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State Farm asks for stay in ACV case pending outcome of allegedly similar Progressive case

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Insurance | Legal
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State Farm has requested an indefinite stay on discovery and proceedings in a lawsuit against it regarding allegations of undervalued total loss claims and reduced payments to claimants.

The request was made because of the pending appeal of a case against Progressive that would “review certifiability of auto total loss class actions alleging systematic underpayments of ‘actual cash value,’ just like this one,” State Farm’s motion states.

On behalf of a proposed nationwide class, the suit accuses Illinois-based State Farm of breach of contract, breach of covenant of good faith and fair dealing, unjust enrichment, and violations of Illinois’ Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2.

Plaintiffs allege State Farm paid out 4-11% less than what was owed by applying a discount, or “typical negotiation adjustment,” to the actual cash value (ACV) of aggregated used vehicle internet prices similar to the ones involved in claims.

State Farm’s stay request includes its motions for summary judgment on some of the plaintiff’s individual claims.

The plaintiffs argue their case shouldn’t be stayed because the Progressive suit involves the valuation of total loss claims by a different insurer using a different method of determining the value of total loss vehicles. They also intend to proceed with the lawsuit if class certification isn’t granted.

“Plaintiffs are not challenging State farm’s use of multiple comparable reports (as opposed to another, permitted, method), but
instead its surreptitious and systematic reduction in its payment with its TNA which will always reduce the payment an insured is offered.”

However, State Farm states in its request, “…the Seventh Circuit’s decision in Schroeder will provide critical guidance to this court and the parties in addressing the same class certification issues sure to arise here.”

In March, State Farm was accused by the plaintiff class of using “evasive tactics” to avoid supplying documents and information, including the first of discovery requested in August 2023. The class hasn’t yet been certified.

“Whether or not Schroeder ultimately provides any guidance for the certification of plaintiffs’ claims can be incorporated when class briefing ultimately begins,” the plaintiffs said in a May 24 filing. “For now, plaintiffs should be allowed to proceed with their discovery, and defendant’s motion should be denied… State Farm has zealously pursued every possible avenue to defeat plaintiffs’ and the class’s claims; further delay risks the loss of testimony, memory, and evidence.”

“…State Farms’ proposed stay would do nothing to simplify or streamline the litigation, but will instead be yet another effort to delay the progress of this case. To be sure, any guidance from the Seventh Circuit regarding Rule 23 may be considered by the parties and the court when a schedule is set for plaintiffs’ eventual motion for class certification, and as such a motion is briefed and, eventually, decided.”

As of now, discovery is set to close on Oct. 31, and any briefing related to class certification isn’t likely to start until 2025, according to the filing.


Featured image credit: David Gyung/iStock

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