Fielder v. Credit Acceptance Corp.

Citations: 175 F.R.D. 313; 1997 U.S. Dist. LEXIS 16443; 1997 WL 662668Docket: No. 96-1210-CV-W-3

Court: District Court, W.D. Missouri; October 9, 1997; Federal District Court

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The Court has granted Plaintiffs' Motion for Class Certification, allowing the case initiated by Marvin Fielder and Deborah Williams, originally filed in Missouri state court in 1996 and later removed to federal court, to proceed as a class action. The defendants include Credit Acceptance Corporation (CAC) and Northeast Auto Credit, Inc. (NAC). CAC primarily finances used car purchases for individuals with limited access to traditional credit. The plaintiffs allege overcharges related to "official fees" in retail installment contracts and other violations by CAC, including excessive post-maturity interest and deficiencies in repossession notices and lawsuits.

Two classes are certified: 

1. **Official Fee Overcharge Class**: Comprising individuals who purchased vehicles in Missouri on or after October 15, 1991, financed by CAC and charged for official fees exceeding the $10.00 maximum allowed under Missouri law. 

2. **Interest Overcharge Class**: Comprising those overcharged for post-maturity interest by CAC.

Each class includes specific subclasses addressing claims against NAC and violations related to credit sale disclosures and repossession notices. The defendants had been duly notified of the proceedings, with NAC notably absent from hearings or responses regarding the certification.

Subclass 1(A) pertains to members of Class 1 who purchased vehicles from Northeast Auto Credit, Inc. (NAC). Subclass 1(B) includes Class 1 members whose retail installment contracts were executed post-October 15, 1995, and involved more than four installments or included a finance charge. Class 2 encompasses individuals who bought a vehicle in Missouri for personal use after October 15, 1991, executed retail installment contracts assigned to CAC, and were charged post-maturity interest exceeding contract terms. 

Subclass 2(A) is limited to Class 2 members whose vehicles were repossessed and resold by Credit Acceptance Corporation (CAC). Subclass 2(B) includes Class 2 members against whom CAC took judgment. The Second Amended Complaint outlines Counts III through IX related to Class 1 concerning official fee overcharges, and Counts X through XIV related to Class 2, focusing on interest overcharges and issues with repossession notifications. Plaintiffs claim NAC and CAC overcharged fees and misrepresented post-maturity interest, alleging violations of the Missouri Vehicle Time Sales Act (MVTSA), The Truth in Lending Act (TILA), and other Missouri laws.

The Court accepts the class definitions proposed by the Plaintiffs, with no objections from the Defendant, affirming that the definitions are sufficient for class certification under Federal Rule of Civil Procedure 23. To maintain a class action, Plaintiffs must meet four prerequisites outlined in Rule 23(a): numerosity, common questions of law or fact, typicality of claims, and adequate representation of class interests. Additionally, Plaintiffs must demonstrate their claims meet one of the criteria in Rule 23(b), specifically addressing the risk of inconsistent adjudications under Rule 23(b)(1)(A).

Rule 23(b)(2) is applicable when the opposing party's actions impact the class as a whole, allowing for injunctive or declaratory relief. Rule 23(b)(3) allows for an 'opt-out' class if common questions of law or fact predominate and a class action is the superior method for resolving the controversy. Plaintiffs have shifted their request for class certification from Rule 23(b)(3) to 23(b)(2) or 23(b)(1) and have met the general requirements of Rule 23(a).

1. **Numerosity**: The court certifies the class against Defendant NAC since it did not respond to the class certification issues. The estimated class size is 120-160 people for NAC, while Defendant CAC has acknowledged numerosity with over 2800 accounts in the overcharged fees class and 2420 accounts in the post-maturity interest class.

2. **Commonality**: This requirement is satisfied as the legal questions for class members are closely related. All class members used the same contract form leading to claims of overcharging by NAC. Both NAC and CAC have conceded that commonality is met.

3. **Typicality**: This criterion is satisfied as the claims of the named plaintiffs against NAC are similar, differing only in the amount of overcharge. The court finds that the legal theory remains consistent across the class.

4. **Adequacy of Representation**: This factor is met as Plaintiffs' counsel is deemed qualified and experienced, and there are no conflicting interests among class members. 

Overall, the court finds that all requirements for class certification under Rule 23(a) have been satisfied.

Defendants concede the competency of counsel but argue that multiple compulsory counterclaims from CAC could hinder the Plaintiffs' ability to represent the class adequately. The Court, however, concludes that the requirements of Rule 23(a)(4) are satisfied based on the allegations in the Second Amended Complaint and the conduct of the case thus far. 

Plaintiffs seek class certification under Rules 23(b)(1) and (b)(2) for injunctive, declaratory relief, and damages. Certification under Rule 23(b)(2) is appropriate as the Defendants' actions affect the class broadly. The Court observes that Defendants have continued their challenged practices and failed to provide authority supporting their claims. The plaintiffs' requests for damages are deemed incidental to their requests for injunctive relief, which does not affect certification under Rule 23(b)(2).

The Court considers counterclaims from CAC, finding that they have not sufficiently demonstrated the number or nature of compulsory counterclaims that would impede class certification. It determines that Federal Rule of Civil Procedure 13 does not apply in class actions, referencing the Buford case that supports this view. The Court also notes that the Defendants have not filed any counterclaims during the proceedings. 

Ultimately, the Court finds that Plaintiffs have met all requirements for class certification under Rule 23, leading to the granting of Plaintiffs' Motion for Class Certification. Some claims remain individual against NAC and CAC and are not subject to class certification under Missouri law and federal statutes.