RENDERED: MAY 27, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0804-ME
SUMMIT MEDICAL GROUP, INC. APPELLANT
D/B/A ST. ELIZABETH PHYSICIANS
APPEAL FROM KENTON CIRCUIT COURT
v. HONORABLE KATHLEEN S. LAPE, JUDGE
ACTION NO. 12-CI-02683
LISA COLEMAN APPELLEE
OPINION
REVERSING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND JONES, JUDGES.
JONES, JUDGE: The Appellant, Summit Medical Group, Inc. d/b/a St. Elizabeth
Physicians (“St. Elizabeth”), seeks interlocutory review of the Kenton Circuit
Court’s July 6, 2021, order certifying a class action pursuant to CR1 23.01 and CR
1
Kentucky Rules of Civil Procedure.
23.02(c), and appointing attorney Alan J. Statman as class counsel pursuant to CR
23.07.2 The Appellee, Lisa Coleman, is the named class representative. St.
Elizabeth argues the circuit court abused its discretion in concluding: (1) that
Coleman, the sole named class member, as represented by Attorney Statman, “will
fairly and adequately protect the interests of the class”; and (2) that this action
meets the superiority and predominance requirements of CR 23.02(c). Having
reviewed the record, we conclude the circuit court abused its discretion when it
concluded that Coleman is adequate to serve as the named representative of this
class.
I. BACKGROUND
Dr. Shaun Jennings, who is employed by St. Elizabeth, was Lisa
Coleman’s primary-care physician during the relevant time period. On June 26,
2012, Coleman was scheduled to see Dr. Jennings for her annual preventive
care/wellness check (hereinafter referred to as the “Office Visit”). As part of the
wellness check portion of her Office Visit, Coleman received a preventative exam,
provided a urine sample, underwent an electrocardiogram (EKG) test, had her
blood drawn, and received a Tdap vaccination. During the examination, Coleman
2
Pursuant to CR 23.03(1), “the court must determine by order whether to certify [an] action as a
class action.” Jones v. Clark County, 635 S.W.3d 54, 56 n.3 (Ky. 2021). CR 23.06 allows an
immediate, interlocutory appeal “of an order granting or denying class action certification . . .
within 10 days after the order is entered.”
-2-
brought up some additional concerns she had to Dr. Jennings, which included
issues with menopausal tiredness, anxiety, depression, and her thyroid. Dr.
Jennings addressed these additional concerns by reviewing Coleman’s medications
and her past treatment as documented in her chart. He diagnosed Coleman as
suffering from anxiety and depression and wrote her a prescription for fluoxetine
(Prozac). Dr. Jennings also prescribed Coleman medication for her thyroid.
On September 9, 2012, Coleman received a bill from St. Elizabeth for
the Office Visit. Upon review, Coleman was surprised to see that St. Elizabeth had
charged her two separate fees for the single visit: (1) a fee for the wellness
examination and related services (labs, EKG, and vaccination), which was fully
covered by Coleman’s insurance; and (2) a separate office visit fee for the
additional treatment she received for her depression/anxiety and thyroid, which
Coleman’s insurance only partially covered, leaving her with a balance of $104.69.
After receiving notice from St. Elizabeth that failure to pay the bill could result in
the account being referred to a collections agency, Coleman paid St. Elizabeth
$54.69, leaving her with a $50.00 outstanding balance.
Prior to paying the balance of her bill, Coleman did some research on
the internet which led her to believe that she had been wrongly billed by St.
Elizabeth. Before paying the remainder of her bill, Coleman decided to seek the
advice of legal counsel regarding whether she might have any recourse against St.
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Elizabeth. She ultimately contacted the Deters Law Firm and met with then-
licensed attorney Eric Deters.3 With the assistance of Mr. Deters, Coleman filed a
putative class action complaint against St. Elizabeth in Kenton Circuit Court on or
about October 25, 2012, alleging that she was “double billed.”4
The case was originally assigned to Kenton Circuit Court Judge
Martin J. Sheehan. Coleman filed a first amended complaint in December 2012.
In January 2013, St. Elizabeth filed a motion to deny class certification. This
kicked off a brief flurry of activity in the case that lasted through August 2013,
when Judge Sheehan recused from the case and entered an order certifying the
need for the appointment of a special judge. For reasons that are not clear from the
record, the case was not assigned to a new judge for over two years.
In October 2015, the case was finally reassigned to Kenton Circuit
Court Judge Kathleen Lape, who continues to preside over the case. Even though
there were several motions pending at the time the case was reassigned to Judge
3
Mr. Deters has a tumultuous history of practicing law in this Commonwealth. On February 23,
2012, the Kentucky Supreme Court upheld the Bar Association Board of Governors’ 61-day
suspension of Mr. Deters’s law license. Kentucky Bar Ass’n v. Deters, 360 S.W.3d 224 (Ky.
2012). On June 15, 2012, the Kentucky Supreme Court granted Deters’s application for
reinstatement, restoring his ability to practice law in the Commonwealth. Deters v. Kentucky
Bar Ass’n, 408 S.W.3d 71 (Ky. 2012). Mr. Deters’s license was again suspended in May of
2013. Kentucky Bar Ass’n v. Deters, 406 S.W.3d 812 (Ky. 2013). To date, Deters’s law license
has not been reinstated. Deters v. Kentucky Bar Ass’n, 627 S.W.3d 917 (Ky. 2021).
4
Although 2012-2013 was punctuated with suspensions and reinstatements of Mr. Deters’s law
license, it appears that he was licensed when the complaint was filed in this action.
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Lape, including St. Elizabeth’s motion to dismiss the class claims, it does not
appear that the pending motions were ever brought to Judge Lape’s attention as
part of the reassignment process or by way of motion by the parties, and sometime
thereafter the file was apparently misplaced somewhere in the Clerk’s Office.5 As
a result, the case lay dormant for another two years. At some point, the file
resurfaced. On January 25, 2017, the circuit court issued a show cause notice for
failure to prosecute pursuant to CR 77.02(2); at the time the circuit court issued its
notice, there had not been any filings by the parties since May 29, 2013, a period
lasting three years, seven months and twenty-seven days.
In February of 2017, Coleman, now represented by Stephanie L.
Collins, a different attorney at Deters Law Firm, filed a terse, three-sentence
objection to the circuit court’s notice, stating: “There were pending Motions. The
case was reassigned and the motions were not ruled upon. Plaintiffs [sic] object to
the dismissal.”6 Still, the case continued to languish with no additional filings for
another one year, five months and fifteen days. Then, on August 10, 2018, the
5
Among others, the pending motions included: (1) St. Elizabeth’s January 29, 2013, motion to
deny class certification; (2) Coleman’s motion to file a second amended complaint; and (3) St.
Elizabeth’s April 16, 2013, motion for summary judgment on all claims.
6
As noted previously, Mr. Deters’s license to practice law had remained in suspension since
May of 2013, making him unable to continue representing Coleman.
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circuit court entered an order allowing Coleman leave to file her second amended
complaint,7 certifying a class, and appointing Attorney Collins as class counsel.8
St. Elizabeth immediately appealed the circuit court’s August 2018
certification order to this Court, Case Number 2018-CA-1238-ME. Around this
same time, Attorney Collins left the Deters Law Firm, and Coleman’s case was
reassigned to another attorney at the firm, Frederick Johnson. Counsel Johnson
represented Coleman throughout the first appeal, which culminated in this Court
vacating the circuit court’s August 2018 certification order and remanding for
additional proceedings. While we found no error with respect to the circuit court’s
determinations as to numerosity, commonality, and typicality, we determined
additional findings were necessary with respect to adequacy. Specifically, we held
as follows:
We agree with [St. Elizabeth] that the issue regarding
appointment of counsel requires further analysis by the
circuit court. “[The adequacy] prong necessarily requires
an analysis of class counsel’s ability to adequately
protect the class’s interests. ‘It tests the qualifications of
class counsel and the class representatives. It also aims
7
Coleman’s second amended complaint modified the substance of her allegations against St.
Elizabeth. Instead of basing her claim against St. Elizabeth on its alleged practice of “double
billing” its patients as alleged in the prior complaints, the second amended complaint asserted a
claim pursuant to Kentucky Revised Statute (“KRS”) 367.220(1), the Kentucky Consumer
Protection Act (“KCPA”), predicated on St. Elizabeth’s failure to notify its patients regarding its
billing practices.
8
This case is somewhat unusual in that the class certification issue was before the circuit court as
part of a motion to dismiss the class claims. For reasons that are not clear from the record,
Coleman never actually affirmatively moved for class certification.
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to root out conflicts of interest within the class to ensure
that all class members are fairly represented in the
negotiations.’” Nebraska Alliance, 529 S.W.3d [307] at
315 [Ky. App. 2017] (citation omitted). Here there was
no such analysis, and, even if there had been, the issue
would need revisiting because of the proposed
substitution of current counsel in place of [Attorney]
Collins. “[W]e would be usurping the trial court’s
discretionary power if we were to make factual findings
and legal conclusions[.]” Id.
“[B]ecause the typicality, commonality, and adequacy
prongs overlap in analysis, the trial court should revisit
all prongs on remand to determine whether to certify a
class. Cf. CR 23.03(3) (‘An order that grants or denies
class certification may be altered or amended before final
judgment.’).” Id. (citation omitted). Therefore, we
vacate the circuit court’s appointment of counsel and
remand the matter for full consideration under CR
23.01 and CR 23.07 (“Class counsel”).
...
We decline to examine the circuit court’s CR 23.02
findings until such time as the CR 23.01 issues are
addressed on remand. Nebraska Alliance, 529 S.W.3d at
316 (“[I]f the trial court finds the CR 23.01 prerequisites
are met, it must then examine whether one of the three
requirements of CR 23.02(a)-(c) is met.”).
Summit Medical Group, Inc. v. Coleman, 599 S.W.3d 445, 451 (Ky. App. 2019)
(emphasis added).
Following denial of Coleman’s petition to reconsider and expiration
of the time to petition for discretionary review from the Kentucky Supreme Court,
this Court entered a designation of finality and returned the record to the Kenton
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Circuit Court on or about June 23, 2020. Shortly thereafter, Attorney Johnson
unexpectedly passed away, at which time Dominick Romeo, also an attorney at
Deters Law Firm, took over the case with the assistance of another attorney at the
firm, Alexander Pertaglia.9 For the next several months the parties took additional
discovery in preparation for the upcoming certification hearing, which the circuit
court scheduled for November 5, 2020. The hearing, which lasted approximately
two hours, was conducted in accordance with this Court’s remand order directing
the circuit court to reassess class certification under CR 23.01, and, if certified, for
appointment of class counsel pursuant to CR 23.07.
Attorney Alan J. Statman was the first witness to testify. Attorney
Statman is the managing member of Statman, Harris & Eyrich, LLC, a Cincinnati,
Ohio law firm. He seeks to be appointed class counsel. The first portion of
Attorney Statman’s testimony focused on his professional qualifications. Attorney
Statman graduated from the University of Dayton School of Law in 1983, and is
currently licensed to practice law in Ohio, Kentucky, and Illinois. He has tried
numerous cases to verdict, securing millions of dollars on behalf of his clients. He
has substantial experience in class actions and other types of complex litigation,
specializing in cases involving banking, finance, consumer rights, and mass torts.
9
On August 27, 2021, Attorney Pertaglia withdrew as counsel for Coleman.
-8-
He testified that this case is relatively simple as related to other, more complex
litigation he has successfully handled.
Attorney Statman testified that if appointed class counsel, he would
oversee the litigation with the assistance of the Deters Law Firm, including its
three attorneys, two outside contractors, and its full support staff in combination
with an associate and two senior members at his law firm. Attorney Statman
testified that he would rely on Deters Law Firm to finance the litigation and assist
in the substantive aspects of the case. He explained: “So I think between the
Deters [Law Firm’s] resources, my firm, and the Deters [Law Firm’s] bank
account, we’re in good shape to get this case through its finish line.”
When asked to explain his relationship with Deters Law Firm,
Attorney Statman stated that while he is not a member of Deters Law Firm or one
of its full-time employees, he has an “of counsel” arrangement with the firm to
work on certain cases as requested. He explained that his fee for that work is
covered by an agreement he has with Deters Law Firm. Attorney Statman testified
that he did not have an individual agreement with Coleman because he had not yet
been appointed class counsel. At this point, any agreement would be between
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Coleman and Deters Law Firm.10 Attorney Statman testified that his of counsel
agreement places the burden of financing any litigation on Deters Law Firm.
Attorney Statman additionally testified that he first met Coleman at
the courthouse that day, shortly before the class certification hearing, and spent
about twenty minutes talking to her. He had no specific recollection of speaking
with Coleman prior to the November 5, 2020, hearing, but noted he could possibly
have spoken to her on the telephone at some point over the years. Lastly, Attorney
Statman testified that he understood the legal and factual issues in this litigation
and would easily be able to handle the case from a substantive standpoint.
Lisa Coleman, the named class representative, was the next witness to
testify. Coleman explained that her claim against St. Elizabeth arose out of the bill
she received for her 2012 Office Visit. She asserted that she did not believe that
St. Elizabeth should have “double billed” her for a preventative exam and an office
visit when the care she received from Dr. Jennings occurred as part of an
uninterrupted, single appointment, and does not recall being advised by Dr.
Jennings that she would be so billed.
10
Attorney Statman testified that he had consulted with outside ethics counsel, George Johnson,
who advised him it was not necessary to have sperate agreements with the clients he assisted in
his of counsel capacity, and that he could rely on the contract those clients had with the Deters
Law Firm.
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Regarding serving as the class representative, Coleman explained that
she understood that the purpose of bringing her claim as part of a class action was
to protect her and other patients “from what was done – you know, what I feel was
done wrong.” She testified that she believes the class, if certified, would consist of
approximately 700 members who received bills similar to hers, and she “would be
their voice.” She explained that in this role she understood her responsibility to be
“just to come forward and – with the advice of counsel and do what was asked,
make appearances.” She indicated that she would supply whatever information
was needed and make herself available for court appearances and depositions as
requested.
Cross-examination of Coleman focused largely on her involvement
(or lack thereof) with the litigation to date. While Coleman testified that she had
read the original complaint, she did so only after it had been filed; she could not
recall whether she had read either the first or second amended complaints filed on
her behalf. She denied having any fee agreement with the Deters Law Firm. She
further testified that other than Eric Deters, she did not know any of the other
attorneys who had represented her since 2012. She testified that she met Attorney
Statman that day shortly before the hearing, but had reviewed his resume at some
point prior. She felt that based on that review and her meeting that Attorney
Statman was competent to serve as class counsel. She testified that if appointed
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class representative she would protect the interests of the other class members by
making sure that she “was involved and educated.” She further testified that she
understood that as class representative she would owe a fiduciary duty to the other
class members which she explained was a duty “to make sure everybody gets a fair
share.” She affirmed that she had and would continue to rely on counsel to
investigate and prosecute her case. After cross-examination, Coleman requested
permission to be excused from the remainder of the hearing, which the circuit court
granted.
Dr. Jennings was called by St. Elizabeth to testify next. Dr. Jennings
testified that the bill Coleman received accurately and correctly reflected the care
and services she received during her Office Visit. As related to the additional
charges, Dr. Jennings explained that treating Coleman’s anxiety/depression and
thyroid issues was outside the realm of the wellness examination, and required him
to spend approximately twenty-five additional minutes with Coleman. Dr.
Jennings further testified that while St. Elizabeth did not have a mandatory notice
requirement, it is his standard practice to orally inform his patients of St.
Elizabeth’s billing practices whenever a patient brings up matters outside the scope
of a wellness examination, and that he does so ninety-nine percent of the time. Dr.
Jennings has no specific recollection of whether he followed his standard practice
during Coleman’s Office Visit, but believes he would have likely done so. Dr.
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Jennings was unaware whether other St. Elizabeth physicians followed this same
practice.
St. Elizabeth’s vice president of revenue and cycle services, Maria
Rankin, testified by deposition about St. Elizabeth’s billing and coding practices.
Rankin testified that the charges reflected on Coleman’s statement accurately
detailed the service she received, and that like other patients Coleman was billed in
accordance with the Current Procedural Terminology (“CPT”) billing codes
published by the American Medical Association.11 She further testified that as of
June 26, 2012, St. Elizabeth did not have a disclosure policy regarding its billing
practices; it was up to the individual physicians whether to the inform the patients
of billing matters prior to dispensing treatment.
Following the hearing and submission of post-hearing briefs and other
documentary evidence, the circuit court entered an order certifying a class and
11
“Starting in the 1960s, shortly after Congress created Medicare, the need for a uniform system
of medical billing became apparent. In response to this growing need, the American Medical
Association (“AMA”), with industry input, developed the first version of the Current Procedural
Terminology (“CPT”) Codes.” United States ex rel. Montcrieff v. Peripheral Vascular
Associates, P.A., 507 F. Supp. 3d 734, 742 (W.D. Tex. 2020). “The CPT Codes are a series of
alphanumeric sequences used by healthcare providers to describe the procedures and services
that they perform.” Id. “In 1996, Congress passed the Health Insurance Portability and
Accountability Act, which required the U.S. Department of Health and Human Services (“HHS”)
to adopt uniform standards of coding for electronic transactions involving healthcare
information. HHS adopted as one of the standards of coding the AMA’s CPT Codes, which had
undergone significant revision and updating. In 2002, the CPT Codes formally became one of
the methods by which healthcare providers must bill Medicare for medical services[.]” Id.
(citations omitted); 45 Code of Federal Regulations (“C.F.R.”) § 162.1002.
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appointing Attorney Statman as class counsel. As certified by the circuit court, the
class includes:
All current and former patients of [St. Elizabeth] who
went to [St. Elizabeth] for a preventative care exam and
were subsequently charged both a preventative care visit
fee and an additional office visit fee for same-day service
and who incurred a debt for or paid out-of-pocket for the
additional fee.
7/6/2021 class cert. order at 12. St. Elizabeth filed this interlocutory appeal of the
circuit court’s certification order pursuant to CR 23.06.
II. STANDARD OF REVIEW
We review the circuit court’s determination as to class certification for
abuse of discretion. Hensley v. Haynes Trucking LLC, 549 S.W.3d 430, 444 (Ky.
2018). “The test for abuse of discretion is whether the trial judge’s decision was
arbitrary, unreasonable, unfair, or unsupported by sound legal principles.”
Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999). While the test for
abuse of discretion is easily stated, the definition is amorphous and applying the
test in practice is exceedingly difficult. It requires appellate courts to walk a fine
line by engaging “in a meaningful review without resorting to retrying the issue[.]”
Miller v. Eldridge, 146 S.W.3d 909, 917 (Ky. 2004).
While we must accord respectful deference to the circuit court’s
discretionary decisions, we must be careful not simply to rubber stamp them. This
is especially important in the class action setting because we are dealing not only
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with the rights of the named representative but also the rights of the absent class
members who the named representative seeks to represent. With this standard in
mind, we now turn to the class certification order at issue in this appeal.
III. ANALYSIS
The class action device is “an exception to the usual rule that litigation
is conducted by and on behalf of the individual named parties only.” Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 348, 131 S. Ct. 2541, 2550, 180 L. Ed. 2d 374
(2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01, 99 S. Ct. 2545, 2557,
61 L. Ed. 2d 176 (1979)); Imhoff v. House, 628 S.W.3d 88, 93 (Ky. 2021). Class
actions in Kentucky are governed by CR 23.01 through CR 23.08. “Taken
together, the rules provide a comprehensive roadmap to class certification.”
Manning v. Liberty Tire Services of Ohio, LLC, 577 S.W.3d 102, 110 (Ky. App.
2019).
As related to this appeal, we are primarily concerned with the circuit
court’s determinations under CR 23.01 and CR 23.02. As explained in United
Propane Gas, Inc. v. Purcell, 533 S.W.3d 199 (Ky. App. 2017):
When read in concert, CR 23.01 and CR 23.02 create a
two-step analysis for the circuit court to undertake when
determining if certification of a class is appropriate.
First, the circuit court must determine if all four of the
requirements set out in CR 23.01 – numerosity,
commonality, typicality, and adequacy of representation
– are present. Pyro Mining Co. v. Kentucky Comm’n on
Human Rights, 678 S.W.2d 393, 395 (Ky. 1984). If they
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are not, the circuit court cannot certify the class. If all
four are present, the circuit court looks to CR 23.02 and
determines if one of the three conditions listed therein is
present. If none of the three is satisfied, the court must
deny class certification; . . .
If all the requirements are met for class certification, the
circuit court “must determine by order whether to certify
the action as a class action.” CR 23.03. In that order, the
circuit court “must define the class and the class claims,
issues, or defenses, and must appoint class counsel under
CR 23.07.” CR 23.03(2).
Id. at 202-03.
Coleman sued St. Elizabeth seeking to represent a class of similarly
situated individuals. As such, “at an early practicable time” the circuit court was
required to “determine by order whether to certify the action as a class action.” CR
23.03. While this is typically done after the named representative moves for class
certification, there is no requirement in the Civil Rules which requires the named
representative to move for certification. See Picus v. Wal-Mart Stores, Inc., 256
F.R.D. 651, 655 n.1 (D. Nev. 2009) (“[A]lthough the plaintiff typically moves for
class certification, the parties do not dispute that a defendant can move to deny
class certification before a plaintiff moves for certification. Rule 23 does not
preclude this.”).
Even when, as here, the class certification issue is raised by the
defendant, if sufficient discovery has taken place, the court should conduct the
certification proceeding as if it were before the court as part of a “regular, plaintiff-
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initiated class certification motion.” WILLIAM B. RUBENSTEIN, NEWBERG ON
CLASS ACTIONS § 7:22 Movant’s burden of proof – Defendant’s burden of proof on
a motion to deny class action (5th ed. 2021). Most importantly, no matter which
party triggers the certification decision, the burden of demonstrating compliance
with the requirements of CR 23.01 and CR 23.02 remains with the plaintiff.
Dukes, 564 U.S. 338 at 350, 131 S. Ct. at 2551 (“A party seeking class certification
must affirmatively demonstrate [her] compliance with the Rule – that is, [s]he must
be prepared to prove that there are in fact sufficiently numerous parties, common
questions of law or fact, etc.”).
On remand, as instructed by this Court, the circuit court reassessed
each of the CR 23.01 requirements, and concluded that the putative class as alleged
in Coleman’s second amended complaint satisfied each.12 With respect to CR
23.01, St. Elizabeth contests only the circuit court’s conclusion that Coleman, as
represented by Attorney Statman, can adequately and fairly protect the class’s
interests.
12
CR 23.01 states: “Subject to the provisions of Rule 23.02, one or more members of a class
may sue or be sued as representative parties on behalf of all only if (a) the class is so numerous
that joinder of all members is impracticable, (b) there are questions of law or fact common to the
class, (c) the claims or defenses of the representative parties are typical of the claims or defenses
of the class, and (d) the representative parties will fairly and adequately protect the interests of
the class.”
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Adequacy in class action litigation refers to the idea that the class
representative will fairly and adequately protect the class’s interests. “The
adequacy prong has two separate criteria: ‘1) the representative must have
common interests with unnamed members of the class[;] and 2) it must appear that
the representatives will vigorously prosecute the interests of the class through
qualified counsel.’” Nebraska Alliance, 529 S.W.3d at 313 (quoting Senter v.
General Motors Corp., 532 F.2d 511, 525 (6th Cir. 1976)). “Adequate
representation is [] the capstone of the Rule 23(a) requirements: it ensures that the
class’s champion will pursue its interests sufficiently well so as to produce a
judgment that can fairly bind all members of a group who cannot appear before the
court individually.” NEWBERG ON CLASS ACTIONS § 3:50 Introduction to Rule
23(a)(4) – Adequacy of representation (5th ed. 2021).
With respect to the first prong of the adequacy analysis, we are mainly
concerned with determining whether “there is any antagonism between the
interests of the [representative] and other members of the class [she] seek[s] to
represent.” In re American Medical Systems, Inc., 75 F.3d 1069, 1083 (6th Cir.
1996).13 Antagonism commonly arises in cases where the named class
13
To date, our appellate courts have not elaborated with any degree of specificity regarding the
factors a trial court should consider in assessing the ability of the proposed class representative to
vigorously prosecute the interests of the class. Given the similarity between CR 23 and its
federal counterpart and in the absence of controlling Kentucky precedent, we look to federal
cases for guidance. Nebraska Alliance, 529 S.W.3d at 311; Curtis Green & Clay Green, Inc. v.
Clark, 318 S.W.3d 98, 105 (Ky. App. 2010) (“It is well established that Kentucky courts rely
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representative seeks to represent a class composed of individuals who may have an
interest in pursuing different types of relief such as prospective versus
retrospective relief.
The second prong of the adequacy analysis, which is the focus of this
appeal, requires the court to determine whether the proposed representative is
properly qualified to assume the role of class representative and whether she will
vigorously prosecute the interests of the class if named the class representative.
This analysis entails considerations such as the proposed representative’s
knowledge of the case, her interest in and enthusiasm for the litigation and for
representing the class, her willingness to respond to interrogatories and
depositions, her understanding of the role and duties of a class representative and
ability to carry out those duties, and the relationship between the representative and
class counsel. See NEWBERG ON CLASS ACTIONS § 3:54 Introduction to adequacy
standard (5th ed. 2021).
St. Elizabeth argues the circuit court’s abuse of discretion in finding
Coleman to be an adequate representative is evinced by (1) Coleman’s lack of a
written fee agreement with any attorney or law firm; (2) her lack of knowledge
regarding the legal basis of her claims; (3) her uncertainty regarding who was
upon Federal caselaw when interpreting a Kentucky rule of procedure that is similar to its federal
counterpart.”).
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representing her at various points in the litigation; and (4) her lack of overall
involvement in the litigation to date, including allowing the case to languish for
several years.
We cannot agree with St. Elizabeth that Coleman’s alleged lack of a
fee agreement with the Deters Law Firm is a basis for finding her to be an
inadequate representative.14 St. Elizabeth’s argument in this regard confuses the
role of individual counsel and class counsel. Even if a fee agreement did exist, it
would not govern Coleman’s relationship with class counsel nor bind the absent
class members. “[R]egardless of whether the class representative was initially an
individual client of class counsel, once a court certifies a class and appoints class
representatives and class counsel, those parties have an attorney-client relationship
with one another.” NEWBERG ON CLASS ACTIONS § 19:2 Attorney-client
14
In her appellee brief, Coleman now asserts that she misspoke at the certification hearing and
that she does in fact have an agreement with the Deters Law Firm. Her brief states: “The written
fee agreement was executed on October 6, 2012, and Deters Law’s records show that the matter
was in connection with a St. Elizabeth billing issue and that Coleman was a new client.” Of
course, Coleman should be well aware that we are limited to the record below and that the
argument of counsel is not evidence. See White v. White, 883 S.W.2d 502, 505 (Ky. App. 1994)
(“The insertion of the promissory note in the hospital’s brief at this stage of the proceedings is an
improper attempt to introduce evidence outside the record. Since our review is limited to the
pleadings and evidence considered by the circuit court, we decline to consider the promissory
note in reaching our decision, although to do so would not change the result.”); Deal v. First and
Farmers National Bank, Inc., 518 S.W.3d 159, 173, n.14 (Ky. App. 2017) (“The arguments of
counsel in briefs are not evidence.”). Additionally, if such a fee agreement does in fact exist, we
are at a complete loss to understand why Coleman did not seek to correct the record while the
case was still pending before the circuit court. Coleman testified on November 5, 2020. There
were numerous opportunities for Coleman to file the alleged fee agreement in the circuit court
before the circuit court rendered its certification decision in July of 2021. Yet, she waited until
this matter was on appeal to claim the existence of the agreement.
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relationships in class actions (5th ed. 2021). After certification, the relationship
and class counsel’s fees are largely governed by CR 23, and not any individual fee
agreement the named representative may have had prior to certification.
We also cannot agree that Coleman’s lack of knowledge regarding the
exact legal theory behind her claims is indicative of the fact that she is not an
adequate class representative. Courts are mostly concerned that the class
representative has an adequate factual understanding of the case; the class
representative does not need to understand the legal theories of the case and is
entitled to rely on counsel’s expertise and advise. Surowitz v. Hilton Hotels Corp.,
383 U.S. 363, 370, 86 S. Ct. 845, 850, 15 L. Ed. 2d 807 (1966). While Coleman
may not have been able to articulate the precise legal theory underpinning her
claim, she demonstrated an acute awareness of the underlying facts.
St. Elizabeth’s final arguments center on Coleman’s lack of
involvement in the case as demonstrated by her inability to identify the various
lawyers who have represented her and her general passivity as related to this
litigation. It points out that Coleman was so uninvolved in the case that it
languished for several years prior to any decision on certification. The circuit
court excused Coleman’s lack of diligence by attributing the delays in this case to
events which occurred at Deters Law Firm and the courthouse “which were not
within Coleman’s control.” In so doing, the circuit court failed to consider how
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Coleman’s response to the delays indicates her ability (or lack thereof) to protect
the interests of the absent class members in the future.
A court must consider the willingness and ability of the class
representative to be actively involved with the litigation; a class representative
should not be simply “lending” her name as the representative. While the events
themselves may not have been within Coleman’s control, we cannot accept that
this excuses the fact that between May of 2013 and August of 2018, nothing was
accomplished in this case. It languished needlessly. A simple phone call or
motion seeking a status conference could have prevented years of needless delay
by alerting court staff to the missing file. Even after the court issued a show cause
order, Coleman’s response was limited to three short sentences noting that there
were pending motions. She did not identify the pending motions by name, request
a status conference, or even call to the court’s attention that this was a putative
class action.
Coleman failed to offer any explanation whatsoever for her past
dilatory conduct during her testimony. From the record, it is unclear whether
Coleman sought any case updates from counsel during this time or whether she had
simply forgotten about the case altogether. If she did inquire and those inquiries
went unanswered, it would have been prudent for her to search for different
counsel; if she did not inquire, one must question why she was so unconcerned
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with the action. Obviously, as a layperson, Coleman must rely on the legal advice
of counsel. However, this does not absolve her from staying updated on the
litigation and ensuring that counsel are diligently pursuing the class claims.
Coleman testified that going forward she would do what was asked of
her by counsel. Certainly, this is important. Perhaps, more important, especially
in light of past delays such as occurred in this case, is the class representative’s
ability and willingness to oversee class counsel. Nothing in this record supports
that Coleman has the willingness or the ability to prevent future similar delays as
have occurred in this case. In fact, the record suggests precisely the opposite.
“[T]he failure of the representative to move for class certification in a
timely fashion or otherwise to prosecute the action is a clear indication that the
named party is not an adequate representative.” MARY KAY KANE, 7A FED. PRAC.
& PROC. CIV. § 1766 The Representatives Will Protect the Interests of the Class –
Quality Not Quantity Is Significant (4th ed. 2022); East Texas Motor Freight
System Inc. v. Rodriguez, 431 U.S. 395, 405, 97 S. Ct. 1891, 1897, 52 L. Ed. 2d
453 (1977) (“[T]he named plaintiffs’ failure to protect the interests of class
members by moving for certification surely bears strongly on the adequacy of the
representation that those class members might expect to receive.”). Coleman did
nothing for almost five years to advance this case beyond the pleading stage.
While she may not be responsible for creating the reasons for the initial delay, her
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lack of attention to and involvement in this case undisputedly prolonged it by
several years.
Allowing this case to proceed with Coleman as the named class
representative would risk the rights of the unnamed class members whom she
would represent. They would be at the mercy of Coleman and her counsel, who, to
date, have demonstrated either an unwillingness or an inability to move this case
along.15 In light of these most unusual facts, we must conclude that the circuit
court abused its discretion when it found that Coleman is able to vigorously
prosecute the interests of the class as the named the class representative. See Nagel
v. ADM Inv’r Services, Inc., 217 F.3d 436, 443 (7th Cir. 2000) (affirming district
court’s sua sponte dismissal of class claims where “the case had been pending for
several years when the court ruled, and the plaintiffs had never during that period
moved for class certification, even though Rule 23 of the Federal Rules of Civil
Procedure and the cases interpreting it require that the issue of class certification be
resolved as quickly after the suit is filed as practicable.”); Harriston v. Chicago
Tribune Co., 992 F.2d 697, 704 (7th Cir. 1993) (holding that delay in moving for
class certification showed that named representative was not adequate because it
15
Attorney Statman testified that, if appointed class counsel, he would rely fully on the Deters
Law Firm to finance the litigation and partially rely on the Deters Law Firm’s staff, including its
attorneys, paralegals, consultants, and support staff to assist him with the litigation. These are
the same attorneys, paralegals, and support staff who were complicit in the extraordinary delay
that plagued this case from 2013 to 2018.
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demonstrated that she was unable to “timely protect the interests of the class
members”).
Having concluded that Coleman fails CR 23.01’s adequacy prong, we
need not consider her additional argument under CR 23.02(c).
IV. CONCLUSION
For the reasons set forth above, we reverse the Kenton’s Circuit
Court’s July 6, 2021, order on class certification.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
David V. Kramer Alan J. Statman
Mark D. Guilfoyle Cincinnati, Ohio
Christopher B. Markus
Crestview Hills, Kentucky A. Dominick Romeo
Independence, Kentucky
ORAL ARGUMENT FOR ORAL ARGUMENT FOR
APPELLANT: APPELLEE:
Christopher B. Markus Alan J. Statman
Crestview Hills, Kentucky Cincinnati, Ohio
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Summit Medical Group, Inc. D/B/A St. Elizabeth Physicians v. Lisa Coleman
Combined Opinion