California Court of Appeals, Fourth District, Third Division
order 6/27/13 (see end of opn.)
Appeal from an order of the Superior Court of Orange County, No. 30-2009-00285190 Kim Garlin Dunning, Judge.
Caldwell Leslie & Proctor, Robyn C. Crowther, Eric S. Pettit; Meiselman, Denlea, Packman, Berg & Eberz, Jeffrey I. Carton, Michael A. Berg and Todd S. Garber for Plaintiff and Appellant.
Manatt, Phelps & Phillips, Phillip R. Kaplan, Benjamin G. Shatz, Adrianne E. Marshack; John K. Beckley for Defendant and Respondent.
Plaintiff Stephen Thompson sued the Automobile Club of Southern California (the Auto Club) in this putative class action. He challenges the Auto Club’s policies relating to renewal, specifically, its practice of “backdating” late renewals to the member’s original expiration date if the renewal occurs within 95 days. He claims this practice results in late-renewing members receiving less than a full year of services. The Auto Club counters that the 95-day period is a “grace period” and that members are generally permitted to continue receiving services, particularly during the first 31 days. This practice, the Auto Club further argues, prevents the member from incurring a $20 fee to start a new membership.
Thompson moved for class certification, and the trial court denied the motion. The court concluded, among other things, that the proposed class was overbroad, lacked commonality, and that Thompson’s claims and defenses were not typical of the class. Further, it ruled that a class action is not a superior method of adjudication. Thompson appeals the trial court’s decision, arguing the court’s decision was unsupported by substantial evidence, contrary to established law, and was premised on the trial court’s misunderstanding of the plaintiff’s claims. The Auto Club argues the class certification motion was properly denied for the reasons stated by the trial court.
Based on the deferential standard of review appropriate to a motion for class certification, we find no error. Contrary to Thompson’s arguments, the court’s decision reflects that it understood the facts and used appropriate criteria for its decision. Therefore, there was no abuse of discretion, and we affirm.
Defendant the Auto Club is a regional affiliate of AAA, an association of automobile clubs with more than 50 million members in the United States. The Auto Club is a non-profit, mutual benefit corporation and has more than six million members. Its services include emergency roadside assistance, a travel agency, DMV transactions, and other benefits.
The Auto Club’s membership dues are billed and collected annually. Since 2005, when joining for the first time, or when rejoining after a cancelled membership, members are generally charged a $20 enrollment fee. Upon joining, the member receives various documents, including a membership card showing the member’s expiration date, and a copy of the Auto Club’s bylaws. Prior to expiration of membership each year, the Auto Club mails the member several renewal notices, which vary depending on the member’s level of service and billing plan. Over 100 different versions of notices exist, and they are changed periodically. The Auto Club also communicates with members regarding renewals by phone.
How the Auto Club handles membership renewals is the subject of this case. According to the Auto Club, members who fail to timely renew a membership “enjoy a 95-day grace period from the expiration date to renew.” Thus, if the member renews at any point during the 95-day period, the Auto Club treats the renewal as retroactive to the date of the expiration. For example, if a member joins on January 1, 2011, the membership expires January 1, 2012. If the member renews at any time up until April 6, 2012, the renewal dates back to January 1. After the 95th day, the member’s file is closed, and any new membership is subject to the $20 new membership fee.
According to the Auto Club, during the grace period, a delinquent member remains eligible to receive services. All services are available during the first 30 days after the failure to renew, and from the 31st to 95th day, whether services are provided is a matter of discretion on the part of the Auto Club agent assisting the member. Exercise of that discretion depends upon various factors, including the length of the membership, the exigency of the circumstances, and the agent’s belief regarding the member’s intent to renew. If a delinquent member receives roadside assistance and subsequently renews, the service call is treated as one that occurred during the membership period. If the member does not renew, any such services are billed.
Plaintiff Stephen Thompson began his current membership with the Auto Club in December 2002. His membership expiration date since that time has been December 6 of each year. Between 2005 and 2008, Thompson renewed his membership late, although he intended to renew each year.
The complaint in this action discusses only the renewals for the years 2006 and 2007. There was, however, evidence in the record regarding his 2008 renewal. Shortly after his membership expired in 2008, he received a mailed notice from the Auto Club informing him that his membership had not been renewed. The notice stated: “We will still continue to provide you with Roadside Assistance service for 30 days after your expiration date. However, if we do not receive your payment, we will be required to bill you for an amount that covers our cost of providing you the service during that 30-day period. If you renew now, all Roadside Assistance calls during the unpaid period will be counted toward your four free calls.”
In early 2009, Thompson renewed his membership by phone. At the end of the call, he specifically asked the representative if his membership started “right now and goes for 12 months forward.” Thompson was informed that the membership could only be started from that date if he paid a $20 new membership fee, otherwise it went back to the date of ...