Felix v. Ganley Chevrolet, Inc. (Slip Opinion)

2015 Ohio 3430, 49 N.E.3d 1224, 145 Ohio St. 3d 329
CourtOhio Supreme Court
DecidedAugust 27, 2015
Docket2013-1746
StatusPublished
Cited by44 cases

This text of 2015 Ohio 3430 (Felix v. Ganley Chevrolet, Inc. (Slip Opinion)) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Felix v. Ganley Chevrolet, Inc. (Slip Opinion), 2015 Ohio 3430, 49 N.E.3d 1224, 145 Ohio St. 3d 329 (Ohio 2015).

Opinions

O’Connor, C.J.

{¶ 1} In this appeal, we address whether all members of a plaintiff class alleging violations of the Ohio Consumer Sales Practices Act (“OCSPA”), R.C. Chapter 1345, must have suffered injuries as a result of the conduct challenged in the suit. We hold that they must and therefore reverse the judgment of the court of appeals.

Relevant Background

{¶ 2} This appeal arises from two related class-action lawsuits that were first brought by appellees, Jeffrey and Stacy Felix, nearly 15 years ago. In each suit, the Felixes sought damages from appellants, Ganley Chevrolet, Inc., and Ganley Management Company (collectively, “Ganley”), as well as declaratory and injunctive relief. Although the issues before us are discrete legal ones, we summarize the history of the case for context.

The Transaction

{¶ 3} The Felixes contend that they went to Ganley in March 2001 to purchase a 2000 Chevy Blazer. They allege that Ganley used a zero-percent-interest financing offer to lure Jeffrey Felix to sign a contract to purchase the vehicle.

{¶ 4} The purchase contract provided that it was “not binding unless accepted by seller and credit is approved, if applicable, by financial institution.” The contract also contained an arbitration clause that required that “any dispute between you and dealer (seller) will be resolved by binding arbitration.”1

[330]*330{¶ 5} When the Felixes returned a few days later to sign the promissory note and security agreement, Ganley purportedly told them that the financing institution would approve them for financing only at 1.9 percent interest, not at the zero percent interest previously represented to them. The Felixes reluctantly agreed to the 1.9 percent rate.

{¶ 6} More than a month later, Ganley informed the Felixes that they had not been approved for financing at the 1.9 percent interest rate. Ganley told the Felixes that they could obtain a 9 percent interest rate with Huntington Bank; the Felixes claim that Ganley contacted Huntington Bank without their permission. The Felixes refused. Soon thereafter, they brought the first of two suits against Ganley in the Cuyahoga County Common Pleas Court.

The Initial Lawsuit

{¶ 7} In their first action, which would become a class-action suit with the Felixes as representatives of the class, the Felixes sought damages under the OCSPA.2

{¶ 8} The first three counts of the complaint alleged the class-action claims that are at issue here. The first count asserted that the arbitration clause used by Ganley was unconscionable and that various practices of Ganley pertaining to the clause violated the OCSPA. Counts two and three alleged that Ganley had committed unfair and deceptive consumer sales practices against the class.

{¶ 9} In their prayer for relief for the class, the Felixes sought certification of their proposed classes of plaintiffs and defendants, an order declaring the arbitration clause unconscionable and void, injunctive relief, “monetary damages against Defendants, jointly and severally, where appropriate to each plaintiff,” and reasonable attorney fees and costs. The Felixes did not specifically request $200 in damages for each class member. Nor did they seek actual damages for each class member. They did, however, make those requests in their prayer for [331]*331relief in their individual capacities. More specifically, in their individual capacity, they sought “three times the amount of their actual damages or two hundred dollars ($200.00), for each unlawful act specified, whichever is greater,” punitive damages, attorney fees and costs, and injunctive relief.

The Second Lawsuit

{¶ 10} The second lawsuit, brought several months after the first suit, is a declaratory-judgment action. The declaratory-judgment action also became a class-action suit.

{¶ 11} The first count of the declaratory-judgment complaint sought a declaration that the arbitration clause is unconscionable. The second, third, and fourth counts sought declarations that Ganley committed unfair and deceptive consumer sales practices with respect to the arbitration clause. And count five requested a declaration that Ganley made false statements, representations, and disclosures of fact and defrauded customers as to the arbitration clause.

{¶ 12} Ganley moved to stay the proceedings in both suits so that arbitration in accordance with the arbitration clause could proceed. The trial court held a consolidated hearing on the motions and denied them without opinion. Ganley appealed that order to the Eighth District Court of Appeals.3 Felix v. Ganley Chevrolet, Inc., 8th Dist. Cuyahoga Nos. 86990 and 86991, 2006-Ohio-4500, 2006 WL 2507469 (“Felix I”).

The Initial Appeal: Felix I

{¶ 13} In its appeal from the denial of the motion to stay, Ganley argued that the trial court erred by failing to stay the proceedings pending arbitration pursuant to R.C. 2711.02 because the purchase contract contains a clear and conspicuous arbitration clause. The Eighth District affirmed the trial court’s judgment, holding that the arbitration clause was unconscionable and that there was no valid, enforceable agreement that required the parties to arbitrate.

{¶ 14} In so doing, the appellate court recognized that R.C. 2711.02(B) requires a trial court, upon application of a party, to stay proceedings in any action in which the court is satisfied that an issue in the case is subject to arbitration pursuant to a written agreement between the parties. Felix I at ¶ 12. But it also noted that R.C. 2711.01(A) provides that a provision for arbitration “shall be valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for the revocation of any contract.” Id. at ¶ 15. It then turned to the Felixes’ claims that the arbitration provision was unconscionable and concluded that it was both procedurally and substantively unconscionable. Id. at ¶ 22-23.

[332]*332{¶ 15} We declined Ganley’s request for review of that decision, Felix v. Ganley Chevrolet, Inc., 112 Ohio St.3d 1470, 2007-Ohio-388, 861 N.E.2d 144, and therefore the unconscionability of the arbitration clause is not before us in this appeal. The issues before us arose after the Eighth District remanded the cause to the trial court.

The Remand

{¶ 16} After remand, the parties litigated for another five years. Eventually, the trial court certified a class of plaintiffs pursuant to Civ.R. 23(B)(2) and (B)(3) and ruled that all class members could recover damages.

{¶ 17} The putative class includes the following:

All consumers of Vehicles from any of the 25 Ganley Companies (see Plaintiffs Chart, Exhibit A, filed August 18, 2003) within the two-year period preceding commencement through the present date (the Class Period), who signed a purchase agreement containing the arbitration clause at suit or one substantially similar thereto.

{¶ 18} The trial court held that Ganley’s inclusion of the arbitration provision in its purchase agreements with consumers violated the OCSPA and established a basis for classwide relief under Civ.R. 23(B)(2) and (B)(3).

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Cite This Page — Counsel Stack

Bluebook (online)
2015 Ohio 3430, 49 N.E.3d 1224, 145 Ohio St. 3d 329, Counsel Stack Legal Research, https://law.counselstack.com/opinion/felix-v-ganley-chevrolet-inc-slip-opinion-ohio-2015.