COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 72549 PHILL I. COHEN, M.D., ET AL. : : JOURNAL ENTRY Plaintiff-Appellants : : AND vs. : : OPINION BANKERS LIFE & CASUALTY CO., ET AL.: : Defendant-Appellees : : DATE OF ANNOUNCEMENT OF DECISION: OCTOBER 15, 1998 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. CV-294256 JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellants: For Defendant-Appellee Bankers Life & Casualty Co: GEORGE M. VON MEHREN Cleveland, Ohio 44114-2302 RICHARD GURBST ARTHUR E. KORKOSZ For Blue Cross & Blue Shield HARRIS A. SENTURIA Squire, Sanders & Dempsey KENNETH D. PETREY 4900 Key Tower MARK SCHLACHET 127 Public Square Halle Building - 9th Floor Cleveland, Ohio 44114-1304 1228 Euclid Avenue Cleveland, Ohio 44115 DAVID M. GAREAU (continued) Gareau & Dubelko Co. For Globe Life and Accident 28323 Lorain Road Company and Hartford Life Suite 200 Insurance Company: North Olmsted, Ohio 44070 ELIOTT R. GOOD VAN R. SHIREY ADAM J. HUBBLE Chorpenning, Good & Mancuso THOMAS J. LEE Co., L.P.A. ANDREW AGATI 77 East Nationwide Blvd. Kelley McCann & Livingstone Columbus, Ohio 43215 3500 BP Tower 200 Public Square For Golden Rule Insurance Co.: -2- ROBERT L. ROTH For Medical Mutual of Ohio: MICHAELS, WISHNER & BONNER, P.C. MARK L. RODIO 1140 Connecticut Avenue NW DANIEL R. WARREN Suite 900 Thompson, Hine & Flory Washington, D.C. 20036-4003 3900 Key Center 127 Public Square DOUGLAS N. GODSHALL Cleveland, Ohio 44114-1216 KIMBERLY K. WYSS Vogelsang, Howes, Lindamood & For Union Fidelity Ins. Co.: Brunn 200 Charter One Bank Building JOHN WINSHIP READ P.O. Box 20870 GAIL C. FORD Canton, Ohio 44701-0870 Vorys, Sater, Seymour & Pease 2100 One Clev eland Center For Standard Life & Accident: 1375 East Ninth Street Cleveland, Ohio 44114-1724 ALTON L. STEPHENS JOHN T. MURPHY Gallagher, Sharp, Fulton & Norman Seventh Floor, Bulkley Bldg. 1501 Euclid Avenue Cleveland, Ohio 44115 -3- JUDGE TERRENCE O'DONNELL: Phill I. Cohen and North East Ohio Health Services appeal from a decision of the common pleas court denying their Civ.R. 23 motion for class certification, in connection with their claim that the appellee insurance carriers, Bankers Life & Casualty Co., Standard Life & Accident Insurance Co., Globe Life and Accident Co., Hartford Life Insurance Co., and Golden Rule Insurance Co., failed to pay mental health care providers in accordance with the terms of their respective policies of Medigap insurance, designed to pay providers of outpatient mental health services the difference between the providers' total fees and the portion of those fees paid by Medicare. After a thorough review of the record provided to us and a complete analysis of the applicable law, we have concluded the court did not abuse its discretion in denying the class certification and we, therefore, affirm that determination. The matter came to the court's attention when Cohen and N.E.O.H.S. filed a class action complaint against these appellees for regular underpayment of claims for outpatient mental health services in contravention of federal and state law governing their respective insurance policies designed to supplement Part B of Medicare. Urging that Medicare pays fifty percent of the allowed charge, members of the proposed class seek entitlement to the full amount of the gap. Further, appellants urged the trial court to certify a nationwide class of health care providers who had submitted claims to appellees for payment and had received less than the full amount of the gap. -4- The trial court conducted a hearing on the motion to certify the class and after consideration declined to certify the matter as a class action. Cohen and N.E.O.H.S. now appeal that determination and present a single assignment of error for our consideration which states: I. THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING PLAINTIFFS-APPELLANTS' MOTION FOR CLASS CERTIFICATION. Appellants contend the trial court abused its discretion in denying the certification, contending the record reflects that all of the requirements for class certification have been satisfied; the appellees urge, on the other hand, that the matter has been properly adjudicated. Thus, the singular issue presented for our review here is whether the trial court properly refused to certify this case as a class action pursuant to Civ.R. 23. In considering this issue, we recognize the standard of review has been clearly established in Marks v. C.P. Chemical Co. (1987), 31 Ohio St.3d 200, where the court stated in its syllabus: A trial judge has broad discretion in determining whether a class action may be maintained and that determination will not be disturbed absent a showing of an abuse of discretion. Further, we note, as the court stated in Hamilton v. Ohio Sav. Bank (1998), 82 Ohio St.3d 67, at 70: * * * the trial court's discretion in deciding whether to certify a class action is not -5- unlimited, and indeed is bounded by and must be exercised within the framework of Civ.R. 23. The trial court is required to carefully apply the class action requirements and conduct a rigorous analysis into whether the prerequisites of Civ.R. 23 have been satisfied. (Citations omitted). In Warner v. Waste Management, Inc. (1988), 36 Ohio St.3d 91, the court stated in its syllabus that a trial judge must make seven affirmative findings before a case may be certified as a class action. Hence, absent any one of the findings, the court need not grant certification. Our review of the trial court's application of Civ.R. 23 to the facts of this case is hampered because the trial court, contrary to the suggestion of the Ohio Supreme Court in Hamilton v. Ohio Sav. Bank, supra, neither made separate written findings as to each of the seven class certification requirements nor specified its reasoning as to such findings. Nonetheless, we recognize the court in Hamilton v. Ohio Sav. Bank, supra, denominated prerequisites to a class action when it stated at 71: The following seven requirements must be satisfied before an action may be maintained as a class action under Civ.R. 23: (1) an identifiable class must exist and the definition of the class must be unambiguous; (2) the named representatives must be members of the class; (3) the class must be so numerous that joinder of all members is impracticable; (4) there must be questions of law or fact common to the class; (5) the claims or defenses of the representative parties must be typical of the claims or defenses of the class; (6) the representative parties must fairly and adequately protect the interests of the class; and (7) one of the three Civ.R. 23(B) requirements must be met. Civ.R. 23(A) and (B); Warner v. Waste Mgt., Inc. (1988), 36 Ohio St.3d 91, 521 N.E.2d -6- 1091. The first prerequisite as denominated and explained in Hamilton v. Ohio Sav. Bank, supra, concerns the existence of an identifiable class which can be unambiguously defined. The court there stated at 71-72: [T]he requirement that there be a class will not be deemed satisfied unless the description of it is sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member. 7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure (2 Ed.1986) 120-121, Section 1760. Thus, the class definition must be precise enough to permit identification within a reasonable effort. Warner, supra, 36 Ohio St.3d at 96, 521 N.E.2d at 1096. In this case, Cohen and N.E.O.H.S. sought to certify a nationwide class of all eligible mental health care providers and their re-assignees who received assignments of claims under Medigap policies from Medicare patients or providers relating to outpatient mental health services, submitted the claims to one of the appellee insurance companies for payment, received payment less than the amount of the gap, and did not receive the outstanding balances from any other source. In this regard, we observe as the court stated in Hamilton v. Ohio Sav. Bank, supra, at 73: The focus at this stage is on how the class is defined. The test is whether the means is specified at the time of certification to determine whether a particular individual is a member of the class. Planned Parenthood Assn. of Cincinnati, Inc. v. Project Jericho (1990), 52 Ohio St.3d 56, 63, 556 N.E.2d 157, 165. The question as to whether there are differing factual and legal issues do[es] not enter -7- into the analysis until the court begins to consider the Civ.R. 23(B)(3) requirement of predominance and superiority. Marks, supra, 31 Ohio St.3d at 202, 31 OBR at 400, 509 N.E.2d at 1253. The court there concluded at 74: It is difficult to accept that individual knowledge inquiries are required to determine class membership in this case * * *. Our review of the appellees' Medigap policies and the application of the various state and federal laws applicable in the separate jurisdictions render identification of members of the class difficult within reasonable effort; clearly, it may not be administratively feasible for the court to determine class membership. Thus, this could be a basis upon which to deny certification. Next, we examine the class membership requirement. As set forth in Hamilton v. Ohio Sav. Bank, supra, at 74: The class membership prerequisite requires only that the representative have proper standing. In order to have standing to sue as a class representative, the plaintiff must possess the same interest and suffer the same injury shared by all members of the class that he or she seeks to represent. 5 Moore's Federal Practice, supra, at 23-57, Section 23.21[1]. See, also, 7A Wright, Miller & Kane, supra, at 137-141, 149-150, Section 1761. Here, both Cohen and N.E.O.H.S. allege they have been denied full recovery under the Medigap policies. Hence, they have proper standing to prosecute this action and this requirement has been satisfied. The third requirement for our consideration is numerosity. -8- Civ.R. 23(A)(1) specifies that a class action may only be maintained if, the class is so numerous that joinder of all members is impracticable * * *. Based upon the purported class to be certified on a nationwide basis of those individual outpatient mental health care providers who have submitted Medigap claims but have received less than the full amount of their fees from appellees, coupled with Cohen's estimate that the class would exceed one thousand members, we recognize that joinder would be impracticable, this requirement has been satisfied, and is not a basis upon which to deny certification. Regarding the fourth requirement, commonality, we observe that Civ.R. 23(A)(2) requires the existence of questions of law or fact common to the class. As stated in Hamilton v. Ohio Sav. Bank, supra, this requirement is given permissive application, and as set forth in Portman v. Akron S. & L. Co. (1975), 47 Ohio App.2d 216, Civ.R. 23 is to be liberally construed in the early stages of the proceedings. Here, the common question presented is whether the providers who are members of the class are entitled to the full recovery from the Medigap policies. Thus, this requirement has been satisfied with respect to the proposed members of the class. The next requirements, typicality and providing adequate representation of the class, are satisfied when, the claims or defenses of the representative parties are typical of the claims or defenses of the class * * *. See Civ.R. 23(A)(3). In Hamilton v. -9- Ohio Sav. Bank, supra, the court at 77-78 stated the typicality requirement is met where, there is no express conflict between the class representatives and the class and that a representative is deemed adequate so long as his or her interest is not antagonistic to that of other class members. In this case, the record reveals that N.E.O.H.S. refused to appear for deposition until ordered to do so by the court; also, that costs in this action may exceed appellants' financial resources. In addition, appellants settled their claims against Medical Mutual of Ohio and Union Fidelity Life Ins. Co., but the trial court refused to approve that settlement based in part because appellants' counsel now represents Medical Mutual in other litigation. Accordingly, we cannot conclude that no express conflict exists between the class representatives and the class, and appellants have difficulty in satisfying the representation requirement. Denial of certification on this basis would not, therefore, be an abuse of discretion. Our final consideration concerns the three requirements set forth in Civ.R. 23(B), one of which must be met in order to maintain a class action. Appellants claim entitlement to certification based upon Civ.R. 23(B)(3) which provides that the questions of law or fact common to the class must predominate over questions affecting individual members and that the class action be superior to any other available method of adjudication. In Schmidt v. Avco Corp. (1984), 15 Ohio St.3d 310, the court stated at 313: -10- * * * it is generally held that in determining whether common questions of law or fact predominate over individual issues, it is not sufficient that common questions merely exist; rather, the common questions must represent a significant aspect of the case and they must be able to be resolved for all members of the class in a single adjudication. And, in determining whether a class action is a superior method of adjudication, the court must make a comparative evaluation of the other procedures available to determine whether a class action is sufficiently effective to justify the expenditure of judicial time and energy involved therein. Wright & Miller, Federal Practice and Procedure (1972) 59, Section 1779. The court concluded at 316, where individual rather than common issues predominate, the economics of time, effort, and expense and the efficiency of class action treatment are lost, and the need for judicial supervision and the risk of confusion are magnified. Under such circumstances, a class action is clearly inappropriate. In this case, we recognize the multiple coverage issue which would necessarily be involved, magnifying the need for judicial supervision and risk of confusion and the economics of time, effort and expense, and the efficiency of the class action would be lost. The task of trying to manage the size of the class would undoubtedly become burdensome for the trial court and would be a basis to deny class certification. In summary, we have concluded appellants have not demonstrated the ability to unambiguously identify members of the class; have not demonstrated the typicality or adequate representation requirements; and have not demonstrated that common questions predominate over individual issues. After carefully considering -11- the complex nature of this litigation and the proposed expenditure of judicial resources which would be required to adjudicate these claims, and having determined the requirements of Civ.R. 23 as set forth in Hamilton v. Ohio Sav. Bank, supra, have not been satisfied, we cannot conclude the trial court abused its discretion in denying the motion to certify the class. Accordingly, the assignment of error is overruled and the judgment of the trial court is affirmed. Judgment affirmed. -12- It is ordered that appellees recover of appellants their costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JOSEPH J. NAHRA, P.J., and TIMOTHY E. McMONAGLE, J., CONCUR JUDGE TERRENCE O'DONNELL N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .