Opinion
Court of Appeals No. H-99-007. Trial Court No. 46317.
Decided: October 22, 1999.
Dennis E. Murray, Sr., Dennis E. Murray, Jr., and Barbara Quinn Smith, for appellee.
Walter J. Rekstis, III, James P. Murphy, Jill G. Okun, Steven A. Friedman, and William W. Owens, for appellant.
OPINION AND JUDGMENT ENTRY
This is an appeal from a judgment of the Huron County Court of Common Pleas. That court granted Kenneth B. Shaver's request for class certification of appellee's breach of fiduciary duty claim. Appellant, Standard Oil Company, also known as Sohio ("Standard Oil"), now appeals and sets forth the following assignments of error:
"I. The trial court erred in reconsidering this Court's ruling denying class certification of Plaintiff's breach of fiduciary duty claim.
"II. The trial court erred in granting class certification of Plaintiff's breach of fiduciary duty claim."
This is the third time that this cause is before the court. Both prior appeals addressed the propriety of class certification, pursuant to Civ.R. 23, of the claims raised by appellee, Kenneth B. Shaver. See Shaver v. Standard Oil (1993), 89 Ohio App.3d 52 ("Shaver II"); Shaver v. Standard Oil (1990), 68 Ohio App.3d 783 ("Shaver I").
Briefly, the facts of this case are as follows. Kenneth Shaver is a former Standard Oil lessee/dealer. Standard Oil required Shaver to sell Sohio brand gasoline and Atlas brand tires, batteries and accessories. In 1981, Shaver filed his complaint against Standard Oil on behalf of himself and all former and present lessee dealers of Standard Oil. He alleged that Standard Oil engaged in restraint of trade and sought to force independent lessee dealers out of business. Shaver later requested class certification of the four claims asserted in his complaint.
The prerequisites for class certification are found in Civ.R. 23. Civ.R. 23(A) requires an identifiable class, class membership, numerosity, commonality, typicality and adequacy of representation. Hamilton v. Ohio Savings Bank (1998), 82 Ohio St.3d 67, 71. In addition, one of the three prerequisites enumerated in Civ.R. 23(B)(3) must be satisfied. Id. In the present case, appellee seeks class certification pursuant to Civ.R. 23(B)(3), which requires a court to determine that common questions predominate over questions affecting only individual members and that a class action is superior to alternative methods for a fair and efficient adjudication of the controversy. Id. at 80. For common questions to predominate, it is not sufficient that such questions merely exist. Rather, they must represent a significant aspect of the case and must be capable of resolution for all members in a single adjudication. Marks v. C.P. Chemical Co. (1987), 31 Ohio St.3d 200, 204, citing Schmidt v. Avco Corp. (1984), 15 Ohio St.3d 310.
In Shaver I, and without considering the foregoing prerequisites, the trial court denied appellee's motion for class certification. On appeal, this court found that the trial court abused its discretion by totally denying class certification on all of appellee's claims without first considering the Civ.R. 23 prerequisites. Shaver I at 799. We held that an appropriate class may be maintainable, Id. at 798, and remanded the case to the trial court for further proceedings, Id. at 799.
In Shaver II, the trial court denied class certification as to all four of appellee's claims. With regard to the claim for breach of fiduciary duty, the court focused on Civ.R. 23(B)(3) and held:
"In light of the allegations of the plaintiff, it would become necessary for this Court to examine the state of mind of each member of the proposed class to determine their intention and understanding with respect to their relationship with Sohio and to examine the defendant as to its course of dealing with each member of the class before a fiduciary duty can be found to have existed between the defendant and any one member of the class and it is possible and probable that the proof on this issue will vary with respect to each of the proposed member [sic] of the class."
This court affirmed the trial court's denial of class certification of appellee's breach of fiduciary duty claim. In that appeal, appellee asked this court to find that a fiduciary duty existed as a matter of law. Therefore, appellee contended that he must be allowed to proceed on the theory that a fiduciary duty is automatically created because to do otherwise would improperly reach the merits of the claim. Id. at 62. We disagreed. The relevant provisions of Shaver II read:
"The second cause of action alleged by appellant was a claim for a breach of fiduciary duty. Appellant [Kenneth Shaver] argues that because Ohio courts recognize some business transactions and relationships as creating fiduciary relationships as a matter of law, the trial court was compelled to declare the existence of a fiduciary relationship in this instance. Appellant acknowledges that no Ohio court has previously ruled on whether the relationship between a major oil company and independent dealer to lease gasoline stations from the company automatically gives rise to fiduciary duties. Appellant argues, however, that it must be allowed to proceed on the theory that a fiduciary duty is automatically created because to rule otherwise and to dismiss the case at this stage is to improperly reach the merits of the claim. We disagree.
"The trial court did not abuse its discretion when it refused to create a new theory of law regarding the proof required to show the existence of a fiduciary duty. The Supreme Court of Ohio has stated: "A `fiduciary relationship' is one in which special confidence and trust is reposed in the integrity and fidelity of another and there is a resulting position of superiority or influence, acquired by virtue of this special trust." In re Termination of Employment of Pratt (1974), 40 Ohio St.2d 107, 115, 69 O.O.2d 512, 517, 321 N.E.2d 603, 609. A contractual relationship alone does not automatically create a fiduciary duty. See Blon v. Bank One, Akron, N.A. (1988), 35 Ohio St.3d 98, 101-102, 519 N.E.2d 363, 367-368. The trial court did not reach the merits of whether a fiduciary duty was in existence in this case. Rather, it ruled that, on the basis of accepted law in Ohio, the manner of proving the existence of a fiduciary duty in this case requires a case-by-case demonstration of the existence of special confidence and trust. Because a case-by-case demonstration is required, individual questions are more predominant than common questions and class certification is not appropriate as to this cause of action pursuant to Civ.R. 23(B)(3)." Shaver v. Standard Oil, 89 Ohio App.3d at 62.
In Shaver II, we also determined that the trial court abused its discretion in failing to certify the proposed class as to Shaver's antitrust claim and a claim based on an alleged violation of the Ohio Consumer Sales Practices Act. We therefore reversed the judgment of the common pleas court with regard to these two claims and remanded this case for further proceedings.Id. at 64-65.
While this case was pending before the trial court upon remand, the Ohio Supreme Court decided Cope v. Metropolitan Life Ins. Co. (1998), 82 Ohio St.3d 426. In Cope, the plaintiffs (MetLife insureds) sought certification of a class of MetLife policyholders who were sold replacement insurance as new insurance and did not receive mandated disclosure warnings. Id. at 437. The plaintiffs in Cope asserted twelve claims, including a breach of fiduciary claim, a breach of insurance law claim, a violation of the Delaware Consumer Fraud Act and a deceit by concealment claim. Id. at 428. The gist of the complaint inCope was that "MetLife engaged in a scheme to collect larger commissions and front-end load charges by intentionally omitting the state-mandated written disclosure warnings when issuing replacement life insurance." Id. at 433. While the trial court in Cope found that all of the prerequisites of Civ.R. 23(A) were met, it concluded that the Civ.R. 23(B)(3) class certification requirements of predominance and superiority were not satisfied because individual determinations as to what each plaintiff was told by his or her insurance agent would be crucial in determining liability. Id. at 428. The court of appeals agreed with the trial court, holding that individualized proof would be necessary to determine each claim. Id.
Thus, on appeal to the Ohio Supreme Court, the sole issue was whether the predominance and superiority questions were fulfilled. In general, the Cope court emphasized the fact that cases involving fraud and/or standard documents that reveal a single underlying scheme are particularly subject to common proof.Id. at 430-432. Relying on identical out-of-state class actions against MetLife and provisions of the Ohio Administrative Code to ascertain intent, the high court determined that "if appellants can establish by common proof and/or form documents that MetLife, through its agents, was required and failed to give the mandated disclosure warnings, then at least an inference of inducement and reliance would arise as to the entire class, thereby obviating the necessity for individual proof on these issues." Id. at 436. Notably, theCope court never stated that the claims raised by the plaintiffs arise in all cases involving consumer or securities fraud or violations of antitrust laws. Instead, the court determined that a "`claim will meet the predominance requirement when there exists generalized evidence which proves or disproves an element on a simultaneous, class-wide basis, since such proof obviates the need to examine each class member's individual position.'" Id. at 429-439, quoting Lockwood Motors, Inc. v. Gen. Motors Corp. (D.Minn. 1995), 162 F.R.D. 569, 580.
MetLife argued separately, however, that the breach of fiduciary duty claim could not be certified because these claims could not "be proven without transaction specific proof." Id. at 436. The Cope court rejected this argument, finding that the alleged circumstances surrounding each insurance transaction presented a common fact situation from which a jury could find "that a reasonable person could repose special confidence and trust in MetLife to disclose material information." Id. at 437. The court held that from this, the jury could infer the existence of a fiduciary duty across the entire class. Id. In summary, the court stated: "The predominant common question is * * * the conduct of the defendants, a common question of fact." Id., citingSkalbania v. Simmons (Ind.App. 1982), 443 N.E.2d 352, 361.
Shortly after the release of Cope, Shaver filed a motion for reconsideration of the class certification of his breach of fiduciary duty claim. Relying on Cope, he contended that the predominance prong of the standard set forth in Civ.R. 23(B)(3) could be satisfied because the predominance question would be the conduct of Standard Oil — not the individual state of mind of each of the dealers. In opposition, Standard Oil asserted that the court was precluded from reconsidering class certification of the breach of the fiduciary duty claim by the doctrine of the law of the case. In reply, Shaver argued that our decision in Shaver II was in direct conflict with Cope on the issue of whether, as a matter of law, proof of the existence of a fiduciary duty could not be made on a class-wide basis. CitingNolan v. Nolan (1984), 11 Ohio St.3d 1, Shaver maintained that the law of the case doctrine was inapplicable due to the intervening decision, i.e., Cope, of the Ohio Supreme Court.
The trial court agreed with Shaver and granted the motion for reconsideration of its denial of class certification of Shaver's breach of fiduciary duty claim. In doing so, however, the court also granted class certification of that claim for breach of fiduciary duty itself. Realizing its error, the trial court later amended its judgment entry, stating only that the "law of the case doctrine does not preclude the Court from reconsidering the prior decision on class certification of the breach of fiduciary claim."
After both parties extensively briefed the issue of certification, the trial court certified the breach of fiduciary duty claim as a class action. This appeal followed.
The threshold issue in this case is found in appellant's first assignment of error. In that assignment, Standard Oil asserts that the trial court is precluded by the doctrine of the law of the case from reconsidering its previous denial of class certification of Shaver's breach of fiduciary claim.
The doctrine of the law of the case provides that the decision of a reviewing court in a case remains the law of that case for all subsequent proceedings at both the trial court and reviewing levels. Nolan v. Nolan, 11 Ohio St.3d at 3 (citations omitted). This rule of practice "is necessary to ensure consistency of results in a case, to avoid endless litigation by settling the issues, and to preserve the structure of superior and inferior courts as designed by the Ohio Constitution. * * *" Id., citing State, ex rel. Potain v. Mathews, 59 Ohio St.2d 29, 32. However, and only under extraordinary circumstances, such as an intervening decision by the Ohio Supreme Court, a trial court can choose to disregard the mandate of an appellate court. Nolan v. Nolan, 11 Ohio St.3d at the syllabus. Furthermore, the intervening Supreme Court case must state a rule of law that is in conflict with the reviewing court's mandate. State ex rel. Crandall, Pheils Wisniewski v. DeCessna (1995), 73 Ohio St.3d 180, 183, Columbus Bd. Of Edn. v. Franklin Cty. Bd. of Revision (1994), 70 Ohio St.3d 344, 345.
In the case before us, the trial court construed our decision in Shaver II and determined "that the Court of Appeals found that the existence of a fiduciary duty can only be made on a case by case basis." The common pleas court then concluded that, in contrast, the Cope court held "that a jury may find the existence of a fiduciary duty across the entire class." Thus, the lower court found that Cope stated a rule of law in conflict with this court's mandate, to wit, "that the existence of a breach of fiduciary duty may be made on a class-wide basis." We disagree with the trial court's characterization of this court's holding inShaver II, and, for the following reasons, reverse that court's judgment.
Judgments are to be construed like other written instruments by giving the language of the instrument its ordinary meaning. Elling v. Witt (Feb. 10, 1995), Ottawa App. No. 94-OT-032, unreported. See, also, 62 Ohio Jurisprudence 3d (1985) 359, Judgments, Section 34. Thus, where an entry is not ambiguous, it needs no interpretation or construction. Blosser v. Enderlin (1925), 113 Ohio St. 121; Geese v. Needs (1926), 24 Ohio App. 543, 545. If the words and language used in a judgment or decree are free of ambiguity and doubt and appear to express clearly and plainly the sense intended, there is no occasion to resort to other means of interpretation. Geese v. Needs, 24 Ohio App. at 545.
The language of this court's judgment in Shaver II is plain and unambiguous. While recognizing that no Ohio court had previously ruled on whether the relationship between a major oil company and an independent lessee of a gasoline station automatically gave rise to a fiduciary relationship, Shaver argued that they were entitled to a finding of a fiduciary relationship as a matter of law. We disagreed, declining to create new Ohio law granting an "automatic" creation of a fiduciary relationship upon the facts of Shaver II. We found that, in this case, the trial court was correct in finding that proving the existence of a fiduciary relationship required individualized questions, that is, case by case questions of the individual lessee-dealers. Because individual questions were more predominant than common questions, we concluded that class certification, pursuant to Civ.R. 23(B)(3), was not appropriate "to this cause of action." (Emphasis added.) In other words, our conclusion was limited to the facts and circumstances of Shaver II. This court did not render a blanket holding stating that theonly way the existence of a fiduciary relationship could be established was on a case by case (individualized) basis. If this were true, a breach of fiduciary duty claim could never meet the predominance standard set forth in Civ.R. 23(B)(3).
Turning to Cope, the Ohio Supreme Court relied on specific allegations in that case to reach the conclusion that, from a common fact situation, it may be possible for a reasonable person to infer the existence of a fiduciary duty on a class-wide basis. Id. at 437. Even if we assume that this is "new" law in Ohio, it does not conflict with the rule of law inShaver II. Cf. Dallas v. Stern (May 4, 1995), Cuyahoga App. No. 67830, unreported. Thus, the law of the case doctrine is applicable in this instance, and the trial court was bound to follow our mandate in Shaver II. Therefore, the court could not consider, much less grant, class certification of Shaver's breach of fiduciary duty claim. Accordingly, Standard Oil's first assignment of error is found well-taken.
These allegations were:
"MetLife agents targeted existing MetLife policyholders, sold them replacement insurance as new insurance, and intentionally omitted the mandatory disclosure warning in violation of statutory and regulatory provisions and MetLife's own policies and procedures." Id. at 437.
Our disposition of the first assignment of error renders Standard Oil's second assignment of error moot and, therefore, the same shall not be considered by this court. The judgment of the Huron County Court of Common Pleas is reversed. This cause is remanded to that court for further proceedings not inconsistent with this judgment. Kenneth B. Shaver is ordered to pay the costs of this appeal.
JUDGMENT REVERSED.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See, also, 6th Dist.Loc.App.R. 4, amended 1/1/98.
Peter M. Handwork, P.J. Melvin L. Resnick, J. Mark L. Pietrykowski, J.
CONCUR.