Detmer v. La'James College of Hairstyling, Inc.

CourtCourt of Appeals of Iowa
DecidedDecember 15, 2021
Docket21-0220
StatusPublished

This text of Detmer v. La'James College of Hairstyling, Inc. (Detmer v. La'James College of Hairstyling, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Detmer v. La'James College of Hairstyling, Inc., (iowactapp 2021).

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 21-0220 Filed December 15, 2021

JENNA DETMER, ASHLEY BARNETT, SAMANTHA BENNETT and RIESHA TATE, on behalf of themselves and a class of similarly situated persons, Plaintiffs-Appellees,

vs.

LA’JAMES COLLEGE OF HAIRSTYLING, INC. OF FORT DODGE, d/b/a LA’JAMES INTERNATIONAL COLLEGE, LYNDI, LTD., d/b/a LA’JAMES INTERNATIONAL COLLEGE, M&C BEAUTY SCHOOL, INC., d/b/a LA’JAMES COLLEGE OF HAIRSTYLING, INC. & LA’JAMES INTERNATIONAL COLLEGE, TIFFANY, LTD., d/b/a LA’JAMES COLLEGE OF HAIRSTYLING, INC. & LA’JAMES INTERNATIONAL COLLEGE, TRAVIS, LTD., d/b/a LA’JAMES COLLEGE OF HAIRSTYLING, INC. & LA’JAMES INTERNATIONAL COLLEGE, R&R CONSTRUCTION CO., d/b/a LA’JAMES COLLEGE OF HAIRSTYLING, INC. & LA’JAMES INTERNATIONAL COLLEGE, and JOHN & JANE DOES 1-12, in their individual and official capacities, Defendants-Appellants. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, Paul D. Scott, Judge.

The defendants appeal the district court ruling certifying the class of former

students. AFFIRMED.

James W. White and Jennifer E. Lindberg of Brown, Winick, Graves, Gross,

& Baskerville, P.L.C., Des Moines, for appellants. 2

Benjamin G. Arato and Alison F. Kanne of Wandro & Associates, PC, Des

Moines, and Eric Rothschild and Kirin Jessel of National Student Legal Defense

Network, Washington, D.C., for appellees.

Heard by Greer, P.J., Badding, J., and Potterfield, S.J.*

*Senior judge assigned by order pursuant to Iowa Code section 602.9206

(2021). 3

POTTERFIELD, Senior Judge.

La’James1 appeals the district court ruling certifying the class of current and

former students who allege La’James is liable for unfair and deceptive practices

under the Iowa Consumer Fraud Act, fraudulent misrepresentation, negligent

misrepresentation, fraudulent concealment, and breach of contract. La’James

maintains the district court abused its discretion in certifying the class, arguing the

district court “failed to adequately consider the predominance factor in fraud cases

and did not apply or address the applicable law.”

I. Background Proceedings.

Jenna Detmer and Ashley Barnett brought suit against La’James in March

2020 “on behalf of themselves and a class of all similarly situated individuals.”

They defined the class as:

all persons who were enrolled or remain enrolled at any Iowa campus of La’James who were awarded financial aid and provided with a financial aid disbursement schedule, and whose financial aid disbursements were not made in accordance with that schedule, either due to a delay in disbursement by La’James, or their failure to disburse, financial aid.

The class was limited “to those students who have not yet received their final credit

balance payment, who are still owed a balance that should have been paid to them,

1 We refer to the defendants collectively as La’James. The defendants are La’James College of Hairstyling, Inc. of Fort Dodge, doing business as La’James International College; Lyndi, Ltd., doing business as La’James International College; M&C Beauty School, Inc., doing business as La’James College of Hairstyle, Inc. and La’James International College; Tiffany, Ltd., doing business as La’James College of Hairstyling, Inc. and La’James International College; Travis, Ltd., doing business as La’James College of Hairstyle, Inc. and La’James International College; R&R Construction Co., doing business as La’James College of Hairstyling, Inc. and La’James International College; and John and Jane Does 1-12. 4

or who received their credit balance after a delay, after March 20, 2018.” The

plaintiffs alleged La’James engaged in unfair and deceptive practices under the

Iowa Consumer Fraud Act (count I), fraudulent misrepresentation (count II),

negligent misrepresentation (count III), fraudulent concealment (count IV), and

breach of contract (count V). Their allegations stemmed from La’James’s handling

of financial aid disbursements. The plaintiffs later amended their petition to add

Samantha Bennett and Riesha Tate as named, representative plaintiffs.

In October, the representative plaintiffs moved the court to certify the

putative class. They asserted the number of proposed class members was

estimated to exceed 149 and that their claims “present a common nucleus of

operative facts and have central issues in common.” In the brief to support their

motion for class certification, the plaintiffs alleged that many students who are

eligible for financial aid due to their enrollment in La’James use the funds both for

tuition and to cover living expenses. La’James, as part of its enrollment process,

gives each student paperwork that details when the financial aid—including any

credit balance remaining after tuition and fees were paid that would be disbursed

to students directly—will be disbursed.2 These disbursement times are

standardized, which the students are told during a financial planning session with

a La’James employee before the students begin classes. La’James’s “Tuition

Payment Schedule Disclosure”3 states:

2 Students also have the option for the credit balance to be returned to the Department of Education for a reduction in their loan amount. 3 This form was included in the plaintiffs’ appendix to the statement of facts. 5

The representative plaintiffs allege La’James engaged in a pattern of failing to

timely disburse the financial aid on the schedule it promised, which prevented

students from obtaining the surplus funds. Students who counted on the credit

balance to help cover their living expenses were then forced to take out additional

loans, pay late fees and penalties, or both. The plaintiffs also assert instances

where the amount of aid they were told they would receive or the cost of

attendance changed after their financial planning meeting with La’James, resulting 6

in smaller credit balances being paid to students than the students expected when

they began their programs at La’James.

La’James resisted the certification of the class. In their written resistance,

they asserted, “The court should deny Plaintiffs’ motion because fraud cases such

as this one are not suitable for class treatment.” The “petition makes clear that

individual issues on misrepresentations, omissions, and reliance will predominate,

making class certification inappropriate here” and “individual issues on damages

will predominate.” In their brief in support of resistance, La’James asserted “the

specific allegedly fraudulent statements will vary from plaintiff to plaintiff” and

“[t]here is no consistency regarding the statements made.”

In a reply brief, the plaintiffs argued “it [was] important to note the aspects

of [their] motion that [La’James] did not resist,” including that La’James “offer[ed]

no opposition to class certification for [the breach-of-contract claim]” and “no

objection to the appointment of class counsel.”

At the hearing on the motion, in January 2021, the plaintiffs argued in

support of certification, asserting that the anticipated class members “mostly come

from lower economic backgrounds” and would not have the means to pursue

claims outside of a class action, especially due to the fact that amount of damages

“range[d] between a couple hundred dollars to a couple thousand dollars.” The

plaintiffs also noted that, “because this is financial aid and we’re dealing with the

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Detmer v. La'James College of Hairstyling, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/detmer-v-lajames-college-of-hairstyling-inc-iowactapp-2021.