Herndon stays motion for class certification in suit over delayed tax returns

A federal judge this week stayed a motion to certify a class in a lawsuit over delayed tax returns.

In an order handed down Monday, U.S. Chief Judge David Herndon stayed the motion for class certification “pending completion of relevant discovery” in the suit Ursula Millett and Jeanine Sanlorenzo brought earlier this month against H&R Block Inc.

The suit, which also names HRB Tax Group Inc. and HRB Technology LLC as defendants, claims that the tax provider’s erroneous preparation of tax returns that included forms for education credits resulted in delayed refunds.

Millett and Sanlorenzo assert that H&R Block admitted that it failed to enter certain information in Forms 8863 to claim their education credits, which delayed refunds for about 600,000 tax returns, including theirs, for at least six weeks.

The suit includes claims for breach of contract and negligence, as well as violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, the Pennsylvania Unfair Trade Practices and Consumer Protection Law and the Missouri Merchandise Practices Act.

It seeks damages “including compensatory damages, consequential damages, treble damages, punitive damages, and any other damages provided under relevant laws,” in addition to litigation costs, attorneys’ fees and pre- and post- judgment interest.

In their since-stayed motion, the two women sought certification of a class that would include all individuals who had their 2012 tax returns that included Forms 8863 prepared by H&R Block before Feb. 22 and were told they were entitled to refunds.

They also proposed two sub-classes in their motion, one for individuals in Illinois and another for individuals in Pennsylvania. Millet is an Illinois resident and Sanlorenzo lives in Pennsylvania.

The two women assert in their motion that they are entitled to class certification because “the class members are so numerous that joinder is impracticable,” “there are questions of law and fact common to the class members” and the “plaintiffs’ claims are typical of the claims of the class members.”

“The prosecution of separate actions by individual members of the proposed Class and Sub Classes would create a foreseeable risk of inconsistent or varying adjudications, which would establish incompatible results and standards for H&R Block,” their motion contends.

Millett and Sanlorenzo further argue that the certification of a class in their suit would avoid “the waste and duplication inherent in potentially thousands of individual actions” and conserve court resources.

According to the motion, the two women sought class certification “at this early stage in the litigation to avoid having their class claims mooted by a tender or settlement offer or offer of judgment.”

“In order to fully develop the facts needed to file their memorandum in support of class certification, Plaintiffs ‘ask the district court to delay its ruling to provide more time for additional discovery or investigation’ … and extend any deadlines to file briefing,” the motion states.

The motion then went on to ask Herndon to enter an order certifying the proposed class and sub-classes and to appoint them class representatives and their attorneys as lead counsel for the class and sub-classes.

The certification motion that Herndon stayed this week was submitted by Edward Wallace, Kenneth Wexler and Amy Keller of Wexler Wallace LLP in Chicago and Sherrie Savett and Eric Lechtzin of Berger & Montague in Philadelphia.

Records show that as of Wednesday, no attorney had entered an appearance on behalf of the defendants.