Plaintiffs in the original suit claimed that Progressive’s method of calculating the ACV of total loss claims undervalued vehicles; specifically referencing the “projected sold adjustment” used in the insurer's valuation methodology. (Credit: lexiconimages/AdobeStock)
A Pennsylvania court has reversed class certification for claims that Progressive Insurance underpaid the actual cash value (ACV) of totaled vehicles.
Plaintiffs in the original suit claimed that Progressive’s method of calculating the ACV of total loss claims undervalued vehicles; specifically referencing the “projected sold adjustment” used in the insurer's valuation methodology. This adjustment allegedly accounts for the fact that used cars often sell for less than the dealer’s listed price.
In their opinion, the Third Circuit Court of Appeals explains that the individualized nature of these claims led to their decision to deny class certification. It reads, in part: “We conclude that identifying whether each class member was actually paid less than true ACV is an individual question. Rule 23(b)(3) required that plaintiffs prove this core issue of underpayment — on which both breach and damages in their breach-of-contract claim turn — with class-wide proof. Plaintiffs cannot meet that burden. And because proving the underpayment issue is essential to Progressive’s alleged liability for breach of contract, we believe that ‘individualized evidence’ of whether each class member’s vehicle’s ACV was greater than the final settlement value would ‘overwhelm the case.’ Accordingly, because ‘proof of the essential elements of [plaintiffs’] cause of action requires individual treatment,’ common issues as to Progressive’s liability do not predominate.”
A federal judge in the Eastern District of Pennsylvania had previously certified two classes for plaintiffs who claimed Progressive undervalued their vehicles. One class was comprised of drivers insured by Progressive Specialty while the second class included those insured by Progressive Advanced.
Despite the failure of this class action, The Legal Intelligencer reports that Progressive’s counsel believes Pennsylvania’s Fourth, Seventh and Ninth circuits are also considering similar cases against the insurance company.
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