Appeal from the Order of the Superior Court dated September 15, 1986, at No. 634 Pittsburgh, 1985, Reversing and Remanding the Order Entered on May 1, 1985, in the Court of Common Pleas of Allegheny County, Pennsylvania, Civil Division, at No. GD 84-17962. 357 Pa. Superior Ct. 1,
Nix, C.j., and Larsen, Flaherty, McDermott, Zappala, Papadakos and Stout, JJ. Flaherty, J., concurs in the result. Zappala, J., files a dissenting opinion.
This is an appeal by Allegheny County and Allegheny County Institution District (Appellants) from an Order of the Superior Court which reversed the Order of the Court of Common Pleas of Allegheny County denying class certification to Barbara Kelly and Richard A. O'Neil (Appellees) and remanded the case to the trial court for further proceedings. The issue presented by this appeal is one of first impression: whether the trial court abused its discretion by denying class certification solely because of its determination that the class members' average claims ($13.61) were disproportionately small in comparison to expenses and fees of the litigation and, therefore, the requirements of Pa.R.C.P.
(a)(7) were not met. Appellants contend that the Superior Court exceeded its permissible scope of review and substituted its judgment for that of the trial court. We do not agree. For the reasons set forth herein, we conclude that class certification should not have been denied and, accordingly, affirm the order of the Superior Court.
This action was commenced by the filing of a class action complaint against Appellants by the representative Plaintiff/Appellees alleging that during 1979, 1980 and 1981, the County erroneously deducted social security contributions from sick pay benefits paid to county employees. After the error was discovered, the County entered into a contract with CTA, Ltd. to obtain a refund of the overpayments from the federal government. Under this contract, the County agreed to pay CTA twenty-five (25%) percent of the amount recouped in exchange for CTA's services. When the County obtained its refund from CTA, it then refunded to the Appellees the amounts erroneously withheld, less the 25% fee which the County paid to CTA. By filing the class action complaint, Appellees sought to recover the 25% fee (totaling, with interest, approximately $150,000.00) which the County had deducted from their refunds and paid to CTA. Appellees alleged that the County's payment of their funds to CTA constituted a breach of the contract between the employees and the County embodied in an Employee Benefit Plan Booklet and summarized in an Employee Benefits Summary Sheet.
Following discovery on class certification issues, Appellee filed a motion for class certification as required by Pa.R.C.P. 1707(a) and an evidentiary hearing was held pursuant to Rule 1707(c).*fn1 The trial judge (Silvestri, J.) subsequently
denied the motion for certification finding that Appellees had satisfied all of the five pre-requisites to a class action set forth in Pa.R.C.P. 1702, and all of the seven criteria for class certification set forth in Pa.R.C.P. 1708(a), except 1708(a)(7).*fn2 Judge Silvestri ordered that the suit proceed as an individual action. On appeal, the Superior court reversed holding that the trial court abused its discretion in applying Pa.R.C.P. 1708(a)(7) to the record facts before it, and remanded for further proceedings, 357 Pa. Super. 1, 515 A.2d 48. The County petitioned for allowance of appeal to this Court contending that the trial court properly found that the amount of money that may be recovered by individual class members is so small in relation to the expense and effort of administering the class action so as to warrant class certification denial. Further, Appellants allege that the Superior Court exceeded the permissible scope of its appellate review and failed to give appropriate deference to the trial court's findings. We granted allocatur in this case because it raises an important legal issue regarding class actions.
This Court has defined an abuse of discretion as "not merely an error of judgment, but if in reaching a conclusion the law is overridden or misapplied, or the judgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias or ill will, as shown by the evidence or the record, discretion is abused." Melzer v. Witsberger, 505 Pa. 462, 475
n. 8, 480 A.2d 991, 997 n. 8 (1984) citing In re Women's Homoeopathic Hospital of Philadelphia, 393 Pa. 313, 316, 142 A.2d 292, 294 (1958) (citations omitted). The standards to be looked to in assessing whether there has been an abuse of discretion by a trial court's order concerning class certification have been stated to be the following:
A lower court's decision concerning class certification is a mixed finding of law and fact entitled to "appropriate deference" upon appeal. Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 235, 348 A.2d 734, 739 (1975), on remand, 241 Pa. Superior Ct. 192, 360 A.2d 681 (1976). "Trial courts are vested with broad discretion in determining definition of the class as based on commonality of the issues and the propriety of maintaining the action on behalf of the class." Klemow v. Time, Inc., 466 Pa. 189, 197, 352 A.2d 12, 16 (1976). Accord, Sharkus v. Blue Cross of Greater Philadelphia, 494 Pa. 336, 343-43, 431 A.2d 883, 886 (1981); ABC Sewer Cleaning Co. v. Bell of Pennsylvania, 293 Pa. Superior Ct. 219,  n. 4, 438 A.2d 616, 619 n. 4 (1981). Consequently, a lower court's order concerning class certification will not be disturbed on appeal unless the court failed to consider the requirements of the rules or abused its ...