Several notable recent class action filings against insurers have come across my desk (or computer screen) and seem worthy of interest to readers of this blog.  I will summarize and comment briefly on them.  If you’d like a copy of any of the complaints, just e-mail me.

  • Use of Staff Counsel:  In Golden v. State Farm Mutual Automobile Insurance Company, Cause No. 02D01-1110-PL-363 (Indiana Superior Court, Allen County; removed to federal court), the plaintiff alleges that State Farm improperly fails to disclose to its insureds that it may use staff counsel to represent them in defending lawsuits under liability insurance coverage.  There are two proposed classes:  (1) insureds in Indiana that have purchased or renewed a policy with State Farm within the last two years, containing liability coverage; and (2) insureds in Indiana who were represented by State Farm staff counsel within the last two years.  The causes of action are breach of an alleged duty to disclose the use of staff counsel (at the time of policy issuance or renewal), breach of a duty of good faith and fair dealing by not disclosing the use of staff counsel at the time of policy issuance or renewal, unjust enrichment, and injunctive relief barring State Farm from continuing to issue or renew policies without disclosures regarding staff counsel, and barring State Farm from assigning staff counsel to represent insureds where no prior disclosure was made.  It will be interesting to see if this complaint survives a motion to dismiss.  There may not be any legal duty to inform insureds about the use of staff counsel absent a statute or regulation requiring it.  It also seems unclear that anyone is injured by a failure to disclose at the time the policy is issued or renewed, particularly if they have never been sued.  The complaint seems to suggest that the use of staff counsel is somehow a new or unusual practice not followed by other insurers.  I’m not sure what the practice has been in Indiana, but as far as I know all of the major insurers have been using staff counsel to defend in the vast majority of jurisdictions for some time (except for a few jurisdictions where use of staff counsel is prohibited).  The complaint also seems to suggest, without articulating any basis, that staff counsel is somehow inferior to private outside counsel.  On the other hand, there is probably no harm in disclosing the use of staff counsel, and some insurers probably are doing that.  It’s hard to imagine that people buy their auto or homeowners’ policies based on whether the insurer is going to use staff counsel in defending them in a lawsuit.
  • Wildfire Claims:  In Abed v. Allstate Ins. Co., Case No. BC 473460 (Cal. Super. Ct., Los Angeles County), the named plaintiffs assert a variety of claims against Allstate arising from their claim for smoke damage to their house from the “Station Fire” in Southern California in August of 2009.  They assert various individual claims but only one cause of action on behalf of a putative class, alleging that Allstate’s policies failed to comply with California law on appraisal, and the efficient proximate cause doctrine.  The appraisal-related claim focuses on a provision in the California standard fire insurance policy providing that “In the event of a government-declared disaster, as defined in the Government Code, appraisal may be requested by either the insured or this company but shall not be compelled.”  Cal. Ins. Code § 2071.  The plaintiffs assert that the “Station Fire” was a “government-declared disaster” within the meaning of this provision.  They claim that Allstate improperly sought to compel a mandatory appraisal, and the appraisal clause in its policy failed to include this sentence.  The efficient proximate cause claim is a bit difficult to discern from the complaint.  That doctrine applies where a loss has more than one cause, and it appears that the claims at issue here were attributable only to the wildfire.  There is no suggestion that I can identify of another cause.  On the appraisal issue, although I think it involves the kind of individual issues that would not be appropriate for class treatment, insurers may want to check into their practices in California with respect to appraisal of claims for government-declared disasters given the unusual statutory language.
  • Depreciation on Auto Claims:  In Silvin v. Geico General Insurance Company, Case No. 1:11-cv-24128-CMA (S.D. Fla.), the plaintiff seeks to certify a nationwide class on the question of whether a particular Geico policy form allows for deduction of “betterment” or depreciation on auto claims under either comprehensive or collision coverage.  The policy language that is quoted in the complaint does not appear to make any reference to a deduction for “betterment” or depreciation.  It will be interesting to see what happens with this case.  This also seems like an area in which insurers may want to check what their policies say and what their practices are.
Tags: Allstate, GEICO, State Farm
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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.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and most of the class actions I’ve defended have been brought against insurance companies. I’ve also handled some involving products liability, managed care, health care, utilities, financial services, higher education and environmental issues.

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 work, you might find me running lines or watching a musical with my teenage daughter who hopes to be a Broadway star (or taking her to voice or dance lessons) or reading a good book.

Read more about Wystan Ackerman
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