Tracking lawsuits that may affect you-and your customers

The industry is laden with diminished value (DV) litigation and disputes about generic crash parts, which ultimately-though perhaps subtly-shape the future of the collision repair industry.

Being cognizant of these disputes can affect you and your customers in the end. Your customer may come to you for advice on a DV or aftermarket parts question and may even ask your opinion on whether he or she should file suit against an insurer. Knowing how the courts in your state have treated these issues can be helpful when responding to your customers. Here is a wrap-up on many of the recent cases that involve DV or aftermarket parts, or both, to help keep you up to speed and arm you with information for both yourself and your customers.

Alliance of American Insurers (AII) vs. State of Florida, Department of Agriculture and Consumer Services, Division of Consumer Services and Bob Crawford, Commissioner-Filed on July 11, 2000, in the Second Judicial Circuit Court in and for Leon County, Florida, after the Florida Department of Agriculture and Consumer Services issued a notice to autobody repair facilities which implied erroneously that it was illegal to use aftermarket crash parts in the state of Florida and set a phantom standard for these parts that shops were unable to meet, the AII says. On Sept. 25, the Florida Department of Agriculture and Consumer Services settled with the AII, and must now put out a new notice with a retraction stating that the use of generic crash parts is, in fact, legal in Florida. The settlement also states that the department cannot "unlawfully delegate" to repair shops "the right and responsibility of determining whether these parts meet the phantom standards of like kind and quality (LKQ)."
Diedre C. Berger vs. Government Employees Insurance Co. (GEICO)-This DV case was filed on Aug. 5, 1999, in Maryland State Trial Court. The case alleges that GEICO is responsible for compensating the plaintiff for the loss in value to the vehicle following an accident. A final decision for the case has not yet been made.
John G. Boeving et al. vs. Mid-Century Insurance Co., Farmers Insurance Group of Cos. and Farmers Group Inc .doing business as (d/b/a) Farmers Underwriters Association and Farmers Insurance Exchange-This aftermarket parts case, which alleges that Farmers Insurance included inferior generic parts on the plaintiff's vehicle damage report, was filed April 24, 2000, in the Circuit Court of the 20th Judicial Circuit in St. Clair County, Ill. The plaintiffs are seeking class action status for the case.
Roxette Busani et al. vs. USAA-Filed Aug. 9, 2000 in the Washington State Superior Court in and for the County of Pierce and was granted class action status on Feb. 1, 2001. The suit alleges that USAA neglected to pay its insureds for all the damages [to which] they are entitled, namely inherent DV. USAA is challenging the court's decision to decertify the case.
Billy Campbell et al. vs. Markel American-This DV lawsuit, originally filed on Aug. 10, 1999, was decided in favor of the plaintiff on Feb. 25, 2000. Markel's request for summary judgment on Dec. 15, 1999, was denied. The insurer filed an appeal on March 29, 2000 and asked the court to consolidate this case with Maurice Entremont et al. vs. American Central Insurance Co., but the Louisiana First Circuit Court of Appeals denied the request on Jan. 8, 2001. This Louisiana appellate court on Sept. 15 then overturned the lower court's original decision and decided the appeal in favor of the insurer.
Jacques Casas et al. vs. USAA-The Circuit Court of the 17th Judicial Court in Broward County ruled in favor of USAA, which alleged that the insurer breached the terms of its insurance contract by using inferior non-OEM parts in its estimate because they were not of like kind and quality (LKQ). The court ruled that Florida law expressly permits these parts and that the plaintiff "cannot possibly establish that each and every non-OEM part specified on an estimate by USAA is not of LKQ to each and every part replaced."
Carlton vs. Trinity Universal Insurance Co.-The District Court of Galveston County 56th District Court granted the insurer's motion for summary judgment on Jan. 4, 1999, in this inherent DV case. In a summary judgment, the court found that Trinity's policy did not provide for DV, despite the plaintiff contending an obligation to pay additional monies for inherent DV. Carlton filed an appeal to the court's decision, but Justice Kem Thompson Frost of the Texas Fourteenth Court of Appeals affirmed the ruling on Nov. 16, 2000. "Trinity's liability for direct and accidental loss to Carlton's vehicle is capped the amount necessary to repair or replace the property with other of like kind and quality," Frost says in his written opinion.
David R. Cazabat Jr. et al. vs. Metropolitan Property Casualty Insurance Co.-This inherent DV case, which was denied class action status, was decided in favor of the insurer on Feb. 23, 2001. The plaintiffs had asked the Rhode Island Superior Court to certify 90,000 potential class members who were residing in Arkansas, Georgia, Louisiana and Rhode Island. The court refused to certify the case and denied the class action request on Feb. 2, 2000. It ruled that while the potential class members had common questions, the number of individual queries that would come up when determining liability and damages in each separate case would be too numerous to ensure an efficiently run trial.
Collision Parts Network (CPN) vs. Michael Avery-CPN, a Fresno, Calif. distributor of generic crash parts, filed a lawsuit on July 27, 2000 against the plaintiff. The case holds that Avery, one of the key plaintiffs in the landmark $1.2 billion judgment against State Farm, is responsible for the more than 50 percent drop in CPN's non-OEM parts sales. The suit alleged that because of the October 1999 decision in favor of the plaintiffs, many insurers have ceased writing for aftermarket parts. On Dec.13, 2000, California Superior Court Judge Stephen Kane dismissed the case by ruling that the court could not exercise personal jurisdiction over Avery, who is a Louisiana resident but whose case was heard in Illinois.
Steven D. Connelly et al. vs. Keystone Insurance Co.- This DV case was filed on June 20, 1999, in the State Trial Court of Delaware. The case was litigated along with Randy and Eileen O'Brien et al. vs. Progressive Northern Insurance Co. lawsuit. The court ruled that the O'Brien and Connelly cases "are not quite close enough to be consolidated," but they are similar enough to be litigated together for expedience." On Dec. 18, 2000, the court granted Keystone's motion to dismiss to case. The court's opinion was released for publication on Jan. 12, 2001.
Linda Cook vs. State Farm Mutual Automobile Insurance Co.-This DV case was filed on Jan. 15, 1999 in the Kentucky State Trial Court. At press time, a final decision was still pending.
Cynthia Cooper and Karen Holmes vs. State Farm Automobile Insurance Co. and James Chancellor-This case was filed on June 9, 2000, in the Circuit Court of Grant County, Arkansas. The plaintiffs allege that State Farm violated anti-steering laws when it told them, in two separate incidents, that they could not use the repair shops of their choice.
Maurice Entremont et al. vs. American Central Insurance Co.-The trial court dismissed Entremont's DV suit on March 27, 2000. The case, which was filed on April 10, 2000 in the 19th Judicial District, Parish of East Baton Rouge State Trial Court of Louisiana, is currently on appeal by the plaintiff. American Central Insurance Co. asked the court to consolidate this case with Billy Campbell, et al. vs. Markel American Insurance Co., but the Louisiana First Circuit Court of Appeals denied this request on Jan. 3, 2001.
Brenda Foultz et al. vs. Erie Insurance Co., et al.-This case, which disputes whether the insurer was justified in repairing the vehicle with non-OEM parts, was filed on June 7, 2000, in the Philadelphia County State Trial Court of Pennsylvania.
Bobby J. Graham Sr., Patricia Dianne Marcotte, Dominique Cappo, James Oliver Jr. and Felton Parquet et al. vs. Allstate Property and Casualty Insurance Co., Allstate Insurance Co. and Allstate Indemnity Co.-This DV case was decided in favor of Allstate on May 31, 2000, by the 21st Judicial District Court, Parish of Livingston, State of Louisiana. "...the court finds no language that specifies [or] implies coverage for the 'diminished value' of damaged property," Judge Brenda Bedsole Ricks says in the written judgment. "Nowhere in the policy can the term 'diminished value' be found."
John Gurman vs. Center Auto Body and Liberty Insurance Co.-A Dedham District Court in Massachusetts found in favor of the plaintiff in its Sept. 19, 2000, decision of this non-OEM parts lawsuit. The court held that both the insurer and repair facility violated Massachusetts General Law Chapter 93A, a consumer protection law, because the shop failed to return Gurman's vehicle to pre-loss condition and the insurer did not authorize the use of appropriate parts for the repair.

Charles Hale vs. American Family Mutual Insurance Group d/b/a/ American Standard Insurance Co. of Wisconsin-This DV case was filed on Jan. 11, 2000, in the Iowa State Trial Court. No further information was available.
Hobbs vs. State Farm Mutual Automobile Insurance Co.-This DV case was filed Nov. 2, 1999, in the Illinois State Trial Court. The complaint alleges that the insurance industry founded the Certified Automotive Parts Association (CAPA) as a front to conceal insurers' conduct as well as to deceive policyholders into believing that competitive parts that were allegedly LKQ were being used to satisfy policyholder claims.
Jepson vs. SAFECO Insurance Co. of America d/b/a General Insurance Co. of America-This lawsuit alleges that the insurer refused to pay for inherent DV to the customer's vehicle. The case was filed on Nov. 2, 1999 in Washington State Trial Court.
Emelda Johnson et al. vs. Illinois National Insurance Co.-This is a first-party, class action case that was filed on July 30, 1999, in the Louisiana State Appellate Court. The trial court granted a summary judgment in favor of the insurer on May 23, 2000, finding that the Illinois National policy did not cover DV.
Herman Jones vs. Trustgard Insurance Co.-This complaint alleges that Trustgard failed to pay for the DV that Jones is entitled. The case was filed on Jan. 26, 2000 in the Circuit Court of St. Louis, Missouri.
James Kenger vs. GEICO-The Superior Court of Arizona of Maricopa County ruled in favor of the insurer in a Nov. 16, 1999, summary judgment, stating that there was "a void of evidence" to support the plaintiff's assertion that the non-OEM parts used to repair his vehicle were inferior.
Ricky Kelly et al. vs. Progressive Premier Insurance Co. d/b/a Progressive Insurance Cos.-This aftermarket parts case was filed April 3, 2000, in the Circuit Court of the Third Judicial Circuit in Madison County, Ill. The plaintiffs are seeking class action certification.
Lina and Remigio Lebrilla and Karen and Paul Balfour et al. vs. Farmers Insurance Group, d/b/a Farmers Underwriters Association, Farmers Insurance Exchange and Does 1 through 50-This suit was filed June 15, 2000, in Orange County Superior Court in Santa Ana, Calif., and alleges that Farmers consistently specifies "inferior imitation crash parts that are not of LKQ to OEM parts," and by doing so, it violates the insurers' contract with its policyholders.
Ruth D. Lundy et al. vs. Farmers Group Inc. d/b/a Farmers Underwriters Association, Farmers Insurance Exchange and Illinois Farmers Insurance Co.-This non-OEM parts case was filed in December 1999, in the Circuit Court of the Eighteenth Judicial Court of DuPage County in Wheaton, Ill. The lawsuit was brought against Farmers Insurance Group for allegedly specifying non-OEM crash parts, for failing to specify all necessary repair procedures and for hiding this practice from consumers. At press time, the plaintiffs were seeking class action status.
Lupo vs. Shelter Mutual Insurance Co. & Shelter General Insurance Co.-This first party DV case was filed on Jan. 1, 2000, in Missouri State Trial Court. A request by Shelter to transfer the venue of the case has been granted, and the court proceedings have been transferred to St. Louis County.
Rudine Mabry and Maurice J. Cardenas et al. vs. State Farm Mutual Automobile Insurance Co.-This class action lawsuit was filed in June 2000, in The Superior Court of Muscogee County, State of Georgia. On Dec. 1, 2000 Georgia Superior Court Judge Douglas C. Pullen ruled that State Farm must consider first party inherent DV claims for all Georgia State Farm policyholders. State Farm filed an appeal in January 2001.
Rex T. Morrison et al. vs. Allstate Indemnity-The U.S. District Court for the Middle District of Florida, Jacksonville Division, denied on Sept. 9, 1999 Allstate's motion to dismiss this five-count complaint, which was an alleged breach of contract due to the defendant's failure to pay DV. The case was appealed but then dismissed on Sept. 26, 2000.
Regina Mu��vs. Allstate Insurance Co.-This DV case was found in favor of Allstate, stating that the plaintiff's expectation of reimbursement for DV was unreasonable and the defendant had not breached its contract. On Nov. 15, 1999, the Civil Trial Division, Court of Common Pleas of Philadelphia County in Pennsylvania sustained Allstate's objections to Munoz's request to have this certified as a class action case. This court filed its decision without a published opinion in favor of the insurer on July 3, 2000. The case is currently on appeal.
Michael Murphy, et al. vs. Hanover Insurance Co.-This inherent DV case was filed on May 4, 2000 in the 22nd Judicial Circuit State Trial Court of Missouri. Hanover filed a motion for summary judgment, and the plaintiffs filed a cross motion for summary judgment. However, Judge Michael B. Calvin ruled in favor of the insurer, granting Hanover its request for summary judgment on Nov. 27, 2000.
Randy and Eileen O'Brien, et al. vs. Progressive Northern Insurance Co.-This DV case was filed on Sept. 18, 2000, in the Delaware State Trial Court. It was litigated with Steven D. Connelly et al. vs. Keystone Insurance Co. The court ruled that the O'Brien and Connelly cases "are not quite close enough to be consolidated, but they are similar enough to be litigated together for expedience." On Dec. 18, 2000, the court decided that the plaintiff's request for partial summary judgment was denied. The court's opinion was released for publication on Jan. 12, 2001.
Trenita Oliver vs. SAFECO Insurance Co. of Illinois and SAFECO-This DV case was filed on Oct. 13, 1998 in the Texas State Trial Court, District Court of Harris County Texas, 198th Judicial Court. On May 6, 1999, the court considered SAFECO's motion for summary judgment. However, it denied this request on Aug. 2, 1999.
Steven Peterson, Genyne Greene and Allison Anderson et al. vs. State Farm Mutual Auto Insurance Co.-This DV case was filed on April 27, 1999 in the Illinois State Trial Court, 20th Judicial Circuit Court of St. Clair. However, on Dec. 21, 2000, after a fourth plea for class certification, the request was granted. The case has not yet been heard.
Eric Rebmann vs. Tennessee Farmers Mutual Insurance-This DV case was filed on Nov. 5, 1999 in the Tennessee State Trial Court. A petition for class action certification has been filed.
Pack Brothers Paint and Body Shop Inc. and Ronnie Pack vs. Nationwide Mutual Insurance Co. (a.k.a. Nationwide Insurance Enterprise) and Joe Benkendorf-This case was filed on Feb. 23, 2000 in the North Carolina Superior Court of Gaston County's General Court of Justice. The suit claims that Nationwide purposely tried to interfere with business relationships at Pack Bros. by making false assertions about the repair facility and attempting to steer work away from it.
Suzanne Roth vs. Amica Insurance Co.-This DV and aftermarket parts case was filed on Sept. 23, 1999, in the Massachusetts State Trial Court. The suit alleged that Amica was required to reimburse the vehicle for any DV and that the insurer was not justified in specifying that non-OEM parts be used in returning the car to pre-loss condition. Amica made a motion for summary judgment. Superior Court Justice Patrick J. Brady granted this request on Sept. 3, 2000, with respect to the DV aspect of the case. In a court order dated July 31, 2000, Elizabeth Bowen Donovan, Justice of the Massachusetts Superior Court, denied Amica's motion for summary judgment.
Theresa Rushing vs. American Farm Bureau Federation et al.-This DV case was filed on June 18, 1999, in the Illinois State Trial Court.
George Schwendeman et al. vs. USAA Casualty Insurance Co.-This non-OEM case was filed in 1999 in the Superior Court of Washington for King County, was decided in favor of the insurer. King County Superior Court Judge J. Kathleen Learned also denied class action certification for the case.
Siegle vs. Progressive Insurance Co.-The Circuit Court of the 17th Judicial Circuit in Broward County (Florida) on March 29, 2000, granted Progressive's motion to dismiss the case, citing the Morrison decision (see above case, Rex T. Morrison et. al vs. Allstate Indemnity, for case summary). Siegle alleged that Progressive breached its contract and was unjust for failing to pay for DV. Siegle filed twice for class action status was denied both times. The case was appealed, but the appellate court upheld the circuit court's finding in its final judgment on May 2, 2001.
Lawrence Siggers vs. Texas Farm Bureau Mutual Insurance Co.-This DV case was filed on Oct. 5, 1999, in the Texas State Trial Court. The court is seeking class action certification.
Tammy Snider and Michael Avery et al. vs. State Farm Mutual Automobile Insurance Co.-This class action case, ruled in favor of the plaintiffs, is considered the largest-ever civil award involving the collision repair industry. In the Oct. 4, 1999 ruling, Judge John J. Speroni of the Circuit Court of Williamson County in Marion, Ill., ruled in favor of the plaintiffs. He awarded them nearly $1.2 billion-$456 million in compensatory damages and a $730 million penalty-for State Farm's breach of contract and violation of a consumer fraud law by its requiring the use of non-OEM parts. The court ruled that the use of these parts was inferior in the repairing a vehicle to pre-accident condition.
Paula Spellman et al. vs. Sentry Insurance Automobile Mutual Co.-This DV case was filed on Feb. 25, 2000, in the Missouri State Trial Court. A summary judgment, which dismissed the case, was granted on Dec. 11, 2000, in the State Trial Court in St. Louis County. The motion to transfer venues from the city to the county has been filed.
Robert Steinberg vs. Fireman's Fund Insurance Co.-This DV case was filed on Nov. 1, 1999, in the Texas State Appellate Court. The court granted the plaintiff's motion for summary judgment, stating that the insurer's policy did provide for coverage of DV.
Stern vs. Metropolitan Casualty Insurance Co.-This DV case was filed on Dec. 1, 1999 in the Florida Federal District Court. No further information was available at press time.
Roy Sweeney vs. Integon General Insurance Co.-This non-OEM parts case, filed March 16, 2000, in the Circuit Court of the 17th Judicial Circuit in Broward County, Fla., was dismissed on Nov. 22, 2000, along with the plaintiff's request for class action status. The lawsuit contends that imitation parts are inferior in quality, making a vehicle that is repaired with them unsafe to drive as well as decreasing its value. Florida Judge W. Herbert Moriarity based his decision for this case on the two other Florida cases, Patricia G. Thames, et al. vs. USAA (see below) and Jacques Casas et al. vs. USAA (see above).
Patricia G. Thames et al. vs. USAA-This case, filed March 9, 1998, in the Circuit Court for the Fourth Judicial Circuit in Duval County, Florida, was decided in favor of USAA after Circuit Court Judge Peter L. Dearing said that evidence had "show[n] that [the] plaintiff cannot possibly establish that each and every non-OEM part specified on an estimate by USAA is not of LKQ to each and every part replaced."
Gerard Vieitez et al. vs. Meridian Mutual Insurance Co.-This DV case, filed in an Indiana court on July 23, 1999, was dismissed on March 22, 2000, finding that Meridian's policy language was unambiguous and did not provide for "coverage for loss in value damages."
Lois West vs. Louisiana Farm Bureau Casualty Insurance Co.-This DV case was filed on July 29, 1999 in the Louisiana State Trial Court. The plaintiff is seeking class action certification.