One of the issues I’ve been covering on this blog is a series of putative class actions in Georgia arising out of a Georgia Supreme Court decision in 2012, which held that diminution in value of real property is potentially covered under a property insurance policy (see my summary of the Georgia Supreme Court decision if you’d like more background on this). The Georgia Supreme Court essentially extended its prior ruling in an auto insurance case to the property insurance context, although it is somewhat counterintuitive that real property, after it is repaired, would see a reduction in value (as opposed to an increase in value).

Earlier this week, a Georgia federal court granted class certification, in part, in Thompson v. State Farm Fire & Casualty Company, 2016 U.S. Dist. LEXIS 30308 (M.D. Ga. Mar. 9, 2016). The class was defined as homeowners who, within the six-year period prior to the filing of the lawsuit, made claims arising from water damage to their homes. The class was limited to a claim for breach of contract based on State Farm’s failure to make assessments for potential diminished value. Key points from the ruling included:

  • State Farm apparently took the position that it does not assess or pay for diminished value, and its policy never covers diminished value, notwithstanding the Georgia Supreme Court’s decision. The court found that State Farm Mutual Auto. Ins. Co. v. Mabry (the auto insurance case) required these assessments. Insurers that do not dispute that their policies potentially cover diminished value in Georgia, and that make assessments for diminished value where appropriate, are likely to be in a different position.
  • With respect to the claim for failure to assess for diminished value, the court found that common issues predominated because State Farm did not make any such assessments, and because damages potentially could be based on the cost of the assessment. at *32. The court did not explain how, under the policy, the insured could recover the cost of the assessment. That puzzles me. Mabry involved declaratory and injunctive relief.
  • The court denied the motion for certification with respect to the claim for State Farm’s failure to pay for diminished value. Common issues did not predominate on that claim because “State Farm can avoid liability, not just an award of damages, by showing that an individual property did not suffer diminished value,” and the “necessary determination of whether each class member suffered diminished value renders breach anything but a common question.” at *23-24. Because State Farm would be entitled to make this showing for every class member, common issues did not predominate. Id. at *26-27. This is consistent with other insurance class action decisions.

This decision seems likely to heat up the diminution in value class action litigation in Georgia, although insurers that are handling the issue differently will have different arguments to make in defending against class certification. As I noted in my February 2 post, Liberty Mutual recently obtained dismissal of a declaratory judgment claim in one of these cases.

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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.