For the second time in as many years, Superior Court Judge Kenneth W. Salinger has denied a motion to amend class certifications in a case involving claims for inherent diminished value (IDV) damages against Safety Insurance Company and The Commerce Insurance Company.
The decision, issued on May 31, 2024, follows a prolonged legal battle and a prior ruling by the Supreme Judicial Court (SJC) that insurers must cover IDV losses if proven under the 2008 Massachusetts automobile insurance policy.
Initial Case Involved Claims For Inherent Diminished Value (IDV) Damages Against Safety & Commerce
The plaintiffs, Jarret McGilloway, Linda Estrella, and Adam Ercolini, initially filed lawsuits in 2017, asserting that Safety and Commerce Insurance companies breached their contracts and engaged in unfair settlement practices by failing to compensate for IDV losses. IDV represents the loss in resale value of a vehicle after it has been damaged in a collision and subsequently repaired.
The SJC ruled in 2021 that the standard Massachusetts automobile insurance policy indeed required insurers to pay for IDV damages if a third-party claimant could prove their vehicle suffered such losses and determine the amount of IDV damages owed. This set the stage for further litigation on whether these claims could be addressed on a class-wide basis.
After the Superior Court found that the 2008 Massachusetts automobile insurance policy property damage section, Part 4, did not cover any loss for IDV, the plaintiffs appealed.
The Supreme Judicial Court accepted the case and ruled that under the 2008 policy form, IDV losses were recoverable losses, if proven, in third-party property damage claims.
The SJC remanded the plaintiffs’ claims to the Superior Court for further proceedings consistent with its decision.
Plaintiffs initially moved to certify classes with over 80,000 IDV claimants
After eighteen months of further litigation, the three plaintiffs moved to certify their classes against the two insurers.
On June 7, 2023, counsel for the plaintiffs and the defendant insurance companies presented their arguments regarding the certification of the proposed classes for inherent diminished value (IDV) claims. See Agency Checklists’ June 13, 2023 article, “Court Asked To Certify Classes Totaling Over 80,000 IDV Claims Against Commerce And Safety.”
The decision was swift. On June 20, 2023, Judge Kenneth W. Salinger issued a detailed 3,500-word opinion denying class certification.
Court Rejects Plaintiff’s Arguments on Class Certification
Undeterred, the plaintiffs amended their complaint to include new expert opinions and revised class definitions. The court, however, remained unconvinced. Rather, the court opined that the motion was simply a request for reconsideration of the prior denial of class certification. The court emphasized that no new circumstances justified revisiting the original ruling and noted that the plaintiffs had not presented any new, substantial evidence.
In addition, Judge Salinger concluded that even if the motions were treated as requests to amend the complaints rather than for reconsideration, they would still be denied due to futility. The court’s prior findings—that liability for IDV must be determined individually—stand.
“Though the Plaintiffs styled their motions as seeking to leave to amend their complaints for a second or third time, in reality the motions are seeking reconsideration as to class certification. The Court will treat the motions as seeking reconsideration and deny them for two reasons. First, Plaintiffs have not shown there is any reason to revisit the Court’s prior ruling. Second, the conclusory expert opinions that they seek to submit are not supported by any analysis, study, data, or evidence of any kind.
In any case, the Court would deny the motions even if it were to treat them as motions to amend, because the proposed amendments would be futile in light of the defects in the expert opinions that they seek to introduce.”
Liability Must Be Determined For “Every Putative Class Member”
In the decision, Judge Salinger also reiterated that IDV claims require individualized assessments. As outlined in the initial denial in the plaintiffs’ first request, the Court denied the plaintiffs’ motion for class certification on the “predominance” issue. To certify a class, the Court said that it must find “the questions of law or fact common to the members of the class predominate over any questions affecting only individual members.”
Since each vehicle’s damage and repair quality, prior accident history, and market conditions must be analyzed to determine whether and to what extent it suffered IDV, this complexity precludes the possibility of class-wide adjudication.
As such, the Judge found that individualized proof, analysis, and findings would be required to determine whether any putative class member’s vehicle suffered some amount of IDV and, if so, how much.
