Ninth Circuit Insurance coverage Class Actions

Quite a few class motion fits have been filed in opposition to auto insurers concerning the valuation of autos which can be whole losses. These instances usually allege that insurers are undervaluing autos in some widespread manner or in violation of a state regulation. The Ninth Circuit just lately affirmed the denial of sophistication certification in a broadcast resolution that I count on can be useful to insurers defending these instances and others involving totally different traces of insurance coverage however comparable points.

In Lara v. First Nationwide Insurance coverage Firm of America, No. 21-35126, — F.4th –, 2022 WL 414691 (ninth Cir. Feb. 11, 2022), the plaintiffs sued Liberty Mutual corporations and CCC Clever Options, a vendor that assists insurers in valuing autos, alleging breach of contract as to Liberty Mutual and an unfair commerce practices declare in opposition to all defendants. The insurance coverage coverage required cost of the “precise money worth” of the car, which was outlined by a Washington regulation as “honest market worth.” CCC researches the costs at which used autos promote at automobile sellers, after which makes adjustment primarily based on the pre-loss situation of the insured car and the distinction between costs paid for autos bought from personal events somewhat than dealerships. The insurance coverage adjuster then in some instances adjusts the worth proven on the CCC report. Plaintiffs claimed that the “situation changes” on the CCC reviews violated a Washington regulation. The case survived a movement to dismiss, however the district courtroom denied class certification below Rule 23(b)(3), primarily based on lack of predominance of widespread points and since a category motion wouldn’t be a superior technique of resolving the dispute.

In affirming, the Ninth Circuit concluded that whether or not the situation adjustment violated the regulation was a typical query, however legal responsibility and damage would require individualized adjudication of every declare. The courtroom defined that “[b]ecause Liberty owed every putative class member the precise money worth of his or her automobile, if a putative class member was given that quantity or extra, then she or he can’t win on the deserves,” and figuring out that “would contain trying into the precise pre-accident worth of the automobile after which evaluating that with what every individual was supplied.” In different phrases, there must be a minitrial on the worth of every car.

As plaintiffs usually do in these instances, the plaintiffs right here argued that the worth of the autos concerned “damages points,” and a few courts have mentioned that if the one individualized points contain damages, that ought to not defeat class certification. However, because the Ninth Circuit defined right here, “if there’s no damage, then the breach of contract and unfair commerce practices claims should fail,” and “[t]hat’s not a damages subject; that’s a deserves subject.” In different phrases, if the final word quantity paid was ample, it doesn’t matter the way you get there. Because the courtroom put it, “the district courtroom was appropriate to use ‘the outdated basketball phrase, ‘no hurt, no foul.’” The courtroom additionally agreed with the district courtroom that the prevalence requirement was not glad as a result of particular person trials can be preferable given the character of the problems to be determined.

Insurers will need to cite this opinion in instances involving different traces of insurance coverage as effectively, equivalent to property. Property insurance coverage class actions usually contain disputes over precise money worth or alternative value worth, and the identical precept ought to apply. Disputes over whether or not just a few hundred {dollars} extra had been owed for harm from a hail storm, for instance, are individualized. As on this case, these disputes could also be finest resolved by the appraisal course of offered for in these insurance policies, or in small claims courtroom, and sometimes fail to fulfill the necessities for a category motion.