SUSAN M. CHEHARDY, Judge.
This is a class action lawsuit that comes before us on appeal of the trial court's denial of the plaintiffs motion to alter the class definition. We affirm and remand for further proceedings.
On July 1, 2002, Robert Defraites' vehicle was damaged in an accident with a vehicle owned by Oasis Horticultural Services, Inc., operated by an Oasis employee. The Oasis vehicle was insured by State Farm Mutual Automobile Insurance Company. Defraites filed suit on August 2, 2002, alleging that his vehicle sustained damage not only in cost of repairs, but also in diminished value attributable to the vehicle's involvement in the accident, and that State Farm paid for the costs to repair his vehicle, but failed to pay for the vehicle's diminished value.
Defraites alleged he made a claim for diminution in value of the vehicle, but State Farm failed to initiate loss adjustment for this item of damages within fourteen days of the notification of loss. Defraites
Defraites requested that the suit be certified as a class action on behalf of all similarly situated persons who have made or will henceforth make third-party automobile property damage claims against State Farm and its insureds for damages sustained, in which State Farm failed to pay losses for diminution in value. He named as defendants Oasis, State Farm, and the class of persons insured through State Farm and situated similarly to Oasis, but yet to be identified. His proposed defendant class was to be comprised of the past and future State Farm insureds who are targets of the vehicular property damage claims asserted by members of the putative plaintiffs' class.
The district court initially certified the matter as a class action. On a prior appeal, however, this Court reversed the certification and remanded the matter for further proceedings. Defraites v. State Farm Mut. Auto. Ins. Co., 03-1081 (La.App. 5 Cir. 1/27/04), 864 So.2d 254, writ denied, 2004-0460 (La.3/12/04), 869 So.2d 832 (hereafter "Defraites I"). In Defraites I we determined that Defraites could not use the class action procedure to seek injunctive and declaratory relief and statutory penalties because the nature of this action does not meet the requirements of La. C.C.P. art. 591(B)(2).
Thereafter Defraites amended his petition, seeking to certify a class to seek injunctive and declaratory relief without a claim for statutory penalties.
State Farm filed a motion to dismiss and also filed an exception of res judicata, citing law-of-the-case doctrine. The trial court denied both the motion to dismiss and the exception of res judicata. State Farm sought supervisory review, but this Court denied the writ application, as did the supreme court. Defraites v. State Farm Mut. Auto. Ins. Co., 04-1479 (La. App. 5 Cir. 1/13/05) (unpublished writ disposition), writ denied, 2005-0381 (La.4/29/05), 901 So.2d 1065 and 901 So.2d 1066 (hereafter "Defraites II").
The trial court thereafter denied re-certification of the class on the amended petition. Defraites sought review, but the writ application was denied. Defraites v. State Farm Mut. Auto. Ins. Co., 07-261 (La. App. 5 Cir. 5/7/07) (unpublished writ disposition), writ denied, 2007-1196 (La.10/5/07), 964 So.2d 939 (hereafter "Defraites III").
Defraites subsequently filed a Motion to Alter the Constituency of the Plaintiff Class and Issues to Be Decided on a Class Wide Basis (hereafter referred to as "Motion to Alter"). Defraites' Motion to Alter seeks to re-certify one plaintiff class for declaratory and injunctive relief under La. C.C.P. art. 591(B)(2), based on violation of La. R.S. 22:1892(A)(4) caused by State Farm's alleged methodical failure to make written offers to settle third-party diminished value property damage claims within
According to Defraites, "[t]he Motion to Alter raises substantive issues as to whether State Farm's practices regarding diminished value claims violates La. R.S. 22:1892 A(4), only. Class wide relief is restricted to written offers to settle. Class claims for La. R.S. 22:1892 A(3) initiation of loss adjustment of diminished value and for La. R.S. 22:1973 C statutory penalties as well as compensatory damages are removed." Defraites asserts these limitations are sufficient to make the altered constituency an appropriate class.
Defraites seeks a declaration that State Farm has a legal duty to adjust for the diminished value of a vehicle once State Farm has been provided notice of a loss claim, i.e., a cost-of-repair estimate for each putative class member. Defraites relies on Louisiana law providing that diminution in value of a vehicle involved in an accident is an element of recoverable damages if sufficiently established.
The trial court rendered judgment denying the Motion to Alter as follows:
That ruling is the subject of this appeal.
Defraites assigns the following as errors: (1) the trial court abused its discretion in denying class certification because it resulted from a misapplication of La. R.S. 22:1892(A) and was an unwarranted departure from the guidance offered in
Defraites argues the Motion to Alter raises substantive issues as to whether State Farm's practices regarding diminished value claims violates La. R.S. 22:1892(A)(4) only. He asserts that class-wide relief is restricted to written offers by State Farm to settle, while class claims for initiation of loss adjustment of diminished value and for statutory penalties as well as compensatory damages are removed.
In opposition State Farm asserts the judgment must be affirmed because there is no abuse of discretion. State Farm contends that Defraites' substantive claims, underlying premise of the class, and demands for relief remain unchanged and that Defraites I is controlling. Further, State Farm argues, not only the two district court judges who have made rulings, but also this Court, have found Defraites' claims improper for class certification, because the putative plaintiffs' class does not meet the requirements of La. C.C.P. arts. 591(A) and 591(B)(2).
The substantive statute under which Defraites now makes his claims is La. R.S. 22:1892, which governs payment and adjustment of personal vehicle damage claims. Specifically, La. R.S. 22:1892(A)(4) states, "All insurers shall make a written offer to settle any property damage claim, including a third-party claim, within thirty days after receipt of satisfactory proofs of loss of that claim." He no longer asserts class claims under La. R.S. 22:1973,
The substantive claims are not before us on this appeal, except as they relate to the suitability of the claims for class action.
The trial court's certification of a class action is subject to a bifurcated standard of review: The factual findings are reviewed under the manifest error/clearly wrong standard, but the judgment on whether or not to certify the class is reviewed by the abuse of discretion standard. Oubre, 07-66 at 6, 961 So.2d at 508.
Class action procedure in Louisiana is governed by La. C.C.P. art. 591, et seq. La. C.C.P. art. 591 provides:
In order to obtain class certification, a plaintiff must meet all of the requirements of La. C.C.P. art. 591(A)— namely, numerosity, commonality, typicality, adequacy of representation, and an objectively definable class—and also satisfy one of the subsections of Article 591(B). Oubre, 07-66 at p. 6, 961 So.2d at 508. The burden of establishing that the statutory criteria are met falls on the party seeking to maintain the action as a class action. Id.
A trial court has great discretion in deciding whether to certify a class, and its decision will not be overturned absent manifest error. Defraites I, 03-1081 at p. 6, 864 So.2d at 259.
Defraites' first assignment is that the trial court misapplied La. R.S. 22:1892(A) and departed from prior rulings in this case. He contends State Farm unlawfully refuses to consider diminished value as part of a property damage claim, even after receiving satisfactory proof of a diminished value loss, unless the claimant expressly requests diminished value. He asserts the requirement of La. R.S. 22:1892(A)(3) regarding the insurer's duty to initiate loss adjustment of a property damage claim within a certain number of days after notification of loss refers to the entire claim resulting from a loss-causing event. He contends,
The question is whether Defraites' proposed "altered" class definition presented any facts or law that would warrant a result different from the prior class denial decisions. We find no basis to overrule the district court's decision.
Shaffer v. Stewart Const. Co., Inc., 03-971, pp. 7-8 (La.App. 5 Cir. 1/13/04), 865 So.2d 213, 218. We find the law of the case principal is applicable here with respect to the effect of Defraites I.
In each of the proceedings, Defraites has alleged that the cost of repair estimate contained in State Farm's files constitutes sufficient proof of loss of third-party diminished value. In each of the proceedings, Defraites has demanded a declaratory judgment requiring State Farm to make an automatic offer of settlement for non-repair-related diminished value upon receipt of the cost of repair estimate. On remand after the first appeal, Defraites tried to escape the Defraites I effects by dropping the claim for statutory damages. He did not, however, alter the substantive allegations. Further, the Defraites I decision had already found that the claims for declaratory and injunctive relief could not satisfy the requirements of La. C.C.P. art. 591(B)(2).
Similarly, Defraites' Motion to Alter, which removed the request for class-wide relief under La. R.S. 22:1892(A)(3) and instead pursued relief only under La. R.S. 22:1892(A)(4), does not alter the jurisprudence or invalidate the holding in Defraites I. The proposed alteration does not affect the prior holdings that the claim for relief under paragraph (A)(4) does not meet the tests for class certification.
The proposed altered definition does not change the determination that third-party diminished value claims require individualized evaluation and proof. The issue whether proof of loss is sufficient to trigger duties under La. R.S. 22:1892(A)(4) requires individualized, fact-based assessments. As before, there are too many individualized variables in a claim for diminution of value in an automobile accident case to make the action appropriate for class certification.
Defraites' reliance on Chalona v. La. Citizens Prop. Ins. Corp., 08-257 (La.App. 4 Cir. 6/11/08), 3 So.3d 494, 503, and Oubre v. Louisiana Citizens Fair Plan, 07-66 (La.App. 5 Cir. 5/29/07), 961 So.2d 504, is misplaced. Chalona is distinguishable because the putative class members were first-party insureds who asserted claims for hurricane damages. No questions of fault existed, the damages to all putative class members allegedly stemmed from a single catastrophic event, and the date of loss was the same for all claims. In contrast, here Defraites seeks to aggregate claims for vehicles that have different ages, types, pre-accident conditions, and severity of accident damage that occurred on different dates, at different locations, under different conditions, and some of which involve issues of fault. Further, here the proposed class would include claimants who were paid the estimated cost of repair but who never requested payment for diminished value. In Oubre, like Chalona, the putative claim members were first-party insureds, with hurricane claims.
Defraites provided no new factual evidence on the motion to alter that refutes Defraites I's conclusion that State Farm
Despite the amendment that removes class claims for statutory penalties and for compensatory damages, we find the ruling in Defraites I is controlling.
In his second assignment, Defraites asserts the trial court abused its discretion in failing to find that all the requirements of La. C.C.P. art. 591(A) are satisfied, and that State Farm's violation of La. R.S. 22:1892(A) qualifies as a refusal to act on grounds applicable to the entire class.
A March 22, 2007 ruling by a prior judge on this case, Judge Ross LaDart, addressed these issues individually in denying Defraites' Second Motion to Certify Action as a Class Action and Motion to Recognize Original Plaintiff Class. This Court and the supreme court denied Defraites' application for supervisory writs. Defraites III, supra.
The March 22, 2007 ruling held that the proposed class definition failed to satisfy the four of the five requirements of La. C.C.P. 591(A)—specifically, the requirements for commonality, typicality, adequacy of representation, and an objectively definable class.
Defraites argues that these requirements are satisfied, as follows:
We find these issues are still within the rulings in Defraites I, supra, in which we stated:
Defraites I, 03-1081 at pp. 11-13, 864 So.2d at 261-262.
Conrad v. Lamarque Ford, Inc., 08-673, p. 20, (La.App. 5 Cir. 5/12/09), 13 So.3d 1154, 1166, writ denied, 2009-1819 (La.11/6/09), 21 So.3d 310.
Here, however, Defraites is not an adequate class member because the evidence showed that his claim was settled; he repaired his car for less than the amount paid in settlement; and he subsequently sold the car to a dealer. The dealer testified that the price paid for the vehicle was not reduced because of the vehicle's having been in an accident; the repairs were considered to sufficiently restore the vehicle. Thus, State Farm would have defenses specific to Defraites' individual claim that would make Defraites an inadequate class representative.
Defraites contends his altered definition provides a sufficient basis to determine the scope of the proposed class and propriety of permitting maintenance of the class. The definition is as follows:
Because of the nature of the underlying substantive claims, even to determine correct membership, the district court would have to make a series of determinations about liability, damages, and statutory compliance by reviewing thousands of claim files. Thus, we find that here to the proposed "altered" class is not readily definable.
Defraites argues that Article 591(B)(2) certification is appropriate because its requirements are met when the primary relief sought is declaratory or injunctive, and the class as a whole is generally affected by a practice of the opposing party, citing Bolin v. Sears, Roebuck and Co., 231 F.3d 970, 957 (5th Cir.2000). Defraites asserts the altered class satisfies the both prongs of the test because (1) the only class-wide relief presently sought is declaratory and injunctive relief, and the amended petition unequivocally excludes all class-wide claims for monetary damages; (2) the common injury suffered by Defraites' class as a whole is State Farm's systemic practice of refusing to recognize its repair estimates are satisfactory proof of loss for diminished value and its attendant failure to act as mandated by La. R.S. 22:1892(A)(4).
Defraites argues that all the class-wide relief sought here is provided by La. R.S. 22:1892(A)(4), and does not focus on varying circumstances of each claimant or the merits of each claim. He states, "State
Defraites states that even after receiving "notice of the entire property damage claim and after being provided with sufficient information to evaluate diminished value losses, State Farm's policy is to completely avoid discussion of diminished value until a claimant makes an express request for diminished value." Defraites cites the testimony of State Farm adjusters taken prior to the first appeal to the effect that "State Farm does not disclose diminished value losses to third party claimants because `... it is not in the interest and benefit of our policy holder for us to advise a third-party claimant about potential claims.'" (Emphasis in original.)
Defraites argues that State Farm's practice is illogical because there are no "potential claims" to hide; he asserts, "Upon receipt of satisfactory proof of loss for each element of property damage (here diminished value), the statutory time period to make written offer to settle commences without further action by the claimant." Defraites contends that State Farm's "universal failure to adequately train Louisiana adjusters to recognize and adjust diminished value makes appropriate the request for final injunctive relief and corresponding declaratory relief with respect to the class as a whole, pursuant to La. C.C.P. art. 591(B)(2)."
We find there is no evidence that State Farm has failed to act toward the putative class members for essentially the same reason:
Defraites I, 03-1081 at p. 5, 864 So.2d at 262. Accordingly, the proposed altered class does not satisfy La. C.C.P. art. 591(B)(2).
Considering the above, we find no basis on which to change the trial court's decision.
For the foregoing reasons, the judgment is affirmed and the matter is remanded for further proceedings. Costs of this appeal are assessed against the plaintiff, Robert Defraites.
WICKER, J., concurring with reasons.
WICKER, J. concurring with reasons.
I agree with the majority that Defraites failed to escape the Defraites I effects. However, I respectfully concur with the majority's reasons in the following respects:
First, the majority finds that typicality is not met because the court must make individualized fact determinations, including whether the State Farm insured was at fault in the accident—one of the factors cited in Defraites I as requiring individualized assessments. Defraites I, 03-1081 at 12, 864 So.2d at 262. I disagree with the majority's suggestion that all of the issues herein were within the rulings of Defraites I. In particular, Defraites has now defined
"The test for typicality, like commonality, is not demanding. It satisfies typicality if the representative plaintiffs' claims arise out of the same event or course of conduct as the class members' claims and are based on the same legal theory." Conrad v. Lamarque Ford, Inc., 08-673 (La. App. 5 Cir. 5/12/09), 13 So.3d 1154, writ denied, 09-1819 (La.11/6/09), 21 So.3d 310 (citations omitted). Even in light of the non-demanding standard and Defraites's attempt to escape the need for individualized fact-intensive determinations of liability (as to the fault of the accident), the overriding issues remain the same as in Defraites I—whether non-repair related diminished value is presumed and whether State Farm has a statutory obligation to initiate loss adjustment for such alleged diminished value and offer settlement based on a repair estimate.
Defraites asserts that the putative class is no longer relying on any presumption, however, at the same time Defraites states that the statute is automatically triggered when an insurer receives proof of a claim for each plaintiffs property damage loss. Thus, despite Defraites's assertions to the contrary, the putative plaintiffs are still attempting to apply a presumption.
The paramount substantive issues in the present case are governed by the rulings in Defraites I. In order to avoid fact-based-intensive individualized assessments, there must be a presumption of non-repair related diminished value as well as a statutory obligation on State Farm's part to initiate non-repair related diminished value loss adjustment based on a repair estimate.
In Defraites I, the court explained that Louisiana statutory authority imposes no requirement that State Farm make an offer of diminution in value to third party claimants where such a claim is not raised by the claimant. 03-1081 at 11, 864 So.2d at 261. The court further noted that there was nothing in the statute which required the insurer to make an offer for an item of damages which was neither claimed nor factually supported based on the evidence. Id., 03-1081 at 11, n. 1, 864 So.2d at 261, n. 1. The court held: "Claims for diminution in value ... must be assessed on an individual basis." Id.
There is no inherent non-repair related diminution of value. Rather, a fact-intensive and individualized inquiry must be made. Determining whether there is such diminished value would require an individual assessment of each class member's case. Thus, none of these individual accidents are "typical."
Second, the majority finds that the adequacy requirement was not met. In doing so, the majority concludes that the class representative's claims are widely divergent from those of the putative plaintiffs. I agree. However, I write separately to emphasize that unlike the proposed altered class, Mr. Defraites asked for diminished value as an item of alleged damages.
The test often used for adequate representation consists of three elements: (1) the chosen class representatives cannot have antagonistic or conflicting claims with other members of the class; (2) the named representatives must have a sufficient interest in the outcome to insure vigorous advocacy; and (3) counsel for the named plaintiffs must be competent, experienced,
Because Mr. Defraites has no interest in the requested injunction and declaratory relief, he lacks a sufficient interest in the outcome to insure vigorous advocacy. Thus, I find no manifest error or abuse of discretion in the trial court's denial of certification.
