Class Certified in Residents' Breach of Contract Claim Against CCRC

A Michigan appeals court affirms a trial court decision certifying a class of continuing care retirement community residents who are suing the community for breach of contract and fraud after the community refused to refund residents' full deposits. Erma Rogers Revocable Trust v. Erickson Retirement Communities (Mich. Ct. App., No. 332495, Dec. 12, 2017).

Erma Rogers moved into a continuing care retirement community (CCRC) and signed an agreement that required her to pay an entrance deposit of $125,000. The agreement stated that the deposit was refundable once someone else was occupying the residence. After Ms. Rogers died, the market price for units was less than $125,000, so the CCRC refused to market Ms. Rogers' unit unless her estate agreed to accept a reduced refund of $93,000.

The estate refused to sign the agreement and filed a class action against the CCRC, alleging breach of contract and fraud. The estate argued that it was entitled to the full refund of the deposit. The trial court certified a class consisting of "[a]ll persons, and the representatives of their estates, who entered into Residence and Care Agreements with Henry Ford Village prior to December 1, 2000 who have received less than a 100 percent full refund of their entrance deposit and persons subject to declaratory relief." The CCRC appealed, arguing, among other things, that the class was too broad because it included current residents and that there was no commonality between the class members because there are different types of units, different management companies, and the units were marketed at different times.

The Michigan Court of Appeals affirms the trial court's certification of the class. According to the court, the court can include current residents in the class because even though these residents have not yet suffered damages, declaratory or injunctive relief is available to them. In addition, the court rules that the class members' claims involve the same general facts and theories and "while differences in individual units or the times when units were vacated may be factors in calculating damages, those differences do not impact the common liability issues in this litigation."

A hat tip to Livonia, Michigan, member attorney Jim Schuster, who wrote about this case on his blog, which is how we learned of it.

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