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American Debt Found. Inc. v. Hodzic

The trial court erred in certifying a class of nine Georgia residents who contracted with the defendant for debt relief services because the class representative did not satisfy the numerosity requirement.

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American Debt Foundation, Inc. “ADF” appeals the trial court’s certification of a class of nine Georgia residents who contracted with the company for debt-relief services, arguing that the citizens —with Mirsada Hodzic as the class representative —failed to establish two necessary requirements to support class certification: numerosity and superiority. For the reasons noted infra , we reverse the trial court’s certification of the class. ADF is a Florida-based debt-negotiation company that contracts with individuals to assist them in reducing their unsecured debt by negotiating the settlement of their accounts with creditors. Although the company no longer operates in Georgia or offers its services to our residents,1 it did so as of July 1, 2003, and Hodzic was one of nine Georgians who contracted with ADF to negotiate the settlement of her debts with creditors.

ADF’s standard formula, which indisputably applied to all Georgia clients, is to charge customers 14 percent of their total debt with approximately 10 percent of the customer’s estimated settlement amount paid upon acceptance into the program. And after generally accruing six or seven months of monthly payments into a customer’s account, ADF then begins to settle the client’s debt with his or her creditors.

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