Glen v. Fairway Independent Mortgage Corp.

265 F.R.D. 474, 2010 U.S. Dist. LEXIS 21487, 2010 WL 623675
CourtDistrict Court, E.D. Missouri
DecidedFebruary 22, 2010
DocketNo. 4:08CV730 RWS
StatusPublished
Cited by6 cases

This text of 265 F.R.D. 474 (Glen v. Fairway Independent Mortgage Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Glen v. Fairway Independent Mortgage Corp., 265 F.R.D. 474, 2010 U.S. Dist. LEXIS 21487, 2010 WL 623675 (E.D. Mo. 2010).

Opinion

MEMORANDUM AND ORDER

RODNEY W. SIPPEL, District Judge.

This matter is before me on plaintiffs’ motion for class certification. Defendant opposes class certification. Following extensive briefing and a hearing held on December 17, 2009, I will grant class certification for the reasons that follow.

I. Introduction

The Glens bring this putative class action against defendant Fairway under the Missouri Merchandising Practices Act, Mo.Rev. Stat. § 407.010 et seq. (MMPA). In Count III of their fourth amended complaint, plaintiffs allege that Fairway promised its customers in loan-origination agreements that it would reveal in good-faith estimates “additional compensation” it received from the lender. The Glens allege that Fairway provided them with good-faith estimates that did not disclose a yield-spread premium (YSP).

II. Proposed Class Definition

Count III of plaintiffs’ fourth amended complaint alleges the following class definition:

All customers of Defendant Fairway who, in Missouri from October 1, 2002 to the present, entered into real estate financing transactions with Defendant Fairway in which Defendant Fairway promised in writing that it would disclose additional compensation that it would receive from the lender on a good-faith estimate, and in which Defendant Fairway did in fact receive additional compensation from the lender.

(emphasis supplied). However in their reply brief in support of class certification filed on July 31, 2009 and at the hearing, plaintiffs suggested the following amended class definition:

All customers of Fairway in Missouri who, from April 21, 2002, to the present, entered into a real estate financing transaction in which Fairway promised in writing that it would disclose additional compensation that it would receive from the lender on a good-faith estimate, and in which defendant Fairway did in fact receive additional compensation from the lender.

(emphasis supplied). Plaintiffs now argue the class period should extend from the earlier April date because their class claim should relate back to the filing of their class claim in the first amended complaint on April 21, 2008. Defendant opposes this amended class definition as untimely. Defendant also argues that the amendment should not relate [476]*476back to the filing of the first amended complaint.

Defendant’s first argument is well-taken. Plaintiffs have never filed a motion to amend the complaint and properly assert their proposed amended class definition, and their time for doing so expired on November 30, 2008. The governing case management order provides that the schedule will not be modified except “upon a showing of exceptional circumstances.” Here, plaintiffs offered no explanation for failing to seek leave to amend their complaint well beyond the time permitted by the case management order. Instead, they merely suggest in a footnote that “the class period should be April 21, 2002, for the reasons stated below.” Yet the only “reasons” given are that plaintiffs believe that Missouri’s six-year statute of limitations for claims against “moneyed corporations,” Mo.Rev.Stat. § 516.420, applies to their class claim, and that their claim should relate back to the filing of their first amended complaint on April 21, 2002.1 However, plaintiffs advanced these legal arguments in their brief in support of class certification, when they were asking the Court to certify the class period beginning October 1, 2002. If these reasons justified an amendment of the class definition, then plaintiffs should have advanced them much sooner, and certainly when they filed their motion to certify the class. They did not. Because plaintiffs have not demonstrated that amendment is warranted under the case management order, their request to modify the proposed class period from October 1, 2002 to April 21, 2002 will be denied. Plaintiffs’ proposed motion to certify the class will be considered with the proposed class definition set forth in the fourth amended complaint and the motion and brief in support of class certification.

I must next consider whether a five-year or six-year statute of limitations applies to plaintiffs’ class claim under the MMPA. The MMPA does not contain a statute of limitations. Defendant argues that Missouri’s five-year statute of limitations for civil actions, Mo.Rev.Stat. § 516.120(2), applies. Mo.Rev.Stat. § 516.120(2) applies a five-year statute of limitations period to “[a]n action upon a liability created by a statute other than a penalty or forfeiture.” The Eighth Circuit Court of Appeals has held that claims under the MMPA are “subject to a five-year statute of limitations.... ” Owen v. General Motors Corp., 533 F.3d 913, 921 n. 6 (8th Cir.2008) (citing Ullrich v. CADCO, Inc., 244 S.W.3d 772, 778 n. 3 (Mo.Ct.App.2008); Mo. Rev.Stat. § 516.120(2)). Plaintiffs nevertheless argue that Missouri’s six-year limitations period should apply to their MMPA claim because it is a suit for “a penalty or forfeiture” against a “moneyed corporation.” See Mo.Rev.Stat. § 516.420.2 This argument is wrong. By its terms, Mo.Rev.Stat. § 516.420 provides that “[njone of the provisions of section 516.880 to 516420 shall apply to suits against moneyed corporations or against the directors or stockholders thereof, to recover any penalty or forfeiture imposed, or to enforce any liability created by the act of incorporation or any other law .... ” (emphasis supplied). Sections 516.380 through 516.420 provide limitations periods for actions on penal statutes. However, the Eighth Circuit has held that the applicable limitations period for MMPA claims can be found not in Sections 516.380 through 516.420, but in Mo. Rev.Stat. § 516.120(2), which applies to “[a]n action upon a liability created by a statute other than a penalty or forfeiture.” See Owen, 533 F.3d at 921 n. 6 (emphasis supplied). Mo.Rev.Stat. § 516.420 does not apply to claims brought under the MMPA because they are not claims brought under the provisions of “section 516.380 to 516.420.” Stated another way, the six-year limitations period of § 516.420 only applies to actions for penalties or forfeitures, and Owen holds that [477]*477claims under the MMPA are not claims for penalties or forfeitures. See id. The five-year limitations period provided by Mo.Rev. Stat. § 516.120(2) applies to plaintiffs’ MMPA claim.3

Defendant next challenges plaintiffs’ proposed class definition as overly broad because it is not limited to those borrowers actually harmed by defendant’s failure to disclose additional compensation.4 Defendant argues the class is not certifiable because the class definition is not limited to those borrowers to whom defendant did not disclose additional compensation as promised. Plaintiffs respond that the proposed class definition meets the requirements of Rule 23 because members of the class are readily ascertainable and membership is not predicated upon any merits determination. Moreover, plaintiffs contend that membership is readily ascertainable because defendant did not disclose its additional compensation to any Missouri borrowers, with one exception.

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Cite This Page — Counsel Stack

Bluebook (online)
265 F.R.D. 474, 2010 U.S. Dist. LEXIS 21487, 2010 WL 623675, Counsel Stack Legal Research, https://law.counselstack.com/opinion/glen-v-fairway-independent-mortgage-corp-moed-2010.