ILNews

Court reverses class certification in hail-damage action

Back to TopCommentsE-mailPrintBookmark and Share

The 7th Circuit Court of Appeals has reversed the class certification granted by the District Court in a suit brought by unsatisfied homeowners following a 2006 hailstorm in central Indiana.

Policy holders with three different State Farm insurance companies brought a proposed class-action suit in state court, which was later moved to federal court, alleging breach of contract, bad-faith denial of insurance benefits, and unjust enrichment. The homeowners sought damages and an injunction requiring State Farm to re-inspect all the class members’ roofs pursuant to a “uniform, reasonable and objective” standard for evaluating hail damage.

U.S. District Judge William Lawrence denied certification of class under Rule 23(b)(3) under the Federal Rules of Civil Procedure, noting that each plaintiff’s claim of underpayment required an individualized factual inquiry on the merits.

The case should have ended there, the 7th Circuit concluded today, but Judge Lawrence did grant the plaintiffs’ class claim for injunctive relief under Rule 23(b)(2). The District Court certified a class to determine whether State Farm should have to re-inspect the roofs with a uniform and object standard.

But the case is not appropriate for class certification under Rule 23(b)(2), the judges decided in Cynthia Kartman, et al. v. State Farm Mutual Automobile Insurance Co., et al., No. 09-1725. The Circuit Court concluded that the lower court order “misconceptualizes” the claims in the case, and this is simply an action for damages and only suitable for class certification under Rule 23(b)(3).

The plaintiffs claimed to have suffered two separate injuries – underpayment of their hail-damage claims and a violation of the distinct right to have their roofs evaluated under a uniform and objective standard. But State Farm had no independent duty – whether sounding in contract or tort – to use a particular method to evaluate hail-damage claims, wrote Judge Diane Sykes.

The plaintiffs’ argument, that even if State Farm lacked a contractual duty to inspect their roofs pursuant to a uniform and object standard, the duty of good faith required it do so, reflected a fundamental misunderstanding of the tort of bad faith, the judge continued.

“Thus, to prove State Farm committed the tort of bad faith, the plaintiffs must establish that their claims were underpaid — or wrongfully denied — in the first place,” she wrote. “This requirement alone bars class certification because it cannot be established on a class-wide basis.”

A case may be certified as a class action under Rule 23(b)(2) where the “party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” In this rule, there are two independent requirements: the equitable relief must be appropriate regarding the class as a whole and be final. In this case, the contemplated injunction doesn’t provide appropriate or final relief of the alleged underpayment of the plaintiffs’ hail-damage claims, wrote the judge.

The Circuit Court remanded with instructions to decertify the Rule 23(b)(2) class.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

ADVERTISEMENT