Last week, in my August 7, 2012 post, I reported on a new class action filed against AIG/Chartis involving the subrogation “made whole” doctrine.  A recent Florida federal district court decision in a putative class action on this issue is significant because it struck the class allegations on the pleadings.

In Vandenbrink v. State Farm Mutual Automobile Insurance Company, 2012 U.S. Dist. LEXIS 108696 (M.D. Fla. Aug. 3, 2012), the plaintiffs allege that on auto insurance claims, State Farm improperly attempts to recover its PIP and/or Med Pay payments out of insureds’ settlements with third-party tortfeasors, without first determining whether the insured has been made whole.  Judge James S. Moody, Jr. of the Middle District of Florida dismissed the complaint under Iqbal and Twombly because, among other grounds, the plaintiffs had failed to “at least make some showing as to what amount would be required to make Plaintiffs whole and what amount was actually received.”  Id. at *6.  More significantly, Judge Moody granted State Farm’s motion to strike the class allegations on the pleadings because individual issues regarding each particular settlement clearly would predominate:

In this instance, the threshold inquiry is whether the Plaintiffs were made whole through their settlements. If this case were to proceed, the most important issues to settle will be individual in nature. The issues will include the damages incurred by an individual plaintiff, the amount of the settlement, and the portion of the settlement that actually was for medical payments. Since the individual factual inquiry will predominate this litigation, making any sort of class litigation highly impractical, the class allegations will be stricken. Since a class action is inappropriate, only one of the named plaintiffs may proceed in this action. The second, as decided upon by plaintiffs, must file a separate action.

Id. at *9.

This decision should be quite helpful to insurers defending against class actions on this issue.  The increased willingness that some federal and state courts have shown towards motions to strike class allegations saves the parties substantial time and expense in discovery in cases that, based on the pleadings, would not be appropriate for class certification.