Lucio v. Safe Auto Insurance

919 N.E.2d 260, 183 Ohio App. 3d 849
CourtOhio Court of Appeals
DecidedSeptember 10, 2009
DocketNo. 08 MO 9
StatusPublished
Cited by11 cases

This text of 919 N.E.2d 260 (Lucio v. Safe Auto Insurance) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lucio v. Safe Auto Insurance, 919 N.E.2d 260, 183 Ohio App. 3d 849 (Ohio Ct. App. 2009).

Opinion

Waite, Judge.

{¶ 1} This is an appeal of an order issued by the Monroe County Court of Common Pleas certifying a class of plaintiffs in a class-action suit. The underlying complaint alleges that Safe Auto Insurance Company and Safe Auto Insurance Group, Inc. (collectively, “Safe Auto” or “appellant”), breached the employment agreements of current and former sales representatives of the insurance company. The complaint also contained a claim for unjust enrichment. Appellees John Lucio and Regina Winland are from Ohio. Appellees filed the lawsuit to recover commissions and bonuses allegedly owed to them for selling automobile insurance contracts. Lucio and Winland sought to represent a class of employees from Ohio employed by Safe Auto since the year 2000. Appellees filed a motion for class certification, which was granted by the trial court. The court limited the class to Ohio employees of Safe Auto and named Lucio and Winland as the class representatives. The court certified the class for both the contract claim and the unjust-enrichment claim.

{¶ 2} Appellant argues that the trial court should not have certified a class on the unjust-enrichment claim because no proof was submitted of unjust enrich[854]*854ment. It is clear from the record that the unjust-enrichment claims were based in significant part on the same documents that appellees relied on to establish their contract claim, and therefore the same proof could be used, at least in part, to establish both claims. Appellant also argues that the trial court failed to thoroughly analyze whether the requirements of Civ.R. 23 were met, but the trial court’s 18-page judgment entry establishes that the court vigorously reviewed Civ.R. 23 and found that its requirements were satisfied. Appellant further argues that the record does not support the argument that common elements predominate or that a class action was the superior method of adjudication. Once again, the trial court reviewed both of these issues, and it was within the court’s discretion to certify the class action. The record does not reflect any abuse of discretion by the trial court, and the judgment certifying the class is affirmed in full.

History of the Case

{¶ 3} On December 11, 2006, the three appellees filed a complaint in Cuyahoga County against their former employer, Safe Auto. On January 5, 2007, appellant removed the case to district court in the Northern District of Ohio. Appellees later dismissed the complaint and refiled it in the Monroe County Court of Common Pleas on March 22, 2007. On April 20, 2007, appellant again removed the case to a federal court, this time in the Southern District of Ohio. On November 13, 2007, the case was remanded to Monroe County.

{¶ 4} Appellees sought to represent a class of sales representatives allegedly employed by Safe Auto from the year 2000 to the present who had their commissions reduced when Safe Auto restructured its sales-incentive programs starting in January 2004. The complaint alleged both breach of contract and unjust enrichment. Although the employees were at-will employees, certain terms of employment were contained in a Sales Representatives Agreement (“SRA”) that each employee was required to sign as a term of employment. One such SRA was dated January 1, 2004, and it stated: “After the initial policy term of six months (i.e., upon renewal), the commission remains 2% for each part (quote and printing of policy) for the duration of the policy.” Appellees rely on the phrase “duration of the policy” to establish that their commission rate should not have been reduced while the automobile insurance policies they sold were still in effect. Appellees alleged that after the employees signed the January 1, 2004 SRA, Safe Auto distributed a memorandum to employees (on January 19, 2004) that unilaterally reduced the commissions earned on renewed policies. Appellees alleged that Safe Auto distributed a similar memo on August 18, 2005, unilaterally reducing the commission on new policy sales. Appellees alleged that these unilateral actions constituted a breach of contract.

[855]*855{¶ 5} Appellees’ unjust-enrichment claim is based on their allegations that Safe Auto continued to collect premiums on renewal policies in the name of former sales representatives but did not pay commissions to those former sales representatives. Appellees allege that Safe Auto was required by Ohio law to only use licensed sales representatives to sell automobile insurance policies. The sales representatives were required to obtain insurance licenses in order to be employed by Safe Auto. These sales representatives sold a large number of policies based on the incentive of a high commission rate promised by Safe Auto. After Safe Auto reduced its commission rates and increased the number of policies that each sales representative was required to sell each month, many sales representatives left the company. Appellees alleged that Safe Auto continued to use these former employees’ names (and insurance licenses) to continue collecting premiums on the renewals of the policies the former employees had sold without giving those former employees any compensation. Appellees allege that Safe Auto unjustly retained these benefits and that profits and commissions should be paid according to the employee’s former contract terms.

{¶ 6} Appellees filed a motion for class certification on July 11, 2008. A hearing on the motion was held on September 2, 2008. The trial court granted it on October 20, 2008. The court defined the class as “[a]U persons engaged by Safe Auto Insurance Company/Group as sales representatives in either the Monroe County or Franklin County Ohio call centers between the time period of January 1,1996 and the present, who had contractually determined sales commissions unilaterally reduced by Safe Auto at least once.” The court granted class certification with respect to both the breach-of-contract claim and unjust-enrichment claim and designated John Lucio and Regina Winland as the class representatives. Both plaintiffs are from Ohio and the class is limited to Ohio employees.

{¶ 7} On November 13, 2008, appellant filed its notice of appeal.

Final, Appealable Order Status

{¶ 8} R.C. 2505.02 states:

{¶ 9} “(B) An order is a final order that may be reviewed, affirmed, modified, or reversed, with or without retrial, when it is one of the following:

{¶ 10} “ * * *

{¶ 11} “(5) An order that determines that an action may or may not be maintained as a class action.”

{¶ 12} An order of a trial court determining that an action may be maintained as a class action is a final, appealable order, pursuant to R.C. 2505.02(B)(5). Gabbard v. Ohio Bur. of Workers’ Comp., 10th Dist. Nos. 02AP-976 and 02AP-1168, 2003-Ohio-2265, 2003 WL 21007091.

[856]*856Legal Standards for Certifying a Class in a Class-Action Case

{¶ 13} The class action is an invention of equity. Amchem Prod., Inc. v. Windsor (1997), 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689. “The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.” Id. at 617, 117 S.Ct. 2231, 138 L.Ed.2d 689.

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Cite This Page — Counsel Stack

Bluebook (online)
919 N.E.2d 260, 183 Ohio App. 3d 849, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lucio-v-safe-auto-insurance-ohioctapp-2009.