In the protracted legal battle pertaining to the recovery of inherent diminished value (IDV) damages under Part Four of the standard Massachusetts 2008 automobile policy form, the two respective litigants against Commerce Insurance and Safety Insurance requested the Business Litigation Session of the Superior Court on June 7, 2023, to certify two classes.
The classes the Plaintiffs are asking the Court to allow them to represent would include the following:
All individual third-party claimants who:
A. Suffered a property damage loss as a result of a Commerce/Safety Insured or Commerce/Safety Insured vehicle driver.
B. Safety determined that its insured (or insured vehicle driver) was/were legally liable for the property damage to the claimant’s automobile.
C. Commerce/Safety has already paid the third-party property damage claim, either to the claimant, the repair shop, or subrogating insurer (or other person or entity).
D. The claimant’s vehicle suffered damage at or in excess of $500.00 as a result of the collision.
Supposedly classes of 50,000 and 30,000 unpaid IDV claims involved in these lawsuits
According to the Plaintiffs, discovery showed that during the relevant time period for the class action suit, Commerce processed 472,669 third-party automobile property damage claims. Of these claims, the Commerce Plaintiff has asserted, more than 50,000 involved third-party property damage claims where Commerce determined its insureds were liable but for which Commerce did not pay any inherent diminished value damages.
Likewise, the discovery allegedly showed that Safety processed 33,172 third-party automobile property damage claims, during which Safety determined its insured was liable for the loss.
The Supreme Judicial Court ruled in 2021 that IDV damages were recoverable on third-party auto property damage claims
The Plaintiffs’ lawsuits claiming that inherent diminished value damages were recoverable under the 2008 addition of the Massachusetts standard policy were filed in 2017 against Safety and in 2018 against Commerce. The lawsuits were consolidated and proceeded to summary judgment. The Superior Court ruled against the Plaintiffs, and they appealed.
The Supreme Judicial Court reversed the Superior Court and found that IDV damages were recoverable under the 2008 version of the standard Massachusetts automobile policy. See Agency Checklists’ article of October 26, 2021, “Supreme Court Rules Auto Policies Cover Vehicles’ Post-Repair Losses of Value.”
The final order of the Supreme Judicial Court returned the Plaintiffs’ cases to the Business Litigation Session of the Superior Court for the Plaintiffs to prove their damages.
After extensive discovery, the critical factor for the Plaintiffs and their counsel is whether they can establish their lawsuits as class actions.
The Plaintiffs’ Motion to certify classes of IDV claimants
In order to certify these lawsuits as class actions, the Business Litigation Session judge will have to find the proposed classes fulfill the following conditions:
- The proposed class is sufficiently numerous to make the joinder of all parties impractical.
- There are common questions of law and fact among the members of the proposed class.
- The claim of the named plaintiff representative is typical of the claims of the proposed class’s members; and
- The named plaintiff will fairly and adequately represent the interests of the class.
The Plaintiffs have the burden of satisfying the Court that these factors apply and warrant the Court certifying the requested classes.
Both Commerce and Safety have presented strong arguments in their opposition to the Plaintiffs satisfying these class action requirements.
Agency Checklists will keep its readers apprised of these important consolidated cases.
Owen Gallagher
Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists
Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.
Connect with me directly, by calling me at 617-598-3801.
