Geico argued that McCoy lacked standing as she suffered no concrete injury because any additional amounts included in her total loss settlement would have been paid to her lienholder, not to her. (Credit: merchantcircle.com)
The U.S. District Court in New Jersey granted plaintiff Diane McCoy class certification in her claim brought against Geico which alleged breach of contract after a 2018 collision rendered her vehicle a total loss, and the insurer failed to pay title or transfer fees for the vehicle.
According to the opinion, McCoy filed her complaint on May 6, 2020, and alleged that she suffered a total loss of her insured vehicle and made a covered claim for physical damage under the collision and comprehensive coverages of her policy. That policy defines the actual cash value with respect to collision and comprehensive coverages as the "replacement cost of the auto or property less depreciation or betterment." The complaint alleged that Geico does not pay the agreed-on replacement costs because it fails to pay costs such as transfer fees and registration transfer fees.
"Plaintiff alleges that she was subjected to defendant's breach of contract following an auto collision in 2018 that rendered her vehicle a 'total-loss' per the policy," Judge Zahid N. Quraishi wrote for the court. "Defendant, through a third-party vehicle valuation provider, determined the vehicle had a base value of $3,777.00 and an adjusted value of $3,838.00."
According to Quraishi, Geico then added sales tax and deducted the $500 deductible to come to a total of $3,592.27. McCoy contended that, by not including any amount for title or transfer fees, Geico breached the policy.
In her motion, McCoy argued that the proposed class satisfies the requirements of Fed. R. Civ. P. 23(a) because the class is numerous, there are questions of law and fact common to that class, the class representative's claims are typical of the class, and McCoy and her counsel will adequately represent the class.
"Plaintiff also argues that the proposed class has satisfied Fed. R. Civ. P. 23(b)(3) because the common question that will control the outcome of this litigation — whether Geico's failure to include transfer fees constitutes a breach of contract — is a question of law that is common to class members and predominate over any questions affecting only individual members," Quraishi wrote.
Geico argued that McCoy lacked standing as she suffered no concrete injury because any additional amounts included in her total loss settlement would have been paid to her lienholder, not to her.
"In response, plaintiff makes clear that she has sufficiently alleged an injury because she alleges that she was underpaid for her insurance claim for property damage — a result of defendant's breach of contract — causing her a financial detriment," Quraishi wrote. "The Third Circuit's 'standing cases uniformly recognize that allegations of injury are sufficient to invoke jurisdiction of a court.'"
Quraishi cited another New Jersey district court decision in Lewis v. Gov't Employees Ins., and stated that "on almost identical facts to this matter … the plaintiffs had standing by claiming that defendant Geico undervalued and underpaid their total-loss claims."
"Accordingly," Quraishi wrote, "the court finds that plaintiff in this case has sufficiently articulated an injury-in-fact and therefore has supported her standing to bring this suit."
As to Geico's motion to strike, Quraishi stated that the company moved to exclude the testimony and reports by McCoy's proposed expert on New Jersey fee requirements for transfer of vehicle title and registration, Josephine Augello.
"Defendant argues, however, that Augello did not write a word of her initial report or amended report, and did not even read them 'word for word' in their entirety," Quraishi wrote. "Interestingly, defendant does not seek to strike Augello's testimony under Federal Rule of Evidence 702 or under Daubert v. Merrill Dow Pharm. Inc., but instead brings its motion to strike as a sanction under Fed. R. Civ. P. 37."
Quraishi stated that Rule 37(c) is invoked only as a sanction for violating Rule 26 and that Geico sought sanctions for an alleged violation of that rule's requirement that an expert report be "prepared and signed by the witness." The judge stated that attorneys are authorized, under federal rules, to provide "assistance to experts in preparing reports, and indeed, with experts such as automobile mechanics, this assistance may be needed."
"Although Augello admitted she did not 'put pen to paper,' she emphasized that the reports nonetheless expressed and reflected her views, which is sufficient to avoid the drastic measure of striking her reports," Quraishi wrote. "Accordingly, the court will deny defendant's motion to strike Augello's reports."
Counsel to McCoy, Rachel N. Dapeer of Dapeer Law, declined to comment on the opinion. Counsel to Geico, Francis X. Nolan IV of Eversheds Sutherland, did not immediately respond to a request for comment.
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