Opinion
Civil Action No. 15735.
Date Submitted: November 14, 2000.
Date Decided: January 11, 2001. Date Filed: January 17, 2001.
William Prickett, Ronald A. Brown, Jr., of PRICKETT, JONES ELLIOTT, Wilmington, Delaware; OF COUNSEL: Arthur T. Susman, Charles, R. Watkins, John R. Wylie, of SUSMAN WATKINS, Chicago, Illinois, Attorneys for Plaintiffs.
Kevin R. Shannon, Brian C. Ralston, of POTTER ANDERSON CORROON LLP, Wilmington, Delaware; OF COUNSEL: Paul Gonson, Jeffrey B. Maletta, Stavroula E. Lambrakopoulos, Christopher E. Dominguez, of KIRKPATRICK LOCKHART LLP, Washington, D.C., Attorneys for Defendants Everen Capital Corporation, Everen Securities Holdings, Inc., Everen Securities, Inc., Everen Clearing Corporation, Wheat First Butcher Singer, Inc., Wheat First Securities, Inc., Mentor Investment Group, Inc., and Mentor Investment Group, L.L.C.
MEMORANDUM OPINION
The plaintiffs, Patrick J. and Leatha S. O'Malley, have filed a motion for class certification arising from their individual and class action claims against eight defendants, Everen Securities, Inc ("Everen"), Everen Securities Holdings, Inc. ("Everen Holdings"), Everen Capital Corporation, Inc., Everen Clearing Corporation ("Everen Clearing") (collectively, the "Everen Defendants") as well as Mentor Investment Group, Inc. ("Mentor"), Mentor Wheat First Securities, Inc., and Wheat First Butcher Singer ("WFBS"), Inc. (collectively, the "Mentor Defendants"), and Mentor Investment Group L.L.C.
At the center of this dispute, the plaintiffs, brokerage customers of Everen, argue that Everen breached the fiduciary duties of loyalty and disclosure to them in connection with a Joint Venture Agreement (the "JVA") that called for the transfer of Everen's clients' money market mutual fund assets from funds managed by Zurich-Kemper Investments to those managed by Mentor. Plaintiffs object to Everen's receipt of an ownership interest in the new money market fund provider. The plaintiffs assert that the seven defendants besides Everen induced, participated in, and aided and abetted Everen's breaches of fiduciary duty.
The plaintiffs seek certification of a class of all clients of Everen whose investments were transferred by Everen from investment companies managed by Zurich-Kemper Investments to investment companies managed by the Mentor Investment Group, or their successors in interest, excluding defendants named herein. Plaintiffs also seek to be named class representatives and to have their attorneys named as class counsel. This is the Court's decision on plaintiffs' motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
The facts of this case have been carefully delineated by the earlier decisions of both the Court of Chancery and the Supreme Court in this matter. A review of the basic facts as well as the procedural history of this case remains important for a complete understanding of the issues here presented.
See O'Malley v. Boris, Del. Ch., C.A. No. 15735, Chandler C. (Jan. 19, 1999), rev'd, O'Malley v. Boris, Del. Supr., 742 A.2d 845, 851 (1999).
The plaintiffs, Patrick J. and Leatha S. O'Malley, are Illinois residents who are brokerage customers of Everen. Prior to November 1, 1996, Everen offered its customers the choice of having cash balances that would otherwise sit idle in brokerage accounts automatically invested in certain money market funds. In other words, the customers' cash is "swept" into "sweep accounts."
More specifically, "sweep accounts" are accounts in which dividends from investments and proceeds from investment sales, rather than sitting idle, are periodically "swept" into money market funds so that these funds can continue to earn income. Thus, for example, at the end of each business day, any excess funds that would otherwise not be invested would be automatically transferred into money market securities where they would earn interest.
On July 25, 1996, the Everen Defendants entered into the JVA with the Mentor Defendants. Under the JVA, Everen's parent company, Everen Holdings, would acquire a 20.2% ownership interest in the successor to Mentor, Mentor Investment Group L.L.C. (the "Venture"). WFBS would hold the remaining 79.8% interest in the Venture, subject to a contingent interest that allowed Everen Holdings to acquire up to a total of 50% of the Venture depending on the amount of assets invested in the Venture by clients of the Everen Defendants.
By letter dated September 23, 1996 ("the Notification Letter"), Everen notified its customers that on November 1, 1996, it would automatically begin to transfer cash balances that had previously been invested with Zurich-Kemper Investments to three Cash Resource Trust ("CRT") money market funds sponsored by Mentor (the "Mentor Funds"). The customers could opt-out of this arrangement by notifying Everen Clearing by October 25, 1996, that they did not want their assets to be transferred to the Mentor Funds. Along with the Notification Letter, Everen also included a prospectus for the Mentor Funds dated September 23, 1996 (the "Mentor Prospectus," or simply the "Prospectus"). The plaintiffs did not notify Everen Clearing of any objections to the proposed asset transfer. As a result, on November 1, 1996, Everen transferred the plaintiffs' assets to the Mentor Funds.
The O'Malleys assert that they would not have approved the transfer of their assets to the Mentor Funds had they known that Everen was using this transfer to acquire its interest in the Venture. The Supreme Court noted that neither the Notification Letter nor the Mentor Prospectus adequately explained how Everen acquired its interest in the Venture, that is, 20% of the Venture with an option to acquire as much as 50%. The Notification Letter simply refers the reader to the attached Mentor Prospectus for information about its ownership interest in the Venture. The Mentor Prospectus states:
O'Malley v. Boris, 742 A.2d at 847.
. . . [I]t is expected that promptly after [the] reorganization, EVEREN Securities, Inc. will acquire 20% of the outstanding shares of Mentor Investment Group. EVEREN may thereafter acquire additional shares in Mentor Investment Group (not to exceed an additional 30% of Mentor Investment Group's outstanding shares) depending principally on the amount of assets in investment companies sponsored by Mentor Investment Group or its affiliates (including the Funds) attributable to shares held by clients of EVEREN.
Am. Compl., Ex. C.
Additionally, the plaintiffs allege that Everen actually left them as well as the other members of their suggested class with little real choice but to participate. According to the Notification Letter, Everen clients who objected to the switch would be treated as follows:
After notifying us, your C.F. [Kemper Money Market Funds] shares will then be re-registered in your own name and will not be held in your Everen account or listed on your Everen statement. Instead, you will receive money market fund statements directly from C.F., and there will be no sweep and/or check writing in connection with your Everen account.
Am. Compl., Ex. B.
Thus, plaintiffs contend, any Everen clients who objected to the transfer of their funds to the Mentor Funds would be penalized because any dividends and proceeds from sales of investments would most likely sit idle rather than being swept into an interest bearing money market fund or other investment company security. In my previous consideration of this matter, I failed to grasp how these actions "penalized" the plaintiffs. Perhaps in the intervening period since that decision, the facts of the case have been further developed to provide some substance to this claim.
The Amended Complaint asserts as the primary claim that Everen breached the fiduciary duties of loyalty and disclosure to its clients in connection with the transfer of sweep accounts to the Mentor Funds. The other claims presented by the Amended Complaint rest entirely on this first claim. In succinct terms, in the remaining claims, the plaintiffs contend that the Mentor Defendants and the other Everen Defendants induced or aided and abetted these breaches of fiduciary duty by Everen. Plaintiffs maintain that as a result of this alleged conduct, they are entitled to compensatory damages as well as a constructive trust over a portion of the Venture.
This Court previously dismissed all counts of the Amended Complaint for failure to state a claim. On appeal, the Supreme Court reversed that decision and remanded the matter. In accordance with that Opinion, the plaintiffs fired the motion for class certification now before me.
See supra note 1.
II. ANALYSIS ON A MOTION FOR CLASS CERTIFICATION
A. Rule 23(a) Elements
Chancery Court Rule 23(a) requires a plaintiff to establish four elements in order to bring a class action:
(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.B. The Uncontested Elements
Ct. Ch. R. 23(a).
Defendants do not contest plaintiffs have met their burden of proof with regard to the first two requirements of Rule 23(a), numerosity of class members, and common questions of law and fact. After reviewing plaintiffs' pleadings, I agree that Plaintiffs unequivocally satisfy the first two requirements of Rule 23(a).
C. Do the O'Malleys Satisfy the Typicality Requirement?
Rule 23(a)(3) focuses on whether the claims or defenses of the class representatives fairly present the issues on behalf of the represented class. A representative's claim or defense will satisfy this element of Rule 23(a) if it arises from the same series of events or course of conduct that gives rise to the claims of other members of the class and is based on the same legal theory. To satisfy this typicality requirement, "the legal and factual position of the class representative[s] must not be markedly different from that of the members of the class."
Leon H. Weiner Assoc., Inc. v. Krapf, Del. Supr., 584 A.2d 1220, 1226 (1991) (quoting Zeffiro v. First Pa. Banking Trust Co., 96 F.R.D. 567, 569 (E.D. Pa. 1983)).
Leon H. Weiner Assoc., Inc. v. Krapf, 584 A.2d at 1225-26 (quoting Singer v. Magnavox Co., Del. Ch., C.A. 4929, mem. op. at 3, Brown, V.C. (Dec. 14, 1978)).
Here, there is no material dispute between the parties that all of the members of the class, including the O'Malleys, maintained money market funds into which their Everen accounts were swept and that Everen owed the same fiduciary duties to each of these clients. Everen's actions in connection with the JVA affected each of the potential class members in the same way and all class members, including the O'Malleys, have identical claims and remedies against the defendants.
Defendants instead contend that the O'Malleys are inappropriate class representatives because they are subject to defenses that differentiate them from the other potential class members. Specifically, defendants argue that: (a) Patrick O'Malley's deposition testimony makes clear that the terms of the JVA were immaterial to him and he was indifferent to the defendants' plans to switch his money market mutual fund assets at the time of the first transfer; (b) the O'Malleys would not have been mislead even had they read the Mentor Prospectus because their reading of the Prospectus, as evidenced by Dr. O'Malley's deposition testimony, is contrary to the allegations of the Amended Complaint; and, (c) by keeping their accounts at Everen after the switch of their assets to the Mentor Funds, the O'Malleys have acquiesced to and ratified the defendants' allegedly wrongful conduct.
See Zimmerman v. Home Shopping Network, Inc., Del. Ch., C.A. Nos. 10911 10919, Jacobs, V.C. (Aug. 14, 1990, revised Aug. 30, 1990); Harman v. Masoneilan Int'l, Inc., Del. Ch., C.A. No. 5935, Longobardi, V.C. (Oct. 26, 1983)(Order). See also Donald J. Wolfe, Jr. Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery § 9-3(b)(1)(iii), at 624 (1998).
Court of Chancery Rule 23 is modeled substantially on Rule 23 of the Federal Rules of Civil Procedure. This Court, therefore, often looks to federal decisions interpreting that rule for precedent that may help to construe and apply its Court of Chancery counterpart. There is some precedent in the Court of Chancery where parties have opposed class certification on the ground that the named plaintiff is subject to unique defenses. The precedent is more developed though at the federal level where numerous courts have held that the existence of unique defenses can destroy typicality. Many federal courts, however, have also persuasively written that the existence of unique defenses do not necessarily render the claims of a specific plaintiff atypical of the larger class. The United States District Court for the Eastern District of Pennsylvania has written:
Federal Rules of Civil Procedure, Rule 23. See, e.g., Leon H. Weiner Assoc., Inc v. Krapf, 584 A.2d at 1224.
See, e.g., Dieter v. Prime Computer, Inc., Del. Ch., 681 A.2d 1068 (1996); Zimmerman v. Home Shopping Network, Inc., Del. Ch., C.A. Nos. 10911 10919, Jacobs, V.C. (Aug. 14, 1990, revised Aug. 30, 1990); see generally Donald J. Wolfe, Jr. Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery § 9-3 (b)(1)(iii), at 624 (1998).
See, e.g., Fleck v. Cablevision VII, Inc., 763 F. Supp. 622, 625-27 (D.D.C. 1991)("A claim is not typical when the representative parties are subject to unique defenses or when it is predictable that a major focus of the litigation will be on an arguable defense unique to the named plaintiff."); Wagner v. Lehman Bros. Kuhn Loeb Inc., 646 F. Supp. 643, 660 (N.D. Ill. 1986)("It is enough to deny class treatment when a defense peculiar to the class representative is even arguably present.")
See, e.g., Mersay v. First Republic Corp. of America, 43 F.R.D. 465, 469 (S.D.N Y 1969)("If [plaintiff] were required to prove his own reliance or damage at this stage, it would follow that no class action could stand until the plaintiff proved every material element of his individual claim. Clearly, such a procedure was not envisioned under Rule 23.")
The defendants' contention that the existence of a unique defense renders a representative's claim atypical has been rejected where the overriding question common to the class is "logically prior" to special defenses against the named plaintiff. . . . Where, as here, an alleged defense may affect the individual's ultimate right to recover, but it does not affect the presentation of the case on the liability issues for the plaintiff class, that defense should not make a plaintiff's claim atypical.
Zeffiro v. First Pennsylvania Banking Trust Co., 96 F.R.D. 567, 570 (E.D. Pa. 1983) (citations omitted).
I find this "logically prior" reasoning quite persuasive as it pertains to the first two atypicality arguments put forth by the defendants.
First, the defendants argue that plaintiffs are not typical of the members of the proposed class because Dr. O'Malley was indifferent to the transfer of his money market mutual fund assets as evidenced by the fact that he did not read the portion of the Prospectus dealing with Everen's acquisition of the interest in the Venture. Therefore, the defendants assert that the alleged omissions could not have been material to the O'Malleys. Second, the defendants assert that the O'Malleys would not have been mislead even had they read the Mentor Prospectus because their reading of the Prospectus, as evidenced by Dr. O'Malley's deposition testimony, is contrary to the allegations of the Amended Complaint. These arguments rest on questions of materiality and reliance. The overriding questions common to the class, however, are whether Everen breached its fiduciary duties of loyalty and disclosure by agreeing to enter into the JVA for its own benefit and whether Everen made the proper disclosures upon entering the JVA. These questions are "logically prior" to this first special defense asserted against the named plaintiff. Questions of reliance and materiality, in keeping with the logic expressed in Zeffiro, do not affect the presentation of the case on the liability issues for the proposed plaintiff class. Although these special defenses may eventually weigh heavily towards the defendants in preventing any compensatory recovery by these named plaintiffs, they do not render the named plaintiffs atypical within the proposed class.
Id.
I leave the issue of what role reliance and materiality may play within this breach of fiduciary duty case to another day. For now, it is enough to hold that these defenses do not render the plaintiffs atypical.
Third, the defendants contend that the O'Malleys have made themselves atypical by keeping their accounts at Everen even after the switch of their assets to the Mentor Funds. This argument is clearly without merit. The proposed class consists of all clients of Everen whose investments were transferred by Everen from investment companies managed by Zurich-Kemper Investments to investment companies managed by Mentor. That class includes persons who continue to do business with Everen as well as persons who have decided for whatever reason to no longer do business with Everen. Both groups have a damage claim, to the extent that these claims succeed on their merits. I therefore find that the plaintiffs satisfy the typicality requirement of Rule 23(a)(3).
See Zimmerman v. Home Shopping Network, Inc., C.A. Nos. 10911 10919, mem. op. at 13, Jacobs, V.C. (Aug. 14, 1990, revised Aug. 30, 1990).
D. Are the O'Malleys Adequate Representatives?
Court of Chancery Rule 23(a)(4) requires that "the representative parties fairly and adequately protect the interests of the class."[19] As I have previously written,
in order to meet the adequacy requirements of Rules 23 or 23.1, a representative plaintiff must not hold interests antagonistic to the class, retain competent and experienced counsel to act on behalf of the class and, finally, possess a basic familiarity with the facts and issues involved in the lawsuit.
In re Fuqua Industries, Inc. Shareholder Litigation, Del. Ch., 752 A.2d 126, 127 (1999).
The defendants do not allege that the O'Malleys have interests antagonistic to the class or that plaintiffs' counsel is in any way incompetent or inexperienced. Rather, defendants argue that Dr. and Mrs. O'Malley lack some of the basic qualifications necessary to act as representatives of the proposed class and that their lawyers, not the named plaintiffs themselves, are the driving force behind this litigation.
Leaving a more detailed discussion to another day, it is fair to say (as even the defendants concede) the requirements for an "adequate" class representative are not onerous. In certain instances, a named plaintiffs understanding and control of the litigation has been held to be largely insignificant. It is a well-settled legal principle that class representatives are not required to fully understand the nuances of the legal theories underlying each of their claims. That is the job of legal counsel. Plainly, a rudimentary understanding of the claims, facts, and issues is adequate.
Def. Answering Br., at 28. For a more thorough discussion, see In re Fuqua Industries, Inc. Shareholder Litigation, 752 A.2d at 129-34.
See, e.g., Surowitz v. Hilton Hotels Corp., 383 U.S. 363, 86 S.Ct. 845 (1966); Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239 (3d Cir. 1975), cert. denied, 421 U.S. 1011, 95 S.Ct. 2415 (1975); Lewis v. Curtis, 671 F.2d 779 (3d Cir. 1982).
Shapiro v. Nu-West Industries, Inc., C.A. No. 15442, slip op. at 6, Chandler, C. (Sept. 29, 2000).
Presently, the O'Malleys do not claim to understand each of the nuances of their claims. Yet it is clear from their deposition testimony that both Dr. and Mrs. O'Malley understand the nature of the claims, the alleged wrongdoing of the defendants, and the basic facts and issues raised by this lawsuit. Further, even if the lawyers are the driving force behind the litigation, that is not reason enough to convince this Court that the O'Malleys are inadequate representatives. As I have previously noted:
Our legal system has long recognized that lawyers take a dominant role in prosecuting litigation on behalf of clients. A conscientious lawyer should indeed take a leadership role and thrust herself to the fore of a lawsuit. This maxim is particularly relevant in cases involving fairly abstruse issues of corporate governance and fiduciary duties.
In re Fuqua Industries, Inc. Shareholder Litigation, 752 A.2d at 132.
That is clearly the case here.
Further, in regard to Mrs. O'Malley specifically, the fact that she relied on her husband to be the primary handler of their financial matters does not disqualify her to act as a class representative. In Iseman v. Liquid Air Corp., this Court found a representative adequate despite the fact she knew little about the litigation but had always received investment advice and assistance from her son who was also a party. Similarly, Mrs. O'Malley, who has clearly relied on her husband to make investment decisions, is an adequate representative where her husband is also a party to the claim. The requirements of Rule 23 (a)(4) are therefore satisfied for both Dr. and Mrs. O'Malley.
See Iseman v. Liquid Air Corp., Del. Ch., C.A. No. 9694, Berger, V.C. (Feb. 11, 1993).
E. Rule 23(b) Elements on a Motion for Class Certification
Once the plaintiff establishes the elements of Rule 23(a), this Court must determine whether to maintain the class action under Rule 23(b). To maintain the class action this Court must find:
(1) The prosecution of separate actions by or against individual members of the class would create a risk of:
(A) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(B) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(1) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(2) The Court finds that the question of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matter pertinent to the findings include:
(A) The interest of members of the class in individually controlling the prosecution or defense of separate actions;
(B) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;
(C) The desirability or undesirability of concentrating the litigation of the claims in the particular forum;
(D) The difficulties likely to be encountered in the management of a class action.
A plaintiff has the burden of satisfying the Court it has met the requirements of Rule 23. F. Is Class Certification Appropriate Under 23(b)?
Dieter v. Prime Computer, Del. Ch., 681 A.2d 1068 (1996).
The Rule 23(b)(1) class designation deals with the possibility of separate adjudications. (b)(1)(A) class designation focuses on the risks faced by the defendants while a 23(b)(1)(B) class designation concentrates on the risks confronting members of the prospective class. For a class to be certified under 23(b)(1)(A), there must be a realistic likelihood of multiple litigation and a total absence of individual issues among the class. Here, given the extended history of this case and the fact that the events complained of occurred over four years ago yet the lack of concurrent related litigations before this or any other court, the probability for multiple litigations seems small. This is purely conjectural evidence though, and by itself, would not be enough to defeat class certification under 23(b)(1)(A). There will, however, plainly be factual and legal issues concerning issues such as reliance and materiality, discussed above, that shall affect individual members of the class. The application of 23(b)(1)(A) is therefore inappropriate here.
Joseph v. Shell Oil Co., Del. Ch., C.A. No. 7450, mem. op. at 4, Hartnett, V.C. (Feb. 8, 1985).
Id.
PaineWebber RD Partners II, L.P. v. Centocor, Inc., Del. Ch., C.A. 14405, mem. op. at 15, Steele, V.C. (Mar. 15, 1995).
Rule 23(b)(1)(B) permits the certification of a proposed class where the risk that adjudication of a single shareholder's claim may have res judicata effect on the claims of other absent shareholders. In situations where class certification is appropriate under 23(b)(1)(B), the claims of absent shareholders would be prejudiced if the claim is not certified. This is the case here where any potential suit brought by any other individual member of this proposed class would necessarily depend on the factual and legal conclusions made by the Court in this matter surrounding the JVA and the conduct of the defendants. If this Court were to decide that Everen did not breach its fiduciary duties of loyalty and disclosure, that would effectively preclude any other potential plaintiffs from pursuing their own claims against Everen. In a recent decision, this Court certified a class under Rule 23(b)(1)(B) under a similar set of circumstances. In Shapiro v. NuWest Industries, the complaint at the time of the decision included a single count in which former holders of Class A preferred stock sought damages alleging that Nu-West improperly calculated the redemption price for the Class A stock pursuant to Nu-West's certificate of incorporation. In certifying the class in that case, this Court noted:
Wacht v. Continental Hosts, Ltd., Del. Ch., C.A. No. 7954, mem. op. at 10, Chandler, C. (Sept. 16, 1994), modified on other grounds, Del. Ch., C.A. No. 7954, Chandler, C. (Dec. 23, 1994).
Id.
C.A. No. 15442, slip op. at 1-2, Chandler, C. (Sept. 29, 2000).
If this Court agrees with defendants that Nu-West's certificate precludes daily accrual of dividends during 1996, this determination would effectively preclude holders of Class A preferred stock who are not parties to this action from pressing claims that they are entitled to payment of dividends for 1996.
Id. at 7.
This same conclusion applies to the present case as well.
Additionally, I would note that it may be appropriate to certify a class under 23(b)(1)(B) even where the claims presented by the plaintiffs are solely for monetary damages. Here, plaintiffs' request for monetary damages as well as equitable damages in the form of a constructive trust placed over a portion of the Mentor Funds, regardless of the merits of that request, in no way prevents me from certifying this class under 23(b)(1)(B).
See Wacht v. Continental Hosts, Ltd., C.A No. 7954, mem. op. at 10; Turner v. Bernstein, Del. Ch., C.A. No. 16190, mem. op. at 5, Strine, V.C. (Aug. 11, 2000).
Rule 23(b)(2) class certification is not appropriate where the plaintiff is seeking primarily monetary relief. Rather, Rule 23 (b)(2) certification is generally reserved for cases in which the relief sought is primarily classwide injunctive or declaratory relief. Although the plaintiffs have asked for a constructive trust, this relief is neither the "thrust" of this litigation nor the likely result of this litigation should the plaintiffs prevail.38 A constructive trust is an appropriate remedy where, in its absence, an injustice would be inflicted upon the plaintiffs.39 Without reaching the merits of the claims in this matter, the Court notes that the granting of a constructive trust here would be quite exceptional. More likely, if plaintiffs are to ultimately recover any damages whatsoever in this action, they would almost assuredly be strictly compensatory monetary damages. For these reasons, class certification under 23(b)(2) would be inappropriate.
Wacht v. Continental Hosts, Ltd., C.A No. 7954, mem. op. at 9.
Nottingham Partners v. Dana, Del. Supr., 564 A.2d 1089 (1989).
The Court also notes, however, that the proposed class could alternatively be certified under Rule 23(b)(3). Clearly in this matter, common issues of fact and law lay at the core of this action and predominate over any questions affecting only individual class members. Additionally, the class action mechanism provides this Court, with its limited judicial time and resources, with the most fair and efficient course of action to deal with this controversy.
III. CONCLUSION
I grant plaintiff's motion for class certification and hereby designate that class to consist of all clients of Everen whose investments were transferred pursuant to the JVA by Everen from investment companies managed by Zurich-Kemper Investments to investment companies managed by the Mentor Investment Group, or their successors in interest, excluding defendants named herein.
I also conclude that plaintiffs Patrick and Leatha O'Malley have asserted claims typical of all class members and will serve as adequate class representatives. Plaintiffs' attorneys are also hereby appointed as class counsel.
Counsel should confer and submit an appropriate Class Certification Order.
Ct. Ch. R. 23(b).