{ "id": 210107, "name": "ADVANCE AMERICA, CASH ADVANCE CENTERS of ARKANSAS, INC. v. Phyllis GARRETT, Individually and o/b/o a Class of Similarly Situated Persons", "name_abbreviation": "Advance America, Cash Advance Centers of Arkansas, Inc. v. Garrett", "decision_date": "2001-03-08", "docket_number": "00-1287", "first_page": "75", "last_page": "80", "citations": [ { "type": "official", "cite": "344 Ark. 75" }, { "type": "parallel", "cite": "40 S.W.3d 239" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "Ark. Code Ann. \u00a7 23-52-104", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 2000, "pin_cites": [ { "page": "(b)" } ], "opinion_index": 0 }, { "cite": "339 Ark. 322", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 130704 ], "weight": 6, "year": 1999, "pin_cites": [ { "page": "335", "parenthetical": "holding that trial court may not consider whether plaintiff will ultimately prevail" }, { "page": "431", "parenthetical": "holding that trial court may not consider whether plaintiff will ultimately prevail" }, { "page": "336" }, { "page": "432" }, { "page": "347-48" } ], "opinion_index": 0, "case_paths": [ "/ark/339/0322-01" ] }, { "cite": "340 Ark. 351", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1365306 ], "weight": 3, "year": 2000, "pin_cites": [ { "page": "356-57" }, { "page": "841" } ], "opinion_index": 0, "case_paths": [ "/ark/340/0351-01" ] }, { "cite": "322 Ark. 742", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1447526 ], "weight": 2, "year": 1995, "opinion_index": 0, "case_paths": [ "/ark/322/0742-01" ] }, { "cite": "323 Ark. 706", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1445784 ], "weight": 2, "year": 1996, "opinion_index": 0, "case_paths": [ "/ark/323/0706-01" ] }, { "cite": "328 Ark. 476", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 50413 ], "weight": 2, "year": 1997, "opinion_index": 0, "case_paths": [ "/ark/328/0476-01" ] }, { "cite": "330 Ark. 261", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 298654 ], "weight": 4, "year": 1997, "pin_cites": [ { "page": "267" }, { "page": "900" } ], "opinion_index": 0, "case_paths": [ "/ark/330/0261-01" ] } ], "analysis": { "cardinality": 570, "char_count": 10392, "ocr_confidence": 0.776, "pagerank": { "raw": 1.988704449760801e-07, "percentile": 0.7414884033779575 }, "sha256": "667c50264115d7b3f0c1cc37e5e82eb2cce55bdaf357d97ecb0235d9d2287dbe", "simhash": "1:af8d22a6fa7c35f2", "word_count": 1635 }, "last_updated": "2023-07-14T20:48:00.616095+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "GLAZE, J., not participating." ], "parties": [ "ADVANCE AMERICA, CASH ADVANCE CENTERS of ARKANSAS, INC. v. Phyllis GARRETT, Individually and o/b/o a Class of Similarly Situated Persons" ], "opinions": [ { "text": "W.H. \u201cDub\u201d Arnold, Chief Justice.\nAppellant, Advance America, Cash Advance Centers of Arkansas, Inc., brings this interlocutory appeal from the Clark County Circuit Court\u2019s order granting appe\u00fcee Phyllis Garrett\u2019s motion to certify the case as a class action pursuant to Ark. R. Civ. P. 23 (2000). Our jurisdiction is authorized by Ark. R. Sup. Ct. l-2(a)(8) (2000) and Ark. R. App. P. \u2014 Civil 2(a)(9) (2000). In the instant appeal, Advance America challenges the portions of the trial court\u2019s order: (1) defining the class as \u201c[a]ll persons, other than Advance America and its owners and agents, who have taken out loans from Advance America at its branch offices throughout the State of Arkansas and [sic] interest rates exceeding the maximum lawful rate set forth in Article 19, Section 13 of the Arkansas Constitution,\u201d and (2) naming Garrett the class representative. We find merit in appellant\u2019s argument that the trial court abused its discretion by reaching the merits of appellee\u2019s underlying claim. Accordingly, we reverse and remand the case to the trial court for further action consistent with this opinion.\nBackground\nAdvance America is licensed by the State Board of Collection Agencies to engage in the check-cashing business in Arkansas pursuant to the Check-cashers Act, codified at Ark. Code Ann. sections 23-52-101 to -117 (Repl. 2000). On several instances, including June 28, 1999, Garrett visited an Advance-America branch in Arkadelphia and received cash advances in exchange for personal checks made out for the amount of the advance plus an additional amount to cover Advance America\u2019s fees. During each cash-advance transaction, Garrett also signed a document prepared by Advance America. Notably, the document Garrett signed at her June 28, 1999 transaction contained an arbitration clause, requiring that all disputes between the parties, except those within the jurisdiction of a small-claims tribunal, be resolved by binding arbitration under the Federal Arbitration Act. The document also stated that Garrett was prohibited from serving as a class representative or member in any dispute with Advance America.\nOver the few weeks following the June 1999 transaction, Garrett reported that she had difficulty repaying her cash advances to Advance America. For example,, in May 1999, Garrett received $150.00 cash in exchange for a $195.00 personal check (including a $45.00 fee). Two weeks later, she returned to Advance America and opted to extend her due date for an additional $45.00 fee. According to Garrett, she extended the due date at least two more times before satisfying the underlying $195.00 debt.\nUltimately, on October 12, 1999, Garrett filed a complaint against Advance America seeking usury damages for herself and other similarly situated persons. Garrett claimed that she paid Advance America over $300.00 in fees resulting in no reduction of her underlying cash advances. Moreover, she alleged that the transactions were actually loans with effective annual percentage rates ranging from 300% to 720%. On one occasion, she reported that she was charged fees resulting in an effective interest rate of2,920%. Appellant acknowledged that it had more than 250 Arkansas customers and, as of February 15, 2000, had engaged in nearly 50,000 check-cashing transactions at twenty-seven Arkansas branches since June 1999.\nOn April 20, 2000, Garrett filed her motion for class certification. Following a hearing on July 31, 2000, the trial court denied appellant\u2019s pending motion to compel arbitration and granted Garrett\u2019s motion for class certification. In an August 9, 2000 order, the trial court issued the following findings of fact and conclusions of law concerning the class-certification motion: (1) appellant\u2019s cash-advance transactions with its customers were all conducted in the same manner and were virtually identical; (2) Garrett\u2019s transactions were similar to other customers\u2019 transactions; (3) some customers never signed an arbitration agreement; (4) the class of persons doing business with appellant was so numerous that joinder was impractical or impossible; (5) the issues raised by Garrett\u2019s complaint were common to other class members; (6) questions of fact common to the class predominated over any questions affecting individual class members; (7) a class action was the superior method to adjudicate the claims raised by Garrett, individually and on behalf of the other customers who received cash advances from Advance America; and (8) Garrett was an adequate person to serve as the class representative.\nSignificantly, the trial court also concluded that the documents underlying Advance America\u2019s cash-advance transactions were usurious on their face, void ah initio, and unenforceable. Further, the transactions were deemed \u201cloans,\u201d and the fees charged by Advance America to its customers were deemed \u201cinterest.\u201d The court described the documents signed by Garrett and drafted by appellant as \u201cadhesion contracts.\u201d Finally, the court concluded that Advance America charged its customers \u201cinterest rates exceeding the maximum lawful rate set forth in Article 19, Section 13 of the Arkansas Constitution.\u201d\nClass certification\nAdvance America contends that the trial court erred by addressing the merits of Garrett\u2019s underlying claim of usury rather than resolving the stricdy procedural question of the appropriateness of class certification. We agree. Ark. R. Civ. P. 23 (2000) provides that a trial court may certify a class only if the following conditions are met:\n(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.\nArk. R. Civ. P. 23(a) (2000). Pursuant to subsection (b), the court must also find that:\n. . . the questions of law or fact common to the members of the class predominate over any 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.\nArk. R. Civ. P. 23(b) (2000).\nThe question of whether class-action elements have been satisfied is a matter within the broad discretion of the trial court, and we will not reverse the trial court\u2019s decision absent an abuse of that discretion. Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997); Direct Gen. Ins. Co. v. Lane, 328 Ark. 476, 944 S.W.2d 528 (1997); Farm Bureau Mutual Ins. Co. v. Farm Bureau Policy Holders & Members, 323 Ark. 706, 918 S.W.2d 129 (1996); Cheqnet Sys., Inc. v. Montgomery, 322 Ark. 742, 911 S.W.2d 956 (1995). However, the determination is purely a procedural question. BNL Equity Corp. v. Pearson, 340 Ark. 351, 356-57, 10 S.W.3d 838, 841 (2000). Neither the trial court nor the appellate court may delve into the merits of the underlying claim when deciding whether the requirements of Rule 23 have been met. Id., see also Fraley v. Williams Ford Tractor & Equip. Co., 339 Ark. 322, 335, 5 S.W.3d 423, 431 (1999) (holding that trial court may not consider whether plaintiff will ultimately prevail); Mega Life & Health Ins. Co. v. Jacob, 330 Ark. 261, 267, 954 S.W.2d 898, 900 (1997).\nIn an illustrative case, we held that a trial court erred by delving into the merits of affirmative defenses at the class-certification stage. Fraley, 339 Ark. at 336, 5 S.W.3d at 432. In Fraley, we reasoned that the trial court prematurely adjudicated the validity of releases signed by putative class members and mistakenly delved into the merits of the appellee\u2019s affirmative defenses. Id. The same reasoning applies here, where the trial court improperly delved into the merits of Garrett\u2019s underlying usury claim and the validity of Advance America\u2019s defenses. The trial court\u2019s order went beyond determining whether Garrett satisfied class-action elements and concluded that, the agreement signed by Garrett and drafted by Advance America was an adhesion contract, void ah initio, and that the cash-advance transactions were usurious in violation of the Arkansas Constitution.\nThe court\u2019s definition of the class also incorporated its judgment that the transactions were not merely cash advances but \u201cloans\u201d and that the fees charged by Advance America were \u201cinterest.\u201d As a result, the court implicitly and prematurely rejected appellant\u2019s argument that the Arkansas Check-cashers Act applied to the disputed transactions and expressly authorized collection of the challenged fees. See Ark. Code Ann. \u00a7 23-52-104(b) (Repl. 2000). Pursuant to Ark. Code Ann. section 23-52-104(b), check-cashing transactions covered by the Act are deemed not to be loans and fees collected are deemed not to be interest. In light of the foregoing, we hold that the trial court abused its discretion by reaching the merits of Garrett\u2019s underlying usury claim and prematurely rejecting appellant\u2019s arguments that the Check-cashers Act applied and that the parties\u2019 arbitration agreement was valid.\nGiven our holding that the trial court improperly delved into the underlying legal issues, we remand the case. Finality principles do not apply to class-certification rulings. See Fraley, 339 Ark. at 347-48, 5 S/VOd at 438-39. Rather, a Rule 23 order may be altered or amended at any time prior to a decision on the merits. Id.; Ark. R. Civ. P. 23(b) (2000). Accordingly, we direct the trial court on remand to resolve the strictly procedural question of the appropriateness of class certification.\nGLAZE, J., not participating.\nIn light of the parties\u2019 purported arbitration agreement, Advance America filed a motion to compel arbitration on March 21, 2000. The trial court\u2019s denial of that motion is the subject of a separate appeal pending before this court. See Advance America v. Garrett, No. 00-1080.", "type": "majority", "author": "W.H. \u201cDub\u201d Arnold, Chief Justice." } ], "attorneys": [ "Bowman and Brooke LLP, by: Robert M. Buell and Charles K. Seyfarth; and Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock and David M. Powell, for appellant.", "Morgan & Turner, by: Todd Turner, for appellee." ], "corrections": "", "head_matter": "ADVANCE AMERICA, CASH ADVANCE CENTERS of ARKANSAS, INC. v. Phyllis GARRETT, Individually and o/b/o a Class of Similarly Situated Persons\n00-1287\n40 S.W.3d 239\nSupreme Court of Arkansas\nOpinion delivered March 8, 2001\nBowman and Brooke LLP, by: Robert M. Buell and Charles K. Seyfarth; and Wright, Lindsey & Jennings, LLP, by: Claire Shows Hancock and David M. Powell, for appellant.\nMorgan & Turner, by: Todd Turner, for appellee." }, "file_name": "0075-01", "first_page_order": 103, "last_page_order": 108 }