Hardy v. Wise

92 S.W.3d 650, 2002 Tex. App. LEXIS 8968, 2002 WL 31835042
CourtCourt of Appeals of Texas
DecidedDecember 19, 2002
Docket09-01-192 CV
StatusPublished
Cited by4 cases

This text of 92 S.W.3d 650 (Hardy v. Wise) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hardy v. Wise, 92 S.W.3d 650, 2002 Tex. App. LEXIS 8968, 2002 WL 31835042 (Tex. Ct. App. 2002).

Opinion

OPINION

PER CURIAM.

This appeal follows a jury trial in a class action involving restrictive covenants and property assessments. The suit was filed by the Horseshoe Lake Property Owners Association (“Association”) to determine the validity of claimed restrictive covenants on some 1,550 lots and to collect assessments considered past due. The trial court certified Class A as a plaintiff class and Class B as a defendant class. The plaintiff class was defined, in effect, as all the owners who agreed with the Association’s Second Amended Petition, and the defendant class was defined as all lot owners who disagreed with the Plaintiffs Second Amended Petition. No interlocutory appeal was taken from the class certification order. The Association filed a Third Amended Petition. Following a jury verdict, the trial court entered judgment in favor of the Association as plaintiff and entered monetary judgments against numerous lot owners. The Association was awarded attorney’s fees and costs against the “defendant class representatives,” “each delinquent lot owner,” and “each member of the defendant class” — jointly and severally.

While the case was on appeal to this court, the Association confessed error and asked that the judgment be vacated. This court vacated the judgment and remanded the case to the trial court “for further proceedings regarding the entry of judgment in accordance with the attached agreement of the parties.” The trial court held hearings, removed the Association as representative of the plaintiff class, and appointed new class representatives for the plaintiff class. The trial court then entered substantially the same judgment previously vacated by this court.

The Association and the named representatives of the defendant class filed this appeal. First, they assert that the trial court erred in not approving the settlement and not dismissing the case. Rule 42(e) of the Texas Rules of Civil Procedure provides that “[a] class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.” Tex.R. Civ. P. 42(e). The trial court serves a role as guardian of the class interest. General Motors Corp. v. Bloyed, 916 S.W.2d 949, 954 (Tex.1996). But we need not address whether the trial court erred in its performance of that role because we find that this action was improperly certified as a class action.

The trial court certified two classes: Class A (“the plaintiff class”) was defined as those lot owners supporting the Association’s requests set out in Plaintiffs Second Amended Petition; and Class B (“the defendant class”) was defined as those lot owners opposing the requests set out in Plaintiffs Second Amended Petition. Attached to the Second Amended Petition were lists of those persons in Class A and those in Class B. The Notice of Class Certification informed Class B members that they were potentially liable for plaintiffs .attorney’s fees and costs. Judgment *653 was entered against those listed in Class B, but judgment was also entered against “delinquent” lot owners who were listed in Class A and part of the plaintiff class. And while the Association is the only named beneficiary in the judgment, the Association no longer supports its own pleadings and has asked that the judgment be set aside. Furthermore, while the judgment purports to resolve restrictive covenant issues involving some 1,550 lots and then collect “delinquent” assessments from previous years, only about 300 of the lots actually had restrictive covenants in the deed records. Appellant Johnson-Harper argues that “state of mind” cannot be employed to define the classes, and that due process precludes class action treatment of the claims at issue here. We agree.

In a review of a class certification order, the threshold inquiry must be the appropriateness of the certified class definition. Intratex Gas Co. v. Beeson, 22 S.W.3d 398, 403 (Tex.2000). Applying the requirements of Rule 42 is not possible absent a cognizable class; an identifiable class susceptible to precise definition is an essential prerequisite to a class action. Id. For the class to be sufficiently defined, the class members must be ascertainable by reference to objective criteria, not subjective criteria. Id. Generally, identifying class members based on each individual's state of mind is not feasible; the class definition would require inquiry into each member’s thoughts, and those thoughts may change. See Giordano v. Radio Corp. of America, 183 F.2d 558, 560-61 (3rd Cir.1950); see generally 7A Chahles AlaN Wright, Arthur R. Miller, & Mary Kay Kanf., Federal Practice and Procedure § 1760 (2d ed.1986); see also Chaffee v. Johnson, 229 F.Supp. 445, 448 (S.D.Miss. 1964) aff'd by 352 F.2d 514 (5th Cir.1965) (“The vague and indefinite description of the purported class depends upon the state of mind of a particular individual, rendering it difficult, if not impossible, to determine whether any given individual is within or without the alleged class.”). 1

The record demonstrates the lot owners cannot readily be divided into those favoring and those opposed to the Association’s claims. Individual lot owners may be opposed to the Association as presently constituted, yet may not be opposed to the general idea of enforcement of use restrictions on property or the assessments for maintenance purposes. One lot owner testified that she paid dues at one time, but when the assessment money collected was not used to her satisfaction, she stopped paying. Class membership as defined was subject to constant change. A class membership that requires the ascertainment of a member’s opinion, which is subject to change at any point, is a moving target. *654 See Giordano, 183 F.2d at 560-61. (A class action based on those labor union members favoring expulsion and those opposed to expulsion was ill-defined; the members could agree with the plaintiffs today and disagree tomorrow.).

Where there are separate factual issues applicable to each individual member of the class, generally class action treatment is inappropriate. See Aamco Automatic Transmissions, Inc. v. Tayloe, 407 F.Supp. 430, 433 (E.D.Pa.1976). The class members here have acquired their property interests under significantly different circumstances requiring individual determination. There are approximately twenty separate sections of Horseshoe Lakes, and some 1,550 individual deeds. Each owner takes under a unique chain of title. At trial the Association relied on matters not recorded in the deed records, such as 1964 letters from the original developer, and the doctrine of negative reciprocal easements in support of its authority to make and collect assessments.

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Bluebook (online)
92 S.W.3d 650, 2002 Tex. App. LEXIS 8968, 2002 WL 31835042, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hardy-v-wise-texapp-2002.