Court Opinion

ID: 9381250
Source: CourtListenerOpinion
Date Created: 2023-03-22 15:04:01.168788+00
Date Added: 2024-06-11T17:17:31.196504
License: Public Domain

Third District Court of Appeal
                               State of Florida

                        Opinion filed March 22, 2023.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                              No. 3D22-181
                       Lower Tribunal No. 17-22854
                          ________________

                 Florida Power & Light Company,
                                  Appellant,

                                     vs.

                           Heydi Velez, et al.,
                                 Appellees.

     An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, David C. Miller, Judge.

     Squire Patton Boggs (US), LLP, Alvin B. Davis and Digna B. French;
Joseph Ianno, Jr. (Juno Beach); Boies, Schiller & Flexner, LLP, Stuart H.
Singer, Sashi C. Bach, and Pascual Oliu (Ft. Lauderdale), for appellant.

      Armas Bertran Zincone and J. Alfredo Armas; MSP Recovery Law
Firm, John H. Ruiz and Alexis Fernandez; Acosta Law Firm, Julio C. Acosta
and Simeon Genadiev; Dorta Law and Gonzalo R. Dorta, for appellees.

Before FERNANDEZ, C.J., and LINDSEY, and HENDON, JJ.

     FERNANDEZ, C.J.
     Florida Power & Light Company (“FPL”) appeals the trial court’s non-

final order certifying a class of FPL customers who sued FPL for breach of

contract and gross negligence after Hurricane Irma. Because the trial court

correctly determined that plaintiffs satisfied the elements necessary to

establish class treatment of their claims against FPL under Florida Rule of

Civil Procedure 1.220(b)(3), we affirm.

              FACTS AND PROCEDURAL BACKGROUND

     In 2005, FPL filed a base rate proceeding before the Public Service

Commission (“PSC”). The parties reached a Settlement Agreement whereby

FPL would be allowed to recover storm restoration costs and replenish its

Storm-Recovery Reserve through the monthly storm surcharge.

     Thereafter, FPL customers were affected by Hurricanes Dennis,

Katrina, Rita, and Wilma. FPL petitioned the PSC to approve the issuance

of storm recovery bonds pursuant to section 366.8260, Florida Statutes

(2005). The bonds would allow FPL to recover over $213 million and $815

million for 2004 and 2005 storm costs; replenish its storm-recovery reserve

to a level of approximately $650 million; and recover interest incurred

through the bond issuance date and bond issuance costs of $23 million. As

a result of the bonds, FPL customers would have to pay a monthly storm

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surcharge. In return, FPL was to improve and strengthen its facilities for

future storms, remove decaying utility poles, and remove vegetation that was

making contact with local power lines.

      During hearings the PSC scheduled on the bond issue, FPL stated the

storm charge would be used for, among other things, restoring FPL’s

facilities to their pre-storm condition; repairing and replacing poles that were

leaning or were braced during the initial restoration stage; replacing lightning

arrestors; repairing or replacing capacitor banks; and strengthening system

infrastructure. FPL’s Storm Secure Plan further would adopt the National

Electric Safety Code (“NESC”) to improve FPL’s system infrastructure to

withstand extreme wind conditions. The PSC approved the order and the

issuance of the storm-recovery bonds in the amount up to $708 million.

      Later, in 2012, FPL petitioned for a permanent increase in base rates

and charges. It requested a base rate increase of $528 million. A Settlement

Agreement was reached, and the PSC gave FPL a revenue increase of $378

million effective January 1, 2013.

      In 2016, FPL requested another base rate increase. FPL's request was

intended to "reduce outages and enable FPL to restore power for customers

and help local communities recover more quickly when severe weather

strikes." The PSC authorized a revenue increase of $400 million effective

                                       3
January 1, 2017. Also in 2016, FPL filed a petition seeking to implement a

storm surcharge to recover $318.5 million for Hurricane Matthew restoration

costs and to replenish its Storm-Recovery Reserve. The PSC granted FPL's

2017 storm surcharge on each customer’s monthly residential bill, beginning

on March 1, 2017, which was to last for twelve months.

      On March 15, 2016, FPL filed its petition with the PSC for approval of

FPL’s Storm Hardening Plan. FPL stated it would comply with NESC

extreme wind loading (“EWL”) standards by hardening its system so that it

would withstand winds of 145, 130, and 105 mph in the three different wind

regions of the state.

      In September 2017, Hurricane Irma sideswiped Florida. Named class

members Heydi Velez, Miriam Perez, Guillermo Patino-Hidalgo, Enrique

Arguelles, Mercedes Sastre, Ruben N. Mendiola, Carlos M. Colina, Shalom

Navarro, and Jose Zarruk (collectively, “plaintiffs”) were FPL customers

whose power went out for an extended period after Hurricane Irma. As

customers, they entered into a contract with FPL, the Tariff, for electrical

services that set out the parties’ obligations. In the Tariff, FPL agreed to use

“reasonable diligence at all times to provide continuous service and storm

recovery activities.”

                                       4
      During Hurricane Irma, the very highest sustained wind recorded by

the National Weather Service was 115 mph in Marco Island where the storm

first made land fall. The highest gust recorded was 142 mph near Naples

Airport. Although Irma did not approach any county east of Lake

Okeechobee, over 75% of FPL customers in South Florida lost power for

close to a week. In the western half of South Florida, over 90% of FPL

customers lost power for over a week.

      On February 1, 2018, plaintiffs brought a class action lawsuit against

FPL. They alleged one count for breach of contract seeking compensatory

damages for FPL’s failure to comply with its contractual obligations to use

reasonable diligence at all times to provide continuous service in accordance

with FPL’s Tariff and industry standards. Plaintiffs alleged that each of the

individual plaintiffs entered into a uniform contractual agreement with FPL

for services (the Tariff), for which plaintiffs paid a monthly fee. They alleged

each plaintiff was individually charged a surcharge for storm restoration and

hardening activities, pursuant to section 366.8260, Florida Statutes (2017).

Plaintiffs suffered consequential damages such as loss of food and incurred

expenses, loss of income, loss of sleep, intense discomfort, and more.

      The Tariff specifically stated that FPL “will use reasonable diligence at

all times to provide continuous service at the agreed nominal voltage” and

                                       5
storm recovery activities. Plaintiffs claim that FPL failed to use reasonable

diligence by failing to meet NESC standards and its own standards, and that

as a result of FPL’s breaches, Florida residents suffered unnecessary and

prolonged power outages from Hurricane Irma that sideswiped South

Florida.

      In Count II for gross negligence, plaintiffs claimed FPL “acted with

reckless, willful, and wanton disregard for plaintiffs in the gross negligent

maintenance and management of its system infrastructure, storm

organization, restoration plan, and outright failure to restore, replace, and

better the distribution system and hazards posed by vegetation and trees

close to power lines.” They alleged FPL became aware of this need after

previous storms hit Florida and undertook a duty to strengthen its distribution

system in anticipation of the next hurricane. Plaintiffs further alleged that FPL

was grossly negligent in performing various actions such as in replacing

outdated grids, decaying utility poles, and hardening its power grid after the

prior storm; failing to clear vegetation from the vicinity of distribution facilities

and equipment; failing to clear vegetation from all feeder circuits serving top

critical infrastructures prior to the peak of hurricane season; and failing to

replace defective equipment, including but limited to, company power poles,

power lines, and transformers.

                                         6
      Thereafter, FPL moved to dismiss the action, which the trial court

denied. FPL then petitioned this Court for a writ of prohibition to require the

parties to take their dispute before the PSC. This Court denied the writ in

Florida Power and Light Company v. Velez, 257 So. 3d 1176 (Fla. 3d DCA

2018). Thus, the matter returned to the trial court.

      Plaintiffs then proceeded with class discovery. Pursuant to a discovery

settlement agreement the parties entered, FPL produced data regarding its

hurricane readiness and performance delivery reports to the PSC. FPL also

produced data relating to power outage assessments, diagnoses, causes,

and repairs during and after Hurricane Irma.

      On October 18, 2021, plaintiffs filed their Motion for Entry of Class

Certification Order. The plaintiffs moved to certify the following class:

      All persons and business owners who reside and are otherwise
      citizens of the state of Florida that entered into contractual
      agreement with FPL for electrical services, were charged a storm
      charge, experienced a power outage after Hurricane Irma, and
      suffered consequential damages, directly and proximately,
      because of FPL’s breach of contract and/or gross negligence.

      The trial court held a three-day evidentiary hearing on class

certification and other issues in December 2021. Plaintiffs argued that the

trial court should focus not on who would prevail on the issues raised related

to the breach of contract or gross negligence counts, but rather whether the

requirements of rule 1.220 were met. Plaintiffs contended that based on

                                       7
FPL’s own structured data, FPL could identify exactly which customer lost

power, at what address, when they lost power, and the reason why they lost

power. At the end of the hearing on the third day, the trial court granted

plaintiffs’ motion and certified the class. Thereafter, the trial court entered its

detailed, twenty-four page “Order Granting Plaintiffs’ Motion for Class

Certification.” FPL then appealed.

                                    DISCUSSION

      “A trial court’s order certifying a class is a non-final appealable order

that is reviewed for an abuse of discretion.” Miami Auto. Retail, Inc. v.

Baldwin, 97 So. 3d 846, 851 (Fla. 3d DCA 2012). This is because “‘the

determination that a case meets the requirements of a class action is a

factual finding,’ which falls within a trial court’s discretion.” Sosa v. Safeway

Premium Fin. Co., 73 So. 3d 91, 103 (Fla. 2011). “[T]he appellate court must

fully recognize the superior vantage point of the trial judge and should apply

the ‘reasonableness’ test to determine whether the trial judge abused his

discretion. If reasonable men could differ as to the propriety of the action

taken by the trial court, then the action is not unreasonable and there can be

no finding of an abuse of discretion.” Canakaris v. Canakaris, 382 So. 2d

1197, 1203 (Fla. 1980). “A trial court should resolve doubts with regard to

                                        8
certification in favor of certification, especially in the early stages of litigation.”

Sosa, 73 So. 3d at 105.

      FPL contends that plaintiffs did not meet their burden under Florida

Rule of Civil Procedure 1.220(b)(3) because individual issues predominate

in this case, and a class action is not manageable or superior to other forms

of resolving this controversy. We find no merit in this argument.

      Parties seeking class certification have the burden of pleading and

proving each element of Florida Rule of Civil Procedure 1.220(a) and one of

the three requirements of Florida Rule of Civil Procedure 1.220(b). Terry L.

Braun, P.A. v. Campbell, 827 So. 2d 261, 265 (Fla. 5th DCA 2002). Under

Rule 1.220(a), the four prerequisites for class certification are numerosity,

commonality, typicality, and adequate representation. Broin v. Philip Morris

Cos., 641 So. 2d 888 (Fla. 3d DCA 1994). FPL makes the general statement

that plaintiffs have not satisfied the elements of Rule 1.220(a). However, it

does not address this argument in its briefs. We have carefully reviewed the

record and find no abuse of discretion in the trial court's determination that

the class established the four elements under Rule 1.220(a). Love v. General

Dev. Corp., 555 So. 2d 397 (Fla. 3d DCA 1989).

      In addition to establishing numerosity, commonality, typicality, and

adequacy of representation, plaintiffs must also demonstrate that the action

                                          9
meets the criteria under at least one basis for class certification under Rule

1.220(b). Here, plaintiffs sought class certification under rule 1.220(b)(3).

This rule states:

      (b) Claims and Defenses Maintainable: A claim or defense may
      be maintained on behalf of a class if the court concludes that the
      prerequisites of subdivision (a) are satisfied, and that
            …
      (3) … the questions of law or fact common to the claim or defense
      of the representative party and the claim or defense of each
      member of the class predominate over any question of law or
      fact affecting only individual members of the class, and class
      representation is superior to other available methods for the fair
      and efficient adjudication of the controversy. …

Thus, predominance and superiority must be shown. Freedom Life Ins. Co.

of Am. v. Wallant, 891 So. 2d 1109, 1118 (Fla. 4th DCA 2004) (“For class

certification to be appropriate under Rule 1.220(b)(3), ‘the issues in the class

action that are subject to generalized proof, and thus applicable to the class

as whole, must predominate over those issues that are subject only to

individualized proof.’”).

      Plaintiffs must first establish that common questions of law and fact

predominate over individual, plaintiff-specific issues. Fla. R. Civ. P.

1.220(b)(3); Sosa, 73 So. 3d at 111. “Florida courts have held that common

questions of fact predominate when the defendant acts toward the class

members in a similar or common way.” Sosa, 73 So. 3d at 111. “The

methodology employed by a trial court in determining whether class claims

                                      10
predominate over individual claims involves a proof-based inquiry.” Id. at

112. Thus, a class representative establishes predominance if “the class

representative can prove his individual case and, by so doing, necessarily

prove the cases for each of the other class members.” InPhyNet Contr.

Servs. v. Soria, 33 So. 3d 766, 771 (Fla. 4th DCA 2010).

      Here, Rule 1.220(b)(3) certification was proper because even where

some individualized issues of proof exist in a case, where an issue raised by

a common contract provision predominates, “the better reasoned approach

is to maintain the suit as a class action and, if required after further

development of the issues, permit the lower court to create subclasses.”

Paladino v. Am. Dental Plan, Inc., 697 So. 2d 897, 899 (Fla. 1st DCA 1997).

Further, “[N]umerous courts have recognized that the presence of

individualized damages issues does not prevent a finding that the common

issues in the case predominate.” Allapattah Servs., Inc. v. Exxon Corp., 333

F.3d 1248, 1261 (11th Cir. 2003).

      The record supports the trial court’s conclusion that plaintiffs

established that common questions of law and fact predominate over

individual plaintiff issues. FPL’s Tariff is a form document, and FPL admitted

it applies to all plaintiffs and class members. As previously discussed, FPL

drafted the Tariff, and it was presented to its customers on a take it or leave

                                      11
it basis. Plaintiffs and class members had no bargaining power in the drafting

of the Tariff. The Tariff    also incorporates FPL’s “Service Standard” as

previously discussed and incorporated the latest edition of the NESC. The

Tariff further provides for the storm charge that plaintiffs referenced in their

amended complaint. Plaintiffs claim that due to FPL’s breach of the Tariff,

plaintiffs and class members experienced consequential damages.

      Predominance exists where common questions can be answered by

use of computerized software systems. Roper v. Consurve, Inc., 578 F.2d

1106, 1113 (5th Cir. 1978) (“While it may be necessary to make individual

fact determinations with respect to charges, if that question is reached, these

will depend on objective criteria that can be organized by a computer,

perhaps with some clerical assistance.”). As the trial court noted in its order,

“It is well-settled in data-driven cases like this one, even if there are potential

individualized determinations, that ‘the necessity of making individualized

factual determinations does not defeat class certification if those

determinations are susceptive to generalized proof like [business] records.’

Minns v. Advanced Clinical Employment Staffing LLC, 2015 WL 3491505, at

*8 (N.D. Cal. 2015) …”.

      The evidence showed that FPL uses “cause codes” among other data

related to customer power outage, which the trial court noted would provide

                                        12
the court with “a reasonable methodology for generalized proof of class-wide

impact.” Thus, FPL’s conduct in determining the cause of power loss for each

client is the same. In addition, the standard Tariff is the same one given to

all customers. Thus, the evidence used to prove one of the named plaintiffs’

breach of contract claims is the same evidence that will be used to prove the

rest of the class members’ breach of contract claims. Accordingly, plaintiffs

can use FPL’s data to prove FPL’s liability for the entire class. Regarding this

predominance factor, the trial court further noted:

      FPL deploys “patrollers” and “forensic patrollers” in order to
      determine outage causes and restore power. FPL uses multiple
      data systems to track that information, makes outage information
      and restoration projections available to customers in real-time,
      draws conclusions from its data-rich systems, and reports outage
      causes (and makes its data available) to Florida’s Public Service
      Commission. It stands to reason that FPL has identified the
      cause of an outage where it has been able to turn the power back
      on. FPL, though, has now dedicated the bulk of its presentation
      to undermining the accuracy of its own records. The Court is
      unmoved by those efforts.

      FPL’s “very business model includes gathering and distilling
      information from a variety of sources in order to [determine the
      cause of outages].” . . . And, in general, “courts do not look
      favorably upon the argument that records a defendant treats as
      accurate for business purposes are not accurate enough to
      define a class.” (citations omitted). The Court finds that the
      evidence supports Plaintiffs’ theory and methodology for utilizing
      FPL’s business records and data systems for determining liability
      on a class-wide basis.

                                      13
      Similarly, regarding the gross negligence claim, the court found that

“these issues are common to Plaintiffs and all putative class members and

will be resolved by common proof that does not vary from customer to

customer based on FPL’s course of conduct to utilize the same data systems

and methodologies for all 5.6 million customers.” The court specifically found

from the information presented to it by FPL that FPL “blurred” the difference

between how it collected data on customer outages on a “blue-sky day” (non-

hurricane days) as opposed to how it collected data on customer outages

during a hurricane. On a “blue-sky” day, the “cause code” pertaining to a

power outage for a customer was the actual cause for a customer’s power

outage. However, FPL trained its employees to select the “cause code” of

“hurricane” as the actual cause of a customer’s power outage following a

hurricane like Hurricane Irma. Thus, the trial court found that whether FPL

adopted or did not adopt these procedures/training instructions evidenced a

conscious disregard of an imminent or “clear and present danger.” The court

stated that “a jury could find that FPL’s conscious decision to categorically

subject information about outages following a storm to a different standard

than information about outages on a blue-sky day, and inherently invites

breaches of the type that are alleged above to be grossly negligent.” The

court noted that a jury could also find that FPL understood the risks

                                     14
associated with its manner of documenting “causes” of customer power

outages after a storm, and its integration or lack of integration with other FPL

databases and that because FPL was aware, its common course of

conducted evinced a conscious disregard of an imminent or “clear and

present danger.” Thus, the court correctly determined that common

questions of law and fact predominated over individual questions in this

case.

        In addition, contrary to FPL’s position, the superiority requirement of

Rule 1.220(b)(3) was also met in this case. Under Rule 1.220(b)(3), the court

examines whether class representation is superior to other available

methods for the fair and efficient adjudication of the controversy. “Three

factors for courts to consider when deciding whether a class action is the

superior method of adjudicating a controversy are (1) whether a class action

would provide the class members with the only economically viable remedy;

(2) whether there is a likelihood that the individual claims are large enough

to justify the expense of separate litigation; and (3) whether a class action

cause of action is manageable.” Sosa, 73 So. 3d at 116.

        Here, the trial court was correct in concluding that class representation

was superior to other methods of adjudication. The court accurately noted

that there were potentially millions of prospective class members and that

                                        15
their small, individual economic claims were not large enough to justify each

individual plaintiff filing a separate action. Thus, the court found a class

action would be the “most economically feasible remedy given the potential

individual damage recovery for each class member.” In addition, a class

action recovery system in this case would be a more manageable and

efficient use of judicial resources than if each plaintiff was required to file

their own individual claim against FPL. The trial court stated in its order that

MSP Recovery LLC’s (class action plaintiff trial counsel) chief information

officer testified in his deposition that through MSP Recovery, LLC, plaintiffs

would have the ability to assess FPL’s data regarding this class action. The

chief information officer reviewed the documents produced by FPL and

testified that FPL’s data contain outage tickets and other information used to

calculate metrics and pinpoint the cause of a customer’s power outage.

Consequently, the trial court was correct in determining that plaintiffs

presented evidence that a class action was superior to other available

methods for resolving this controversy.

                                   CONCLUSION

      The trial court correctly concluded that in this case, common questions

of law and fact predominate over individual questions, and that class

                                      16
representation is superior to other methods of adjudication. Accordingly,

finding no abuse of discretion in the trial court’s decision to certify the class

under Rule 1.220(b)(3), we affirm the trial court’s “Order Granting Plaintiffs’

Motion for Class Certification.”

      Affirmed.

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