Civil Practice – Class Certification – Breach of Contract

Because Plaintiff’s claim and the claims of all the purported class members are essentially individualized claims requiring mini trials as to each, common questions do not predominate and that therefore the district court abused its discretion in certifying the class.

We reversed the district court’s certification order.

Plaintiff commenced this action against Defendant insurance company, alleging that Defendant breached the insurance policy it had issued to her by paying her “less than the actual cash value” of her vehicle, which had been declared a total loss following a collision. She claimed that Defendant improperly reduced its appraisal of her vehicle’s value by applying a “Projected Sold Adjustment,” which was based on the predicted sales prices of vehicles like hers and applied when actual sales prices were unavailable. Plaintiff purported to represent a class of all persons in South Carolina who were similarly situated insofar as Defendant decreased their compensation for their totaled vehicles by applying Projected Sold Adjustments. The district court certified the class, and Defendant sought interlocutory review of the district court’s order under Federal Rule of Civil Procedure 23(f).

Defendant contended first that Plaintiff lacks standing to challenge its use of Projected Sold Adjustments because she has failed to show, given her particular circumstances, that Defendant’s use of such adjustments caused her to suffer an injury. We agreed. Because Plaintiff has failed to show that Defendant’s use of Projected Sold Adjustments caused her any injury, she lacks standing. And without standing, her claim cannot be typical of the class members’ claims.

Defendant also contended that there is no common issue of law or fact that predominates to satisfy the respective requirements of Rules 23(a)(2) and 23(b)(3). We agreed with Defendant that common questions of law or fact do not predominate in this case. This is, at bottom, a straightforward breach of contract case where Plaintiff contended that Defendant failed to pay her the actual cash value of her totaled vehicle. And the district court recognized this to be the nature of the case, noting, “Plaintiff alleges that Defendant breached her insurance policy by paying less than the actual cash value (‘ACV’) of her totaled 2020 Chevrolet Equinox.” To prove the breach, Plaintiff and every purported class member would have to show that the market value of his or her vehicle — with all its unique characteristics — was greater than the amount Defendant paid. This totally individualized process precludes class certification. Because Plaintiff’s claim and the claims of all the purported class members are essentially individualized claims requiring mini trials as to each, we concluded that common questions do not predominate and that therefore the district court abused its discretion in certifying the class.

Reversed.

Freeman v. Progressive Direct Insurance Company (Lawyers’ Weekly No. 001-157-25, 27 pp.) (Paul V. Niemeyer, J.) Appealed from the U.S. District Court for the District of South Carolina, at Aiken (Donald C. Coggins, Jr., J.) ARGUED: Jeffrey Cashdan, KING & SPALDING LLP, Atlanta, Georgia, for Appellant. Jacob Lawrence Phillips, JACOBSON PHILLIPS PLLC, Winter Park, Florida, for Appellee. ON BRIEF: Paul Alessio Mezzina, Amy R. Upshaw, Christine M. Carletta, Washington, D.C., Julia C. Barrett, Austin, Texas, Nicole Bronnimann, Houston, Texas, Zachary A. McEntyre, James Matthew Brigman, Allison Hill White, Erin Munger, KING & SPALDING LLP, Atlanta, Georgia, for Appellant. U.S. Court of Appeals for the Fourth Circuit