Title: SCOUFOS v. STATE FARM FIRE & CASUALTY CO.

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

SCOUFOS v. STATE FARM FIRE & CASUALTY CO.  SCOUFOS v. STATE FARM FIRE & CASUALTY CO. 2001 OK 113 41 P.3d 366 72 OBJ 3685 Case Number: 94395 Decided: 12/11/2001 Mandate Issued: 02/22/2002 THE SUPREME COURT OF THE STATE OF OKLAHOMA HARRY G. SCOUFOS IV, Plaintiff/Appellee v. STATE FARM FIRE and CASUALTY CO., Defendant/Appellant [ 41 P.3d 366 ]APPEAL FROM THE DISTRICT COURT, WAGONER COUNTYHONORABLE JOHN C. GARRETT, JUDGE [ 41 P.3d 367 ] ¶0 Scoufos [plaintiff/appellee], on behalf of himself and like-situated insureds, brought an action against State Farm Fire and Casualty Co. [State Farm or appellant] alleging appellant charged premiums for replacement-cost homeowners insurance policies greater than that allowed by statute. The trial judge ordered a class certified and appointed Scoufos class representative. State Farm appeals from the trial court's class-certification order. THE TRIAL COURT'S CLASS-CERTIFICATION ORDER IS REVERSED. Clyde A. Muchmore and Harvey D. Ellis, Jr., of Crowe & Dunlevy, Oklahoma City, Oklahoma; John A. Gladd and Gail Harris of Gladd, Smith & Harris, Tulsa, Oklahoma; and Joseph A. Cancila, Jr. and Heidi Dalenberg of Schiff Hardin & Waite, Chicago, Illinois, for appellant. Sean Burrage, Stratton Taylor and Darrell Downs of Taylor, Burrage, Foster, Mallett & Downs, Claremore, Oklahoma, and Andrew P. Campbell and Janet R. Varnell of Campbell & Walker, Birmingham, Alabama, for appellee. George P. Phillips and Stephen L. McCaleb for Oklahoma Insurance Department, Oklahoma City, Oklahoma, amicus curiae. LAVENDER, J. ¶1 Resolution of today's cause requires the Court to measure the trial court's February 11, 2000 class-certification order against the prerequisites for issuing the same enunciated in 12 O.S.1991 § 2023(A) & (B). I FACTS AND PROCEDURAL HISTORY ¶2 In 1997 Scoufos purchased a State Farm "HO-W" replacement-cost homeowners insurance policy to cover a residence he was purchasing in Coweta, Oklahoma. The purchased policy was a multi-peril policy covering losses not only to the primary dwelling but also to detached extensions such [ 41 P.3d 368 ] as garages, sheds, fences and other structures. The extension coverage was in an amount equal to ten percent (10%) of the dwelling's coverage. The policy's terms were approved by the Oklahoma Department of Insurance [ODI] and the charged rates were sanctioned by the Board of Property and Casualty Rates. Scoufos purchased $83,000 of coverage to satisfy his mortgage-lender's coverage-requirements. The amount of replacement-insurance purchased exceeded State Farm's estimated replacement cost ($79,400) for the subject dwelling. ¶3 The gravamen of the class' suit is that State Farm overcharged the insureds for replacement-cost homeowners insurance in contravention of the terms of 36 O.S.1991 § 4804 triggering a statutory right-of-reimbursement. Scoufos on behalf of himself and like-situated insureds seeks reimbursement of the costs attributable to the alleged overinsurance (excess premiums) which he defines as equaling the difference between (1) the premiums charged for the issued insurance policy and (2) the costs of a policy with coverage limits equal to State Farm's estimate of replacement costs (measured at the time of the policy's purchase). ¶4 When the present case was filed, Scoufos was employed as a lawyer by one of the firms representing the putative class. Also, his father a senior partner in the same firm was one of the plaintiff's counsel. [While today's case was pending on appeal, the elder Mr. Scoufos resigned as counsel for the certified class. ¶5 State Farm seeks the class action's dismissal asserting (among other reasons) that the trial court is without jurisdiction to hear the matter. The defendant argues that the ODI is vested with authority to hear the cause and that allowing the same to proceed in the district court contravenes those provisions of the Oklahoma Administrative Procedures Act [OAPA], 75 O.S.1991 §§ 250.1 et seq., which require a plaintiff to exhaust administrative remedies before proceeding to the district court. State Farm also contends that the certification requirements of § 2023 were not met in that individual class-member claims are too varied and distinct from a evidentiary-proof perspective to be litigated as a unit. ¶6 After a hearing the trial court certified as a class "all current or former policyholders in the [S]tate of Oklahoma . . . whose residential dwelling was insured by State Farm . . . where State Farm's records assign an insurance to value ratio greater than 100%." II THE TRIAL COURT'S ASSESSMENT OF THE PARAMETERS OF THE STATUTORY RIGHT CREATED BY THE TERMS OF 36 O.S.1991 § 4804 ¶7 Although the defendant objects to the district court's jurisdiction over the plaintiff's claims [asserting failure to comply with OAPA requirement of exhaustion of administrative remedies], this issue need not be reached because the class-certification issues are dispositive of today's cause. Also, there is no need for the Court to reach the issue whether a private cause of action is in fact authorized by the terms of 36 O.S.1991 § 4804; hence, we do not. ¶8 The trial court based its class-certification order upon a perceived "common right" If What is not reflected in the class representative's understanding of the relevant statutory language is that the right to reimbursement being asserted is conditioned upon the insured property's total destruction by fire. ¶11 When the parameters of the right being asserted are fully understood, it becomes clear that prospective class members could include only those persons purchasing fire insurance policies covering property (in Oklahoma) which was totally destroyed by fire. The record clearly evidences that the claim being pressed by the class representative is not typical of claims which might be asserted by the putative class inasmuch as there is no representation that Scoufos has suffered any, much less total, loss of his property by fire. Hence, while others might be able to meet the two statutory predicates for reimbursement, the class representative's claim as delineated by the record falls short. As Scoufos's claim necessarily must proceed upon different facts and legal theory from the suggested § 4804 statutory right of recovery which the prospective class members assert, his claim is not typical of the class' and his appointment as class representative cannot be sustained. ¶12 In resolving today's cause we need not and do not reach nor make any pronouncement on the numerous other challenges raised by the parties' appeal. THE TRIAL COURT'S CLASS-CERTIFICATION ORDER IS REVERSED. [ 41 P.3d 371 ] ¶13 HARGRAVE, C.J., WATT, V.C.J., HODGES, LAVENDER, OPALA, KAUGER, BOUDREAU and WINCHESTER, JJ., concur. ¶14 SUMMERS, J., concurs in result. FOOT