plaintiff’s claims for fraud and breach of contract relate to defendants’ representations that
residents would receive a full refund of their entrance deposits and their failure to adhere to the
terms of the original agreements entered into by all class members for a full refund upon reletting
of their individual units. Plaintiff’s theory is that both types of residents were affected by
defendants’ common practice of inducing residents to agree to accept a discounted refund.
Plaintiff maintains that defendants’ practice of insisting on a discounted refund to obtain
competitive marketing of a vacated unit breached duties owed under the original residential
agreements and supports a claim for fraud, regardless of whether a resident actually agreed to
accept a discounted refund. Although the execution of amendments and the receipt of partial
refunds by some residents may affect the calculation of individual damages, it does not affect the
typicality of plaintiff’s claims with respect to the class.

        Defendants also argue that plaintiff’s claims are not typical of other residents’ claims
because different management companies were involved at various periods and the occupancy of
residential units was affected by fluctuations in the real estate market. These factors do not
affect the typicality of plaintiff’s claims. Plaintiff’s theory is that HFV continued to use the same
method or scheme when it had residents sign like agreements and like amendments that did not
significantly vary depending on which management company was handling the acquisition of
units by residents. Each management company was alleged to have acted as HFV’s agent. The

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differences in the identities of the agents may be relevant to assessing the liability of each
individual defendant, but does not impact the typicality of plaintiff’s claims, which are based on
HFV’s common scheme and practices, regardless of which management company was involved.

        To maintain a class action, a plaintiff must also show that “the maintenance of the action
as a class action will be superior to other available methods of adjudication in promoting the
convenient administration of justice.” MCR 3.501(A)(1)(e). In A&M Supply, 252 Mich App at
601-602, this Court explained:

               MCR 3.501(A)(1)(e), the fifth and final class action factor, asks whether a
       class action, rather than individual suits, will be the most convenient way to
       decide the legal questions presented, making a class action a superior form of
       action. In deciding this factor, the court may consider the practical problems that
       can arise if the class action is allowed to proceed. “The relevant concern . . . is
       whether the issues are so disparate” that a class action would be unmanageable.
       To determine whether a class action is a superior form of action, a trial court must
       consider:

                       (a) whether the prosecution of separate actions by or
               against individual members of the class would create a risk of

                      (i) inconsistent or varying adjudications with respect to
               individual members of the class that would confront the party
               opposing the class with incompatible standards of conduct; or

                       (ii) adjudication with respect to individual members of the
               class that would as a practical matter be dispositive of the interests
               of other members not parties to the adjudications or substantially
               impair or impede their ability to protect their interests;

                      (b) whether final equitable or declaratory relief might be
               appropriate with respect to the class;

                      (c) whether the action will be manageable as a class action;

                      (d) whether in view of the complexity of the issues or the
               expense of litigation the separate claims of individual class
               members are insufficient in amount to support separate actions;

                        (e) whether it is probable that the amount which may be
               recovered by individual class members will be large enough in
               relation to the expense and effort of administering the action to
               justify a class action; and

                      (f) whether members of the class have a significant interest
               in controlling the prosecution or defense of separate actions.
               [Footnotes omitted.]

                                               -12-
The superiority and commonality requirements are related because if individual questions of fact
predominate over common questions, the case will not be manageable as a class action. Duskin,
304 Mich App at 658.

       Here, the trial court found that this requirement supported pursuing plaintiff’s claims in a
class-wide action, stating:

              In the present case, this Court finds that a class action would be the most
       convenient way to adjudicate this matter. Under MCR 3.501(A)(2)(a), the
       defendant may be subjected to inconsistent standards of conduct if each proposed
       members [sic] claim were tried individually. Furthermore, Plaintiff is also
       seeking equitable relief in addition to damages. MCR 3.501(A)(2)(b).

        As explained previously, the underlying issues involve HFV’s use of standardized
agreements and amendments, which were common to all residents, and HFV’s common practice
of inducing residents to agree to a discounted refund in order for their units to be fairly marketed.
Individualized evidence becomes more necessary when determining individual damages, but the
overall issues related to defendants’ liability involve matters common to all residents. We are
not persuaded by defendants’ claim that pursuit of this action on a class-wide basis will require a
massive amount of discovery for each individual resident considering that the claims are based
on standardized form agreements and amendments, as well as practices common to all residents.
In addition, the information related to each resident and each unit should be within defendants’
possession. To the extent that damages must be individualized, this alone does not render a class
action inappropriate.

        With respect to whether HFV violated a duty of good faith and fair dealing when
marketing the units, defendants should be able to offer evidence of their marketing efforts at
various times during the years in question to explain how it responded to fluctuations in the real
estate market. Defendants also argue that the potential claims by former residents and their
estates are large enough to support individual actions. This may be true for some residents who
are due a full refund, but not necessarily so for residents who allegedly were induced to sign an
amendment to accept a lesser refund.

        Overall, the trial court, which will be tasked with handling the case, found that the case
was more manageable as a class action. Considering the predominately common questions of
fact regarding defendants’ liability, the trial court did not err in ruling that a class action was the
superior method for resolving the claims.

        The final requirement for certification of a class action is that “the representative parties
will fairly and adequately assert and protect the interests of the class.” MCR 3.501(A)(1)(d).
The adequacy element requires a “showing that ‘class representatives can fairly and adequately
represent the interests of the class as a whole.’ ” Duskin, 304 Mich App at 657 (citation
omitted). “To show adequacy, the proponents must show that (1) counsel is qualified to pursue
the proposed class action, and (2) the members of the class do not have antagonistic or
conflicting interests.” Id.

       In this case, the trial court addressed the requirement as follows:

                                                 -13-
               Plaintiff’s counsel appears to have adequate experience in litigating
       complex class actions. Pl’s Exhibit 9. Also, there is no assertion that Plaintiff’s
       counsel is unqualified to pursue this action. Moreover, there appears to be no
       conflicting interests between the representative plaintiff and the proposed class
       members. Accordingly, the requirement of adequacy is satisfied as to this claim.

        Defendants do not dispute that plaintiff’s counsel and his law firm, which has handled
other class actions, was qualified to pursue this matter as a class action. Defendants instead
focus on whether plaintiff is qualified to act as a class representative. As discussed previously,
we believe that plaintiff is qualified to act on behalf of other proposed class members, despite
differences in the circumstances of some of the residents.

        Defendants argue that plaintiff cannot represent other class members because he dealt
only with Life Care Services as HFV’s management company, while other class members dealt
with other management companies. As explained earlier, plaintiff’s claims are not dependent on
the identity of the management company, but instead are based on form agreements and policies
that were generally consistent throughout the tenure of the different management companies.
Plaintiff’s theory is that the management companies were acting as HFV’s agents in carrying out
its common policies. The different identities of the management companies have little or no
impact on plaintiff’s ability to properly represent the interests of other class members.

        Defendants also argue that plaintiff’s position is at odds with the entire class, or at least
current residents, because plaintiff is seeking to force an overall reduction in the amounts
charged for entrance deposits, and to force HFV to repay entrance deposits before units are
reoccupied. Defendants contend that if plaintiff is successful, it will increase the likelihood that
HFV will file for bankruptcy protection because it already has a negative cash flow and has been
in default to its secured bondholders.

        We are not persuaded that plaintiff’s claims would necessarily cause an increased risk of
bankruptcy. In particular, plaintiff is not challenging the requirement that a unit must be
reoccupied before a refund is paid back to a former resident; he is only claiming that defendants
are unwilling to fairly market a unit unless a resident signs an agreement to accept a lesser
refund. Further, the amount of an entrance deposit that HFV accepts from new residents has
been left to HFV. It is not appropriate for defendants to argue that plaintiff will be responsible
for any economic harm that may occur to HFV when it was HFV who offered 100 percent
refunds of entrance deposits. In addition, to the extent that bankruptcy may affect all refund
claims as unsecured debts, as defendants allege, such a scenario would also impact plaintiff’s
claim for a full refund. Defendants have not shown that plaintiff cannot properly represent the
interests and claims of other class members.

       Affirmed.

                                                              /s/ Elizabeth L. Gleicher
                                                              /s/ Michael F. Gadola
                                                              /s/ Colleen A. O'Brien

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