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H & R Block Inc. v. Haese6/4/1998
On appeal from the 105th District Court of Kleberg County, Texas.
H & R Block, Inc. and others present this interlocutory appeal from an order certifying a class, appointing appellees Ronnie and Nancy Haese ("the Haeses") sole class representatives, and designating the Haeses' counsel as class counsel. We affirm.
Block prepares income tax returns. As part of its tax return preparation services, Block arranges short term loans for its clients, including the Haeses. These short-term loans, in the amount of the client's anticipated income tax refund, are referred to as Rapid Refund Loans or Rapid Anticipation Loans (RAL's). It is uncontroverted that Block received a payment from the lending bank for every RAL it processed. It is also uncontroverted that Block failed to disclose to its clients that it received this payment, which the Haeses term a kickback.
The Haeses filed suit against Block, alleging Block's failure to disclose the payments it received from banks on the RALs constituted a breach of fiduciary duty to its clients and an unconscionable course of conduct under the Texas Deceptive Trade Practices--Consumer Protection Act. The Haeses also alleged this conduct resulted from a conspiracy between Block and its non-party franchisees, which rendered Block liable to those class members who obtained their RAL's through such franchisees.
Based on these allegations, and after conducting a full evidentiary hearing, the court certified the following class:
any individual in Texas who was, at any time, a debtor on a Refund Anticipation Loan (hereinafter "RAL")1 for which an H & R Block entity2 acted as a facilitator.3
1. "Refund Anticipation Loan or RAL" means a loan that a creditor arranges to be repaid directly from the proceeds of a debtor's income tax refund.
2. "H & R Block entity" means any entity which uses the words "H & R Block" or the initials "HRB" in its business, whether or not it is owned by one of the defendants.
3. "Facilitator" means any individual, partnership, corporation, or other business entity, who individually or in conjunction or cooperation with another, processes, receives, or accepts for delivery an application for a refund anticipation loan, or a check in payment of refund anticipation loan proceeds, or in any other manner facilitates the making of a refund anticipation loan.
Block presents five issues for review, generally complaining the trial court abused its discretion in certifying the class.
The criteria for class certification are contained in the rules of civil procedure:
Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
Tex. R. Civ. P. 42(a). An action may be maintained as a class action if the foregoing prerequisites are satisfied and
the court finds that the questions of law or fact common to the members of the class predominate over questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. . . .
Tex. R. Civ. P. 42(b)(4). Our review of the trial court's holding that the case should proceed as a class action is limited to determining whether t
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