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Perez v. ATLANTA CHECK CASHERS, INC.

Citations: 692 S.E.2d 670; 302 Ga. App. 864; 2010 Fulton County D. Rep. 905; 2010 Ga. App. LEXIS 252Docket: A09A2114

Court: Court of Appeals of Georgia; March 17, 2010; Georgia; State Appellate Court

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Julian Perez appealed the trial court's denial of his motion for class certification against Atlanta Check Cashers, Inc. and other defendants for claims including identity fraud, conspiracy to commit identity fraud, invasion of privacy, and violation of the Georgia RICO Act. The trial court determined that individual factual issues would outweigh any common issues, justifying the denial of class certification. Perez worked at Atlanta Check from May 2006 to November 2007, performing various customer service duties, including selling insurance products through an affiliate, Super Auto Insurance Agency, Inc. Under Georgia law, individuals must be licensed to sell insurance, but can become limited subagents with proper application. Perez was unaware of the licensing requirement and discovered post-termination that an application for a limited subagent license had been submitted in his name, containing his personal information and purported signature, which he did not authorize or sign.

Perez asserted that his signature on a licensing application was fraudulent and that he had never met the supposed sponsoring agent or attended the required prelicensing course. He filed a lawsuit against Atlanta Check, Super Auto, Emmet, and Spare Time, representing a potential class of former and current Atlanta Check employees whose personal information was allegedly used fraudulently without authorization in filings with the Commissioner. The claims included identity fraud, conspiracy to commit identity fraud, invasion of privacy, and violations of Georgia RICO laws. After discovery, Perez moved for class certification, arguing that many employees shared similar experiences regarding unauthorized use of their information. However, the trial court denied the motion, determining that individual factual issues regarding the authorization of the applications would overwhelm any common issues, thus negating the purpose of class certification. Perez appealed, contending that the trial court abused its discretion in denying class certification for monetary damages. The court noted that the burden of proof lies with the plaintiff to meet class certification requirements, and a trial court can deny certification if even one factor is not satisfied. The appellate court affirmed the trial court's decision, emphasizing that common questions must predominate over individual ones for class certification under Rule 23 (b)(3).

Claims requiring substantial individualized proof or arguments to establish elements of individual claims are unsuitable for class certification under Rule 23(b)(3). A common question alone does not suffice if its resolution varies among class members and affects their class membership. In this case, the trial court found that individual factual issues would predominate, particularly as all claims hinge on proving that subagent license applications were submitted without the consent of former and current Atlanta Check employees. 

Identity fraud occurs when an individual willfully uses someone else's identifying information without authorization. To prove lack of consent for the submission of licensure documents, an individualized inquiry is necessary, particularly regarding allegations of forgery of signatures. Each potential class member would need to testify about their authorization for the use of their personal information, which further complicates class certification. The trial court's decision to deny class certification was supported by precedents emphasizing that individual issues must be resolved to determine class membership. 

While the plaintiff suggested that deposition testimony from a former manager could eliminate the need for individualized evidence, the manager's refusal to answer questions under the Fifth Amendment highlighted the challenges in proving the claims without individualized inquiries.

A witness invoked the privilege against self-incrimination when asked about signature pages for subagent licenses, specifically regarding whether he signed any and if he was aware of others signing on behalf of applicants. In civil cases, such an invocation can imply that a truthful answer may indicate wrongdoing. However, this does not negate the need for specific evidence regarding employee consent in this case. While the manager's refusal could suggest that forged signatures existed, it does not clarify whether any of the 196 class members had their signatures forged or submitted without their consent. 

Furthermore, the argument for class certification based on OCGA 16-9-130(a), which allows consumers to pursue class actions for identity fraud, does not eliminate the requirements of Rule 23 for class certification. The statute should be interpreted in conjunction with existing laws, reflecting the legislature's awareness of current legal frameworks. Thus, OCGA 16-9-130(a) does not automatically permit class certification in identity fraud cases; plaintiffs must still satisfy Rule 23's prerequisites. The predominance inquiry is essential to assess how a trial would proceed if a class is certified, ensuring that the evidence presented can support classwide claims.

Class action suits are deemed inappropriate when resolving individual questions is essential to determining liability. The trial court's denial of Perez's motion for class certification under Rule 23 (b)(3) was upheld, as individual factual issues regarding employee authorization or consent were found to outweigh common issues. Additional findings by the trial court indicated that Perez's claims were not typical of the class and that he was not an adequate representative, although these were not necessary for the ruling. Perez did not challenge the denial of class certification for claims under Rule 23 (b)(2) effectively, and the court declined to address his new argument raised in his reply brief. His Georgia RICO claims, which were based on the same fraudulent acts, also required proof of lack of consent from employees. Despite evidence presented regarding false information in licensure documents, the trial court determined it did not resolve the critical issue of whether employee signatures were forged or if employees consented to the use of their personal information. Several courts have similarly ruled that class certification is inappropriate when individual consent issues must be resolved for each class member.

Class certification can be appropriate when the defendant's database allows for addressing consent on a class-wide basis, as noted in Kavu, Inc. v. Omnipak Corp. Perez contends that the trial court improperly considered the merits of his claims while evaluating whether individual factual issues would dominate the class action. He emphasizes that the initial focus should be on whether the criteria of Rule 23 are satisfied, not on the substance of the claims. However, case law indicates that class determination inherently involves factual and legal issues relevant to the plaintiff’s claims. The trial court may assess the merits of the claims to the extent necessary for the predominance analysis, as established in multiple precedents. Since the court examined the merits of Perez's claims solely to facilitate this inquiry, it did not err in its ruling. Additionally, the document notes that it is unnecessary to determine the implications of a nonparty witness invoking privilege in relation to drawing an adverse inference against a party, referencing relevant case law and legal commentary.