             SUPREME COURT OF MISSOURI
                                        en banc

STATE EX REL. GENERAL CREDIT                  )            Opinion issued April 2, 2019
ACCEPTANCE COMPANY, LLC,                      )
                                              )
              Relator,                        )
                                              )
v.                                            )           No. SC97175
                                              )
THE HONORABLE DAVID L.                        )
VINCENT III,                                  )
                                              )
              Respondent.                     )

                    ORIGINAL PROCEEDING IN PROHIBITION

       General Credit Acceptance Company, LLC, (GCAC) filed a petition for a writ of

prohibition barring the circuit court from taking any further action other than vacating the

order granting class certification in whole or in part. The circuit court abused its discretion

by certifying an overly broad class.       The circuit court is directed to withdraw its

certification of the class as presently defined because it includes large numbers of

individual claims precluded by final deficiency judgments or estopped by their failure to

disclose the claims in bankruptcy.

       Further, the named plaintiff is not typical of the class because she voluntarily

surrendered her vehicle and because GCAC has no deficiency judgment against her. Each
class and subclass must have a representative whose claims are typical of the claims of

members of that class and subclass. Either the class must be redefined to include only

those for whom the named class representative is typical or a new or additional class

representative must be named so each class or subclass has a representative whose claims

are typical of the claims of the class. The preliminary writ is made permanent.

                          Factual and Procedural Background

       Helena Weatherspoon defaulted on payments owed to Car Credit Acceptance

Company pursuant to a consumer credit contract requiring her to make installment

payments. Car Credit sent Weatherspoon notices informing her of the default and how to

cure it. Weatherspoon did not cure the default. Car Credit assigned Weatherspoon's credit

contract to GCAC. GCAC repossessed the vehicle, but Weatherspoon regained possession.

       Weatherspoon defaulted again, and GCAC again notified her of the default and how

to cure it. Weatherspoon did not cure the default and voluntarily surrendered her vehicle

to GCAC. GCAC mailed a presale notice informing Weatherspoon her vehicle would be

sold in compliance with the Missouri Uniform Commercial Code (UCC). GCAC sold the

vehicle and mailed Weatherspoon a post-sale notice of her deficiency balance.

       Weatherspoon filed the underlying class action "on behalf of all other similarly

situated Missouri consumers" alleging GCAC, and its predecessors or successors, violated

statutory notice requirements relating to the repossession and disposition of collateral and

collected unlawful interest following default and repossession of the collateral. 1


1
  Weatherspoon alleged GCAC violated § 408.554, RSMo 2000, by omitting statutorily required
language from its right to cure notice; violated § 408.555, RSMo Supp. 2006, by wrongfully
                                             2
Weatherspoon alleged the deficient notices caused her and all class members to suffer harm

to their credit, character, and general reputation. Weatherspoon requested "damages equal

to the amount of any judgment wrongfully obtained by GCAC" and "a mandatory

injunction compelling GCAC to return any money collected for deficiency judgments, time

price differential, delinquency and collection charges from Plaintiff and the classes." She

also requested statutory damages, an injunction preventing GCAC from collecting

deficiency judgments from the class, and a declaration that GCAC's form right to cure,

presale, and post-sale notices violate Missouri law.

       GCAC introduced evidence of statistical sampling showing approximately 87

percent of potential class members' claims against GCAC were resolved by final deficiency

judgments or were extinguished in bankruptcy. GCAC argued this evidence showed the

proposed class was overbroad because the vast majority of potential class members' claims

were resolved in prior judicial proceedings. GCAC has no deficiency judgment against

Weatherspoon, and she did not declare bankruptcy.

       The circuit court certified two classes and designated Weatherspoon as the sole class

representative. The first class included "all persons who are named as borrowers or buyers

with a Missouri address on a loan or financing agreement with GCAC, assigned to GCAC

or owned by GCAC; whose loan or financing agreement was secured by collateral; and



accelerating loan balances and obtaining possession of vehicles without proper notice; violated
§ 400.9-602, RSMo Supp. 2002, and § 400.9-623, RSMo Supp. 2001, by providing presale notices
restricting redemption payments; provided misleading presale notices regarding the timeframe for
selling repossessed vehicles; provided inadequate disclosures on post-sale notices; and provided
post-sale notices informing consumers they owed a balance including interest in violation of
§ 408.553, RSMo 2000.
                                               3
who had the possession of their collateral taken by GCAC, voluntarily or involuntarily,

from May 12, 2008 to present." The second class included "all persons from Class 1 who

had the possession of their collateral taken by GCAC involuntarily."

       GCAC filed a petition for permission to appeal the certification order pursuant to

Rule 84.035. The court of appeals denied the petition. GCAC filed the underlying petition

for a writ of prohibition asserting the circuit court abused its discretion by certifying the

class. This Court issued a preliminary writ of prohibition.

                                    Standard of Review

       This Court has jurisdiction to issue original remedial writs. Mo. Const. art. V, § 4.1.

A writ petition is the appropriate procedure for obtaining review of the court of appeals'

denial of a petition for permission to appeal from an order granting class certification. State

ex rel. Coca-Cola Co. v. Nixon, 249 S.W.3d 855, 859-60 (Mo. banc 2008).

       Determining whether a claim should proceed as a class action "ultimately rests with

the sound discretion of the trial court." Id. at 860 (internal quotation omitted). The circuit

court abuses its discretion "if its order is clearly against the logic of the circumstance, is

arbitrary and unreasonable, and indicates a lack of careful consideration." Id. (internal

quotation omitted).

                                    Class Certification

       "[T]he underlying question in any class action certification is whether the class

action device provides the most efficient and just method to resolve the controversy at

hand, all things considered." Id. at 860-61. Rule 52.08(a) provides all class actions must

satisfy the following four elements:

                                              4
       (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.

       If the Rule 52.08(a) prerequisites are met, a class action may be maintained only if

the plaintiff shows the class satisfies one of the three additional standards set forth in Rule

52.08(b). The circuit court determined Weatherspoon's putative class satisfied Rule

52.08(b)(3), which provides certification is proper if "the court finds that 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."

       GCAC asserts the circuit court abused its discretion in certifying the class because

individual issues predominate. As to liability, however, the class claims are based on an

interpretation of the form UCC notices regarding the right to cure the default and rights to

presale and post-sale notice of disposition of the collateral.           A central aspect of

Weatherspoon's putative class action is a determination of whether GCAC violated any

statutory provisions governing its form UCC notices. Claims involving the interpretation

of form contracts often present a "classic case for treatment as a class action." McKeage

v. TMBC, LLC, 847 F.3d 992, 999 (8th Cir. 2017) (internal quotation omitted). GCAC has

not established the circuit court abused its discretion by concluding common liability issues

predominate. This Court expresses no opinion about whether the issue of damages will be

suitable for class treatment if a class is certified consistent with this opinion.



                                               5
                                      Class Definition

       When class certification is appropriate, Rule 52.08 presupposes a properly defined

class that is ascertainable and not overbroad. Coca-Cola, 249 S.W.3d at 861-62. A

properly defined class "is necessary to realize both the protections and benefits for which

the class action device was created." Id. at 861. A class definition encompassing "more

than a relatively small number of uninjured putative members is overly broad and

improper." Id.

       As a threshold matter, Weatherspoon incorrectly argues that considering the

preclusive effect of final deficiency judgments or bankruptcy proceedings improperly

resolves the merits of the class action at the certification stage. "Although the class

certification decision is independent of the ultimate merits of the lawsuit, the applicable

substantive law is relevant to a meaningful determination of the certification issues."

Green v. Fred Weber, Inc., 254 S.W.3d 874, 880 (Mo. banc 2008); Amgen Inc. v.

Connecticut Ret. Plans & Tr. Funds, 568 U.S. 455, 466 (2013) ("Merits questions may be

considered to the extent—but only to the extent—that they are relevant to determining

whether the Rule 23 prerequisites for class certification are satisfied.").

       Further, the Rule 52.08(b)(3) predominance and superiority analysis requires

consideration of "the extent and nature of any litigation concerning the controversy already

commenced by or against members of the class." Rule 52.08(b)(3)(B). Considering the

"nature and extent" of prior litigation involving individual class members is necessary to

determine whether the Rule 52.08 class certification requirements are satisfied and does



                                              6
not improperly resolve the merits of the claims of the class as a whole. 2 In this case, the

"extent and nature" of the litigation "already commenced . . . against members of the class"

is that GCAC obtained final deficiency judgments against approximately 60 percent of

class members while approximately 27 percent of class members extinguished their claims

in bankruptcy. The issue, then, is the preclusive effect of the prior deficiency judgments

and bankruptcy proceedings.

                             Deficiency Judgments: Res Judicata

       Res judicata "precludes not only those issues on which the court in the former case

was required to pronounce judgment, but to every point properly belonging to the subject

matter of litigation and which the parties, exercising reasonable diligence, might have

brought forward at the time." Chesterfield Vill., Inc. v. City of Chesterfield, 64 S.W.3d

315, 318 (Mo. banc 2002) (internal quotation omitted). Res judicata "includes within its

ambit … a prohibition against collateral attack on a judgment." Wright v. Bartimus

Frickleton Robertson & Gorny PC, 364 S.W.3d 558, 564 (Mo. App. 2011). 3



2
  Weatherspoon also asserts the "general rule" is that affirmative defenses against individual class
members do not defeat class certification. William B. Rubenstein, Newberg on Class Actions,
§ 4:55 (5th ed. 2011). This general rule is based on "the fact that a defense may arise and may
affect different class members differently does not compel a finding that individual issues
predominate over common ones." Bridging Cmtys. Inc. v. Top Flite Fin. Inc., 843 F.3d 1119, 1124
(6th Cir. 2016). Here, approximately 87 percent of the class members' claims are precluded by
prior final judgments or bankruptcy proceedings. Under this overly broad class definition, the
predominant common issue is that the vast majority of class members have no unresolved claim
against GCAC.
3
  Determining whether res judicata applies typically requires analysis of whether the lawsuits share
four identities: "1) identity of the thing sued for; 2) identity of the cause of action; 3) identity of
the persons and parties to the action; and 4) identity of the quality of the person for or against
whom the claim is made." King Gen.Contractor, Inc. v. Reorganized Church of Jesus Christ Latter
Day Saints, 821 S.W.2d 495, 501 (Mo. Banc 1991). When a subsequent action constitutes a
                                                  7
       "A collateral attack is an attempt to impeach a judgment, whether interlocutory or

final, in a proceeding not instituted for the express purpose of annulling the judgment."

Beil v. Gaertner, 197 S.W.2d 611, 613 (Mo. 1946). A collateral attack is appropriate when

the underlying judgment is void, but a subsequent action "will not be tolerated as a

subterfuge or facade for litigating an issue to which a former final judgment is conclusive."

Flanary v. Rowlett, 612 S.W.2d 47, 50 (Mo. App. 1981) (declaratory judgment action

constituted an impermissible collateral attack upon final decree of dissolution).

       The deficiency judgments against approximately 60 percent of the individual class

members established their indebtedness to GCAC following sale of the collateral securing

the loan. 4 The class action requests "damages equal to the amount of any judgment

wrongfully obtained by GCAC," an injunction requiring GCAC to "return any money

collected for deficiency judgments, time price differential, delinquency and collection

charges from Plaintiff and the classes," and a declaration that GCAC's form UCC notices

violate Missouri law. The class action, while "not instituted for the express purpose of




collateral attack on a prior judgment, the identities analysis is unnecessary. Wright, 364 S.W.3d
at 564.
4
  "The right to a deficiency judgment accrues only when there is strict compliance with statutory
requirements." States Res. Corp. v. Gregory, 339 S.W.3d 591, 596 (Mo. App. 2011) (internal
quotation omitted). Section 408.556.1 required GCAC to "allege the facts of the borrower's
default, facts sufficient to show compliance with the provisions of sections 400.9-601 to
400.9-629, which provisions are hereby deemed applicable to all credit transactions[.]" Sections
400.9-601 to 400.9-629 govern the class claims regarding default, notice, repossession,
acceleration, sale, and the calculation of the deficiency. Further, § 408.556.2 provides "[a] default
judgment may not be entered in the action in favor of the lender unless the petition is verified by
the lender, or sworn testimony, by affidavit or otherwise, is adduced showing that the lender is
entitled to the relief demanded." Therefore, the deficiency judgments against 60 percent the
individual class members resolved the issue of GCAC's compliance with statutory requirements
relating to the repossession, sale of the collateral, and calculation of the deficiencies.
                                                 8
annulling the judgment," Gaertner, 197 S.W.2d at 613, has precisely that effect because

the requested relief seeks to nullify and undermine the deficiency judgments previously

entered against class members. Therefore, approximately 60 percent of individual class

members' claims are impermissible collateral attacks on final deficiency judgments entered

against them. Those claims are precluded.

       Weatherspoon asserts res judicata does not apply because GCAC obtained the

deficiency judgments in associate circuit divisions in which there is no compulsory

counterclaim rule. 5 If there is no compulsory counterclaim rule, res judicata generally does

not bar the assertion of that counterclaim in a subsequent action. Hemme v. Bharti, 183

S.W.3d 593, 599 (Mo. banc 2006). The general rule does not apply, however, when:

       The relationship between the counterclaim and the plaintiff's claim is such
       that successful prosecution of the second action would nullify the initial
       judgment or would impair rights established in the initial action.

Restatement (Second) of Judgments § 22(2)(b) (1982). The failure to assert a counterclaim

in the first action will be given preclusive effect "when allowance of a subsequent action

would so plainly operate to undermine the initial judgment that the principle of finality

requires preclusion of such an action." Restatement (Second) of Judgments § 22, cmt. f.

In other words, the absence of a compulsory counterclaim rule does not sanction collateral

attacks on final judgments. The fact the final deficiency judgments were rendered in




5
 Pleadings in associate circuit divisions are generally not subject to the Rule 55.32(a) compulsory
counterclaim rule. Becker Glove Intern., Inc. v. Jack Dubinsky & Sons, 41 S.W.3d 885, 888 (Mo.
banc 2001).
                                                9
proceedings in which no counterclaim was required does not justify a collateral attack on

those judgments in a subsequent class action. 6

                                   Bankruptcy: Estoppel

       Following repossession of their vehicles, approximately 27 percent of the putative

class members discharged their debts to GCAC in bankruptcy. Based on statistical

sampling, few, if any, class members disclosed the claims they now assert against GCAC

in their schedule of assets filed with the bankruptcy court, yet those claims would have

existed at the time of the bankruptcy. A provision in the bankruptcy code, 11 U.S.C. § 521,

imposes upon a debtor "an express, affirmative duty to disclose all assets, including

contingent and unliquidated claims." Strable v. Union Pac. R.R. Co., 396 S.W.3d 417, 422

(Mo. App. 2013) (internal quotation omitted). The failure to disclose potential claims

against a creditor estops the debtor from later asserting those claims. Id. at 422-23, 426.

Therefore, approximately 27 percent of individual class members' are estopped from

asserting their claims against GCAC in the class action.

               The class definition is overbroad and otherwise deficient

       Because approximately 87 percent of individual class members' claims are either

precluded by deficiency judgments or have been extinguished in bankruptcy, the vast

majority of individual class members have no unresolved claim against GCAC. Like Coca-


6
 The fact many of the deficiency judgments were entered by default does not change the analysis.
Res judicata applies to final judgments entered by default. Drainage Dist. No. 1 Reformed v.
Matthews, 234 S.W.2d 567, 572-73 (Mo. 1950); State ex rel. Family Support Division v. Stovall-
Reid, 163 S.W.3d 519, 521-22 (Mo. App. 2005); State ex rel. Barnett v. Mullen, 125 S.W.3d 896,
899 (Mo. App. 2004).


                                              10
Cola, in which 80 percent of the putative class suffered no injury, the class definition in

this case is likewise overbroad. 249 S.W.3d at 862. The overly broad class definition is

not necessarily fatal, because an overly broad "class definition may be modified consistent

with the precepts of . . . Rule 52.08 in order to remove the uninjured putative members."

Id. at 861.

       In addition, it is unclear why the court certified only a single subclass whose

members constitute only a subset of the members of the class. Normally, subclasses would

be differentiated by some distinct characteristic, such as one involving a voluntary and the

other an involuntary repossession or another differentiating characteristic. Here, however,

there is only one subclass, and it is for those whose vehicles were involuntarily repossessed.

It is unclear whether this single subclass was separated from the larger class and the

subclass members' interests may diverge from those who had their vehicles returned

voluntarily, such as Weatherspoon. As discussed below, this is the reason Weatherspoon

is an inappropriate class representative. The circuit court should carefully consider the

definition of those subclasses, if any, it may certify.

       The circuit court is prohibited from taking any further action other than to decertify

the existing class, but it may consider whether to certify a class without the definition

problems here identified and that satisfies the typicality and other requirements for a class

action, as discussed below. 7


7
  GCAC also asserts class certification was improper because the request for prejudgment interest
is barred by § 408.553, which GCAC maintains prohibits the accrual of interest after default and
before judgment. Unlike considering the preclusive effect of prior judgments and bankruptcy
proceedings to determine the scope of the class, GCAC's statutory interpretation argument
                                               11
                    Weatherspoon's claims are not typical of the class

       Class actions are "an exception to the usual rule that litigation is conducted by and

on behalf of the individual named parties only." Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.

147, 155 (1982) (internal quotation omitted). A class representative's claims must be

typical of the claims of the class. Rule 52.08(a)(3). To satisfy the typicality requirement,

the class representative "must be a part of the class and possess the same interest and suffer

the same injury as the class members." Falcon, 457 U.S. at 156 (internal quotation

omitted); Harris v. Union Elec. Co., 766 S.W.2d 80, 86 n.10 (Mo. banc 1989).

        Weatherspoon's claims are not typical of the class because she did not suffer the

same alleged injury as the class members. The second class consists of individuals "who

had the possession of their collateral taken by GCAC involuntarily." Weatherspoon

testified she voluntarily surrendered her vehicle to GCAC.                 Further, as the class

representative, Weatherspoon requested "damages equal to the amount of any judgment

wrongfully obtained by GCAC" and "a mandatory injunction compelling GCAC to return

any money collected for deficiency judgments, time price differential, delinquency and

collection charges from Plaintiff and the classes." GCAC did not obtain a deficiency



attempts to resolve the merits of the class action at the certification stage. While this Court
expresses no opinion about the ultimate merits of Weatherspoon's claim for prejudgment interest,
a court may not refuse certification "on the ground that it thinks the class will eventually lose on
the merits." Loeb Indus., Inc. v. Sumitomo Corp., 306 F.3d 469, 480 (7th Cir. 2002).
        GCAC also asserts class certification was improper because it did not send right-to-cure
notices. Weatherspoon asserts that, even if GCAC did not send improper notices, GCAC violated
§ 408.555 by improperly accelerating the loans and repossessing the collateral. This argument
also goes to the merits of the action, not the scope of the class.



                                                12
judgment against Weatherspoon. Weatherspoon's claim is not typical of the class because

she was not injured by an involuntary repossession or by a deficiency judgment.

       The circuit court abused its discretion by certifying a class with Weatherspoon as

the sole class representative because her claims are not typical of the class and she is not a

member of the subclass. The circuit court is prohibited from certifying the class and

subclass as presently defined. The court is not prohibited from considering whether

Weatherspoon is typical of a redefined class, if a new class definition is proposed and meets

the criteria set out in the rule and explained in this opinion, nor is it prohibited from

appointing a new or additional class representative should one be proposed with claims

typical of the class and who otherwise satisfies the criteria set out in the rule.

                                         Conclusion

       The circuit court abused its discretion by certifying an overly broad class with a

class representative whose claims are not typical of the class. The preliminary writ of

prohibition is made permanent, and the circuit court is directed to take no action

inconsistent with this opinion.



                                                           __________________________
                                                           Zel M. Fischer, Chief Justice


All concur.




                                              13
