Professional Documents
Culture Documents
LLC
United States District Court for the Western District of Washington
January 12, 2018, Decided; January 12, 2018, Filed
CASE NO. C16-920 MJP
Reporter
2018 U.S. Dist. LEXIS 6217 *
JOHN R. BUND II, et al., and on behalf For Safeguard Properties LLC, a
of others similarly situated, Plaintiffs, v. Delaware corporation, Defendant: Marc
SAFEGUARD PROPERTIES LLC, Rosenberg, Pamela J DeVet, LEE
Defendant. SMART PS INC, SEATTLE, WA.
Page 2 of 17
2018 U.S. Dist. LEXIS 6217, *3
Page 3 of 17
2018 U.S. Dist. LEXIS 6217, *5
superior method [*6] of adjudication. might not have been completed1 and
that it would require a time-intensive
manual search — file by file — to
FRCP 23(a) determine which jobs belonged within
the class [*7] qualification. While the
Court is not entirely convinced that
1. Numerosity
class members cannot be identified
Plaintiffs initially cited to the through a refined cross-matching of
spreadsheet created from the data data which Defendant has in its
supplied by Defendant during discovery possession2, it is not necessary at this
for their claim that there are over 18,000 point.
homes which were entered and locks
Plaintiffs have produced evidence of a
changed. Gatens Decl. at ¶ 18; Ex. 11.
"Complaint Log" supplied by Defendant
They cite to case law finding numerosity
(Dkt. No. 87-2, Ex. 26) which "identifies
in proposed classes of forty or more
a number of complaints submitted by
members; e.g., Toering v. EAN
consumers regarding various property-
Holdings, LLC, 2016 U.S. Dist. LEXIS
related activities." (Dkt. No. 87,
124274, 2016 WL 4765850, *2 (W.D.
Declaration of Gatens, ¶ 35.) While not
Wa. Sept. 13, 2016).
all of the complaints concern activities
Defendant objects on two grounds. First which fall within parameters of the
(citing to the class definition regarding proposed class definition, the Court is
properties "entered upon by Safeguard satisfied that there are well in excess of
or its agents" [emphasis supplied]), it forty (the number found minimally
argues that (1) Safeguard itself does not sufficient in Toering to satisfy the class
enter anyone's property and (2) the numerosity requirement) involving
vendors which performed services on its complaints concerning entry into the
behalf were independent contractors, residence related to the changing of
not agents. The second point will be locks within the statutory time limits for
analyzed in greater depth in the FRCP this proposed class. In addition to listing
23(b)(3) section infra; suffice it to say at the date and nature of the complained-
this point that the Court is not
persuaded. Under either an actual or 1 Atoral argument, Defendant explained in greater detail that,
apparent agency analysis, the vendors while a work order might indicate that it was "completed," such
a designation did not establish the nature of the work which
are Defendant's agents. had been done; i.e., "completed" could mean that a vendor
had visited the property, found it occupied, and on that basis
Second, Safeguard argues that the not done the work which had been requested by Safeguard.
spreadsheet data which it provided 2 For example, cross-matching "closed" work orders with
Plaintiffs is "inconclusive," that they invoices of fee payments to identify fee amounts which
have a list of work orders that might or correspond to the fees habitually charged for changing locks
would yield a list of residences where the homes had actually
been entered and re-keyed pursuant to orders by Safeguard.
Page 4 of 17
2018 U.S. Dist. LEXIS 6217, *7
of activity, the log lists the names and agents in pre-foreclosure seizures?
contact numbers of the complaining
5. Did Safeguard take possession of
parties.
member homes prior to foreclosure?
For purposes of class certification, the
6. Is Safeguard liable for reasonable
numerosity requirement has been
rents to class members for the time it
established.
possessed their home pre-
foreclosure?
2. Commonality
7. Did Safeguard wrongfully commit
Plaintiffs must demonstrate that the waste or injury to the class members'
claims of their proposed [*8] class property pre-foreclosure?
"depend on a common contention" such 8. Is Safeguard liable for treble
that "determination of its truth or falsity damages and attorneys' fees under
will resolve an issue that is central to the CPA?
the validity of each claim in one stroke."
Toering, supra, 2016 U.S. Dist. LEXIS See Motion at 24-25.
124274, [WL] at *3 (quoting Mazza v.
Amer. Honda Motor Co., Inc., 666 F.3d Defendant argues that Questions 2, 3,
581, 588 (9th Cir. 2012), and Dukes, 4, 6, and 8 all pose variations of the
564 U.S. at 349-50). question "what remedies should
Plaintiffs get?" and that [*9] such
Plaintiffs provide a series of question questions cannot constitute "common
which they contend present "common questions of law." See Dukes, 564 U.S.
questions of law and fact:" at 359. The Court agrees: questions
which assume that a common question
1. Were Safeguard's common
of liability has been satisfactorily asked
practices/procedures unfair and
and answered for a class cannot qualify
deceptive?
as common questions of law.
2. Must Safeguard compensate
class members for damage resulting Nevertheless, the Court finds that the
from forcible entries and lock questions concerning whether the
changes? actions of the vendors employed by
Safeguard (specifically, the entry into
3. Is Safeguard liable to the class for the homes of class members for the
restitution of the fees it received from purpose of changing the locks)
its clients for the pre-foreclosure constituted a form of trespass and/or
activities? "unfair or deceptive acts" as defined by
the CPA are questions of law common
4. Is Safeguard liable for the
to all members of the class and
personal property converted by its
susceptible of a common answer. There
Page 5 of 17
2018 U.S. Dist. LEXIS 6217, *9
is no requirement that the proposed FRCP 23(a)(3) requires that "the claims
class members "share every fact in or defenses of the representative
common or completely identical legal parties are typical of the claims or
issues" (Rodriguez v. Hayes, 591 F.3d defenses of the class."
1105, 1122 (9th Cir. 2009) - Rule
23(a)(2) requires only "a single The test of typicality is whether other
significant question of law or fact." members have the same or similar
injury whether the action is based on
Abdullah v. U.S. Sec. Assocs., Inc., 731
conduct which is not unique to the
F.3d 952, 957 (9th Cir. 2013).
named plaintiffs and whether other
Defendant argues that the damages class members have been injured in
which Plaintiffs seek for the class will the same course of conduct.
entail individualized assessments (locks
are worth varying amounts, different Ellis v. Costco Wholesale Corp., 657
amounts and values of property may F.3d 970, 984 (9th Cir. 2011)(citation
have been damaged, rents vary, etc.). omitted). It is not a requirement in the
Ninth Circuit that the members' injuries
In the Ninth Circuit, a variable amount of
be identical: claims are considered
damages between class members will
"typical" "if they are reasonably co-
not defeat certification if they are bound
extensive with those of absent class
by a common question of liability. [*10]
members; they need not be
("The amount of damages is invariably
substantially identical." Hanlon v.
an individual question and does not
Chrysler Corp., 150 F.3d 1011, 1020
defeat class action treatment;" Blackie
(9th Cir. 1998).
v. Barrack, 524 F.2d 891, 905 (9th Cir.
1975).) Furthermore, if the issue of Plaintiffs' allegations arise out of a
whether Defendant is liable for the course of conduct which is similar to
damages can be resolved on a common that contained in the class
basis, then the matter of amount of description; [*11] i.e., the pre-
damages can if necessary be bifurcated foreclosure inspections of defaulted
into a separate, non-class proceeding. properties. Safeguard does not contest
Jimenez v. Allstate Ins. Co., 765 F.3d the similarity of its actions as regards
1161, 1168 (9th Cir. 2017). the potential members of the class (i.e.,
The Court is satisfied that Plaintiffs have that it routinely sent its vendors onto
meet their burden of establishing pre-foreclosure properties to perform
commonality for purposes of class inspections), but instead asserts that
certification. the named Plaintiffs have unique
challenges and defenses which are not
applicable to all the members of the
3. Typicality class, and thus they are not typical.
Page 6 of 17
2018 U.S. Dist. LEXIS 6217, *11
Page 7 of 17
2018 U.S. Dist. LEXIS 6217, *13
homeowners whose homes were not claims with prejudice. On that basis, the
forcibly entered and the locks changed Court has no need to analyze whether
(but were, instead, merely externally the Hanouseks are typical class
inspected) qualify as class members. members under FRCP 23(a)(3).
Plaintiffs presented no legal authority in In summary, while the claims of the
support of this theory and the Court is Hanouseks and Ms. Haynes are not
unconvinced that the de minimis nature typical of the proposed class, the Bund
of any injury to a house left by the claim relating to entry into the house for
Safeguard sticker is sufficient to satisfy purposes of changing locks is typical of
the damages requirement of a trespass the proposed class and the Court finds
cause of action.3 On this basis, the that Plaintiffs have satisfied that
Court finds that Haynes is not a typical element.
class member. The Court further finds,
based on the same rationale, that
Plaintiffs should [*14] not be permitted 4. Adequacy
to maintain a class whose membership This element of class certification
includes persons whose property was requires a finding that the named
entered upon without permission prior to plaintiffs and their counsel (1) have no
foreclosure but subject only to an
conflicts of interest with other class
external inspection (i.e., no home entry)
members [*15] and (2) will prosecute
and "damaged" only by the placing of a
the action vigorously on behalf of the
sticker on the exterior of the home. The
class. FRCP 23(a)(4); Ellis, 657 F.3d at
Court will modify the class definition
985; Hanlon, 150 F.3d at 1020. Since
accordingly.
the only remaining named Plaintiff is
Bund, this factor will be analyzed as
Hanouseks regards him alone.
These two named plaintiffs are the Specific to Bund, Safeguard asserts the
subject of a separate summary argument (similar to the one raised
judgment motion seeking dismissal of concerning his "typicality" supra) that
their claims. As evidenced by the his status as a member of the Jordan
Court's ruling on that motion (see Dkt. class creates a conflict with other
No. 203), the Court agrees with potential class members both in terms
Defendant that it is entitled to summary of its impact on his standing and his
judgment dismissing the Hanouseks' incentive to prosecute the action
vigorously. Concerning standing, the
Court has already made its position
3 In
fact, Plaintiffs conceded at oral argument that, if the Court clear. As regards his incentive to
were unwilling to accept the "Safeguard sticker = property
damage" theory, Haynes would not qualify as a typical class prosecute the matter vigorously,
member.
Page 8 of 17
2018 U.S. Dist. LEXIS 6217, *15
Page 9 of 17
2018 U.S. Dist. LEXIS 6217, *17
Page 10 of 17
2018 U.S. Dist. LEXIS 6217, *19
(in fact, that is exactly the case with the orders were agents of Defendant.
Hanouseks). Safeguard relies on Washington case
law holding that "a principal who hires
Where theft on the part of the vendor an independent contractor is not liable
can be established, it breaks the chain for harm resulting from that contractor's
of agency by which Safeguard could be work. The crucial distinction is the right
held vicariously liable (see below); nor to control... Where there is no right to
could Defendant be held responsible for
control, then the subordinate party is an
thefts which occur outside the purview
independent contractor." Wilcox v.
of its involvement with the property, but
Basehore, 187 Wn.2d 772, 789-90, 389
during a period when the premises may P.3d 531 (2017).
have been unoccupied by the class
member (which evokes the third Defendant maintains that (1)
possibility of theft of the personal determination of agency is a factual
property by unknown third party). The question that must be decided on a
bottom line is that these varying case-by-case basis and (2) the facts of
permutations and combinations of its relationship [*21] with its vendors
possible occurrences set up a scenario (including contractual language
where inquiries into the individual specifically stating that its vendors are
circumstances of each class member's independent contractors) indicate that
loss threaten to overwhelm [*20] the the company does not retain control of
common questions of fact and law. On its vendors' work. The Court is not
that basis, the Court finds that common persuaded.
questions of fact and law will not
predominate over individualized Plaintiffs present an impressive array of
inquiries as regards the sub-class and it evidence establishing that Safeguard,
will not be certified. as a matter of uniform procedure,
retains the right to control every aspect
With the proposed sub-class eliminated, of its vendors' work. Using depositions
the Court still needs to address from Defendant's employees, Plaintiffs
Safeguard's argument that, as regards demonstrate that Safeguard controls
the proposed class, (1) the company each vendor's geographic area, the
itself entered no one's home and (2) it training of those vendors, the details of
cannot be held vicariously liable for the each work order (including what tools
actions of its vendors because of lack of are needed, what vendors can and
agency. Safeguard's position is that, cannot wear, and when the work must
since the company itself did not enter be completed), as well as how the
onto anyone's property, it can only be vendors respond to complaints and
held vicariously liable, which requires speak to homeowners or third parties.
proof that the network of vendors The evidence shows that Defendant
employed to execute the company's requires immediate submission of a
Page 11 of 17
2018 U.S. Dist. LEXIS 6217, *21
comprehensive report upon completion In fact (as Plaintiffs point out), following
of the work order; every report is a determination of vacancy, a vendor
reviewed and vendors who do not installs a Safeguard "first time vacancy
comply with Safeguard's expectations sticker" instructing the owner to contact
do not get paid. (See Dkt. No. 123, Safeguard immediately. Similarly, when
Reply at 6-7.) a lock is replaced, the vendors place
Safeguard's "securing sticker" [*23]
There is no doubt in the Court's mind and sign-in sheet on the door — both
that Defendant exercises a high level of state that "Safeguard" entered the
control over its vendors. As for the property. Plaintiffs' briefing contains
language inserted into Defendant's several other examples of procedures
vendor contracts [*22] identifying them which operate to create the impression
as "independent contractors:" it is the that it is Defendant which is responsible
case law in Washington that simply for the determinations and activities
calling a vendor an "independent taking place in regard to the
contractor" in the vendor's contract does homeowner's property. (See Reply at
not alter the nature of the relationship 8.)
where the hiring entity has the right to
exercise significant control. Wilcox, 187 This same sort of activity undermines
Wn.2d at 787. Such is the case here. Safeguard's second "apparent agency"
argument — that the fact that the
Additionally, while there is sufficient homeowners are rarely home when the
evidence to establish the status of the vendors visit the property renders it
vendors as Safeguard's actual agents, unlikely that the class members would
the facts also suffice to create the have relied on the apparent agency of
existence of an "apparent agency," the vendors. But the fact that all the
which exists where (1) the defendant's traces of activity which the vendors
conduct would lead a reasonable leave behind direct the owner to contact
person to believe that the acting party Safeguard leads to exactly the opposite
was an agent of the defendant and (2) conclusion: that whoever was on the
plaintiff relied upon the apparent agency property must have been an agent of
relationship. Wilson v. Grant, 162 Safeguard's.
Wn.App. 731, 744, 258 P.3d 689.
Safeguard argues that its prohibition The Court finds, in light of all this
against the vendors displaying the evidence, that the class will have no
Safeguard logo on their clothing, difficulty establishing Safeguard's
vehicles or business cards establishes vicarious liability regarding the proposed
that the first element is not true "as a class if the vendors' pre-foreclosure
matter of law." It is not a convincing conduct of entering the homes and
argument. replacing the locks is found to have
been tortious and/or a CPA violation.
Page 12 of 17
2018 U.S. Dist. LEXIS 6217, *23
Page 13 of 17
2018 U.S. Dist. LEXIS 6217, *25
State Court at Dkt. No. 27.) Plaintiff arguments it has already made as to
Bund amended his complaint in state why certification should not be
court to (1) reinsert the class granted at all.
allegations [*28] and (2) add
allegations related to injunctive relief 3. That injunctive relief is still
under FRCP 23(b)(2). Defendant again necessary: Plaintiffs allege (with no
removed the action to federal court, evidentiary support) that (a)
Defendant [*29] is continuing to
where it was eventually reassigned to
order pre-foreclosure inspections in
this Court.
violation of Jordan and (b)
The deadline to move for class Defendant has failed to remove any
certification was July 3, 2017. Plaintiffs of the new locks that it installed in
timely moved for certification, but under violation of Jordan.
FRCP 23(b)(3) only. Defendant now
moves for dismissal of the injunctive 4. That, assuming that their motion
relief claims. for class certification is granted,
Plaintiffs are entitled to move for
modification of that certification
Discussion order: While this is technically
correct, it does not mean that
Plaintiffs object to this request on Plaintiffs can successfully move for
several grounds: modification any time they want
1. The motion represents an (e.g., on the eve of trial) or that they
additional dispositive motion in can at any time advance a legal
violation of LCR 7(e)(3): Defendant remedy which they may have plead
justifies this on the grounds that but for which they have not laid the
there are four named plaintiffs and groundwork prior to trial.
multiple causes of action and that 5. That they will not know if
addressing them all in a single injunctive relief is necessary until
motion is not possible. Safeguard they have reviewed the results of a
has also attempted to address this pending RFP ("RFP #6"): In
issue with its pending Motion under response, Defendant asserts out that
LCR 7(e)(3) seeking permission to (1) the deadline for class-related
file more than a single dispositive discovery has long since passed and
motion. (2) RFP #6 concerns information
2. The motion represents an ill- related to their restitution theory of
disguised attempt to make additional damages (payments which
argument against class certification Safeguard made to vendors and
in general: In fact, Defendant's then charged to clients which may
motion does reiterate several of the have been passed along to class
Page 15 of 17
2018 U.S. Dist. LEXIS 6217, *29
Page 16 of 17
2018 U.S. Dist. LEXIS 6217, *31
End of Document
Page 17 of 17