No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

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and writes an estimate for the repair costs, specifying the parts it will pay for. To be specified on a repair estimate, a non-OEM part had to meet State Farm’s criteria, R. 9286- 89, which required coverage by a warranty, R. 8454-55. In addition, beginning in 1992, State Farm’s policy was to designate only non-OEM parts certified by the Certified Automotive Parts Association (“CAPA”) whenever the category of part involved was subject to CAPA certification. R. 8433-34; DX 209. 6/ State Farm also worked with bodyshops to prevent any inferior non-OEM parts from being installed on insured vehicles. Plaintiffs’ own bodyshop witnesses and State Farm’s witnesses agreed that State Farm routinely authorized and paid for an OEM part if the bodyshop could not obtain or had found problems with a non-OEM part State Farm specified in the repair estimate. 7/ Bodyshops also sometimes installed OEM parts without passing on the cost to either State Farm or the policyholder. 8/ In some cases, policyholders (including two of the class representatives who testified at trial) decided they wanted OEM parts and 6/ CAPA was established and funded by the major insurance companies, in cooperation with consumer advocates, on the model of Underwriters Laboratories to certify non-OEM parts that meet certain quality standards. R. 9771-72. 7/ For example, plaintiffs’ witness Francis Ingaharro testified that State Farm “honored its contract” every time he brought a defective non-OEM part to its attention. R. 6655-56. Plaintiffs’ witness Dave Beyers testified that he would simply fax State Farm a form, and it would approve an OEM part. R. 6090. Plaintiffs’ witness Larry Visser stated that State Farm would always authorize an OEM part if the non-OEM part did not fit. R. 5938-39, 5949. Plaintiffs’ witnesses Shane Kelley, Michael Berounsky, and Loren Lowe agreed, R. 4513-15, 4525, 7047, 7102, as did State Farm’s bodyshop witnesses, R. 8007, 8063, 8109, 8291, 8320, 8444, 8471, 8510, 9602-03, 10346-47. 8/ Sometimes bodyshops were able to obtain OEM parts from their suppliers at lower than list prices and installed them for the same price State Farm had agreed to pay, C. 15712- 13; bodyshops also sometimes absorbed any difference in cost, R. 4529-30. -8-
paid the difference in cost out of their own pockets. R. 6117, 6191. Thus, the fact that a non-OEM part was designated in a State Farm repair estimate does not mean that it was installed on an insured’s vehicle. Although State Farm’s computerized records indicate whether non-OEM parts were specified on the estimate, they do not show whether those parts were actually installed by the bodyshop or, if not, who paid for the installation of an OEM part. R. 10211. Whenever State Farm specified a non-OEM part on an estimate, it disclosed to the insured that the estimate included a part “not made by the original equipment manufacturer.” DX 2025 (red stamp placed on estimate); DX 418 (disclosure form); DX 397A (disclosure brochure). As the circuit court acknowledged, “[w]hen [non-OEM] parts are used on an estimate, the policyholder is given a State Farm brochure discussing the use of non-OEM parts . . . . The estimate is then stamped indicating the use of non-OEM parts.” A. 28. Since 1990, State Farm has offered its policyholders a written Guarantee of satisfaction, promising to replace or repair — at no cost to the insured — any State Farmspecified non-OEM part that does not satisfy the policyholder. See, e.g., R. 8464-68; DX 859A. The Guarantee in most cases runs for as long as the policyholder owns the vehicle and can be invoked at any time if the policyholder decides, in his or her sole discretion, that the non-OEM part is not satisfactory. See DX 320; see also R. 9289, 10334-35. 5. Prior Litigation Regarding Non-OEM Parts. Over the past few years, several putative class action suits have been filed against various insurance companies challenging their specification of non-OEM parts. State Farm settled two cases; in each, only a minute fraction of the class claimed any damages from non-OEM parts. See Ashenfelter Affidavit, -9-
Page 1 and 2: No. 5-99-0830 IN THE APPELLATE COUR
Page 3 and 4: Charles Hester Enters. v. Illinois
Page 5 and 6: In re Fibreboard Corp., 893 F.2d 70
Page 7 and 8: State v. Piedmont Funding Corp., 38
Page 9 and 10: Hansberry v. Lee, 311 U.S. 32 (1940
Page 11 and 12: 1. Plaintiffs’ Body Shop Witnesse
Page 13 and 14: People v. Clayton, 302 Ill.App.3d 2
Page 15 and 16: VPHI, Inc. v. National Educ. Traini
Page 17 and 18: Okada v. MGIC Indem. Corp., 823 F.2
Page 19 and 20: Zekman v. Direct Am. Marketers, Inc
Page 21 and 22: Malooley v. Alice, 251 Ill.App.3d 5
Page 23 and 24: NATURE OF THE CASE This is an appea
Page 25 and 26: STATUTES INVOLVED Relevant portions
Page 27 and 28: to its “pre-loss condition.” DX
Page 29: OEM parts. 5/ At least two states
Page 33 and 34: epair estimate specified only OEM p
Page 35 and 36: potential class members whose names
Page 37 and 38: member’s vehicle other than those
Page 39 and 40: William Anderton, who had previousl
Page 41 and 42: categorically inferior and, in fact
Page 43 and 44: specified on their repair estimates
Page 45 and 46: Second, plaintiffs sought “instal
Page 47 and 48: parts] are inferior.” R. 12539 (
Page 49 and 50: had an adequate remedy at law if St
Page 51 and 52: loss condition. Instead of requirin
Page 53 and 54: ARGUMENT I. Class Certification Vio
Page 55 and 56: members.” Slimack v. Country Life
Page 57 and 58: of evidence State Farm would be ent
Page 59 and 60: that are incongruous with the effic
Page 61 and 62: fenders to its pre-loss condition.
Page 63 and 64: a result of Allstate’s specificat
Page 65 and 66: insurance regulators and consumer a
Page 67 and 68: have been the overwhelming predomin
Page 69 and 70: some class members and the issue of
Page 71 and 72: not sooner, that plaintiffs could n
Page 73 and 74: explained above, class members who
Page 75 and 76: Even if the court had been right in
Page 77 and 78: value” of “parts at the time of
Page 79 and 80: page 7, supra. All of these statute
Page 81 and 82:
(7th Cir. 1995) (decertifying class
Page 83 and 84:
As the circuit court itself recogni
Page 85 and 86:
the same shortcut, arguing — just
Page 87 and 88:
epresentatives who appeared at tria
Page 89 and 90:
— was injured by the alleged dece
Page 91 and 92:
Litig., 182 F.R.D. at 225. Basic fa
Page 93 and 94:
Meineke’s continued financial via
Page 95 and 96:
this decision, plaintiffs were excu
Page 97 and 98:
corresponding OEM part. R. 7169. In
Page 99 and 100:
Mathur’s testimony was particular
Page 101 and 102:
end of the day, Mathur conceded tha
Page 103 and 104:
Zimny, 256 Ill.App.3d 386, 390-91 (
Page 105 and 106:
the jury was focused on the wrong i
Page 107 and 108:
to its pre-loss condition.” R. 12
Page 109 and 110:
quality of non-OEM parts. See Baltu
Page 111 and 112:
which is not surprising because the
Page 113 and 114:
In this case, plaintiffs’ experts
Page 115 and 116:
Bender could not swear that the non
Page 117 and 118:
OEM part construction “had some d
Page 119 and 120:
theory, even non-OEM parts that are
Page 121 and 122:
of his training or expertise”). P
Page 123 and 124:
eflected a policy of “discriminat
Page 125 and 126:
“speak up for justice.” R. 1301
Page 127 and 128:
12984-85. The perversion of ostensi
Page 129 and 130:
Polywheels company makes both the O
Page 131 and 132:
parts — was simply a made-for-lit
Page 133 and 134:
In contrast, each of the 47 other s
Page 135 and 136:
occurred outside Illinois. 51/ In t
Page 137 and 138:
laws of the State where the policy
Page 139 and 140:
This Court should follow the weight
Page 141 and 142:
other states, Illinois cannot apply
Page 143 and 144:
state’s law when it is not within
Page 145 and 146:
headquartered in Michigan); Endo, 1
Page 147 and 148:
for this Court to alter that author
Page 149 and 150:
y using parts of like kind and qual
Page 151 and 152:
plaintiffs’ failure to identify a
Page 153 and 154:
percentage of the class (New York a
Page 155 and 156:
committing fraud: if all non-OEM pa
Page 157 and 158:
specification damages they had soug
Page 159 and 160:
A. It Is Unconstitutional To Punish
Page 161 and 162:
that will subject him to punishment
Page 163 and 164:
fact benefitted from access to non-
Page 165 and 166:
deterrence and therefore must be va
Page 167 and 168:
517 U.S. at 576. This case is not i
Page 169 and 170:
either higher premiums or the incre
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No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

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