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FULLER v. HEARTWOOD 11

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Court of Appeals of Georgia.

FULLER v. HEARTWOOD 11 et al.

No. A09A2036.

Decided: November 24, 2009

Jacob Stanford Eby, Atlanta, for Fuller. Robert J. Proctor, Bradley Andrews Hutchins, Adam C. Caskey, Atlanta, for Appellee.

Wilbur Fuller appeals from an order of the Superior Court of Fulton County denying his motion for class certification pursuant to OCGA § 9-11-23. Fuller contends the trial court erred in denying his written motion for class certification. He argues the court erred in finding his motion untimely filed and in concluding that the delay in filing the motion resulted in prejudice to the defendants and the class. Fuller further contends the trial court erred in failing to make factual findings in support of its ruling. For the reasons set forth below, we vacate the court's order and remand the case for further proceedings consistent with this opinion.

The record shows that, on March 26, 2004, Fulton County property owners Wilbur Fuller and Velva Bass (“plaintiffs”) filed a “Class Action Complaint” against Heartwood 11, LLC, and Vesta Holding Company I, LLC (“defendants”), companies that had purchased some of Fulton County's tax liens on the plaintiffs' property. The plaintiffs sought relief for themselves and members of the proposed class for the allegedly unconstitutional and fraudulent actions of the defendants in demanding additional penalties and interest on those purchased tax liens. The defendants jointly filed an answer on May 3, 2004, and, on July 1, 2004, they filed a motion seeking a judgment on the pleadings. In the brief in support of their motion, the defendants argued that the law expressly allowed for the collection of penalties and interest on the transferred tax liens and that the voluntary payment doctrine barred Fuller from seeking any recovery. On July 14, 2004, the parties filed a stipulation in which they agreed that the defendants did not have to respond to the plaintiffs' discovery requests until the court ruled on the motion for a judgment on the pleadings. The trial court did not rule on that motion until December 5, 2005,1 when it entered an order granting in part and denying in part the motion. In granting a partial judgment on the pleadings in favor of Heartwood as to Count 1 of Fuller's Complaint, the court concluded that OCGA § 9-13-36 “specifically authorizes [the] transfer of a tax execution” and was not unconstitutional on its face.

Within two weeks of the entry of the court's order on the defendants' motion for judgment on the pleadings, the plaintiffs resumed their discovery efforts. On December 28, 2005, the defendants filed a motion for reconsideration of that portion of the court's order denying them a judgment on the pleadings. On January 17, 2006, the defendants responded to the plaintiffs' discovery requests. On January 19, 2006, the plaintiffs filed a second amended complaint and a motion for class certification. The court did not address the plaintiffs' motion for class certification or any other pending motions, but, rather, on February 10, 2006, entered an order staying “all proceedings” and tolling “any discovery periods, time to respond or other time limits imposed by law” until this Court's decision in E-Lane Pine Hills v. Ferdinand, 277 Ga.App. 566, 569, 627 S.E.2d 44 (2005), was final.2 The superior court reasoned that the E-Lane case was “potentially dispositive of many of the remaining claims in this case[.]”

In E-Lane, we held that OCGA § 9-13-36, which provides that, after purchasing a tax execution, “[t]he transferee shall have the same rights as to enforcing the execution ․ as might have been exercised or claimed before the transfer,” was impliedly repealed, insofar as it applies to tax executions, by OCGA § 48-3-19. 277 Ga.App. at 570, 627 S.E.2d 44. Fuller moved for reconsideration of the trial court's partial grant of judgment on the pleadings to the defendants. On July 11, 2007, almost a year after the Supreme Court of Georgia denied certiorari in E-Lane, the superior court entered an order granting the motion in part and vacating its previous finding that “the transfer of the right to enforce the tax lien under OCGA § 9-13-36 is not unconstitutional as a matter of law.” In this same order, the superior court, in response to Fuller's motion for class certification, ordered the parties to appear for a “case management conference” on August 16, 2007. Citing OCGA § 9-11-23(f)(1), the court stated that “[a]t this time[,] a schedule for discovery as to the issues presented in the motion for class certification shall be entered.”

During the August 16 conference, the defendants vigorously argued that Fuller's motion for class certification should be denied as untimely filed. (The judge also dismissed plaintiff Bass from the suit, a ruling which is not at issue in this appeal.) The judge agreed to postpone the conference to allow the parties to submit briefs on whether Fuller's motion for class certification was timely. The judge, however, never ruled on the matter, and, at some point not evident in the record, the case was transferred to another judge. On March 18, 2009, the new judge, without further hearing, entered an order denying Fuller's motion for class certification “as the determination was not accomplished as soon as practicable after the commencement of this action almost five years ago. As such, both Defendants and even members of the proposed class have been prejudiced by the delay.” The court did not elaborate on how the defendants or the class were prejudiced. It is from this order that Fuller appeals.

Fuller contends the superior court erred in construing OCGA § 9-11-23 to place a burden on him to timely file a motion for class certification. He further argues that the trial court's order is unsupported by the record and that the court erred in failing to make factual findings supporting its determination that the delay prejudiced the defendants and members of the class. For the following reasons, we agree that the trial court's order must be vacated and the case remanded.

OCGA § 9-11-23(c)(1) provides: “As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subsection may be conditional, and may be altered or amended before the decision on the merits.” Additionally, OCGA § 9-11-23(f)(1) provides:

After the commencement of an action in which claims or defenses are purported to be asserted on behalf of or against a class, the court shall hold a conference among all named parties to the action for the purpose of establishing a schedule for any discovery germane to the issue of whether the requested class should or should not be certified. At this conference, the court shall set a date for a hearing on the issue of class certification. Except for good cause shown, such hearing may not be set sooner than 90 days nor later than 180 days after the date on which the court issues its scheduling order pursuant to the conference. If evidence is presented by affidavit, the parties shall have an opportunity to cross-examine affiants as to such testimony offered by affidavit.

And, further, OCGA § 9-11-23(f)(3) provides:

When deciding whether a requested class is to be certified, the court shall enter a written order addressing whether the factors required by this Code section for certification of a class have been met and specifying the findings of fact and conclusions of law on which the court has based its decision with regard to whether each such factor has been established. In so doing, the court may treat a factor as having been established if all parties to the action have so stipulated on the record.

The statute neither directs a plaintiff to move for class certification within a specified time, nor does it prevent a defendant from requesting an order denying class certification or a court from acting on its own initiative. In fact, it appears from these relevant portions of OCGA § 9-11-23 that the Legislature intended for the trial courts to actively manage class certification matters. Although the statute sets no specific deadlines, it mandates that a decision on class certification should be made “as soon as practicable.” The parties have cited to no Georgia cases, nor have we found any, specifically addressing the circumstances under which an otherwise proper motion for class certification may be denied as untimely. Consequently, we look to those federal cases interpreting Rule 23 of the Federal Rules of Civil Procedure, the rule upon which OCGA § 9-11-23 was based3 , for guidance.4

Federal courts construing Rule 23 have stated that the rule imposes no specific deadline by which a district court must certify a class,5 although some jurisdictions impose specific time limits by local rule,6 a circumstance which is not applicable in the instant case. The decision to certify an action as a class action may be made upon the motion of the proponent or the opponent of the class action or upon the court's own initiative.7 Further, a trial “court is expected to actively manage a case to ensure that the certification decision is not unjustifiably delayed.”8 Given this persuasive authority, we hold that OCGA § 9-11-23 places a shared obligation upon the litigants and the court to ensure that the question of class certification is timely resolved.

We further hold that, when deciding whether to deny a motion for class certification as untimely, the court, in the exercise of its sound discretion,9 must consider the purposes served by the rule, balancing any actual prejudice to the litigants or the class against any legitimate reasons for the delay. In the absence of a local rule governing the timely filing of a motion for class certification, a court may not deny an otherwise proper motion solely on the basis that it was untimely. Rather, the court must determine, considering the factors set forth below, whether the delay resulted in any actual prejudice to the litigants or to the class.10 Then, in its order on the motion for class certification, the court shall set forth in writing factual findings supporting its decision.11

The purposes served by requiring the certification of a class “as soon as practicable” include timely identifying the legal issues and trial strategies involved in a case,12 in determining who will be bound by a judgment,13 and in expeditiously and efficiently managing the litigation from discovery through appellate review.14 Legitimate reasons for delay include resolving legal issues that may be dispositive of the action against a named individual without binding the proposed class15 and conducting discovery on the certification issue so that the court will have sufficient information when deciding whether to certify the class.16

Because the court did not engage in this analysis in determining whether the motion for class certification should be denied as untimely or make any factual findings supporting its decision, we vacate the court's order and remand this case to the trial court for further proceeding consistent with this opinion.

Judgment vacated and case remanded with instruction.

ELLINGTON, Judge.

JOHNSON, P.J., and MIKELL, J., concur.

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