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

More documents

Recommendations

Info

See, e.g., Jones v. State Farm Mut. Auto. Ins. Co., 289 Ill.App.3d 903, 918 (1st Dist. 1997); Allen v. State Farm Mut. Auto. Ins. Co., 214 Ill.App.3d 729, 738-39 (1st Dist. 1991). The circuit court did not dispute this basic proposition, but nevertheless ignored all variations in state laws on the ground that contract law was consistent nationwide and that there was therefore no “true conflict” requiring application of other states’ laws. That decision was wrong as a matter of law. The relevant state laws differ in a number of important respects which made it impossible to achieve a single, uniform interpretation of even facially identical State Farm policies. For example, at least 13 states have specific statutes or regulations governing the key legal question raised by this case: what quality standards must be met before an insurance company may properly specify a non-OEM part in a repair estimate. See note 3, supra. Those statutory provisions are controlling for repairs ordered in those states, providing a statutory gloss, which differs from state to state, on the meaning of both “like kind and quality” and “pre-loss condition.” See Boyd v. Madison Mut. Ins. Co., 146 Ill.App.3d 420, 424-25 (5th Dist. 1986) (“As with any other type of contract, statutory provisions applicable to insurance policies which are in effect at the time the policy is issued or renewed are treated as part of the agreement”), aff’d, 116 Ill.2d 305 (1987). In addition, apart from statutory quality standards, a large number of states expressly allow insurance companies to specify non-OEM parts subject to certain disclosure and/or consent requirements. See notes 1-4, supra. As noted above, two states, Massachusetts and Hawaii, have sought to hold down the cost of insurance by effectively requiring an insurance company to specify non-OEM parts when “like kind and quality” parts are available. See -56-
page 7, supra. All of these statutes bear directly on State Farm’s contractual obligations in particular states. Thus, for example, if a Massachusetts policyholder had sued State Farm for breach of contract in Massachusetts, State Farm undoubtedly would have been entitled to have the Massachusetts statute considered in adjudicating the claim. That this case was brought as a class action should not have altered the standards under which State Farm’s conduct with respect to a Massachusetts policyholder was judged. Yet it clearly did, as the circuit court went so far as to bar State Farm from even mentioning the existence of state statutes governing the specification of non-OEM parts. State laws interpreting terms like “pre-loss condition” and “like kind and quality” also vary. For example, in several states, courts have expressly rejected the argument that an insurance company is required to restore vehicles to their pre-loss value, holding that the only obligation is to restore vehicles to their physical condition prior to the accident. 27/ Yet in this case, plaintiffs were permitted to argue that State Farm had breached its contracts with all class members even if non-OEM parts restored their vehicles to pre-loss condition because those parts supposedly diminished the market value of the vehicles. See R. 12861 (even if non-OEM parts were “good,” “it doesn’t matter because the perception is going to diminish the value of a vehicle. And therefore, these parts are not like kind and quality, simply because of the perception, for that reason alone”). Plaintiffs never would have been 27/ See Johnson v. State Farm Mut. Auto. Ins. Co., 754 P.2d 330, 331 (Ariz. App. 1988); Great Tex. County Mut. Ins. Co. v. Lewis, 979 S.W.2d 72, 75 (Tex. App. 1998); Ray v. Farmers Ins. Exch., 246 Cal.Rptr. 593, 596 (Ct. App. 1988); Bickel v. Nationwide Mut. Ins. Co., 143 S.E.2d 903, 906 (Va. 1965); General Accident Fire & Life Assurance Corp. v. Judd, 400 S.W.2d 685, 687 (Ky. 1966); Roth v. Amica Mut. Ins. Co., Civ. No. 98-3551, slip. op. at 2-3 (Mass. Super. Ct. Sept. 3, 1999). -57-
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 and 30: OEM parts. 5/ At least two states
Page 31 and 32: paid the difference in cost out of
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: value” of “parts at the time of
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
show all

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

Create successful ePaper yourself

Delete template?

Save as template?