McCart v. Chief Executive Officer in Charge, Independent Federal Credit Union

BARTEAU, Judge,

dissenting.

I respectfully dissent.

In order to have an action certified as a class action, Plaintiffs must satisfy the two-prong requirements of Ind. Trial Rule 28(A) & (B). Plaintiffs must first satisfy the preliminary requirements found in T.R. 28(A)(1)-(4), commonly referred to as the requirements of "numerosity," "commonality," "typicality," and "adequate representation." Second, Plaintiffs must satisfy T.R. 28(B)(1), (2) or (8). I find that Plaintiffs have satisfied these necessary requirements and that the trial court abused its discretion in denying certification of the class.

"Numerosity"

The majority finds Plaintiffs failed to satisfy the "numerosity" requirement of T.R. 23(A)(1), concluding that the 20,000-person figure advanced by Plaintiffs represents an approximation of the Credit Union's entire membership, but is not a good faith estimation of the class to be certified. However, under Plaintiffs's allegations, all of the approximately 20,000 members of the credit *87union could be joined as class members in this action.

Plaintiffs claim that, from 1946 through December 31, 1988, the Credit Union offered group life insurance to all eligible members of the Credit Union as an automatic benefit. Thus, all eligible persons who were members of the Credit Union prior to and through December 31, 1988 were eligible for the life insurance program Plaintiffs now seek to enforce. To estimate this number, Plaintiffs presented evidence of the total membership of the Credit Union on December 31, 1988.

Plaintiffs bear the burden of demonstrating that the class is so numerous that joinder of all members is impracticable TR. 23(A)(1). Generally, a precise accounting of the total number of class members is not required. See, eg., Graham v. Security Savings & Loan (N.D.Ind.1989), 125 F.R.D. 687, aff'd, (7th Cir.1990), 914 F.2d 909; In re Three Mile Island Litigation (M.D.Penn.1982), 95 F.R.D. 164. What is required is a good faith estimate of the class size. Jones v. Blinziner (N.D.Ind.1982), 586 F.Supp. 1181. This is especially true when, as here, the exact number of class members is not known by the claimants, but is readily available to the defendants who have the means to identify them. Folsom v. Blum (S.D.N.Y.1980), 87 FRD. 443.

I agree that the 20,000-person figure does not estimate the size of Plaintiffs's proposed sub-classes within the total class. But that does not render Plaintiffs's estimate of the total class insufficiently accurate or one made in bad faith. Plaintiffs have demonstrated that the total class is so numerous that join-der of all members is impracticable.8

"Commonality"

In its order denying certification, the trial court made no mention of whether Plaintiffs failed to satisfy the "commonality" requirement of TR. 23(A)(2). Plaintiffs allege that the Credit Union wrongfully terminated life insurance coverage for all class members, in violation of a common agreement between the Credit Union and the class members. Plaintiffs allege that the Credit Union breached the same agreement with all the class members and did so in the same manner, if not by the same act. Clearly, there are questions of law or fact common to the class.

"Typicality" & "Adequate Representation"

In its order denying certification, the trial court included the following findings and conclusions:

A. That each plaintiff is seventy years or more of age and are not now representative of any person or class arising under the life insurance program offered by defendants until December 31st, 1988.
"# * * ## * "k
C. That the claims of the plaintiffs, which have become moot at this time due to their age, is one of injunctive relief, ie. to order the defendants to reinstate a life insurance program for the benefit of its depositors and members, is a claim that does not require the joinder of any class. Thus, the claims of the plaintiffs would benefit all qualified members and depositors of the defendant.
D. That if the plaintiffs prevail upon their individual claims against the defendant, all members and depositors of the defendant would benefit from the relief requested by the plaintiffs without the necessity of the action being deemed a class.

The trial court found that, since all of the representative Plaintiffs were at least seventy-years-old, none of them were entitled to the life insurance proceeds they were seeking. Thus, the trial court concluded that the representative Plaintiffs's claims were moot, atypical of the class, and that the representative Plaintiffs could not adequately represent the proposed class. I find the trial court's conclusion erroneous.

To state Plaintiffs's claims in simplified terms, under the Credit Union's life insurance program, the coverage afforded to each *88member was based upon the amount of money each person deposited with the Credit Union according to a graduated seale. Money saved while a member was under the age of 55 accrued $1 of life insurance coverage for every $1 that person deposited. A person between the ages of 55 and 59 accrued $.75 of coverage for every $1 saved during that time. Between the ages of 60 and 64, members accrued $.50 for every $1 saved, and between 65 and 69, members accrued $.25 for every $1 saved. When the members reached the age of 70, the money they deposited no longer acerued life insurance benefits.

The trial court concluded that members over the age of 70 were not entitled to life insurance proceeds, and therefore the representative Plaintiffs who all are over 70 could not represent the claims of the class. This conclusion is erroneous for two reasons. First, the trial court has effectively resolved the underlying claims of Plaintiffs by determining they are not entitled to insurance coverage. In determining whether a class should be certified, the trial court's focus should be on whether Plaintiffs's claims are typical of the class, not whether the claims are meritorious. T.R. 283(A)(8). Here, the trial court effectively resolved the parties's dispute in favor of the Credit Union without allowing Plaintiffs to put forth any proof.

Second, according to the claims of Plaintiffs, members did not lose life insurance benefits upon reaching the age of 70, contrary to the trial court's conclusion. Plaintiffs contend that, onee members reached the age of 70, the money they deposited thereafter no longer accrued insurance benefits. However, members retained the coverage they accrued from their deposits during the previous years. Regardless of the merits of their claims, Plaintiffs contend that they, like the rest of the proposed class, are entitled to life insurance coverage. The trial court abused its discretion in wrongfully denying class certification by deciding the ultimate issue in this matter, rather than basing its decision on the claims of the class.

TR. 23(B)(2) & "Necessity"

Finally, I find that Plaintiffs's claims fall squarely within TR. 23(B)(2), in that the Credit Union has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. In denying class certification, the trial court went beyond the specific requirements of T.R. 23, and found that class certification was not "necessary" to achieve the result Plaintiffs sought.

Some jurisdictions hold that class certification may be denied when the plaintiffs's individual claims for injunctive or declaratory relief, if successful, would benefit the entire class, even though the specific requirements for class certification have been met. Seq, e.g. James v. Ball (9th Cir.1979), 613 F.2d 180; Davis v. Smith (2d Cir.1978), 607 F.2d 535. Often this additional requirement is invoked when the parties dispute a broad-sweeping issue that, if successful, would inure to the benefit of all regardless of class certification.

However, not all jurisdictions recognize the "necessity" requirement, and the Seventh Circuit has flatly rejected its application. Brown v. Scott (7th Cir.1979), 602 F.2d 791, aff'd on other grounds sub nom, Carey v. Brown (1980), 447 U.S. 455, 100 S.Ct. 2286, 65 L.Ed.2d 263; Vergara v. Hampton (7th Cir.1978), 581 F.2d 1281, cert. denied, 441 U.S. 905, 99 S.Ct. 1993, 60 L.Ed.2d 373; Paul v. Indiana Election Bd. (S.D.Ind.1990), 743 F.Supp. 616. And, the jurisdictions that permit trial courts to consider the "necessity" of class certification do so only if the court is certain that judgment in favor of the individual plaintiffs will inure to the benefit of the entire class.

[Those courts that have declined to certify a class [due to lack of necessity] "do not merely assume that defendants will comply with the terms of the injunction on a class-wide basis." Cason v. Rochester Housing Authority (W.D.N.Y.1990), 748 F.Supp. 1002, 1010. Positive assurance regarding future compliance with the injunction as to other class members is required. Id.; Doe v. Coughlin (N.D.N.Y.1988), 697 F.Supp. 1234, 1235 n. 4; Calkins v. Blum (N.D.N.Y.1981), 511 F.Supp. 1073, 1089-90, aff'd, (2nd Cir.1982), 675 F.2d 44.

*89Catanzano v. Dowling (W.D.N.Y.1994), 847 F.Supp. 1070, 1079. I find that even if we were to decline to follow the lead of the Seventh Cireuit and permit trial courts to consider whether class certification is "necessary" in addition to the T.R. 238 requirements, there is nothing present in this case from which the court can be assured that the Credit Union will comply with the terms of an injunction on a class-wide basis. Plaintiffs are suing for a declaration that they are entitled to life insurance coverage. Should the individual Plaintiffs succeed, there is nothing to assure that the Credit Union will not simply procure insurance coverage for the individual Plaintiffs, leaving the rest of the class without benefit.

Plaintiffs have satisfied all the TR. 23 requirements for class certification of this matter. A class action is appropriate in this matter, and contrary to the trial court's conclusion, is "necessary" to assure the benefit of all members of the proposed class.

For these reasons, I respectfully DISSENT.

. Tacitly, the Credit Union agrees with this conclusion. In its Brief, the Credit Union's only contention is that Plaintiffs failed to demonstrate the size of each sub-class. Appellee's Brief at 11-13. The Credit Union does not contest the numerosity of the total class.