Nebraska Alliance Realty Co. v. Brewer

529 S.W.3d 307
CourtCourt of Appeals of Kentucky
DecidedSeptember 15, 2017
DocketNO. 2017-CA-000062-ME
StatusPublished
Cited by22 cases

This text of 529 S.W.3d 307 (Nebraska Alliance Realty Co. v. Brewer) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nebraska Alliance Realty Co. v. Brewer, 529 S.W.3d 307 (Ky. Ct. App. 2017).

Opinion

OPINION

CLAYTON, JUDGE:

This case involves an appeal from a class action certification. Following the Jefferson Circuit Court’s orders granting Appel-lees’ motion for class certification, Nebraska Alliance Realty Company (“NARC”) filed a CR1 23.06 interlocutory appeal. NARC principally claims the trial court erred by failing to make all the required findings pursuant to CR 23. We agree that the requisite findings were not made, thus we vacate and remand for further proceedings. We begin with a brief history of the case.

BACKGROUND

This case involves allegations that NARC, which purchases delinquent tax bills, committed two tortious acts: first, it overcharged prelitigation attorney’s fees during collection efforts; and second, it charged interest not permitted by statute. Appellees claim NARC charged these fees and interest to hundreds of people in Kentucky, and it sought to certify a class on these two claims because it alleged the facts underlying the claims were common and typical of all class members. A brief outline of delinquent property tax claims highlights the commonalities of the class members’ claims.

In Kentucky, when a real property owner is delinquent in paying his or her ad valorem taxes, certificates of delinquency may be created and sold to third parties. KRS2 134.128. By selling the delinquent certificates to.- third parties, the government receives the .funds it needs to operate. Those third parties satisfy the tax debt and, in exchange, are permitted to recoup the cost of the certificates of delinquency along with other fees and interest as prescribed by statute. Farmers National Bank v. Commonwealth Department of Revenue, 486 S.W.3d 872, 875 (Ky. App. 2015); KRS 134.452. Recoverable fees include “[p]relitigation attorneys’ fees, which may include amounts incurred for collection efforts and costs related to notification, processing, research, communication, compliance, legal costs,’ documentation, and similar expenses ... [,] ” actual and reasonable attorneys’ fees incurred during collection remedies, and administrative fees. Id.

In the instant case, Appellees claim that NARC charged excessive and unfounded prelitigation attorneys’ fees. NARC began purchasing certificates of delinquency in 2003. Appellees allege that NARC, as part of its pre-litigation efforts, would go to a Kinko’s in Omaha, Nebraska, and print and mail unsigned notice letters to the delinquent tax payers on bills NARC had purchased. Prior to 2008, Appellees claim, NARC only charged $1.00 or $2.00 for these prelitigation notices. After the General Assembly amended KRS 134.452 to cap prelitigation fees because some delinquent bill purchasers were exacting excessive amounts, NARC began charging $50 to $75 for each letter as prelitigation attorney's fees, as those amounts were less than the statutory limitations. Appellees claim the owner and operator of NARC, who is an attorney, admitted the charges were neither related to work on particular, certificates, nor tied to efforts in creating the letters, but, rather, were reasonable amounts for the sum total of the work the owner was performing on- all tax bills. Ap-pellees further .claim that NARC kept no records of the prelitigation work, nor did it separate out for what state its prelitigation work was being performed, as NARC purchased delinquent tax bills in multiple states.

In summary, Appellees’ first claim is that, because NARC kept no records detailing its work and simply charged blanket fees for each letter, it cannot prove that its fees to anyone in the purported class are either reasonable or actual.

Appellees’ second claim is straightforward. Appellees allege that NARC charged interest on prelitigation fees in violation of KRS 134.125 and 134.452. They proffer that NARC’s owner admitted during a deposition that he charged interest on administrative and prelitigation fees.

After delays for discovery, and following multiple, lengthy hearings on Appellees’ class-certification motion, the trial court entered two orders. The first order analyzed the rule-based requirements for certifying a class and directed the parties to brief and present evidence at a hearing regarding the class’s ascertainability. The second order -then granted the motion and certified the class as follows:

All persons who, on or after January 30, 2008, made payments to NARC on a certificate of delinquency purchased by NARC, which included: (a) payment forwards “prelitigation attorney’s fees” but for which no attorney performed or was, paid for work attendant to that particular certificate of delinquency; and/or (b) payment towards interest charged on money due and owing for anything other than the purchase price of the certificate of delinquency.

NARC timely brought this interlocutory appeal pursuant to CR 23.06. We now address the myriad claims NARC raises.

STANDARD OF REVIEW

A trial court’s decision to certify a class is reviewed for an abuse of discretion. Sowders v. Atkins, 646 S.W.2d 344, 346 (Ky. 1983). “The test for abuse of discretion is whether the trial judge’s decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles.” Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 576, 581 (Ky. 2000) (citing Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999)). Under this standard, we review the record and the ruling while giving deference to the trial court’s factual findings and rulings because the trial court is in the best position to evaluate the evidence before it. Miller v. Eldridge, 146 S.W.3d 909, 917 (Ky. 2004).

We are cautioned to “be careful to avoid the sort of unfettered review of the record and of the trial court’s rulings that indicates a de novo review.” Id. When given discretion, trial courts are permitted to make decisions of their choosing within the realm of possible choices, and appellate courts are “powerless to disturb such rulings” that fall within that realm even if the appellate court would, make a different choice. Id. See, e.g., Harris v. Commonwealth, 313 S.W.3d 40, 50 (Ky. 2010) (“While a trial court would be within its discretion to avoid even ,the possibility of impropriety posed by married jurors by dismissing one or the other, the trial court did not abuse its discretion here [by permitting the married jurors to both serve on the defendant’s jury].”). Under this standard, we turn to the issues before us.

CLASS CERTIFICATION JURISPRUDENCE

CR 23 governs class cer,tifíeátion in Kentucky. CR 23.01 and 23.02 are nearly identical to their federal counterparts. See Fed. R. Civ. Pro. 23(a) and (b). “It is well established that Kentucky courts.rely upon Federal caselaw when interpreting a Kentucky rule of procedure that is similar to its federal counterpart.” Curtis Green & Clay Green, Inc. v.

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Cite This Page — Counsel Stack

Bluebook (online)
529 S.W.3d 307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nebraska-alliance-realty-co-v-brewer-kyctapp-2017.