A recent Florida Supreme Court decision addressed class certification in a case involving insurance premium finance agreements, and highlighted several important issues. 

In Sosa v. Safeway Premium Finance Co., No. SC09-1849 (Fla. July 7, 2011), the plaintiff claimed that the defendant violated a Florida statute by applying a $20 service charge for a premium finance agreement twice in one year.  Under a premium finance agreement, a finance company pays the entire premium for an insurance policy upfront, and the insured then repays the finance company in monthly installments, with interest and typically a service charge.  Here, a Florida statute required that an “additional service charge” (beyond interest) must not exceed $20 and can be imposed no more than once in a 12-month period, except if there was a cancellation for nonpayment.  The plaintiff claimed that the defendant improperly charged this fee twice per year for policies issued for six-month terms, in violation of the statute.  The Florida Department of Financial Services had discovered this during an audit of the defendant, and had required that the problem be fixed going forward, but had not required refunds of past overcharges. 

The trial court had granted class certification, and the Third District Court of Appeal had reversed.  The Florida Supreme Court reversed the court of appeal, finding the case appropriate for class certification.  (This was a 4-3 decision, with the dissenters opining that there was insufficient conflict between the courts of appeal for the state supreme court to exercise jurisdiction.)  I saw a few points of broader applicability to insurance class actions here: 

  1. Predominance should be evaluated based on whether trial of one named plaintiff’s case can prove the class members’ cases.  The court explained that “a class representative establishes predominance if he or she demonstrates a reasonable methodology for generalized proof of class-wide impact,” and “[a] class representative accomplishes this if he or she, by proving his or her own individual case, necessarily proves the cases of the other class members.”  (Slip opinion, at 35 (emphasis in original).)  This is not new, a number of other courts in Florida and other jurisdictions have said this, but parties and trial courts do not always give it sufficient attention.  The focus needs to be on how the plaintiff and defendant will prove their cases at trial.
  2. Appellate courts owe appropriate deference to trial court factual findings.  The Florida Supreme Court stressed that, where the trial court had conducted an evidentiary hearing, the Third District Court of Appeal “gave no deference to the trial court’s factual findings and made its own independent determination” of whether the class certification requirements were met.  (Id. at 15.)
  3. Defenses matter to class certification when they are individualized, not common defenses.  The court concluded that, in this dispute over a billing practice of the defendant, “any minor variance in factual circumstances would be with regard to the issue of damages and not liability,” and “any defense by Safeway would involve a defense common to all class members, i.e., that it was not aware, nor did not understand, that its conduct would result in an overcharge to all class members.”  (Id. at 38.)  One thing insurers need to focus on in defending class actions is identifying defenses that are dependent on the individual circumstances of putative class members, and proving that up with concrete examples at a class certification hearing.  Safeway may not have had the ability to do this effectively here where the case focused on an across-the-board billing practice.
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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.