Browning v. Angelfish Swim School, Inc.

1 So. 3d 355, 2009 Fla. App. LEXIS 553, 2009 WL 187694
CourtDistrict Court of Appeal of Florida
DecidedJanuary 28, 2009
Docket3D08-1827
StatusPublished
Cited by14 cases

This text of 1 So. 3d 355 (Browning v. Angelfish Swim School, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Browning v. Angelfish Swim School, Inc., 1 So. 3d 355, 2009 Fla. App. LEXIS 553, 2009 WL 187694 (Fla. Ct. App. 2009).

Opinions

SALTER, J.

The Secretary of State of Florida, Kurt Browning, appeals a circuit court order certifying a class of corporate plaintiffs asserting that late annual report and reinstatement fees paid to the Secretary by them violated the Excessive Punishments section of the Florida Constitution. See Art. I, § 17, Fla. Const.1 We affirm the [357]*357class certification order insofar as it addresses three of the four threshold requirements imposed by Florida Rule of Civil Procedure 1.220(a) — these three are commonly referred to as numerosity, commonality, and typicality. We reverse and remand regarding the fourth requirement, however — adequacy of the proposed class representatives — because the relief sought by the plaintiffs, the likely out-of-pocket costs for the litigation, and the financial ability of the proposed representatives to bear those costs, were not adequately established by the appellees.

The Claims and the Procedural History

In September 2000, appellee Angelfish Swim School, Inc., a Florida corporation, filed a late annual report and paid a late charge of $400 to the Secretary as required by section 607.193(2)(b), Florida Statutes (2000). The late charge was payable in addition to the annual corporate report fee of $61.25, see section 607.0122, and the annual supplemental corporate fee of $88.75 then payable, see section 607.193(1), if the annual report and fees were remitted after May 1 of any calendar year. The second plaintiff below and ap-pellee here, Steak on the Run, Inc., also a Florida corporation, alleged that it was administratively dissolved by the Secretary in October 1998, and in May 2000 was required to pay the $600 statutory reinstatement application fee, see section 607.0122(13), as well as the three outstanding annual report and supplemental corporate fees ($150 for each year).

These two plaintiffs alleged in their amended class action complaint that the $400 late charge and $600 reinstatement fee violated the excessive punishments provision, and in a single count Angelfish and Steak sought “declaratory relief’ under “F.S. 68 et seq. [sic].”2 The amended class action complaint also alleged that the late charges and reinstatement fees are a “denial of due process and equal protection under the law,” but the equal protection claim was rejected by the trial court in an order granting partial summary judgment. The prayers for relief did not make it clear what monetary relief, if any, Angelfish and Steak sought as a result of the alleged unconstitutionality of the late charge and reinstatement application fee — a disgorgement of all such payments, or of only that portion of such payments found by the trial court to be “excessive.”3

Discovery ultimately revealed that over 249,000 Florida corporations paid the $400 late fee between 1997 and 2007, and over 97,000 paid a $600 reinstatement application fee. The resulting arithmetic indicates that Angelfish and Steak — each of which lacked the attention or wherewithal to file a timely annual report or to remit $150 as required by Florida law4 — are [358]*358proposing that they are adequate class representatives for several hundred thousand separate entities that paid aggregate charges to the Secretary exceeding $150 million. As analyzed in greater detail below, if Angelfish and Steak are seeking a disgorgement of all those charges and a payment of statutory prejudgment interest on the charges, see section 55.03, Florida Statutes (2000) (applicable because the amounts in question are liquidated), the aggregate claim against the State of Florida would likely exceed $300 million.

Pre-certification discovery also included the depositions of the principals of Angelfish and Steak who would serve as the class representatives. The representative of Angelfish was unfamiliar with its fee agreement with counsel. Angelfish’s counsel instructed the representative (who testified that he was the person with greatest knowledge of the corporation’s assets, income, and liabilities for the period 1998 to present) not to answer questions regarding those “privileged financial matters.” At the class certification hearing, Angelfish’s representative testified that he thought he could afford a mailing, relying on personal and corporate funds, but he was uncertain what other costs might be involved in a class action.

Steak’s corporate representative was more forthcoming about that corporation’s financial condition, but the information was bleak. Steak had no assets at the time of the class certification hearing and had not had any assets or money for five or six years.

Nor did the class certification hearing shed additional light on the relief sought by the putative class. Counsel for Angelfish and Steak did not explain whether the single count amended complaint was limited to declaratory relief, or whether it sought a recovery of all late charges and reinstatement application fees paid, plus prejudgment interest, or whether it sought a recovery of only those charges and fees proven at trial to be “excessive.”

Following the hearing, the circuit court entered the certification order, and this appeal followed.

Analysis

As noted, the first three elements of Rule 1.220(a) were unquestionably present — the class is numerous, the claims of the putative class members involve common issues of law and fact, and the claims of the proposed class representatives are typical of those of the class as a whole. The fourth element, the adequacy of Angelfish and Steak as class representatives, is the issue here.5

Ordinarily, the merits of a class claim need not be addressed before the procedural question of class certification is determined. In some cases, however, the two inquiries are interrelated. The dimensions of a class action claim, including the types of relief sought, must be clear so as to guide the court’s assessment of (1) the proposed class representatives’ ability and financial capacity to prosecute the action diligently, and (2) proposed class counsel’s experience and competence. The merits of the underlying claim also bear on the trial court’s exercise of discretion regarding the costs of notice under Rule 1.220(d)(2). See Dep’t of Agric. & Consumer Servs. v. Cox, 947 So.2d 561, 563 (Fla. 4th DCA 2006) “Unless otherwise ordered,” the plaintiffs must bear those costs. Fla. R. Civ. P. 1.220(d)(2).

[359]*359In this case, it is evident that the Secretary will defend the lawsuit vigorously and thoroughly — if Angelfish and Steak clarify their complaint to confirm that they seek $150 million in disgorgements plus at least that amount again in prejudgment interest, the pretrial proceedings, trial, and appeal will be particularly protracted and expensive. If Angelfish and Steak are only seeking those amounts that are “excessive,” the damages sought from the Secretary will still be huge. Presumably, expert accounting witnesses would be required to guide the trial court in determining what late charges and reinstatement application fees might be reasonable, and what amounts should be held excessive. The present record falls woefully short of demonstrating any capacity on the part of Angelfish and Steak to fund even a part of the costs6 likely to be incurred in so substantial a case. See Brooks v. S. Bell Tel. & Tel. Co., 133 F.R.D. 54 (S.D.Fla.1990).

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Browning v. Angelfish Swim School, Inc.
1 So. 3d 355 (District Court of Appeal of Florida, 2009)

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Bluebook (online)
1 So. 3d 355, 2009 Fla. App. LEXIS 553, 2009 WL 187694, Counsel Stack Legal Research, https://law.counselstack.com/opinion/browning-v-angelfish-swim-school-inc-fladistctapp-2009.