Southwood v. The Credit Card Solution et al

Filing 54

ORDER denying 34 Motion to Certify Class without prejudice to renew in 60 days. The Clerk of Court is DIRECTED to file an entry of default as to Defendant Philip Manger. The Court in its discretion consolidates cases 7:09-cv-81-F and 7:09-cv-183-F. Each filing shall continue to reflect case numbers 7:09-cv-81-F and 7:09-cv-183-F, but shall be filed only in the consolidated action. The Motion to Certify Class [DE-96] filed in 7:09-cv-183-F is DENIED without prejudice to renew in 60 days. The parties are reminded to read the order in its entirety for detailed information. Signed by Senior Judge James C. Fox on 3/27/2014. (Grady, B.)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION

SHARON SOUTHWOOD, for herself,
and all others similarly situated,
Plaintiff,
v.
THE CREDIT CARD SOLUTION, et. al,
Defendants.

CHRIS TAYLOR, for himself
and all others similarly situated, et al.
Plaintiffs,
v.
LEE W. BETTIS, Jr., Esq. et al.
Defendants,

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No. 7:09-CV-81-F

No. 7:09-CV-183-F

This matter is before the court following the failure of Defendant Philip M. Manger to
respond to this court's September 30, 2013 Order [DE-53]. Also before the court for consideration
is whether to consolidate the instant action with Taylor v. Bettis, 7:09-CV-183-F. Additionally,
motions to certify the class in both this action and Taylor v. Bettis, 7:09-CV -183-F have long been
npe.
For the reasons more fully stated below, (1) the Clerk of Court is directed to enter default
against Defendant Philip M. Manger; (2) the court orders that the instant action is consolidated with

Taylor v. Bettis, 7:09-CV-183-F; and (3) the motions to certify a class in both actions are DENIED
without prejudice.

I. FAILURE TO RESPOND

In the September 30,2013, Order [DE-53], the court denied Manger's motion to dismiss this
action for lack of subject matter jurisdiction, and ordered that he had thirty (30) days to file an
answer in this action and a response to the Motion to Certify Class. Manger has failed to do so.
Accordingly, the Clerk of Court is DIRECTED to file an entry of default as to Defendant Philip
Manger.
II. CONSOLIDATION

In an order filed on September 30,2013, in Taylor v. Bettis, 7:09-CV-183-F, the court
directed the remaining parties to that action to show cause why it should not be consolidated with
the instant action. 1 Only the Plaintiffs in the Taylor action filed a response, and they indicated
they do not oppose consolidation.
Rule 42(a) of the Federal Rules of Civil Procedure provides that "[i]f actions before the
court involve a common question oflaw or fact, the court may ... consolidate the actions."
Courts have "broad discretion" to consolidate cases under Rule 42(a). AIS J Ludwig Mowinckles
Rederi v. Tidewater Canst. Co., 559 F.2d 928, 933 (4th Cir.1977). Consolidation "clearly"

satisfies Rule 42(a) when the claims are brought against the same party, rely on the same
witnesses, allege the same misconduct, and are answered with the same defenses. Harris v. L & L
Wings, Inc., 132 F.3d 978, 982 n. 2 (4th Cir.1997). Although the Taylor action includes some

additional defendants than those named in the instant action, there is undoubtedly a common
question of law and fact overlapping between the two actions.

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All of the named Defendants in this action are also named defendants in the Taylor

action.
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Accordingly, the court in its discretion CONSOLIDATES cases 7 :09-CV -81-F and 7:09CV-183-F. These two actions shall proceed under one consolidated case number, 7:09-CV-81-F
(Consolidated Action). Each filing shall continue to reflect case numbers 7:09-CV -81-F and
7:09-CV-183-F, but shall be filed only in the consolidated action. The Clerk of Court is
DIRECTED to administratively close the case file ofthe 7:09-CV-183-F, and at the appropriate
time, the action shall be reopened so that judgment or other proceedings may be entered therein.

III. MOTIONS TO CERTIFY CLASS
Plaintiffs in both the Southwood and Taylor actions have moved to certify a class. The
court examines the motions in tum.
A.

Southwood action
Plaintiff Sharon Southwood has the following surviving claims in this action: (1) a claim

for unfair and deceptive trade practices under the North Carolina Unfair and Deceptive Trade
Practices Act, N.C. Gen. Stat.§ 75-1.1, et seq. 9 ("UDTPA") against CCDN, LLC and R.K. Lock
& Associates; (2) a claim for fraud against CCDN, LLC and R.K. Lock & Associates; (3) a claim

for violation of 18 U.S.C. § 1962(c) of the Racketeer Influence and Corrupt Organizations Act
("RICO") against Robert Lock and Philip Manger; and (4) claims for civil conspiracy and
piercing the corporate veil against Robert K. Lock, Colleen Lock, and Philip Manger. Default
has been entered against all the remaining defendants.
In her Amended Motion to Certify Class, Plaintiff requests that this court "certify a Class
of Plaintiffs consisting of all persons in the United States who gave money to one or more
Defendants for debt relief or credit repair services." Amend. Mot. to Certify Class [DE-34].

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"Although not specifically mentioned in [Rule 23], the definition of the class is an
essential prerequisite to maintaining a class action." Roman v. ESB, Inc., 550 F.2d 1343, 1348
(4th Cir. 1976). The definition of the class and subclasses serves three important purposes: "it
identifies the persons (1) entitled to relief, (2) bound by a final judgment, and (3) entitled under
Rule 23(c)(2) to the 'best practicable notice' in a Rule 23(b)(3) action."' Manual for Complex

Litigation§ 21.222 at 270 (4th ed. 2004). The definition must accordingly be "precise, objective,
and presently ascertainable." /d.; see also NOW v. Scheidler, 172 F.R.D. 351, 357 (N.D. Ill.
1997) (to constitute an identifiable class, it must be possible to identify class members by
reference to objective criteria).
Although a determination must always be made whether a particular person is a member
of a class, the definition should not require the court to engage in extensive fact finding to
determine an individual's membership in the class. See Cuming v. South Carolina Lottery

Com'n, No. 3:05-CV-3608-MBS, 02008 WL 906705, at *1 (D.S.C. 31 Mar. 2008). In addition,
the class or subclass should not be defined in terms that require resolution of the merits of the
case. /d. Newberg on Class Actions states that in suits for damages the class or subclass should
describe three principal things:
1. a common transactional fact or status predicated on the cause of action, such as
purchasers, stockholders, or franchisees;
2. the time span appropriate to the cause of action;
3. any appropriate geographical scope.
Alba Conte & Herbert B. Newberg, Newberg on Class Actions§ 6:17 (5th ed.) ("Newberg").
Similarly, The Manual for Complex Litigation explains:

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The class definition should describe the operative claims, issues, or defenses, such
as injury resulting from securities fraud or denial of employment on account of
race. The relevant time should be included in the class definition. The relevant
time, often referred to as the "class period," is, for example, the period during
which members of the proposed class incurred the claimed injury.

Id § 21.222.
In this case, the court finds Plaintiff's proposed definition to be imprecise and overbroad.
There is no temporal limitation on the proposed class definition. In the same vein, there is no
discussion in the supporting memorandum of law of how varying state laws affect the definition
of the class, or if needed, any sub-classes. The Amended Motion to Certify the Class [DE-34] is
therefore DENIED without prejudice to renew in 60 days. Any renewed motion must put forth a
precise, objective, and presently ascertainable definition of the class or sub-classes, address the
relevant factors under Rule 23 in detail, and address the impact, if any of the putative class
claims in Taylor after the dismissal of claims against certain defendants. Alternatively, should
Plaintiff choose not to file a renewed motion to certify a class, she should file an appropriate
motion with regard to the action within that same time period.

B.

Taylor action
All the claims against Lee W. Bettis, Pat Leigh Pittman, Joanne K. Partin, Robert L.

Emanuel, Stephen A. Dunn, Raymond E. Dunn, Emanuel & Dunn, PLLC, Bettis Dunn & Dunn,
W. Andrew Arnold, and the Law Offices ofW. Andrew Arnold, P.C., have been dismissed.
Additionally, Plaintiffs' claims against R.K. Lock & Associates; Jen Devine, Robert K. Lock, Jr.;
Colleen Tomasino Lock; S. John Hagenstein; The Credit Card Solution; Robert Mitchell
Lindsey; Richard D. Russ; Ernest Gregg Britt, Jr., R&G Marketing; Excell Marketing, LLC, and
Tracy Webster have been dismissed without prejudice.

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Plaintiffs assert the following claims against the remaining defendants: (1) constructive
trust; (2) unjust enrichment; (3) conversion; (4) violation ofNorth Carolina Racketeer Influence
and Corruption Organizations Act, N.C. Gen. Stat. §§ 75D-1, et seq. ("NC RICO"); (5) violation
of the Credit Repair Organization Act ("CROA"), 15 U.S.C. § 1692 et seq.; (6) violation of 18
U.S.C. § 1962(c) and (d) ofRICO; (7) civil conspiracy; (8) piercing the corporate veil; (9)
tortious interference with prospective business advantage; (1 0) negligence; (11) violation of
UDTPA; (12) fraud and (13) gross and willful legal malpractice. These claims are asserted
against the following defendants: (1) CCDN, LLC; (2) Legal Debt Cure, LLC; (3) Philip M.
Manger; (4) Barrister Legal Services, PC; (5) Richard Jude Wasik; (6) Richard D. Russ; (7)
Rodney Emil Brisco: (8) Debt Jurisprudence Inc.; (9) Aegis Corporation; (1 0) M. David Kramer;
and (11) Marcia M. Murphy. Default has been entered as to all of the remaining defendants, with
the exception of Philip M. Manger.
In Plaintiffs' Motion to Certify Class [DE-96], Plaintiffs ask the court "to certify a Class
per Fed. R. Civ. P. 23(b)(2) and 23(b)(3) as to all theories of relief in the Amended Complaint
(DE23) except common law fraud and legal malpractice .... The relevant Class consists of all
persons in the United States who paid money to one or more Defendants for any debt
elimination, debt reduction, credit repair or litigation assistance plan or services." !d.
The same deficiencies found in the proposed definition in the Southwood action are also
present here. Again, there is no temporal limitation on the proposed class definition, nor any
discussion of how varying state laws affect the definition of the class, or if needed, any subclasses. Accordingly, the Motion to Certify Class [DE-96] is DENIED without prejudice to
renew in 60 days. Any renewed motion must put forth a precise, objective, and presently

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ascertainable definition of the class or sub-classes, address the relevant factors under Rule 23 in
detail, and address the impact, if any of the putative class claims in Southwood. Alternatively,
should Plaintiffs choose not to file a renewed motion to certify a class, they should file an
appropriate motion with regard to the action within the same time period.

IV. CONCLUSION
For the foregoing reasons, it is hereby ORDERED that:

(1) the Clerk of Court is DIRECTED to file an entry of default as to Defendant Philip
Manger;
(2) the court in its discretion CONSOLIDATES cases 7:09-CV-81-F and 7:09-CV-183-F.
These two actions shall proceed under one consolidated case number, 7:09-CV-81-F
(Consolidated Action). Each filing shall continue to reflect case numbers 7:09-CV-81-F and
7:09-CV-183-F, but shall be filed only in the consolidated action. The Clerk of Court is
DIRECTED to administratively close the case file ofthe 7:09-CV-183-F, and at the appropriate
time, that action shall be reopened so that judgment or other proceedings may be entered therein;
(3) the Amended Motion to Certify Class [DE-34] filed in 7:09-CV-81-F is DENIED
without prejudice to renew in 60 days. Alternatively, should Plaintiff Southwood choose not to
file a renewed motion to certify a class, she should file an appropriate motion with regard to the
action within that same time period; and
(4) the Motion to Certify Class [DE-96] filed in 7:09-CV-183-F is DENIED without
prejudice to renew in 60 days. Alternatively, should Plaintiffs choose not to file a renewed
motion to certify a class, they should file an appropriate motion with regard to the action within
the same time period.

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SO ORDERED.
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This the 1-lfd~y of March, 2014.

Jat6fs C. Fox
Senior United States District Judge

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