Title: National Security Fire & Casualty Company v. Maurice DeWitt

State: alabama

Issuer: Alabama Supreme Court

Document:

REL: 
11/18/2011 
Notice: T h i s o p i n i o n i s 
s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n 
t h e 
advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e 
Reporter of 
Decisions, 
Alabama A p p e l l a t e C o u r t s , 300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 
((334) 
2 2 9 - 0 6 4 9 ) , o f 
any t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may be made 
b e f o r e t h e 
o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2011-2012 
1091225 
N a t i o n a l S e c u r i t y F i r e & C a s u a l t y Company 
v. 
Maurice DeWitt 
Appeal from M o b i l e C i r c u i t Court 
(CV-07-1434) 
WISE, 
J u s t i c e . 
The r e m a i n i n g d e f e n d a n t below, N a t i o n a l S e c u r i t y F i r e & 
C a s u a l t y Company ( " N a t i o n a l S e c u r i t y " ) , a p p e a l s an o r d e r o f 
the M o b i l e C i r c u i t C o u r t c e r t i f y i n g a c l a s s a c t i o n . 
1091225 
F a c t s and P r o c e d u r a l 
H i s t o r y 
The 
p l a i n t i f f , M a u r i c e D e W i t t , l i v e d i n 
a m o b i l e home 
i n 
T h e o d o r e . 
On August 29, 2005, D e W i t t ' s m o b i l e home and 
s t o r a g e 
shed were damaged d u r i n g H u r r i c a n e 
K a t r i n a . A t 
t h e 
time o f t h e l o s s , D e W i t t had a homeowner's i n s u r a n c e 
p o l i c y 
w i t h N a t i o n a l S e c u r i t y , and 
DeWitt f i l e d a c l a i m w i t h N a t i o n a l 
S e c u r i t y 
r e g a r d i n g 
t h e l o s s . 
S u b s e q u e n t l y , an 
i n s u r a n c e 
a d j u s t e r w i t h N a t i o n a l S e c u r i t y went t o 
D e W i t t ' s p r o p e r t y and 
p r e p a r e d an e s t i m a t e . 
The e s t i m a t e 
s t a t e d t h a t t h e " A c t u a l 
Cash 
V a l u e " 
("ACV") o f t h e damage t o D e W i t t ' s home was 
$3,438.71, t h e damage t o t h e c o n t e n t s was $568.00, and 
t h e 
damage t o h i s s t o r a g e shed was $418.59. The t o t a l ACV o f t h e 
damage was $4,425.30, and D e W i t t had a $500.00 
d e d u c t i b l e . 
T h e r e f o r e , t h e 
a d j u s t e r recommended t h a t N a t i o n a l S e c u r i t y pay 
D e W i t t $3,925.30. 
On O c t o b e r 3, 2005, N a t i o n a l 
S e c u r i t y 
i s s u e d a check p a y a b l e t o D e W i t t and Green P o i n t C r e d i t
1 
f o r 
$2,938.71 and 
two checks p a y a b l e t o 
D e W i t t -- one f o r $418.59 
and 
a n o t h e r 
f o r $568.00, 
f o r a 
t o t a l 
o f 
$3,925.30. 
S u b s e q u e n t l y , D e W i t t s e n t a l e t t e r t o N a t i o n a l 
S e c u r i t y i n 
1 G r e e n P o i n t C r e d i t was t h e 
mortgagee f o r D e W i t t ' s m o b i l e 
home. 
2 
1091225 
w h i c h he d i s p u t e d t h e amount N a t i o n a l S e c u r i t y had p a i d 
f o r 
the l o s s o f h i s 
s t o r a g e shed. 
N a t i o n a l S e c u r i t y p r e p a r e d a 
s u p p l e m e n t a l e s t i m a t e and, on November 3, 2005, i s s u e d an 
a d d i t i o n a l check i n 
t h e 
amount o f $4,001.41 p a y a b l e t o D e W i t t . 
On J u l y 19, 2007, D e W i t t f i l e d a c o m p l a i n t i n 
t h e M o b i l e 
C i r c u i t C o u r t a g a i n s t 
N a t i o n a l 
S e c u r i t y , N a t i o n a l 
S e c u r i t y 
Group, 
I n c . , and Omega 
One 
I n s u r a n c e 
Company 
("the 
d e f e n d a n t s " ) .
2 
I n h i s c o m p l a i n t , 
D e W i t t a l l e g e d t h a t t h e 
d e f e n d a n t s had b r e a c h e d h i s 
p o l i c y o f i n s u r a n c e when t h e y d i d 
not i n c l u d e i n 
t h e 
payment t o 
him 20% f o r g e n e r a l 
c o n t r a c t o r 
overhead and p r o f i t ("GCOP") i n c a l c u l a t i n g t h e 
ACV o f h i s 
l o s s . 
S p e c i f i c a l l y , 
he 
a l l e g e d 
t h a t , 
a c c o r d i n g 
t o t h e 
d e f i n i t i o n o f a " a c t u a l cash v a l u e " i n 
h i s 
i n s u r a n c e 
p o l i c y 
and 
a c c o r d i n g t o i n s u r a n c e - i n d u s t r y 
s t a n d a r d s , 
"when i t i s 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t 
t h e s e r v i c e s 
o f a 
g e n e r a l 
c o n t r a c t o r w i l l be n e c e s s a r y t o r e p a i r c o v e r e d p r o p e r t y , 
then 
2The c o m p l a i n t a l l e g e d t h a t N a t i o n a l S e c u r i t y Group, 
I n c . , 
was an i n s u r a n c e h o l d i n g company " t h a t had c o n d u c t e d 
b u s i n e s s 
r e l e v a n t t o t h i s c o m p l a i n t 
w i t h [ D e W i t t ] and p u t a t i v e c l a s s 
members t h r o u g h i t s w h o l l y owned s u b s i d i a r y , N a t i o n a l S e c u r i t y 
F i r e & C a s u a l t y Company. 
I t a l s o conducts b u s i n e s s 
r e l e v a n t 
t o t h e c l a s s a l l e g a t i o n o f t h i s c o m p l a i n t 
w i t h t h e p u t a t i v e 
c l a s s members t h r o u g h Omega One I n s u r a n c e Company, a w h o l l y 
owned 
s u b s i d i a r y 
o f N a t i o n a l 
S e c u r i t y 
F i r e 
& 
C a s u a l t y 
Company." 
3 
1091225 
' a c t u a l 
cash v a l u e ' 
i n c l u d e s 
not 
o n l y 
m a t e r i a l 
and 
l a b o r 
c o s t s , b u t 
a l s o the s t a n d a r d overhead and 
p r o f i t charged 
by 
the 
g e n e r a l 
c o n t r a c t o r " ; 
t h a t , 
" [ a ] c c o r d i n g 
t o 
i n d u s t r y 
s t a n d a r d 
... when t h r e e or more t r a d e 
s k i l l s 
(e.g., r o o f i n g , 
s h e e t r o c k i n g , 
p a i n t i n g ) w i l l 
be needed t o r e p a i r 
p r o p e r t y , 
then i t i s r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a g e n e r a l 
c o n t r a c t o r 
w i l l be employed t o a c c o m p l i s h 
the r e p a i r " ; t h a t the damage t o 
h i s m o b i l e home r e q u i r e d more t h a n t h r e e t r a d e 
s k i l l s t o make 
the r e p a i r s ; and t h a t , " [ a ] c c o r d i n g t o [ N a t i o n a l S e c u r i t y ' s ] 
s t a n d a r d 
p r a c t i c e , 
[ N a t i o n a l 
S e c u r i t y ] does 
not 
i n c l u d e 
payment f o r c o n t r a c t o r overhead and p r o f i t i n i t s payment o f 
' a c t u a l 
cash 
v a l u e ' 
t o 
i t s 
i n s u r e d s , 
even when 
i t 
i s 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t 
the 
s e r v i c e s 
o f 
a 
g e n e r a l 
c o n t r a c t o r w i l l be n e c e s s a r y t o r e p a i r c o v e r e d p r o p e r t y . " 
He 
a l s o 
sought 
t o 
r e p r e s e n t 
a p r o p o s e d 
c l a s s 
o f 
p l a i n t i f f s 
p u r s u a n t t o R u l e 2 3 ( b ) ( 3 ) , A l a . R. 
C i v . 
P. 
On J a n u a r y 11, 2008, the d e f e n d a n t s f i l e d t h e i r answer t o 
the 
c o m p l a i n t 
and 
an o b j e c t i o n t o c l a s s c e r t i f i c a t i o n . 
In 
s u p p o r t o f t h e i r o b j e c t i o n , the d e f e n d a n t s f i l e d an 
a f f i d a v i t 
o f A.W. 
S h i v l e y , the c l a i m s manager f o r N a t i o n a l S e c u r i t y . 
In 
h i s 
a f f i d a v i t , S h i v l e y s t a t e d : 
4 
1091225 
"3. 
[DeWitt's] C o m p l a i n t i n t h i s case 
r e q u e s t s 
a r e v i e w o f 
a l l e s t i m a t e s 
r e g a r d i n g 
overhead 
and 
p r o f i t s 
f o r 
a 
p e r i o d 
o f 
s i x 
y e a r s 
i m m e d i a t e l y 
p r e c e d i n g 
the 
f i l i n g o f the C o m p l a i n t . 
To 
r e s p o n d 
t o such a r e q u e s t would be an o v e r l y burdensome t a s k 
f o r 
N a t i o n a l S e c u r i t y . 
"4. Each i n d i v i d u a l c l a i m f i l e would be 
r e q u i r e d 
t o be 
p u l l e d and 
s o r t e d 
t o d e t e r m i n e i f the 
f i l e 
i n c l u d e s 
any 
o f 
the 
i n f o r m a t i o n 
r e q u e s t e d 
by 
[ D e W i t t ] . 
T h i s would t a k e a massive amount o f 
t i m e . 
"5. S i n c e J a n u a r y 01, 2002 N a t i o n a l S e c u r i t y has 
opened 
a p p r o x i m a t e l y 
57,818 
c l a i m 
f i l e s 
( t h i s 
i n c l u d e s 
3 
major 
h u r r i c a n e s ) . 
We 
have 
c l o s e d 
a p p r o x i m a t e l y 51,242 c l a i m f i l e s and have a 
c u r r e n t 
open i n v e n t o r y of 6,576 open c l a i m f i l e s . 
R e s e a r c h 
i n t o 
t h i s 
many 
f i l e s 
would 
cause 
the 
c l a i m s 
department 
t o 
cease 
d a i l y 
o p e r a t i o n 
f o r 
a 
l o n g 
p e r i o d of 
t i m e . 
"6. 
N a t i o n a l 
S e c u r i t y 
i s 
l o c a t e d 
i n 
E l b a , 
Alabama. 
I t i s not so l a r g e a company t h a t i t can 
a f f o r d t o d e d i c a t e numerous employees s o l e l y t o 
a 
s e a r c h 
of c l i e n t 
f i l e s . 
"7. Responding or p r o v i d i n g 
the 
d o c u m e n t a t i o n 
r e q u e s t e d by [DeWitt] would be a g r e a t burden on 
the 
company." 
On 
J u l y 
13, 
2009, N a t i o n a l 
S e c u r i t y Group, 
I n c . , 
and 
Omega One 
I n s u r a n c e Company f i l e d a m o t i o n t o d i s m i s s them as 
d e f e n d a n t s , w h i c h the 
t r i a l c o u r t g r a n t e d on August 3, 2009. 
On 
O c t o b e r 
1, 
2009, DeWitt 
f i l e d 
a motion 
f o r 
c l a s s 
c e r t i f i c a t i o n , d e f i n i n g the c l a s s of p o t e n t i a l p l a i n t i f f s 
a s : 
"1) A l l c u r r e n t 
and 
former N a t i o n a l S e c u r i t y 
F i r e 
and C a s u a l t y Company 
i n s u r e d s ; 
5 
1091225 
"2) who a r e c i t i z e n s o f t h e S t a t e o f A l a b a m a ; 
"3) who i n t h e s i x y e a r s p r e c e d i n g 
J u l y 19, 2007, 
s u f f e r e d a c o v e r e d l o s s t o p r o p e r t y s i t u a t e d w i t h i n 
the S t a t e o f A l a b a m a ; 
"4) where t h e 
damage e s t i m a t e f o r 
such l o s s p r e p a r e d 
by N a t i o n a l S e c u r i t y F i r e & C a s u a l t y Company o r i t s 
agents 
i n d i c a t e d r e p a i r s by t h r e e o r more 
t r a d e 
s k i l l s ; 
"5) where t h e l o s s was s e t t l e d on an a c t u a l 
cash 
v a l u e b a s i s ; and 
"6) 
where t h e a c t u a l cash 
v a l u e payment d i d n o t 
i n c l u d e an amount f o r g e n e r a l 
c o n t r a c t o r overhead 
and 
p r o f i t e q u a l t o 20% o f t h e u n d e r l y i n g c o s t o f 
r e p a i r . " 
On March 1, 2010, t h e t r i a l c o u r t c o n d u c t e d a h e a r i n g on 
DeWitt's c l a s s - c e r t i f i c a t i o n m o t i o n . 
D u r i n g t h e h e a r i n g , the 
f o l l o w i n g 
p o r t i o n o f S h i v l e y ' s 
d e p o s i t i o n was 
r e a d 
i n t o 
e v i d e n c e : 
"[DEWITT'S COUNSEL:] 
I f 
a homeowner has a l o s s 
-- and I'm t a l k i n g about on an a c t u a l cash 
v a l u e 
c l a i m i f a homeowner has a l o s s , when would N a t i o n a l 
S e c u r i t y 
F i r e 
& 
C a s u a l t y 
o r Omega One pay f o r 
g e n e r a l c o n t r a c t o r overhead and p r o f i t ? 
"[SHIVLEY:] 
When the g e n e r a l 
c o n t r a c t o r was 
i n v o l v e d . 
"[DEWITT'S COUNSEL:] 
The homeowner d i d n o t 
a c t u a l l y 
i n v o l v e a g e n e r a l 
c o n t r a c t o r , would ... 
N a t i o n a l S e c u r i t y F i r e & C a s u a l t y o r Omega One pay 
the g e n e r a l c o n t r a c t o r overhead and p r o f i t i n t h a t 
c a s e ? 
6 
1091225 
"[SHIVLEY:] Each c l a i m i s 
i n d i v i d u a l 
and unique 
and we h a n d l e each and e v e r y c l a i m on i t s m e r i t . 
"[DEWITT'S COUNSEL:] 
Okay. 
"[SHIVLEY:] 
G e n e r a l l y , no. 
"[DEWITT'S COUNSEL:] 
Okay. So, g e n e r a l l y , ... 
the 
i n s u r e d d i d not a c t u a l l y h i r e a 
g e n e r a l 
4- - . ^ ^ 4- ^ -
.
^ 
^ v v ^ - v - , ! ^ , , 
^^^^^-^1 
^ ^ ^ 4 - 
^-^ 
^4- 
4 - 1 ^ ^ ^ 
4-1^-^+-
i f 
c o n t r a c t o r o r employ a g e n e r a l c o n t r a c t o r , t h e n t h a t 
c o n t r a c t o r overhead and p r o f i t would n o t be 
g e n e r a l 
i n c l u d e d i n t h e l o s s payment. 
I s t h a t 
c o r r e c t ? 
"[SHIVLEY:] Yes. 
"[DEWITT'S COUNSEL:] Okay. When i s i t t h e case 
t h a t when an i n s u r e d has a l o s s , i f 
t h e y go out and 
h i r e 
a 
g e n e r a l 
c o n t r a c t o r , 
w i l l 
Omega One o r 
N a t i o n a l 
S e c u r i t y F i r e & C a s u a l t y 
always pay t h e 
g e n e r a l c o n t r a c t o r overhead and p r o f i t on e v e r y l o s s 
t h a t t h e i n s u r e d h i r e s a g e n e r a l 
c o n t r a c t o r on? 
"[SHIVLEY:] 
I c a n ' t say e v e r y l o s s b u t I c a n ' t 
t h i n k o f a r e a s o n why we wouldn't. 
I would say --
"[DEWITT'S COUNSEL:] 
Okay. 
"[SHIVLEY:] 
-- y e s , 
b u t i t ' s h a r d t o say --
"[DEWITT'S COUNSEL:] 
Okay. 
"[SHIVLEY:] 
110 p e r c e n t o f t h e t i m e . 
"[DEWITT'S COUNSEL:] 
Sure. 
L e t ' s 
t a l k about, 
you know say, you know, a l o s s where t h e r e was j u s t 
r o o f i n g damage, where t h e r e was j u s t r o o f damage 
i n v o l v e d . 
I f t h e i n s u r e d 
c a l l e d up a r o o f e r and 
h i r e d a r o o f e r and t h a t r o o f e r charged overhead and 
p r o f i t above what t h e e s t i m a t e 
c a l l e d f o r , you know, 
f o r m a t e r i a l and l a b o r c o s t s t o f i x t h e r o o f , would 
y ' a l l pay overhead and p r o f i t on t h a t c a s e ? 
7 
1091225 
"[SHIVLEY:] 
J u s t on a r o o f e r ? 
"[DEWITT'S COUNSEL:] 
C o r r e c t . 
"[SHIVLEY:] 
No. 
"[DEWITT'S COUNSEL:] 
Okay. 
I f , say, t h e 
i n s u r e d had some r o o f damage and some v i n y l 
s i d i n g 
damage and then would you pay overhead and p r o f i t i n 
t h a t c a s e ? 
"[SHIVLEY:] 
E v e r y 
c l a i m 
i s 
unique 
and 
i n d i v i d u a l . 
The a d j u s t e r would h a n d l e t h e c l a i m on 
i t s m e r i t s and he would agree w i t h t h e i n s u r e d on 
the l o s s and pay 
i t . 
"[DEWITT'S COUNSEL:] 
Okay. 
I f , 
say, you had 
and, o f c o u r s e , I was up t o two t r a d e s t h e r e . 
B u t 
l e t ' s say you had a t h r e e - t r a d e 
l o s s . 
L e t ' s say 
you 
had a t h r e e - t r a d e 
l o s s . 
I f , i n a t h r e e - t r a d e 
l o s s , 
somebody went out and h i r e d a g e n e r a l c o n t r a c t o r t o 
f i x t h a t l o s s , would y ' a l l -- and by t h a t , I mean. 
Omega One o r N a t i o n a l 
S e c u r i t y F i r e & C a s u a l t y -¬
pay overhead and p r o f i t i n t h a t c a s e ? 
"[SHIVLEY:] Yes." 
DeWitt p r e s e n t e d t h e e x p e r t t e s t i m o n y o f A l b e r t Stephen 
P a x t o n . 
Paxton t e s t i f i e d t h a t "[w]hen t h r e e o r 
more u n r e l a t e d 
b u i l d i n g t r a d e s a r e i n v o l v e d , i t ' s 
r e a s o n a b l y f o r e s e e a b l e 
t h a t 
c o o r d i n a t i n g c o n t r a c t o r a c t i v i t i e s a r e g o i n g t o be n e c e s s a r y 
and need t o be i n c l u d e d i n t h e j o b 
-- need t o be i n c l u d e d i n 
the 
e s t i m a t e . " 
He 
a l s o 
t e s t i f i e d 
t h a t t h e T r a n s a m e r i c a 
I n s u r a n c e Group i n 
C a l i f o r n i a t a u g h t him t h i s t h r e e - t r a d e 
r u l e 
i n 1972. 
Paxton f u r t h e r t e s t i f i e d 
t h a t he was a l i c e n s e d 
8 
1091225 
c o n t r a c t o r i n 
C a l i f o r n i a and 
t h a t C a l i f o r n i a law 
p r o v i d e s 
t h a t 
a l i c e n s e d g e n e r a l 
c o n t r a c t o r would be r e q u i r e d t o p e r f o r m 
work t h a t i n v o l v e d a c o n t r a c t o f $500 o r more and t h r e e o r 
more t r a d e s . 
He a l s o t e s t i f i e d t h a t he had been t a u g h t t h e 
t h r e e - t r a d e 
r u l e by o t h e r p e o p l e ; t h a t he had seen t h e t h r e e -
t r a d e r u l e i n o p e r a t i o n and 
had r e a d about i t 
t h r o u g h o u t 
h i s 
c a r e e r ; and t h a t t h e t h r e e - t r a d e 
r u l e was a l m o s t u n i v e r s a l l y 
r e c o g n i z e d 
t h r o u g h o u t t h e 
U n i t e d 
S t a t e s . 
However, on c r o s s - e x a m i n a t i o n , 
Paxton a d m i t t e d t h a t t h e 
i n s u r a n c e - i n d u s t r y s t a n d a r d , which was a p p l i e d i n 
Alabama, was 
t o pay GCOP on a c a s e - b y - c a s e b a s i s ; 
t h a t i t 
was N a t i o n a l 
S e c u r i t y ' s 
p o l i c y , 
c o n s i s t e n t 
w i t h t h e 
i n s u r a n c e - i n d u s t r y 
s t a n d a r d , 
t o pay GCOP on a c a s e - b y - c a s e 
b a s i s ; and t h a t 
N a t i o n a l 
S e c u r i t y had made t h e assessment 
r e g a r d i n g t h e 
payment o f GCOP i n DeWitt's c l a i m on t h a t b a s i s . 
He a l s o 
t e s t i f i e d t h a t N a t i o n a l S e c u r i t y ' s t r e a t m e n t o f 
DeWitt's c l a i m 
was c o n s i s t e n t w i t h Alabama s t a t u t e s and Alabama 
i n s u r a n c e 
r e g u l a t i o n s and t h a t N a t i o n a l 
S e c u r i t y d i d 
n o t v i o l a t e any 
s t a t u t e o r i n s u r a n c e 
r e g u l a t i o n i n p r o c e s s i n g DeWitt's c l a i m . 
He f u r t h e r 
t e s t i f i e d t h a t he b e l i e v e d 
t h a t t h e t h r e e - t r a d e 
r u l e s h o u l d be t h e i n d u s t r y 
s t a n d a r d . 
9 
1091225 
D u r i n g t h e 
c l a s s - c e r t i f i c a t i o n h e a r i n g , S h i v l e y t e s t i f i e d 
t h a t 
N a t i o n a l S e c u r i t y does n o t a p p l y a t h r e e - t r a d e 
r u l e ; 
t h a t , w h i l e he has worked a t N a t i o n a l 
S e c u r i t y , i t never 
a p p l i e d a t h r e e - t r a d e r u l e ; t h a t , t o 
h i s 
k n o w l e d g e , no s t a t u t e 
or i n s u r a n c e r e g u l a t i o n r e q u i r e d t h e a p p l i c a t i o n o f 
t h e t h r e e -
t r a d e 
r u l e ; and t h a t no i n s u r a n c e 
s t a n d a r d i n t h e S t a t e o f 
Alabama 
r e q u i r e d t h e a p p l i c a t i o n o f a 
t h r e e - t r a d e 
r u l e . 
S h i v l e y 
f u r t h e r 
t e s t i f i e d 
t h a t he d i d n o t know o f any 
i n s u r a n c e company i n 
Alabama t h a t a p p l i e d a t h r e e - t r a d e 
r u l e 
and t h a t , a f t e r t h i s 
a c t i o n was 
f i l e d , he t e l e p h o n e d and 
c h e c k e d w i t h s e v e r a l d i f f e r e n t i n s u r a n c e companies i n Alabama 
and none o f t h o s e o t h e r i n s u r a n c e companies a p p l i e d a t h r e e -
t r a d e 
r u l e . 
S h i v l e y a l s o 
t e s t i f i e d t h a t N a t i o n a l S e c u r i t y has been 
p a y i n g GCOP on a c a s e - b y - c a s e b a s i s ; t h a t N a t i o n a l 
S e c u r i t y 
does n o t r e q u i r e t h e h i r i n g o f a g e n e r a l c o n t r a c t o r b e f o r e i t 
pays GCOP; and t h a t i t 
pays GCOP when t h e use o f a g e n e r a l 
c o n t r a c t o r i s 
r e a s o n a b l y f o r e s e e a b l e . 
D u r i n g t h e 
h e a r i n g , t h e 
f o l l o w i n g 
o c c u r r e d : 
"[DEFENSE COUNSEL:] 
A l l r i g h t . 
And we h e a r d 
e a r l i e r from your d e p o s i t i o n t h a t you s a i d when [a 
g e n e r a l 
c o n t r a c t o r i s ] i n v o l v e d . 
What do you mean 
by t h a t ? 
10 
1091225 
"[SHIVLEY:] 
When one has been h i r e d , when one 
has s u b m i t t e d an e s t i m a t e , o r when t h e i n s u r e d says 
he's 
g o i n g t o use one o r when 
i t ' s r e a s o n a b l y 
f o r e s e e a b l e 
t h a t t h e i n s u r e d w i l l use o n e . 
"[DEFENSE COUNSEL:] 
A l l r i g h t . And i s 
t h a t t h e 
s t a n d a r d 
t h a t you've been a p p l y i n g up and t o t h i s 
l a w s u i t ? 
"[SHIVLEY:] 
I t ' s t h e 
s t a n d a r d 
I've 
been 
a p p l y i n g my e n t i r e 
c a r e e r . " 
N a t i o n a l 
S e c u r i t y 
p r e s e n t e d two 
e x p e r t 
w i t n e s s e s 
-¬
Thomas 
E l l i o t t 
("Thomas") 
and 
C h r i s t o p h e r 
E l l i o t t 
( " C h r i s t o p h e r " ) , 
t h e 
p r e s i d e n t 
and 
v i c e 
p r e s i d e n t , 
r e s p e c t i v e l y , o f E l l i o t t B u i l d e r s , I n c . 
Thomas t e s t i f i e d t h a t 
E l l i o t t 
B u i l d e r s 
d i d r e s i d e n t i a l 
r e m o d e l i n g , 
c a t a s t r o p h e 
r e s t o r a t i o n , 
h i s t o r i c 
r e s t o r a t i o n , 
s i n g l e and m u l t i f a m i l y 
r e s i d e n t i a l work, and l i g h t c o m m e r c i a l work; t h a t i t p r a c t i c e d 
i n t h e S o u t h e a s t , p a r t i c u l a r l y i n 
M o b i l e and B a l d w i n 
C o u n t i e s ; 
and t h a t t h e company was l i c e n s e d as a g e n e r a l 
c o n t r a c t o r i n 
Alabama, M i s s i s s i p p i , and F l o r i d a . Thomas a l s o t e s t i f i e d t h a t 
he d i d 
n o t agree t h a t , when t h r e e o r 
more t r a d e s a r e r e q u i r e d , 
the need f o r a g e n e r a l 
c o n t r a c t o r i s r e a s o n a b l y 
f o r e s e e a b l e ; 
t h a t he d i d 
n o t t h i n k t h a t t h r e e 
t r a d e s 
a l o n e was adequate 
i n f o r m a t i o n ; 
t h a t t h e t h r e e - t r a d e 
r u l e was an attempt a t 
o r g a n i z a t i o n , b u t i t 
was an 
a r t i f i c i a l 
o r g a n i z a t i o n ; 
t h a t 
11 
1091225 
i n p u t was needed f r o m someone w i t h t h e e x p e r i e n c e t o l o o k a t 
the c o m p l e x i t y and v a l u e o f t h e 
j o b 
t o d e t e r m i n e 
i f a g e n e r a l 
c o n t r a c t o r ' s s e r v i c e s a r e needed; t h a t he c o u l d n o t t h i n k o f 
a b r i g h t - l i n e 
r u l e t o be used t o d e t e r m i n e 
when a g e n e r a l 
c o n t r a c t o r i s n e c e s s a r y ; and t h a t he thought t h a t a t t e m p t i n g 
t o 
a p p l y a b r i g h t - l i n e 
r u l e was a p r o b l e m because i t was 
a r t i f i c i a l and no two j o b s a r e a l i k e . 
He f u r t h e r 
t e s t i f i e d 
t h a t f a c t o r s t h a t s h o u l d be c o n s i d e r e d i n 
d e t e r m i n i n g whether 
a g e n e r a l c o n t r a c t o r would be n e c e s s a r y were t h e c o m p l e x i t y o f 
the p r o j e c t , w h i c h i n c l u d e d t e c h n i c a l d i f f i c u l t y ; t h e number 
o f s u b c o n t r a c t o r s o r t r a d e s t h a t would be r e q u i r e d ; t h e v a l u e 
o f t h e c o n t r a c t ; and t h e l e n g t h o f time t h e p r o j e c t would 
t a k e . Thomas a l s o t e s t i f i e d t h a t he d i d n o t t y p i c a l l y t a k e on 
j o b s o f l e s s than $ 5 , 0 0 0 . 
C h r i s t o p h e r l i k e w i s e t e s t i f i e d t h a t he d i d n o t t h i n k t h a t 
i t i s r e a s o n a b l y f o r e s e e a b l e t h a t a g e n e r a l c o n t r a c t o r would 
be n e c e s s a r y when t h r e e o r more t r a d e s a r e i n v o l v e d and t h a t 
he 
c o u l d n o t c o n c e i v e o f a b r i g h t - l i n e 
r u l e t h a t c o u l d be 
m e c h a n i c a l l y a p p l i e d t o d e t e r m i n e whether a g e n e r a l c o n t r a c t o r 
would be r e q u i r e d on a j o b . He a l s o t e s t i f i e d 
t h a t , when 
d e t e r m i n i n g 
whether 
a 
g e n e r a l 
c o n t r a c t o r was 
r e a s o n a b l y 
12 
1091225 
n e c e s s a r y , 
one would l o o k a t t h e c o m p l e x i t y o f t h e t a s k , t h e 
d o l l a r amount o f t h e j o b , t h e amount o f time t h a t would be 
r e q u i r e d t o complete t h e j o b , and t h i n g s o f t h a t n a t u r e . 
He 
a l s o t e s t i f i e d t h a t t h e d o l l a r amount o f the j o b encourages a 
g e n e r a l c o n t r a c t o r t o become i n v o l v e d . 
On May 
17, 2010, t h e 
t r i a l 
c o u r t 
e n t e r e d 
an 
o r d e r 
c e r t i f y i n g t h e c l a s s . In t h a t o r d e r , t h e t r i a l c o u r t s t a t e d , 
i n p e r t i n e n t p a r t : 
"The P o l i c y Language 
"The p o l i c y p r o v i d e s : 
"'Loss S e t t l e m e n t 
Terms -- S u b j e c t t o t h e 
d e d u c t i b l e 
or 
o t h e r 
l i m i t a t i o n 
t h a t 
a p p l i e s , we, pay t h e l e s s e r o f : 
"'a) t h e l i m i t t h a t a p p l i e s ; 
"'b) your i n t e r e s t i n t h e p r o p e r t y ; o r 
" ' c ) t h e amount d e t e r m i n e d under t h e A c t u a l 
Cash V a l u e Terms. 
"'1. 
A c t u a l Cash V a l u e Terms — 
A c t u a l 
cash 
v a l u e 
i n c l u d e s 
a 
d e d u c t i o n 
f o r 
d e p r e c i a t i o n , however caused. The s m a l l e s t 
of 
t h e 
f o l l o w i n g 
amounts 
i s u s e d 
i n 
a p p l y i n g t h e Loss S e t t l e m e n t Terms: 
" ' a . t h e c o s t t o r e p a i r o r r e p l a c e the 
p r o p e r t y 
w i t h m a t e r i a l s o f l i k e 
k i n d and 
q u a l i t y t o t h e e x t e n t 
p r a c t i c a l . 
13 
1091225 
"'b. t h e a c t u a l cash v a l u e o f t h e p r o p e r t y 
a t t h e time o f l o s s ; 
o r 
" ' c . 
( a p p l i e s 
o n l y t o m o b i l e homes) t h e 
d i f f e r e n c e i n t h e a c t u a l cash v a l u e 
j u s t 
b e f o r e t h e l o s s and t h e a c t u a l cash 
v a l u e 
j u s t a f t e r t h e l o s s . ' 
" N a t i o n a l 
S e c u r i t y 
p a i d 
each 
p u t a t i v e 
c l a s s 
member under t h e A c t u a l Cash V a l u e Terms. 
These 
terms embody what N a t i o n a l S e c u r i t y ' s c l a i m s manager 
d e s c r i b e d as an i n d u s t r y s t a n d a r d 
'replacement c o s t 
l e s s d e p r e c i a t i o n ' d e f i n i t i o n o f a c t u a l cash v a l u e . 
The 
C o u r t 
a g r e e s 
w i t h t h e c a s e l a w 
c i t e d i n 
t h e 
s e c t i o n below on Commonality t h a t such a d e f i n i t i o n 
r e q u i r e s 
payment 
f o r GCOP 
when 
[ a 
g e n e r a l 
c o n t r a c t o r ] i s 
r e a s o n a b l y 
f o r e s e e a b l e . 
"Rule 23 
"The C o u r t t u r n s now t o 
t h e 
r e q u i r e m e n t s o f R u l e 
23[, 
A l a . R. C i v . 
P . ] . I n o r d e r t o c e r t i f y 
t h i s 
case as a c l a s s a c t i o n , t h e 
C o u r t must f i n d , and i t 
does f i n d , t h a t t h e f o u r f a c t o r s o f R u l e 2 3 ( a ) have 
been met, a l o n g 
w i t h t h e f a c t o r s i n one o f t h e 
s e c t i o n s o f 2 3 ( b ) , i n 
t h i s case 2 3 ( b ) ( 3 ) . 
F o l l o w i n g 
c l a s s d i s c o v e r y , [ D e W i t t ] f o r m a l l y moved f o r c l a s s 
c e r t i f i c a t i o n on October 1, 2009. 
"The 
C o u r t h e l d an e v i d e n t i a r y h e a r i n g on 
t h e 
m o t i o n on March 1, 2010 a t w h i c h time each s i d e was 
g i v e n t h e o p p o r t u n i t y t o p r e s e n t r e l e v a n t t e s t i m o n y 
and 
o t h e r 
e v i d e n c e . 
As 
s t a t e d 
above, 
a f t e r 
c o n s i d e r i n g t h e e v i d e n c e p r e s e n t e d a l o n g 
w i t h t h e 
subsequent b r i e f i n g o f t h e 
p a r t i e s , t h e 
C o u r t f i n d s 
t h a t 
t h e p l a i n t i f f 
has 
c a r r i e d h i s burden o f 
e s t a b l i s h i n g 
t h e 
r e q u i s i t e 
f a c t o r s 
f o r 
c l a s s 
c e r t i f i c a t i o n . 
S p e c i f i c a l l y , t h e C o u r t f i n d s 
t h a t 
1) t h e c l a s s i s so numerous t h a t 
j o i n d e r o f a l l 
members i s 
i m p r a c t i c a b l e ; 2 ) t h e r e a r e 
q u e s t i o n s o f 
law o r f a c t common t o t h e c l a s s ; 3 ) t h e c l a i m s o r 
d e f e n s e s o f t h e r e p r e s e n t a t i v e 
p a r t i e s a r e t y p i c a l 
14 
1091225 
of t h e c l a i m s o r d e f e n s e s of t h e c l a s s ; and 4 ) 
t h e 
r e p r e s e n t a t i v e 
p a r t i e s 
w i l l 
f a i r l y and a d e q u a t e l y 
p r o t e c t t h e i n t e r e s t s o f t h e c l a s s . 
F u r t h e r m o r e , 
the 
C o u r t f i n d s 
t h a t t h e q u e s t i o n s o f law o r f a c t 
common t o 
t h e 
members o f t h e c l a s s predominate over 
any q u e s t i o n s a f f e c t i n g o n l y i n d i v i d u a l members, and 
t h a t a c l a s s a c t i o n i s s u p e r i o r t o o t h e r 
a v a i l a b l e 
methods f o r 
t h e f a i r and e f f i c i e n t a d j u d i c a t i o n o f 
the 
c o n t r o v e r s y . 
" A l a . R. C i v . 
P. 2 3 ( a ) ( 1 ) 
N u m e r o s i t y 
" [ N a t i o n a l S e c u r i t y ] s t i p u l a t e d on 
t h e 
r e c o r d a t 
the 
c l a s s 
c e r t i f i c a t i o n 
h e a r i n g 
t h a t 
t h e 
c l a s s 
d e f i n i t i o n 
a d o p t e d i n t h i s 
o r d e r 
s a t i s f i e s t h i s 
r e q u i r e m e n t f o r c l a s s 
c e r t i f i c a t i o n . 
Under 
A l a . 
Code [1975,] § 6-5-641(e), t h e c o u r t may t r e a t a 
c l a s s 
c e r t i f i c a t i o n 
f a c t o r 
as 
h a v i n g 
been 
e s t a b l i s h e d 
i f t h e 
p a r t i e s have so s t i p u l a t e d on 
t h e 
r e c o r d , and t h e c o u r t i s s a t i s f i e d t h a t such 
f a c t o r 
c o u l d be p r o v e n . 
G i v e n t h a t t h e 
number o f a f f e c t e d 
c l a i m s may r u n i n t o t h e thousands, t h e c o u r t i s 
s a t i s f i e d t h a t t h i s f a c t o r c o u l d be p r o v e n . See 
Cox 
 
v. American C a s t I r o n P i p e Co., 784 F.2d 1546, 
1553 
(11th C i r . 1986) (as 
a g e n e r a l r u l e , c l a s s e s o f more 
than 
40 a r e deemed t o 
s a t i s f y t h e n u m e r o s i t y 
r e q u i r e m e n t ) . 
" A l a . R. C i v . 
P. 2 3 ( a ) ( 2 ) 
Commonality 
"There must be q u e s t i o n s o f law 
o r f a c t common 
t o t h e c l a s s . 
T h i s case p r e s e n t s a m i x t u r e o f b o t h . 
The 
q u e s t i o n s o f law and f a c t common t o each 
c l a s s 
member i n t h i s case i n c l u d e whether o r n o t 
GCOP 
i s 
encompassed 
w i t h i n 
t h e p o l i c y 
term 
' a c t u a l 
cash 
v a l u e , ' whether a c l a s s member may c l a i m GCOP under 
a c t u a l 
cash v a l u e w i t h o u t d e m o n s t r a t i n g 
t h a t 
t h e y 
a c t u a l l y h i r e d a g e n e r a l c o n t r a c t o r , and whether a 
c l a s s member i s 
e n t i t l e d t o 
GCOP when t h r e e o r more 
t r a d e s a r e 
i n d i c a t e d on N a t i o n a l 
S e c u r i t y ' s 
e s t i m a t e 
of t h e i r damage. Numerous c o u r t s around t h e c o u n t r y 
have h e l d t h a t a c t u a l cash v a l u e i n c l u d e s GCOP when 
15 
1091225 
i t i s r e a s o n a b l y f o r e s e e a b l e 
t h a t the s e r v i c e s of a 
g e n e r a l 
c o n t r a c t o r 
w i l l be n e c e s s a r y . See 
M i l l s 
v. 
 
Foremost I n s u r a n c e 
Co., 
511 
F.3d 
1300 
(11th 
C i r . 
2008). 
The 
i s s u e has not been a d d r e s s e d i n Alabama, 
and i t must be d e c i d e d f o r each member of the 
c l a s s . 
F u r t h e r m o r e , i f t h i s i s s u e were d e c i d e d i n f a v o r 
of 
the 
c l a s s , 
then 
the 
i s s u e 
of 
whether 
g e n e r a l 
c o n t r a c t i n g s e r v i c e s are r e a s o n a b l y f o r e s e e a b l e when 
t h r e e or more t r a d e s 
are i n v o l v e d would have t o 
be 
d e c i d e d . 
" [ N a t i o n a l 
S e c u r i t y ] 
a s s e r t s 
t h a t 
the 
m o b i l e 
home c l a u s e of the A c t u a l Cash V a l u e Terms d i s r u p t s 
the commonality r e q u i r e m e n t of c l a s s 
c e r t i f i c a t i o n . 
( [ D e W i t t ' s ] 
home 
i s 
a 
m o b i l e home.) 
However, 
N a t i o n a l S e c u r i t y ' s c l a i m s 
a d j u s t e r 
t e s t i f i e d 
t h a t 
he 
had 
never 
seen 
a 
c l a i m where 
t h i s 
p r o v i s i o n 
a p p l i e d . 
T h e r e f o r e , 
the C o u r t f i n d s t h a t the f a c t o r 
of commonality has been a d e q u a t e l y shown. 
" A l a . R. C i v . P. 2 3 ( a ) ( 3 ) 
T y p i c a l i t y 
" [ D e W i t t ] has 
a d e q u a t e l y shown t h a t he 
i s i n 
f a c t 
a member 
of 
the 
c l a s s 
as 
d e f i n e d 
below. 
[DeWitt] i s a former N a t i o n a l S e c u r i t y i n s u r e d 
and 
a c i t i z e n of Alabama. 
He s u f f e r e d a l o s s i n the s i x 
y e a r s p r i o r 
t o J u l y 19, 2007 t h a t was 
c o v e r e d 
by 
N a t i o n a l 
S e c u r i t y . 
[DeWitt's] 
damage 
e s t i m a t e 
p r e p a r e d by N a t i o n a l S e c u r i t y i n d i c a t e d r e p a i r s 
by 
t h r e e 
or more t r a d e s . 
[DeWitt] 
t e s t i f i e d t h a t 
he 
d i d not r e c e i v e GCOP. F u r t h e r m o r e , i t i s u n d i s p u t e d 
t h a t the p r o v i s i o n e x c l u d i n g c e r t a i n p e o p l e from the 
c l a s s does not a p p l y t o [ D e W i t t ] . 
[DeWitt] has 
not 
been i n p r e v i o u s 
l i t i g a t i o n w i t h N a t i o n a l 
S e c u r i t y 
r e g a r d i n g 
h i s 
c l a i m , 
nor 
has 
he 
r e l e a s e d 
i t s 
l i a b i l i t y f o r h i s c l a i m . 
" [ D e W i t t ' s ] c l a i m s 
f o r b r e a c h of c o n t r a c t stem 
from N a t i o n a l 
S e c u r i t y ' s 
p r a c t i c e of 
c o n d i t i o n i n g 
the payment 
of GCOP on 
the 
h i r i n g 
of 
a 
g e n e r a l 
c o n t r a c t o r . 
B o t h 
[DeWitt's] 
and 
[ N a t i o n a l 
S e c u r i t y ' s ] 
e x p e r t s 
t e s t i f i e d 
t h a t 
the 
s t a n d a r d 
16 
1091225 
amount p a i d f o r g e n e r a l 
c o n t r a c t o r 
overhead and 
p r o f i t 
i s 20% o f t h e u n d e r l y i n g 
r e p a i r 
c o s t . 
[DeWitt] seeks t h e same damages f o r 
h i m s e l f as 
f o r 
each c l a s s member, t h a t b e i n g an a d d i t i o n a l 20% o f 
the a c t u a l cash v a l u e o f r e p a i r c o s t s shown on t h e 
c l a s s members' r e s p e c t i v e N a t i o n a l S e c u r i t y damage 
e s t i m a t e s . T h e r e f o r e , 
[DeWitt's] c l a i m s a r e t y p i c a l 
of t h e c l a s s 
c l a i m s , 
and 
t h i s 
f a c t o r has been 
s a t i s f i e d . 
" A l a . 
R. 
C i v . P. 
2 3 ( a ) ( 4 ) 
Adequacy 
o f 
R e p r e s e n t a t i o n 
"A p l a i n t i f f s e e k i n g t o r e p r e s e n t a c l a s s must 
be an adequate r e p r e s e n t a t i v e o f t h e c l a s s members' 
i n t e r e s t s . 
F a c t o r s 
t o c o n s i d e r 
i n c l u d e 
whether 
t h e r e i s 
any c o n f l i c t o f i n t e r e s t between t h e named 
p l a i n t i f f 
and t h e p u t a t i v e 
c l a s s 
members, and 
whether t h e a t t o r n e y s 
r e p r e s e n t i n g t h e c l a s s a r e 
q u a l i f i e d , e x p e r i e n c e d and g e n e r a l l y a b l e t o conduct 
the 
p r o p o s e d 
l i t i g a t i o n . 
C u t l e r 
v. 
O r k i n 
E x t e r m i n a t i n g 
Co., I n c . , 
770 So. 2d 67, 71 
( A l a . 
2000). 
The named 
p l a i n t i f f 
i n t h i s 
case 
seeks 
r e l i e f i d e n t i c a l t o t h e r e l i e f sought f o r each c l a s s 
member, 
t h e 
o n l y 
v a r i a t i o n 
b e i n g 
t h e amount 
c a l c u l a t e d from a d d i n g 20% t o t h e a c t u a l cash v a l u e 
l i s t e d on each c l a s s member's 
e s t i m a t e . 
" [ N a t i o n a l 
S e c u r i t y ] 
s t i p u l a t e d 
t h a t 
t h i s 
r e q u i r e m e n t f o r c l a s s 
c e r t i f i c a t i o n has been met, 
and t h e C o u r t i s s a t i s f i e d 
t h a t 
t h i s 
r e q u i r e m e n t 
c o u l d be p r o v e n . F u r t h e r m o r e , t h e C o u r t f i n d s t h a t 
M a u r i c e DeWitt has no 
i n t e r e s t s a n t a g o n i s t i c t o 
[those] 
o f t h e c l a s s , and t h a t he p o s s e s s e s an 
adequate u n d e r s t a n d i n g 
o f t h e case t o a s s i s t h i s 
a t t o r n e y s . 
The 
C o u r t 
a l s o 
f i n d s 
t h a t 
he i s 
p e r s o n a l l y w i l l i n g and a b l e t o r e p r e s e n t t h e c l a s s . 
The 
C o u r t i s f a m i l i a r w i t h t h e e x p e r i e n c e 
o f t h e 
c l a s s c o u n s e l and f i n d s t h a t t h e c l a s s c o u n s e l have 
the 
e x p e r i e n c e 
and r e s o u r c e s 
t o conduct t h e c a s e . 
The C o u r t n o t e s t h a t t h e e f f o r t s o f t h e a t t o r n e y s i n 
c o n d u c t i n g 
t h i s case t h u s f a r 
have shown t h a t t h e y 
17 
1091225 
are more than a b l e t o f u l l y r e p r e s e n t t h e i n t e r e s t s 
of t h e c l a s s members. T h e r e f o r e , t h e C o u r t 
f i n d s 
t h a t t h e adequacy o f r e p r e s e n t a t i o n 
f a c t o r has been 
s a t i s f i e d . 
" A l a . R. C i v . 
P. 23(b) (3) 
Predominance o f Common  
I s s u e s Over I n d i v i d u a l I s s u e s and S u p e r i o r i t y 
"As 
shown 
above, 
t h i s 
case 
meets 
a l l f o u r 
p r e r e q u i s i t e s o f A l a . R. C i v . 
P. 2 3 ( a ) . 
T h e r e f o r e , 
"As 
pre 
a c l a s s may be c e r t i f i e d i f , under R u l e 23(b) (3) 
: 
" ' [ T ] h e c o u r t f i n d s t h a t t h e q u e s t i o n s o f 
law o r f a c t common t o t h e members o f t h e 
c l a s s 
predominate 
over 
any 
q u e s t i o n s 
a f f e c t i n g o n l y i n d i v i d u a l members, and t h a t 
a 
c l a s s 
a c t i o n 
i s 
s u p e r i o r 
t o 
o t h e r 
a v a i l a b l e 
methods 
f o r t h e 
f a i r 
and 
e f f i c i e n t a d j u d i c a t i o n o f t h e c o n t r o v e r s y . 
The 
m a t t e r s 
p e r t i n e n t 
t o t h e 
f i n d i n g s 
i n c l u d e : (A) t h e i n t e r e s t o f 
members o f 
t h e 
c l a s s 
i n 
i n d i v i d u a l l y 
c o n t r o l l i n g t h e 
p r o s e c u t i o n o r d e f e n s e o f s e p a r a t e 
a c t i o n s ; 
(B) t h e e x t e n t and n a t u r e o f any l i t i g a t i o n 
c o n c e r n i n g 
t h e 
c o n t r o v e r s y 
a l r e a d y 
commenced by o r a g a i n s t members o f t h e 
c l a s s ; 
(C) 
t h e 
d e s i r a b i l i t y 
o r 
u n d e s i r a b i l i t y 
o f 
c o n c e n t r a t i n g 
t h e 
l i t i g a t i o n o f t h e c l a i m s i n 
t h e p a r t i c u l a r 
f o r u m ; (D) t h e d i f f i c u l t i e s 
l i k e l y t o be 
e n c o u n t e r e d i n t h e management o f a 
c l a s s 
a c t i o n . ' 
"The 
f o u r 
f a c t o r s 
l i s t e d above a l l m i t i g a t e i n 
f a v o r o f c l a s s 
c e r t i f i c a t i o n . 
R e l a t i v e t o f a c t o r 
(A) 
c o n c e r n i n g t h e i n t e r e s t o f c l a s s members i n 
b r i n g i n g 
s e p a r a t e a c t i o n s , t h e amounts due t o each 
c l a s s member i s r e l a t i v e l y s m a l l . 
The C o u r t 
f i n d s 
t h a t each c l a s s member would have 
l i t t l e 
i n c e n t i v e 
t o 
t a k e an a c t i v e 
p a r t 
i n p r o s e c u t i n g t h e c a s e . 
T h e r e f o r e , g i v e n t h e r e l a t i v e l y s m a l l amounts due t o 
[DeWitt] and each c l a s s member, t h e l i t i g a t i o n 
c o s t s 
18 
1091225 
f o r a s i n g l e i n s u r e d c h a l l e n g i n g 
an a c r o s s - t h e - b o a r d 
p r a c t i c e 
o f 
an 
i n s u r a n c e 
company 
would 
be 
p r o h i b i t i v e l y h i g h r e l a t i v e t o t h e r e l i e f t o which 
the i n s u r e d would be e n t i t l e d . 
"As t o f a c t o r (B) 
c o n c e r n i n g s i m i l a r 
l i t i g a t i o n , 
the 
C o u r t has n o t been made aware o f any c l a s s 
a c t i o n 
l i t i g a t i o n 
p e n d i n g 
a g a i n s t 
[ N a t i o n a l 
S e c u r i t y ] r e g a r d i n g t h e 
payment o f 
GCOP i n 
Alabama. 
As t o f a c t o r 
(C), M o b i l e County i s 
a n a t u r a l forum 
f o r 
t h i s 
l i t i g a t i o n . 
The v a s t 
m a j o r i t y o f t h e 
c l a i m s 
i n v o l v e d a r o s e 
from 
H u r r i c a n e s 
Ivan and 
K a t r i n a . 
The c l a s s i s l i m i t e d t o Alabama 
c i t i z e n s , 
and t h e c l a s s i s l i m i t e d t o l o s s e s t h a t o c c u r r e d i n 
Alabama. T h e r e f o r e , t h e 
C o u r t f i n d s t h a t most o f t h e 
c l a s s members 
w i l l be r e s i d e n t s o f e i t h e r 
M o b i l e 
County o r B a l d w i n County, and t h e l o s s e s 
concerned 
are c o n c e n t r a t e d i n t h e s e two c o u n t i e s . 
"As 
t o f a c t o r 
(D) c o n c e r n i n g 
m a n a g e a b i l i t y , 
N a t i o n a l S e c u r i t y m a i n t a i n s an e l e c t r o n i c 
database 
of i t s c l a i m s f i l e s , i n c l u d i n g each r e p a i r e s t i m a t e 
p r e p a r e d by i t s a d j u s t e r s d u r i n g t h e time p e r i o d 
r e l e v a n t t o t h i s c a s e . The r e l e v a n t e s t i m a t e s would 
be 
r e v i e w e d t o see which ones i n d i c a t e d t h r e e o r 
more t r a d e s b u t d i d n o t i n c l u d e GCOP. As [DeWitt's] 
e x p e r t A l b e r t Paxton t e s t i f i e d , t h i s i s 
a r e l a t i v e l y 
s i m p l e m a t t e r o f c o u n t i n g . 
The C o u r t agrees 
from 
e x a m i n i n g t h e e s t i m a t e s f o r [DeWitt] 
t h a t t h i s i s 
not a c o m p l i c a t e d t a s k . A c c o r d i n g t o 
Mr. Paxton, one 
may a l s o t a k e t h e l i s t o f 
t h e 
terms used t o d e s c r i b e 
the v a r i o u s t r a d e s , which 
[DeWitt] s u b m i t t e d a t 
t h e 
h e a r i n g , and r e v i e w an e s t i m a t e t o see i f t h r e e 
d i f f e r e n t t r a d e s a r e l i s t e d . 
Review o f t h e f i l e s 
w i l l a l s o r e v e a l t h e i d e n t i t y and a d d r e s s e s o f 
t h e 
members o f t h e c l a s s , so t h a t n o t i c e o f t h e c l a s s 
and an o p p o r t u n i t y f o r o p t - o u t may be a f f o r d e d each 
c l a s s 
member 
under A l a . R. C i v . P. 
2 3 ( c ) ( 2 ) , 
r e q u i r i n g such n o t i c e f o r any c l a s s c e r t i f i e d under 
Rule 2 3 ( b ) ( 3 ) . 
19 
1091225 
" C o u r t s 
i n s e v e r a l 
j u r i s d i c t i o n s 
around the 
c o u n t r y have h e l d t h a t a case such as t h i s i n v o l v i n g 
the w i t h h o l d i n g o f g e n e r a l 
c o n t r a c t o r o v e r h e a d and 
p r o f i t from a c t u a l cash v a l u e was s u i t a b l e f o r c l a s s 
c e r t i f i c a t i o n 
under 
v e r s i o n s 
o f 
R u l e 
2 3 ( b ) ( 3 ) 
i d e n t i c a l 
t o Alabama's 
v e r s i o n . 
In Burgess 
v.  
Farmers I n s u r a n c e Co., 151 P.3d 92 (Okla. 2006), t h e 
p l a i n t i f f s sought c l a s s c e r t i f i c a t i o n f o r b r e a c h o f 
c o n t r a c t , 
f r a u d , and bad f a i t h f o r f a i l u r e t o add 
20% overhead and p r o f i t t o each a c t u a l cash 
v a l u e 
c l a i m 
where 
t h e 
e s t i m a t e 
showed 
t h r e e 
o r more 
t r a d e s . 
The 
t r i a l 
c o u r t 
c e r t i f i e d t h e c l a s s , b u t 
the 
Oklahoma 
C o u r t 
o f 
C i v i l 
A p p e a l s 
r e v e r s e d . 
However, t h e Oklahoma Supreme 
C o u r t 
r e v e r s e d t h e 
i n t e r m e d i a t e 
c o u r t and a f f i r m e d t h e t r i a l 
c o u r t ' s 
c l a s s c e r t i f i c a t i o n . The i n s u r a n c e company's p r i m a r y 
argument a g a i n s t 
c l a s s 
c e r t i f i c a t i o n 
was 
t h a t i t 
e v a l u a t e d each c l a i m on i t s own m e r i t s , t h a t i t d i d 
not o p e r a t e p u r s u a n t t o an a c r o s s - t h e - b o a r d 
p a t t e r n , 
and i t d e n i e d t h e v a l i d i t y o f m e a s u r i n g t h e number 
of t r a d e s . 
I d . a t 99-100. 
The Oklahoma 
Supreme 
C o u r t h e l d t h a t d e n y i n g c l a s s c e r t i f i c a t i o n based on 
t h o s e arguments would i n a p p r o p r i a t e l y i n v o l v e 
r u l i n g 
on t h e m e r i t s o f t h e c o m p l a i n t . 
The c o u r t 
s t a t e d 
t h a t whether the ' t h r e e t r a d e r u l e ' was v a l i d o r not 
u l t i m a t e l y 
depended on t h e j u r y ' s 
d e t e r m i n a t i o n . 
I d . a t 100. 
"The [ U n i t e d S t a t e s C o u r t of A p p e a l s f o r t h e ] 
E l e v e n t h 
C i r c u i t has a l s o t a c i t l y approved of c l a s s 
c e r t i f i c a t i o n of a case s i m i l a r t o t h i s . 
In M i l l s  
v. Foremost I n s u r a n c e Co., 511 F.3d 1300 (11th C i r . 
2008), t h e p l a i n t i f f s b r o u g h t a c l a s s a c t i o n f o r 
not 
p a y i n g overhead and p r o f i t i n a c t u a l cash v a l u e as 
w e l l as n o t p a y i n g 
s a l e s t a x . 
The D i s t r i c t 
C o u r t 
d i s m i s s e d t h e c a s e , h o l d i n g t h a t t h e p l a i n t i f f s were 
r e q u i r e d t o show 
t h a t 
t h e y had a c t u a l l y h i r e d a 
g e n e r a l 
c o n t r a c t o r 
i n 
o r d e r 
t o 
r e c e i v e 
t h e 
a d d i t i o n a l payment. The 
D i s t r i c t 
C o u r t 
a l s o 
h e l d 
t h a t t h e case would not be a p p r o p r i a t e 
f o r c l a s s 
c e r t i f i c a t i o n , 
because 
t h e 
i n d i v i d u a l 
i s s u e 
of 
a n a l y z i n g each c l a s s member's p r o p e r t y damage t o see 
20 
1091225 
who was 
e n t i t l e d 
t o a g e n e r a l 
c o n t r a c t o r 
would 
predominate over any common i s s u e . 
"The E l e v e n t h C i r c u i t r e v e r s e d , and h e l d t h a t 
i f 
i t 
was 
r e a s o n a b l y 
l i k e l y 
t h a t 
t h e 
p l a i n t i f f s ' 
r e p a i r s would i n v o l v e a g e n e r a l c o n t r a c t o r , then i t 
d i d 
n o t 
m a t t e r 
under 
t h e 
a c t u a l 
cash 
v a l u e 
d e f i n i t i o n 
(which was s u b s t a n t i a l l y t h e same as t h e 
d e f i n i t i o n 
g i v e n 
by 
N a t i o n a l 
S e c u r i t y ' s 
c l a i m s 
manager) 
whether o r n o t t h e p l a i n t i f f s 
a c t u a l l y 
h i r e d a g e n e r a l 
c o n t r a c t o r t o be e n t i t l e d t o t h e 
a d d i t i o n a l payment. As t o c l a s s c e r t i f i c a t i o n , t h e 
E l e v e n t h C i r c u i t n o t e d , and r e j e c t e d , t h e i n s u r e r ' s 
p o s i t i o n t h a t t h e d e t e r m i n a t i o n o f whether a c l a s s 
member's damage ' r e a s o n a b l y 
r e q u i r e d ' t h e s e r v i c e s 
of a g e n e r a l 
c o n t r a c t o r would 
n e c e s s a r i l y be an 
i n d i v i d u a l i z e d 
i s s u e 
t h a t 
p r e v e n t e d 
23(b)(3) 
c e r t i f i c a t i o n . 
The c o u r t remanded t h e case t o g i v e 
the p l a i n t i f f s a chance t o d e v e l o p t h r o u g h d i s c o v e r y 
t h e i r 
a l l e g a t i o n s , 
n e a r l y i d e n t i c a l t o t h i s 
case, 
t h a t 
t h e 
i n s u r e r ' s 
own 
a d j u s t e r s 
had 
a l r e a d y 
p r e p a r e d e s t i m a t e s o f each c l a s s member's c l a i m , and 
t h a t i t 
c o u l d be r e a d i l y d e t e r m i n e d from t h e f a c e o f 
the e s t i m a t e s whether o r n o t a g e n e r a l c o n t r a c t o r ' s 
s e r v i c e s 
were 
r e a s o n a b l y 
l i k e l y 
u s i n g 
methods 
employed by a d j u s t e r s e v e r y d a y . 
I d . 
a t 
1310. 
"The E l e v e n t h 
C i r c u i t 
s t a t e d t h a t i t 
was not 
e x p r e s s i n g 
an o p i n i o n on t h e a p p r o p r i a t e n e s s 
o f 
c l a s s 
c e r t i f i c a t i o n . 
However, by g r a n t i n g 
c l a s s 
d i s c o v e r y i n s t e a d o f s i m p l y a f f i r m i n g t h e d i s m i s s a l 
of t h e c l a s s a l l e g a t i o n s , t h e c o u r t can o n l y be 
i n t e r p r e t e d as h a v i n g i n d i c a t e d t h a t i n d i v i d u a l i z e d 
i s s u e s would n o t predominate i f 
t h e p l a i n t i f f 
c o u l d 
show some o b j e c t i v e measure t h a t o b v i a t e d t h e need 
t o i n d i v i d u a l l y a s s e s s each c l a s s member's damage. 
In 
t h i s 
case, 
[ D e W i t t ] has p r e s e n t e d t h e i d e a o f 
c o u n t i n g 
t h e number o f t r a d e s , t h e 
' t h r e e - t r a d e 
r u l e . ' 
[ D e W i t t ' s ] e x p e r t e x p l a i n e d t h a t once a l o s s 
r e a c h e d t h e l e v e l o f c o m p l e x i t y where t h r e e o r more 
t r a d e s 
were 
n e c e s s a r y , 
then 
t h e s e r v i c e s o f a 
21 
1091225 
g e n e r a l c o n t r a c t o r 
(and, t h u s , GCOP) were r e a s o n a b l y 
f o r e s e e a b l e . 
" N a t i o n a l 
S e c u r i t y 
c h a l l e n g e d t h e use o f 
t h e 
t h r e e - t r a d e 
r u l e 
a t 
t h e 
h e a r i n g 
l a r g e l y 
by 
s u g g e s t i n g 
t h a t an i n s u r e d may f o r t u i t o u s l y know 
someone who c o u l d p e r f o r m a l l 
o f 
t h e 
needed r e p a i r s , 
even i n 
a t h r e e - t r a d e 
s i t u a t i o n . 
One o f [ N a t i o n a l 
S e c u r i t y ' s ] e x p e r t s 
t e s t i f i e d t h a t i n 
a l o s s such as 
t h a t 
s u s t a i n e d by t h e p l a i n t i f f i n t h i s 
case, he 
would h i r e such a 'handyman' t o complete t h e j o b s 
w i t h o u t p a y i n g GCOP. 
However, t h e e x p e r t 
a d m i t t e d 
t h a t 
h i s knowledge o f who t o 
c a l l 
i n such a 
s i t u a t i o n was b a s e d on h i s y e a r s o f e x p e r i e n c e as a 
g e n e r a l 
c o n t r a c t o r . 
However, i t was c l e a r from t h e 
t e s t i m o n y t h a t f o r 
an i n s u r e d t o t a k e advantage o f 
t h i s e x p e r t c o n t r a c t o r ' s knowledge would r e q u i r e t h e 
i n s u r e d t o i n c u r t h e c o s t o f 
GCOP. 
T h e r e f o r e , GCOP 
would have t o be i n c l u d e d i n 
t h e a c t u a l cash 
v a l u e 
payment. 
" F u r t h e r m o r e , R u l e 2 3 ( b ) ( 3 ) does n o t r e q u i r e 
t h a t 
t h e r e be no i n d i v i d u a l i z e d i s s u e s . I t o n l y 
r e q u i r e s 
t h a t common i s s u e s predominate over any 
i n d i v i d u a l i z e d 
i s s u e s 
t h a t may e x i s t . 
The C o u r t 
f i n d s 
t h a t 
t h e h y p o t h e t i c a l 
p r e s e n c e o f a few 
extreme 
examples 
a r e 
n o t 
enough 
t o 
cause 
i n d i v i d u a l i z e d 
i s s u e s t o predominate 
over common 
i s s u e s . 
"At t h i s s t a g e , t h e f u n c t i o n o f t h e 
C o u r t i s t o 
d e t e r m i n e whether [ N a t i o n a l S e c u r i t y ' s ] c h a l l e n g e t o 
t h i s 
r u l e i m p l i c a t e s t h e need f o r 
t e s t i m o n y about 
e v e r y l o s s , o r whether t h e r u l e i s 
a r e l i a b l e t o o l 
t h a t can 
be a p p l i e d c l a s s - w i d e . 
The m e r i t s o f 
t h e 
t h r e e - t r a d e 
r u l e 
i t s e l f a r e n o t a t i s s u e a t t h i s 
p o i n t . 
C l a s s 
c e r t i f i c a t i o n i s 
a p r o c e d u r a l 
i s s u e 
d i s t i n c t 
from t h e m e r i t s o f t h e case. 
Ex 
p a r t e  
Government Employees I n s . Co., 729 So. 2d 299, 
303 
( A l a . 
1999). The d e c i s i o n on c l a s s c e r t i f i c a t i o n i s 
not 
based on a d e c i s i o n about t h e m e r i t s o f 
t h e 
22 
1091225 
c l a s s c l a i m s . 
A l l s t a t e I n s . 
Co. v. Ware, 824 So. 
2d 
739, 744 ( A l a . 
2002). 
" C o u r t s have h e l d t h a t whether i t 
was improper 
t o w i t h h o l d 20% 
overhead and p r o f i t from a c t u a l cash 
v a l u e where t h r e e o r more t r a d e s were i n v o l v e d i s 
a 
common 
i s s u e 
t h a t 
p r e d o m i n a t e s 
over 
any 
i n d i v i d u a l i z e d 
i s s u e s , making c l a s s 
c e r t i f i c a t i o n 
a p p r o p r i a t e . 
See L i n d q u i s t v. Farmers I n s u r a n c e Co.  
of 
A r i z o n a , 
[No. CV 06-597-TUC-FRZ] 
(D. 
A r i z . , 
F e b r u a r y 6, 2 0 0 8 ) [ n o t 
r e p o r t e d 
i n F. Supp. 2 d ] ; 
M e l o t v. Oklahoma Farm Bureau Mut. I n s . 
Co., 87 
P.3d 
644 
(Okla. C i v . 
App, 2003); and P r e s s v. L o u i s i a n a  
C i t i z e n s F a i r P l a n P r o p e r t y I n s . Corp., [12 So. 3d 
392 (La. 
D i s t . C t . 
App. 2 0 0 9 ) ] . 
The C o u r t agrees 
w i t h t h e 
r e a s o n i n g o f t h e s e cases and f i n d s t h a t t h e 
common 
q u e s t i o n s 
o f law and f a c t i n t h i s 
case 
predominate over any i n d i v i d u a l i z e d i s s u e s . 
"The C o u r t f u r t h e r f i n d s t h a t a c l a s s a c t i o n 
i s 
a s u p e r i o r method o f a d j u d i c a t i n g t h e 
c l a s s members' 
c l a i m s . 
As 
shown 
above, 
i t would 
n o t be 
e c o n o m i c a l l y 
f e a s i b l e f o r each 
c l a s s member t o 
i n d i v i d u a l l y 
l i t i g a t e 
h i s 
o r 
h e r 
c l a i m . 
F u r t h e r m o r e , 
t h e 
a p p r a i s a l 
p r o c e s s 
o f f e r e d 
by 
N a t i o n a l S e c u r i t y i s 
n o t 
a s u p e r i o r method e i t h e r as 
d i s c u s s e d i n 
t h e n e x t s e c t i o n . [
3 ] 
"CONCLUSION 
"The C o u r t o r d e r s 
t h a t t h e f o l l o w i n g c l a s s i s 
e s t a b l i s h e d : 
3The 
t r i a l c o u r t ' s o r d e r c o n t a i n s a s e c t i o n on " N a t i o n a l 
S e c u r i t y ' s 
D e f e n s e s , " 
w h i c h 
i n c l u d e s 
a 
d i s c u s s i o n 
o f 
" A p p r a i s a l , " 
"Overpayment/Set-Off," 
and 
" J o i n d e r 
o f 
Mortgagees." 
Because o f our d i s p o s i t i o n o f t h e c l a s s -
c e r t i f i c a t i o n i s s u e under R u l e 23, A l a . 
R. C i v . P., we have 
o m i t t e d 
t h a t s e c t i o n . 
23 
1091225 
"1) 
A l l c u r r e n t and 
former N a t i o n a l S e c u r i t y 
F i r e & C a s u a l t y Company i n s u r e d s ; 
"2) who 
are c i t i z e n s of the S t a t e of Alabama; 
"3) 
who 
i n the 
s i x y e a r s 
p r e c e d i n g 
J u l y 
19, 
2007, s u f f e r e d a c o v e r e d 
l o s s t o p r o p e r t y s i t u a t e d 
w i t h i n the S t a t e of Alabama; 
"4) 
where the damage e s t i m a t e 
f o r such 
l o s s 
p r e p a r e d 
by 
N a t i o n a l 
S e c u r i t y 
F i r e 
& 
C a s u a l t y 
Company or i t s agents i n d i c a t e d r e p a i r s by t h r e e or 
more t r a d e 
s k i l l s ; 
"5) where the l o s s was 
s e t t l e d on an a c t u a l cash 
v a l u e b a s i s ; and 
"6) where the a c t u a l cash v a l u e payment d i d not 
i n c l u d e an amount f o r g e n e r a l 
c o n t r a c t o r overhead 
and 
p r o f i t e q u a l t o 20% of the u n d e r l y i n g c o s t of 
r e p a i r . " 
S t a n d a r d of Review 
" T h i s C o u r t has 
s t a t e d the s t a n d a r d of 
r e v i e w 
a p p l i c a b l e 
t o 
a 
c l a s s - c e r t i f i c a t i o n 
o r d e r 
as 
f o l l o w s : 
" ' T h i s C o u r t 
r e v i e w s 
a 
t r i a l 
c o u r t ' s 
c l a s s - c e r t i f i c a t i o n 
o r d e r 
t o 
d e t e r m i n e 
whether the c o u r t exceeded i t s d i s c r e t i o n 
i n 
e n t e r i n g the 
o r d e r , 
but 
we 
r e v i e w 
de 
novo the q u e s t i o n whether the 
t r i a l 
c o u r t 
a p p l i e d 
the 
c o r r e c t 
l e g a l 
s t a n d a r d 
i n 
r e a c h i n g i t s d e c i s i o n t o c e r t i f y a 
c l a s s . 
Compass Bank v. Snow, 823 So. 2d 667 
( A l a . 
2001). 
We 
w i l l not d i s t u r b a t r i a l c o u r t ' s 
c l a s s - c e r t i f i c a t i o n o r d e r w i t h o u t a showing 
t h a t 
i n 
e n t e r i n g 
the 
o r d e r 
the 
c o u r t 
exceeded 
the 
p e r m i s s i b l e 
l i m i t s 
of 
i t s 
d i s c r e t i o n . 
G e n e r a l 
Motors 
A c c e p t a n c e 
24 
1091225 
Corp. v. 
o n 
n o \ 
I 
Dubose, 834 So. 2d 67, 70 ( A l a . 
2 0 0 2 ) . ' 
v. Johnson, 893 So. 2d 
"U-Haul Co. of Alabama, I n c . 
307, 310-11 ( A l a . 2004)." 
307, 310-11 
B a l d w i n Mut. I n s . Co. v. Edwards, 63 So. 3d 1268, 1271 ( A l a . 
2010). 
"The p a r t y s e e k i n g c e r t i f i c a t i o n has t h e burden of 
p r o v i n g t h a t i t i s e n t i t l e d t o c l a s s c e r t i f i c a t i o n . 
§ 6-5-541(e), A l a . Code 1975. 
" ' [ A ] n abuse of d i s c r e t i o n [
4 ] i n c e r t i f y i n g 
a 
c l a s s 
a c t i o n may 
be p r e d i c a t e d upon a 
showing by the p a r t y s e e k i n g t o have the 
c l a s s - c e r t i f i c a t i o n 
o r d e r s e t a s i d e 
t h a t 
"the 
p a r t y 
s e e k i n g 
c l a s s 
a c t i o n 
c e r t i f i c a t i o n f a i l e d t o c a r r y the burden o f 
p r o d u c i n g 
s u f f i c i e n t 
e v i d e n c e t o 
s a t i s f y 
the r e q u i r e m e n t s of R u l e 23."' 
"Compass Bank v. Snow, 823 So. 2d 667, 672 ( A l a . 
2001) 
( q u o t i n g Ex p a r t e Green Tree F i n . Corp., 
684 
So. 2d 1302, 1307 
( A l a . 1 9 9 6 ) ) . " 
CIT Commc'n F i n . Corp. v. McFadden, Lyon & Rouse, L.L.C., 3 
7 
So. 3d 114, 121 ( A l a . 2009). 
A n a l y s i s 
4 " T h i s C o u r t now p h r a s e s t h e q u e s t i o n i n terms o f whether 
a t r i a l c o u r t 'exceeded' i t s d i s c r e t i o n , r a t h e r t h a n whether 
the 
t r i a l 
c o u r t 
'abused' i t s d i s c r e t i o n . 
The s t a n d a r d o f 
r e v i e w 
remains 
t h e 
same." 
C l a s s r o o m d i r e c t . c o m , LLC 
v. 
 
D r a p h i x , LLC, 992 So. 2d 692, 701 n. 1 ( A l a . 2008). 
25 
1091225 
N a t i o n a l S e c u r i t y argues t h a t t h e t r i a l 
c o u r t e r r e d i n 
f i n d i n g t h a t DeWitt s a t i s f i e d h i s burden o f showing t h a t c l a s s 
c e r t i f i c a t i o n was w a r r a n t e d . 
In t h i s c a s e , DeWitt a l l e g e d t h a t N a t i o n a l S e c u r i t y had 
engaged i n a p r a c t i c e o f n o t p a y i n g GCOP on a c l a i m f o r 
r e p a i r s when t h e i n s u r e d d i d 
n o t a c t u a l l y 
h i r e a 
g e n e r a l 
c o n t r a c t o r . 
I n h i s c o m p l a i n t , 
DeWitt a l s o a l l e g e d t h a t t h e 
i n s u r a n c e - i n d u s t r y s t a n d a r d was t h a t when t h r e e o r 
more t r a d e s 
would be i n v o l v e d i n making t h e r e p a i r s i t 
was 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a g e n e r a l c o n t r a c t o r would be n e c e s s a r y and 
GCOP s h o u l d be p a i d . 
However, N a t i o n a l S e c u r i t y a l l e g e d t h a t 
i t s p o l i c y was t o 
pay 
GCOP when i t 
was r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a g e n e r a l 
c o n t r a c t o r would be n e c e s s a r y , 
r e g a r d l e s s o f 
whether a g e n e r a l 
c o n t r a c t o r was a c t u a l l y h i r e d and w i t h o u t 
a p p l i c a t i o n o f 
t h e 
t h r e e - t r a d e r u l e . I t 
a l s o a s s e r t e d t h a t i t 
made such a d e t e r m i n a t i o n on a c a s e - b y - c a s e b a s i s and t h a t 
i t 
was t h e 
i n s u r a n c e - i n d u s t r y s t a n d a r d i n 
Alabama t o 
pay 
GCOP on 
a c a s e - b y - c a s e b a s i s . 
R u l e 23, A l a . R. C i v . 
P., p r o v i d e s : 
"(a) 
P r e r e q u i s i t e s t o a C l a s s A c t i o n . 
One o r 
more members o f a c l a s s may sue o r be sued as 
r e p r e s e n t a t i v e p a r t i e s on b e h a l f o f a l l o n l y i f (1) 
the c l a s s i s 
so numerous t h a t j o i n d e r o f a l l 
members 
26 
1091225 
i s i m p r a c t i c a b l e , (2) t h e r e a r e q u e s t i o n s o f law 
o r 
f a c t common t o 
t h e c l a s s , (3) 
t h e 
c l a i m s o r d e f e n s e s 
of t h e r e p r e s e n t a t i v e p a r t i e s a r e t y p i c a l o f 
t h e 
c l a i m s 
o r d e f e n s e s 
o f t h e c l a s s , 
and (4) t h e 
r e p r e s e n t a t i v e p a r t i e s w i l l 
f a i r l y and 
a d e q u a t e l y 
p r o t e c t t h e i n t e r e s t s o f t h e c l a s s . 
"(b) C l a s s A c t i o n s M a i n t a i n a b l e . 
An a c t i o n may 
be m a i n t a i n e d as a c l a s s a c t i o n i f t h e p r e r e q u i s i t e s 
of s u b d i v i s i o n (a) 
a r e s a t i s f i e d , and i n 
a d d i t i o n : 
"(1) t h e p r o s e c u t i o n o f s e p a r a t e 
a c t i o n s by 
o r 
a g a i n s t i n d i v i d u a l members o f 
t h e 
c l a s s would c r e a t e 
a r i s k o f 
"(A) 
i n c o n s i s t e n t 
o r 
v a r y i n g 
a d j u d i c a t i o n s 
w i t h 
r e s p e c t t o i n d i v i d u a l 
members o f t h e c l a s s w h i c h would e s t a b l i s h 
i n c o m p a t i b l e 
s t a n d a r d s o f conduct f o r t h e 
p a r t y o p p o s i n g t h e c l a s s , o r 
"(B) 
a d j u d i c a t i o n s 
w i t h 
r e s p e c t t o 
i n d i v i d u a l members o f 
t h e 
c l a s s w h i c h would 
as a p r a c t i c a l m a t t e r be d i s p o s i t i v e o f t h e 
i n t e r e s t s o f t h e o t h e r members n o t 
p a r t i e s 
t o 
t h e a d j u d i c a t i o n s 
o r 
s u b s t a n t i a l l y 
i m p a i r o r impede t h e i r 
a b i l i t y t o p r o t e c t 
t h e i r i n t e r e s t s ; o r 
"(2) t h e p a r t y o p p o s i n g t h e c l a s s has a c t e d o r 
r e f u s e d t o a c t 
on grounds g e n e r a l l y a p p l i c a b l e t o 
the 
c l a s s , 
t h e r e b y 
making 
a p p r o p r i a t e 
f i n a l 
i n j u n c t i v e 
r e l i e f 
o r 
c o r r e s p o n d i n g 
d e c l a r a t o r y 
r e l i e f w i t h r e s p e c t t o t h e c l a s s as a whole; o r 
"(3) t h e c o u r t f i n d s t h a t t h e q u e s t i o n s o f 
law 
or 
f a c t 
common 
t o t h e members 
o f t h e 
c l a s s 
predominate 
over 
any 
q u e s t i o n s 
a f f e c t i n g 
o n l y 
i n d i v i d u a l members, and t h a t a c l a s s 
a c t i o n i s 
s u p e r i o r t o o t h e r a v a i l a b l e methods f o r 
t h e f a i r and 
e f f i c i e n t 
a d j u d i c a t i o n o f t h e c o n t r o v e r s y . 
The 
m a t t e r s p e r t i n e n t t o t h e f i n d i n g s i n c l u d e : (A) 
t h e 
27 
1091225 
i n t e r e s t 
of members of the 
c l a s s i n 
i n d i v i d u a l l y 
c o n t r o l l i n g the p r o s e c u t i o n or d e f e n s e of 
s e p a r a t e 
a c t i o n s ; (B) the e x t e n t and n a t u r e of any 
l i t i g a t i o n 
c o n c e r n i n g 
the c o n t r o v e r s y a l r e a d y commenced by 
or 
a g a i n s t members of the c l a s s ; 
(C) the 
d e s i r a b i l i t y 
or u n d e s i r a b i l i t y of c o n c e n t r a t i n g the l i t i g a t i o n of 
the 
c l a i m s 
i n 
the 
p a r t i c u l a r 
forum; 
(D) 
the 
d i f f i c u l t i e s 
l i k e l y 
t o 
be 
e n c o u n t e r e d 
i n 
the 
management of a c l a s s a c t i o n . " 
F u r t h e r , i n CIT Communication F i n a n c e Corp., s u p r a , t h i s C o u r t 
s t a t e d : 
" ' " [ C ] l a s s 
a c t i o n s 
may 
not 
be 
approved 
l i g h t l y 
and 
... 
the 
d e t e r m i n a t i o n 
of 
whether the p r e r e q u i s i t e s of Rule 23 have 
been 
s a t i s f i e d 
r e q u i r e s 
a 
' r i g o r o u s 
a n a l y s i s . ' " 
Ex p a r t e C i t i c o r p A c c e p t a n c e  
Co., 
715 So. 2d 199, 
203 
( A l a . 1997); 
see 
a l s o 
§ 
6-5-641, 
A l a . 
Code 
1975. 
The 
p l a i n t i f f must o f f e r s u f f i c i e n t e v i d e n c e of 
the Rule 23 c r i t e r i a ; t h i s e v i d e n c e must be 
r e f e r e n c e d 
i n 
the 
t r i a l 
c o u r t ' s 
o r d e r 
b e f o r e c l a s s c e r t i f i c a t i o n i s p r o p e r . ' 
" B i l l Heard C h e v r o l e t Co. v. Thomas, 819 So. 2d 
34, 
40 
( A l a . 2001)." 
37 So. 
3d a t 121. 
F u r t h e r , i n Wyeth, I n c . v. B l u e C r o s s 
& 
B l u e S h i e l d of Alabama, 42 So. 3d 1216, 1221-22 ( A l a . 2010), 
t h i s C o u r t s t a t e d : 
"'A 
Rule 23 d e t e r m i n a t i o n i s w h o l l y p r o c e d u r a l 
and 
has 
n o t h i n g 
t o do 
w i t h whether 
a 
p l a i n t i f f 
w i l l 
u l t i m a t e l y p r e v a i l . . . . ' 
L i t t l e Caesar E n t e r s . , I n c .  
v. 
Smith, 
172 F.R.D. 236, 
241 
(E.D. 
M i c h . 
1997) 
(comment on R u l e 23, Fed. R. C i v . P.). 
We a l s o note 
t h a t , 
i n e x a m i n i n g 
the 
s e v e r a l p r e r e q u i s i t e s f o r 
c l a s s c e r t i f i c a t i o n c o n t a i n e d i n R u l e 23, i t s h o u l d 
28 
1091225 
be 
kept i n mind t h a t 
'Alabama's R u l e 23 and 
t h e 
c o r r e s p o n d i n g 
f e d e r a l 
r u l e 
(Rule 23, Fed. R. 
C i v . 
P.) a r e " v i r t u a l l y 
i d e n t i c a l , " ... and " [ f ] e d e r a l 
a u t h o r i t i e s 
a r e p e r s u a s i v e 
when 
[a c o u r t i s ] 
i n t e r p r e t i n g t h e 
Alabama R u l e s o f C i v i l P r o c e d u r e . " ' 
M i t c h e l l v. H & R B l o c k , I n c . , 783 So. 2d 812, 
816 
( A l a . 2000) ( q u o t i n g M a r s h a l l D u r b i n & Co. 
v. J a s p e r  
U t i l s . Bd., 437 So. 2d 1014, 1025 ( A l a . 1983), and 
Rowan v. F i r s t Bank o f Boaz, 476 So. 2d 44, 46 ( A l a . 
1 9 8 5 ) ) . 
"'The 
p a r t y s e e k i n g 
c e r t i f i c a t i o n 
b e a r s t h e 
burden o f showing t h a t each o f 
t h e f o u r r e q u i r e m e n t s 
of R u l e 23(a) and a t l e a s t one r e q u i r e m e n t o f R u l e 
23(b) have been met.' A l l i e d O r t h o p e d i c A p p l i a n c e s ,  
I n c . v. Tyco H e a l t h c a r e Group L.P., 
247 F.R.D. 156, 
164 
(C.D. C a l . 
2007). BCBSAL seeks 
c e r t i f i c a t i o n 
under 
R u l e 
2 3 ( b ) ( 3 ) , A l a . 
R. C i v . 
P. 
We 
have 
p r e v i o u s l y n o t e d t h a t '[a] number o f t h e s e 
c r i t e r i a , 
such as t h e R u l e 23(a) r e q u i r e m e n t s o f commonality 
and t y p i c a l i t y and t h e 
R u l e 2 3 ( b ) ( 3 ) r e q u i r e m e n t o f 
predominance, a r e a n a l y t i c a l l y s i m i l a r . ' 
A v i s Rent  
A Car Sys., I n c . v. Heilman, 876 So. 2d 1111, 1116 
( A l a . 
2003) 
( c i t i n g 
H e a r t l a n d Commc'ns, I n c . 
v. 
 
S p r i n t Corp., 161 F.R.D. 111, 
117 (D. 
Kan. 1 9 9 5 ) ) . " 
In t h i s case, DeWitt sought 
c l a s s 
c e r t i f i c a t i o n p u r s u a n t t o 
R u l e 2 3 ( b ) ( 3 ) , A l a . R. C i v . P. 
A. Predominance 
N a t i o n a l S e c u r i t y ' s most s i g n i f i c a n t argument i s t h a t 
t h e 
p r o p o s e d 
c l a s s a c t i o n does n o t s a t i s f y t h e r e q u i r e m e n t 
t h a t 
i s s u e s common t o 
t h e 
c l a s s predominate over i n d i v i d u a l i s s u e s . 
"We have s t a t e d t h a t ' [ i ] n 
d e t e r m i n i n g whether 
the q u e s t i o n s o f law o r f a c t common t o t h e c l a s s 
members predominate over t h o s e q u e s t i o n s t h a t a f f e c t 
o n l y 
i n d i v i d u a l 
c l a s s 
members, 
t h e c o u r t 
must 
29 
1091225 
i n i t i a l l y i d e n t i f y the s u b s t a n t i v e law a p p l i c a b l e t o 
the 
case 
and 
i d e n t i f y 
the 
p r o o f 
t h a t 
w i l l 
be 
n e c e s s a r y 
t o e s t a b l i s h the c l a i m . ' 
Ex p a r t e Green  
Tree F i n . Corp., 723 
So. 
2d 6, 9 ( A l a . 1998). 
The 
s t a n d a r d l e a s e agreement used i n t h i s case p r o v i d e s : 
' [ T ] h i s l e a s e 
w i l l be governed by the laws of 
the 
S t a t e 
of 
New 
J e r s e y . ' 
T h e r e f o r e , 
the 
same 
s u b s t a n t i v e law 
w i l l 
a p p l y 
t o a l l the c l a i m s . 
... 
As we have p r e v i o u s l y d i s c u s s e d , we do not f i n d 
any 
a m b i g u i t y 
i n 
the 
terms 
of 
the 
s t a n d a r d 
l e a s e 
agreement, and CIT's methods of a d m i n i s t e r i n g 
the 
i n s u r a n c e programs and a s s e s s i n g f e e s were the same 
f o r each c l a s s member. 
T h e r e f o r e , 
t h e r e w i l l be 
no 
need f o r i n d i v i d u a l i z e d p r o o f as t o e i t h e r of 
those 
m a t t e r s . 
"CIT 
a l s o 
argues 
t h a t 
McFadden 
cannot 
demonstrate a predominance of common i s s u e s of 
law 
and 
f a c t , because the 
c a l c u l a t i o n of damages 
w i l l 
r e q u i r e 
i n d i v i d u a l i z e d 
e v i d e n c e , 
and McFadden 
has 
not 
p r e s e n t e d 
the 
t r i a l 
c o u r t 
w i t h 
a 
c l a s s - w i d e 
method 
of 
d e t e r m i n i n g 
damages. 
However, 
as 
the 
U n i t e d S t a t e s C o u r t of A p p e a l s f o r the F i r s t 
C i r c u i t 
n o t e d i n Smilow v. S o u t h w e s t e r n B e l l M o b i l e Systems, 
323 
F.3d 
32, 
40 
( 1 s t 
2003) 
' [ t ] h e 
i n d i v i d u a t i o n of damages i n 
C i r . 
2003), 
' [ t ] h e 
consumer c l a s s a c t i o n s 
i s r a r e l y d e t e r m i n a t i v e under R u l e 2 3 ( b ) ( 3 ) . 
Where 
... 
common 
q u e s t i o n s 
predominate 
r e g a r d i n g 
l i a b i l i t y , 
t h e n 
c o u r t s 
g e n e r a l l y 
f i n d 
the 
predominance r e q u i r e m e n t 
t o be 
s a t i s f i e d even i f 
i n d i v i d u a l damages i s s u e s remain.' 
... " 
CIT Communication, 37 So. 3d a t 126-27 ( f o o t n o t e 
o m i t t e d ) . 
"'As 
n o t e d 
above, 
R u l e 
2 3 ( b ) ( 3 ) 
r e q u i r e s a f i n d i n g t h a t " q u e s t i o n s 
of 
law 
or f a c t common t o the members of the c l a s s 
predominate over any 
q u e s t i o n s 
a f f e c t i n g 
o n l y i n d i v i d u a l members, and t h a t a c l a s s 
a c t i o n 
i s 
s u p e r i o r 
t o 
o t h e r 
a v a i l a b l e 
methods 
f o r 
the 
f a i r 
and 
e f f i c i e n t 
a d j u d i c a t i o n 
of 
the 
c o n t r o v e r s y . " 
T h i s 
30 
1091225 
r e q u i r e m e n t 
" ' t e s t s 
whether 
p r o p o s e d 
c l a s s e s 
a r e 
s u f f i c i e n t l y 
c o h e s i v e 
t o 
w a r r a n t a d j u d i c a t i o n by r e p r e s e n t a t i o n . ' " 
R e y n o l d s M e t a l s [Co. 
v. H i l l ] , 825 So. 2d 
[100] a t 104 [ ( A l a . 2002)] ( q u o t i n g Amchem  
P r o d s . , I n c . v. Windsor, 521 
U.S. 591, 623, 
117 S. C t . 
2231, 
138 L. Ed. 
2d 689 (1997)). 
In making 
t h i s 
d e t e r m i n a t i o n , 
" [ c ] o u r t s 
examine t h e s u b s t a n t i v e law a p p l i c a b l e t o 
the 
c l a i m s 
and d e t e r m i n e 
whether t h e 
p l a i n t i f f s p r e s e n t e d s u f f i c i e n t p r o o f t h a t 
common q u e s t i o n s o f 
law 
o r f a c t predominate 
over i n d i v i d u a l c l a i m s . " Voyager I n s . Cos.  
v. W h i t s o n , 867 So. 2d 1065, 1071 ( A l a . 
2003). "When i n d i v i d u a l i s s u e s predominate 
over t h e common c l a i m s , 
m a n a g e a b i l i t y o f 
the 
a c t i o n as a c l a s s i s n o t p o s s i b l e . " 
Voyager 
I n s . , 867 
So. 
2d 
a t 1077. 
T h e r e f o r e , 
t h i s 
C o u r t 
must 
d e t e r m i n e 
whether 
[the 
p l a i n t i f f s ] 
p r e s e n t e d 
s u f f i c i e n t e v i d e n c e t h a t common 
q u e s t i o n s 
of law 
o r f a c t predominate over i n d i v i d u a l 
i s s u e s as t o each o f [the p l a i n t i f f s ' ] 
c l a i m s . ' 
" U n i v e r s i t y Fed. C r e d i t Union v. Grayson, 878 So. 
2d 
280, 285-86 ( A l a . 2003). 
" T h i s C o u r t has e x p l a i n e d : 
" ' I n d e t e r m i n i n g whether t h e q u e s t i o n s 
of law 
o r f a c t common t o 
t h e c l a s s members 
predominate 
over 
t h o s e 
q u e s t i o n s 
t h a t 
a f f e c t o n l y i n d i v i d u a l c l a s s members, t h e 
c o u r t 
must 
i n i t i a l l y 
i d e n t i f y 
t h e 
s u b s t a n t i v e law a p p l i c a b l e t o 
t h e 
case and 
i d e n t i f y t h e p r o o f t h a t 
w i l l be n e c e s s a r y 
t o e s t a b l i s h t h e c l a i m . 
Alabama v. B l u e  
B i r d Body Co., 573 F.2d 
309, 
316 (5th C i r . 
1978). 
T h i s c o n s i d e r a t i o n i s p a r t i c u l a r l y 
31 
1091225 
i m p o r t a n t i n cases where one o r more o f 
t h e 
c l a i m s 
w i l l 
r e q u i r e p r o o f o f 
s u b j e c t i v e 
f a c t o r s 
' 
"Ex p a r t e Green Tree F i n . 
Corp., 723 So. 2d 6, 9 
( A l a . 
1998). 
"'We 
have 
h e l d 
t h a t 
t h e 
n e c e s s i t y 
o f 
i n d i v i d u a l i z e d t e s t i m o n i e s from each c l a s s 
member t o prove an e s s e n t i a l element o f 
t h e 
cause 
o f 
a c t i o n 
d e f e a t s 
c l a s s 
c e r t i f i c a t i o n . 
R e y n o l d s 
M e t a l s Co. v.  
H i l l , 825 So. 2d 100 ( A l a . 2002); Compass  
Bank 
v. Snow, 
[823 So. 2d 
667 ( A l a . 
2001)] .' 
"Smart P r o f ' l Photocopy Corp. v. C h i l d e r s - S i m s , 850 
So. 2d 1245, 1249 ( A l a . 2002). 
"'The mandate t o i d e n t i f y t h e " s u b s t a n t i v e 
law a p p l i c a b l e t o t h e c a s e " r e q u i r e s more 
t h a n a s i m p l e s t a t e m e n t o f w h i c h 
s t a t e ' s 
law g o v e r n s ; t h e t r i a l c o u r t i s 
r e q u i r e d t o 
i d e n t i f y t h e elements o f t h e c l a i m s t o be 
c e r t i f i e d and t o d i s c u s s , i n 
t h e c o n t e x t 
o f 
the 
c l a s s - c e r t i f i c a t i o n c r i t e r i a , t h e 
p r o o f 
the 
p l a i n t i f f s must p r e s e n t t o e s t a b l i s h 
each o f t h o s e e l e m e n t s . 
I t i s o n l y by 
s p e c i f i c a l l y 
d i s c u s s i n g t h e elements o f 
each c l a i m i n t h e c o n t e x t o f t h e R u l e 23 
c r i t e r i a t h a t t h e t r i a l c o u r t may d e t e r m i n e 
whether t h e p l a i n t i f f s can e s t a b l i s h t h e 
R u l e 23(a) and 23(b) elements o f 
c l a s s 
c e r t i f i c a t i o n . 
See e.g., Mann 
[v. GTE  
M o b i l n e t o f Birmingham I n c . , 730 So. 2d 
150, 152 ( A l a . 1 9 9 9 ) ] ; Ex p a r t e Green Tree  
F i n . 
Corp., 723 So. 2d 6 [ ( A l a . 1 9 9 8 ) ] . ' 
" B i l l Heard C h e v r o l e t Co. v. Thomas, 819 So. 2d 34, 
41-42 
( A l a . 2001). 
32 
1091225 
" I n c o n n e c t i o n w i t h t h e p l a i n t i f f s ' burden t o 
demonstrate 
t h a t 
c l a s s 
c e r t i f i c a t i o n 
i s p r o p e r , 
' [ t ] h e t r i a l c o u r t may n o t 
m e r e l y r e l y on a s s u r a n c e s 
of c o u n s e l t h a t any problems w i t h predominance o r 
s u p e r i o r i t y ... can be overcome.' 
Ex p a r t e Green  
Tree F i n . Corp., 723 So. 2d a t 10. ' " I f s e r i o u s 
m a n a g e a b i l i t y problems e x i s t , i t i s 
no answer t o say 
t h a t t h e y w i l l be r e s o l v e d l a t e r i n 
some u n e x p l a i n e d 
or u n c e r t a i n manner."' 
Compass Bank v. Snow, 823 
So. 2d 667, 675 ( A l a . 2001) ( q u o t i n g w i t h a p p r o v a l 
an u n p u b l i s h e d 
o r d e r i s s u e d by a f e d e r a l 
d i s t r i c t 
judge i n 
a case i n v o l v i n g c l a i m s v i r t u a l l y 
i d e n t i c a l 
t o t h o s e a s s e r t e d i n Snow)." 
Houston County H e a l t h Care Auth. v. W i l l i a m s , 961 So. 2d 
795, 
804-05 ( A l a . 2006). 
In 
t h i s 
case, 
DeWitt 
a l l e g e s t h a t N a t i o n a l S e c u r i t y 
b r e a c h e d 
i t s i n s u r a n c e 
c o n t r a c t s when i t 
d i d n o t i n c l u d e 
payments f o r GCOP t o i n s u r e d s whose e s t i m a t e s r e f l e c t e d t h a t 
t h r e e o r 
more t r a d e s were i n v o l v e d i n 
t h e c o v e r e d r e p a i r s 
and 
who d i d n o t 
h i r e a g e n e r a l c o n t r a c t o r . DeWitt argued t h a t 
t h e 
f o l l o w i n g q u e s t i o n s o f law 
and f a c t were common t o a l l c l a s s 
members: 
"1) 
whether o r n o t ' a c t u a l cash 
v a l u e ' as 
d e f i n e d i n t h e p o l i c y i n c l u d e s g e n e r a l c o n t r a c t o r 
o v e r h e a d 
and 
p r o f i t 
when 
i t i s 
r e a s o n a b l y 
f o r e s e e a b l e a t t h e time o f l o s s s e t t l e m e n t t h a t t h e 
s e r v i c e s o f a g e n e r a l c o n t r a c t o r w i l l be n e c e s s a r y 
t o a c c o m p l i s h t h e l o s s ; 2) whether o r not i t i s 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t 
t h e s e r v i c e s o f a 
g e n e r a l c o n t r a c t o r w i l l be n e c e s s a r y t o a c c o m p l i s h 
r e p a i r o f t h e l o s s when t h e s k i l l s o f t h r e e o r more 
t r a d e s a r e e s t i m a t e d t o be n e c e s s a r y t o r e p a i r t h e 
33 
1091225 
l o s s ; and 3) whether o r n o t i t 
i s 
a beach o f 
t h e 
p o l i c y 
f o r [ N a t i o n a l 
S e c u r i t y ] 
t o omit 
g e n e r a l 
c o n t r a c t o r overhead and p r o f i t from i t s a c t u a l cash 
v a l u e payments." 
" I n 
o r d e r t o e s t a b l i s h a b r e a c h - o f - c o n t r a c t 
c l a i m , a 
p l a i n t i f f must show '(1) 
t h e e x i s t e n c e o f a v a l i d 
c o n t r a c t 
b i n d i n g t h e p a r t i e s i n t h e a c t i o n , (2) h i s 
own performance 
under t h e c o n t r a c t , (3) t h e d e f e n d a n t ' s nonperformance, and 
(4) damages.' 
Southern Med. H e a l t h Sys., 
I n c . v. Vaughn, 669 
So. 2d 98, 
99 ( A l a . 1995) ( c i t a t i o n s o m i t t e d ) . " 
Ex p a r t e ALFA  
Mut. 
I n s . Co., 799 So. 2d 957, 962 ( A l a . 2001). 
The p i v o t a l 
i s s u e i n t h i s case i s 
t h e a l l e g e d nonperformance by N a t i o n a l 
S e c u r i t y . 
N a t i o n a l 
S e c u r i t y 
concedes 
t h a t ACV 
i n c l u d e s 
payments f o r GCOP when i t i s 
r e a s o n a b l y f o r e s e e a b l e 
t h a t t h e 
s e r v i c e s 
o f a 
g e n e r a l 
c o n t r a c t o r 
w i l l 
be 
n e c e s s a r y t o 
a c c o m p l i s h t h e c o v e r e d r e p a i r s . 
T h e r e f o r e , 
t h a t i s 
n o t 
an 
a c t u a l i s s u e i n t h i s c a s e . 
The f i r s t common i s s u e i n t h i s 
case i s whether N a t i o n a l 
S e c u r i t y engaged i n a p a t t e r n and 
p r a c t i c e o f n o t i n c l u d i n g payments f o r GCOP u n l e s s a g e n e r a l 
c o n t r a c t o r was a c t u a l l y h i r e d . However, t h e 
o v e r r i d i n g common 
i s s u e i n t h i s case i s 
whether i t was r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a g e n e r a l 
c o n t r a c t o r was n e c e s s a r y t o complete t h e 
r e p a i r s i n 
each o f 
t h e 
p u t a t i v e c l a s s members' c l a i m s so t h a t 
34 
1091225 
N a t i o n a l S e c u r i t y b r e a c h e d i t s c o n t r a c t by not p a y i n g GCOP. 
F i n a l l y , the n e x t common i s s u e i s whether the t h r e e - t r a d e r u l e 
s h o u l d 
be 
a p p l i e d t o d e t e r m i n e whether 
i t was 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t 
a 
g e n e r a l 
c o n t r a c t o r 
was 
n e c e s s a r y 
t o 
complete the 
r e p a i r s . 
Alabama 
c o u r t s 
have 
not 
a d d r e s s e d 
predominance 
w i t h 
r e g a r d t o the c e r t i f i c a t i o n of a c l a s s of i n s u r e d s who 
argue 
t h a t an i n s u r a n c e company i m p r o p e r l y 
f a i l e d t o pay GCOP when 
the i n s u r e d s ' e s t i m a t e s 
i n d i c a t e d t h a t t h r e e or more t r a d e s 
would be n e c e s s a r y t o make the r e p a i r s .
5 
However, i n John v.  
N a t i o n a l S e c u r i t y F i r e & C a s u a l t y Co. 
(No. 06-1407, Feb. 
12, 
2008) 
(W.D. 
L a . 2008) 
(not 
r e p o r t e d 
i n F. 
Supp. 
2d), 
an 
u n p u b l i s h e d memorandum, the U n i t e d S t a t e s D i s t r i c t C o u r t f o r 
the 
Western 
D i s t r i c t 
of 
L o u i s i a n a 
a d d r e s s e d 
the 
a p p r o p r i a t e n e s s 
of c l a s s c e r t i f i c a t i o n 
f o r a s i m i l a r c l a i m . 
In 
John, the 
d i s t r i c t 
c o u r t r e f u s e d t o 
c e r t i f y 
a c l a s s of 
i n s u r e d s whose c l a i m s " ' i n d i c a t e [ d ] the i n v o l v e m e n t 
of more 
5 I n 
B a l d w i n M u t u a l I n s u r a n c e 
Co. 
v. Edwards, 63 So. 
3d 
1268 
( A l a . 2010), B a l d w i n 
M u t u a l 
I n s u r a n c e 
Company, 
I n c . , 
a p p e a l e d the c i r c u i t c o u r t ' s c e r t i f i c a t i o n of a s i m i l a r c l a s s . 
However, t h i s C o u r t d i d not a d d r e s s the Rule 23, A l a . R. C i v . 
P., 
r e q u i r e m e n t s 
f o r c l a s s 
c e r t i f i c a t i o n . 
35 
1091225 
t h a n two t r a d e s ' " and who were n o t p a i d GCOP. 
The d i s t r i c t 
c o u r t 
s t a t e d : 
" N a t i o n a l 
S e c u r i t y 
m a i n t a i n s 
t h a t t h e c l a s s 
a l l e g a t i o n s 
must be 
s t r i c k e n because 
i n d i v i d u a l 
f a c t s predominate a g a i n s t any common i s s u e s 
w h i c h 
may be p r e s e n t [ ; ] 
t h e r e f o r e 
P l a i n t i f f s have 
f a i l e d 
t o s t a t e a c l a i m upon w h i c h t h e 
r e q u e s t e d r e l i e f can 
be g r a n t e d . 
N a t i o n a l S e c u r i t y a l s o m a i n t a i n s 
t h a t 
P l a i n t i f f s 
have 
s t a t e d no cause o f a c t i o n f o r 
a u t o m a t i c 
'overhead 
and 
p r o f i t ' 
payments 
under 
L o u i s i a n a law. 
The C o u r t a g r e e s . 
"A 
c o m p l a i n t 
t h a t 
g i v e s 
a 
'bare 
bones' 
a l l e g a t i o n t h a t a wrong o c c u r r e d and does n o t p l e a d 
any o f 
t h e f a c t s g i v i n g r i s e t o 
t h e i n j u r y , does 
n o t 
p r o v i d e 
adequate 
n o t i c e . 
I n 
t h e i r 
c l a s s 
a l l e g a t i o n s , 
P l a i n t i f f s 
make 
t h e 
c o n c l u s o r y 
a l l e g a t i o n 
t h a t i f 
a c l a i m r e q u i r e s more t h a n two 
t r a d e s , t h e y a r e 
a u t o m a t i c a l l y e n t i t l e d t o 
a g e n e r a l 
c o n t r a c t o r 
r e s u l t i n g i n 20% overhead and p r o f i t . 
The 
c o m p l a i n t s , 
as amended, a l l e g e no f a c t s 
t h a t 
would demonstrate t h e 
need f o r a g e n e r a l 
c o n t r a c t o r , 
nor do t h e y a l l e g e any c o n t r a c t u a l p r o v i s i o n 
t h a t 
a u t o m a t i c a l l y 
e n t i t l e s 
P l a i n t i f f s 
t o a 
g e n e r a l 
c o n t r a c t o r . 
T h i s C o u r t f i n d s t h a t a case by case 
f a c t u a l i n q u i r y would have t o 
be made r e g a r d i n g t h e 
t y p e , n a t u r e and c o m p l e x i t y o f 
t h e 
n e c e s s a r y r e p a i r s 
b e f o r e 
i t can 
be d e t e r m i n e d i f a g e n e r a l 
c o n t r a c t o r 
i s w a r r a n t e d . 
Such an i n d i v i d u a l i z e d i n q u i r y would 
n e c e s s a r i l y p r e v e n t t h i s t y p e o f c l a i m from 
b e i n g 
c e r t i f i e d as a c l a s s . " 
(Footnote o m i t t e d . ) 
In Nguyen v. S t . P a u l T r a v e l e r s 
I n s u r a n c e Co. (No. 
06¬
4130, Oct. 
6, 2008) (E.D. 
L a . 
2008) (not r e p o r t e d i n 
F. Supp. 
2d), 
a n o t h e r u n p u b l i s h e d o r d e r , t h e U n i t e d 
S t a t e s 
D i s t r i c t 
36 
1091225 
C o u r t f o r 
t h e E a s t e r n 
D i s t r i c t o f L o u i s i a n a 
a d d r e s s e d t h e 
a p p r o p r i a t e n e s s 
o f c l a s s c e r t i f i c a t i o n f o r 
a s i m i l a r c l a i m . 
In Nguyen, t h e p l a i n t i f f s 
argued t h a t , i n a d j u s t i n g 
t h e i r 
c l a i m s , 
S t a n d a r d 
F i r e I n s u r a n c e Company 
("Standard 
F i r e " )
6 
d e t e r m i n e d t h a t t h e r e p a i r o f t h e i r p r o p e r t y 
would 
r e q u i r e 
more t h a n t h r e e 
t r a d e s and t h a t S t a n d a r d F i r e b r e a c h e d i t s 
i n s u r a n c e 
c o n t r a c t w i t h t h e p l a i n t i f f s when i t d i d 
n o t i n c l u d e 
GCOP i n 
payment o f t h e i r c l a i m s . 
The p l a i n t i f f s a l s o sought 
c l a s s 
c e r t i f i c a t i o n . 
S t a n d a r d 
F i r e moved t o d i s m i s s t h e 
amended c o m p l a i n t s and t o s t r i k e t h e c l a s s a l l e g a t i o n s . I n 
a d d r e s s i n g t h e motion t o d i s m i s s t h e p l a i n t i f f s ' 
b r e a c h - o f -
c o n t r a c t c l a i m , t h e d i s t r i c t c o u r t 
s t a t e d : 
" P l a i n t i f f s ' 
i n s u r a n c e 
p o l i c y 
p r o v i d e s 
t h a t 
S t a n d a r d F i r e ' w i l l pay 
no more than t h e 
a c t u a l cash 
v a l u e 
o f t h e damage 
u n t i l 
a c t u a l 
r e p a i r o r 
r e p l a c e m e n t i s complete.' 
(See 
I n s . P o l i c y , R. 
Doc. 
302-2 a t 16 o f 37.) 
P l a i n t i f f s 
a l l e g e t h a t 
t h e y 
were 
e n t i t l e d 
under t h e l o s s 
p r o v i s i o n o f 
t h e i r 
i n s u r a n c e p o l i c y t o r e c e i v e t h e 
a c t u a l cash v a l u e o f 
t h e i r damaged 
p r o p e r t y . 
They f u r t h e r 
c l a i m 
t h a t 
when d e f e n d a n t s e t t l e d w i t h them on an a c t u a l cash 
v a l u e b a s i s , i t 
d i d 
n o t 
pay 
them t h e 
complete a c t u a l 
cash v a l u e , because d e f e n d a n t d i d 
n o t 
i n c l u d e GCO&P. 
A c c o r d i n g l y , 
p l a i n t i f f s 
a l l e g e 
t h a t 
d e f e n d a n t 
v i o l a t e d t h e 
terms o f t h e i n s u r a n c e 
p o l i c y . 
6 A l t h o u g h " S t . P a u l T r a v e l e r s I n s u r a n c e Co." 
i s 
l i s t e d as 
the a p p e l l e e i n 
t h e 
s t y l e o f t h i s u n p u b l i s h e d o r d e r , t h e o r d e r 
a d d r e s s e s o n l y c l a i m s a g a i n s t S t a n d a r d 
F i r e . 
37 
1091225 
"The p l a i n t i f f s a r e 
c o r r e c t t h a t p u r s u a n t t o t h e 
terms o f t h e i r homeowner's p o l i c y , t h e y a r e e n t i t l e d 
t o 
payment 
o f t h e a c t u a l 
cash 
v a l u e 
o f 
t h e i r 
p r o p e r t y 
b e f o r e 
any r e p a i r s o r r e p l a c e m e n t 
t a k e 
p l a c e , and r e g a r d l e s s i f 
such measures a r e never 
t a k e n . 
"Replacement c o s t s i n c l u d e t h e c o s t s n e c e s s a r y 
t o r e p a i r o r r e p l a c e t h e p r o p e r t y . 
A l t h o u g h 
t h e r e 
i s no L o u i s i a n a law 
on t h e 
payment o f 
GCO&P as p a r t 
of an 
ACV payment, numerous o t h e r j u r i s d i c t i o n s have 
h e l d t h a t an i n s u r e r i s r e q u i r e d t o i n c l u d e GCO&P 
i n 
an ACV payment when i t 
d e t e r m i n e s t h a t an i n s u r e d 
i s 
r e a s o n a b l y 
l i k e l y t o r e q u i r e t h e s e r v i c e s o f a 
g e n e r a l 
c o n t r a c t o r 
t o 
r e p a i r 
c o v e r e d 
p r o p e r t y 
damage. ... 
These [ c i t e d ] cases h o l d t h a t i t 
i s 
a 
b r e a c h o f t h e i n s u r a n c e 
c o n t r a c t t o f a i l t o 
pay 
overhead and p r o f i t as p a r t o f 
an ACV o r u p f r o n t RC 
[ r e p l a c e m e n t 
c o s t ] 
payment 
when t h e i n s u r e d i s 
r e a s o n a b l y 
l i k e l y t o r e q u i r e t h e s e r v i c e s o f a 
g e n e r a l 
c o n t r a c t o r 
t o 
r e p a i r 
c o v e r e d 
p r o p e r t y 
damage. 
" P l a i n t i f f s n e v e r t h e l e s s 
a v e r , 
c i t i n g 
i n d u s t r y 
s t a n d a r d s and custom, as w e l l as M e l o t v. Oklahoma  
Farm Bureau Mut. I n s . Co., 87 P.3d 644 (Okla. 
C i v . 
App. D i v . 4 2003),
5 t h a t d e f e n d a n t i s 
r e q u i r e d as a 
m a t t e r o f c o n t r a c t t o i n c l u d e GCO&P i n a c t u a l cash 
v a l u e payments whenever i t s 
e s t i m a t e 
r e f l e c t s 
t h a t 
t h r e e o r more t r a d e s a r e n e c e s s a r y t o p e r f o r m t h e 
i n s u r e d ' s r e p a i r s . 
(See Amend. Compl. 5 10) ('It i s 
b o t h 
l e g a l l y 
a c c e p t e d , and t h e c l e a r 
custom and 
p r a c t i c e 
i n t h e i n s u r a n c e 
i n d u s t r y 
t o 
i n c l u d e 
g e n e r a l c o n t r a c t o r overhead and p r o f i t i n 
t h e ACV 
o r 
u p f r o n t payment a s , 
"a c o s t r e a s o n a b l y 
e x p e c t e d t o 
be i n c u r r e d " when d e f e n d a n t ' s a d j u s t m e n t o f c o v e r e d 
damages i n d i c a t e s t h e i n v o l v e m e n t o f t h r e e o r more 
t r a d e s 
n e c e s s a r y t o p e r f o r m 
r e p a i r s ' . ) The C o u r t 
does n o t f i n d 
t h a t as a m a t t e r o f L o u i s i a n a law, 
S t a n d a r d F i r e i s r e q u i r e d t o i n c l u d e GCO&P as p a r t 
of 
an ACV o r u p f r o n t 
RC payment 
whenever i t 
d e t e r m i n e s t h a t t h r e e o r more t r a d e s a r e 
needed t o 
38 
1091225 
r e p a i r t h e i n s u r e d ' s damaged p r o p e r t y . 
P l a i n t i f f s 
have p o i n t e d t o 
no such law 
i n 
L o u i s i a n a s u p p o r t i n g 
t h e i r 'three o r 
more t r a d e s r u l e , ' and 
t h e 
C o u r t has 
found none. 
II 
"... 
A c c o r d i n g l y , t h e 
C o u r t does n o t 
r e a d i n t o 
d e f e n d a n t ' s c o n t r a c t a r e q u i r e m e n t 
t h a t d e f e n d a n t 
pay g e n e r a l c o n t r a c t o r overhead and p r o f i t whenever 
t h r e e t r a d e s a r e r e q u i r e d f o r r e p a i r s . 
" A l t h o u g h 
t h e C o u r t 
does n o t f i n d 
t h a t t h e  
' t h r e e - t r a d e 
r u l e ' 
a p p l i e s as a m a t t e r o f law 
i n 
 
L o u i s i a n a , 
p l a i n t i f f s a r e e n t i t l e d t o i n t r o d u c e as  
e v i d e n c e t h a t because t h e i r c o v e r e d damages r e q u i r e d  
t h r e e o r more 
t r a d e s , 
t h e y 
were 
e n t i t l e d t o a  
payment o f GCO&P as p a r t o f t h e i r ACV payment  
because i t 
was a c o s t 
r e a s o n a b l y 
e x p e c t e d t o be  
i n c u r r e d i n r e p a i r i n g o r r e p l a c i n g t h e 
c o v e r e d 
l o s s . 
II 
"
5 I n 
M e l o t , 
t h e Oklahoma 
c o u r t 
a f f i r m e d 
c e r t i f i c a t i o n o f a c l a s s t h a t p r e s e n t e d t h e 
common 
q u e s t i o n whether t h e i n s u r e r , i n cases 
where i t 
conceded t h a t t h e i n s u r e d ' s r e p a i r s i n v o l v e d t h r e e 
or more t r a d e s , was r e q u i r e d t o i n c l u d e an a l l o w a n c e 
f o r GCO&P i n 
an ACV payment." 
(Some f o o t n o t e s 
o m i t t e d . ) 
W i t h r e g a r d t o S t a n d a r d F i r e ' s m o t i o n t o s t r i k e t h e 
c l a s s 
a l l e g a t i o n s , t h e d i s t r i c t c o u r t s t a t e d : 
"To be c e r t i f i e d , a c l a s s must f i r s t s a t i s f y 
t h e 
t h r e s h o l d 
r e q u i r e m e n t s 
o f Rule 
2 3 ( a ) , 
i n c l u d i n g 
n u m e r o s i t y , commonality, t y p i c a l i t y , and 
adequacy 
o f 
r e p r e s e n t a t i o n , and 
then s a t i s f y Rule 2 3 ( b ) ( 3 ) ' s two 
p r e r e q u i s i t e s 
o f predominance 
and 
s u p e r i o r i t y . 
Here, 
t h e 
p a r t i e s 
m a i n l y 
c o n t e s t 
whether 
39 
1091225 
p l a i n t i f f [ s ] can show t h a t q u e s t i o n s o f law 
o r f a c t 
common 
t o t h e 
c l a s s 
members 
p r e d o m i n a t e 
over 
q u e s t i o n s 
a f f e c t i n g 
o n l y 
i n d i v i d u a l 
members. 
A c c o r d i n g l y , 
t h e C o u r t 
a d d r e s s e s 
t h e i s s u e o f 
predominance 
f i r s t . 
"To p r e d o m i n a t e , 'common i s s u e s must c o n s t i t u t e 
a 
s i g n i f i c a n t 
p a r t 
o f t h e 
i n d i v i d u a l 
c a s e s . ' 
M u l l e n [ 
v. T r e a s u r e Chest C a s i n o , L L C ] , 
186 F.3d 
[620] a t 626 [ ( 5 t h C i r . 1 9 9 9 ) ] . 
'This r e q u i r e m e n t , 
a l t h o u g h r e m i n i s c e n t o f t h e commonality r e q u i r e m e n t 
of R u l e 2 3 ( a ) , i s " f a r more demanding" because 
i t 
" t e s t s whether p r o p o s e d 
c l a s s e s a r e s u f f i c i e n t l y 
c o h e s i v e 
t o 
w a r r a n t 
a d j u d i c a t i o n 
by 
r e p r e s e n t a t i o n . " ' 
Unger[ v. Amedisys, 
I n c . ] , 401 
F.3d 
[316] 
a t 320 [ ( 5 t h C i r . 2005)] ( q u o t i n g Amchem  
P r o d s . [ , I n c . 
v. W i n d s o r ] , 521 U.S. [591] 
a t 623-24 
[ ( 1 9 9 7 ) ] ) . 
The C o u r t f i n d s t h a t i n d i v i d u a l i s s u e s 
predominate over q u e s t i o n s o f law 
o r f a c t common t o 
the 
p u t a t i v e 
c l a s s , 
and 
t h e r e f o r e 
s t r i k e s 
p l a i n t i f f s ' 
c l a s s a l l e g a t i o n s . 
"As 
d i s c u s s e d 
above, 
p l a i n t i f f s 
a l l e g e 
t h a t 
S t a n d a r d 
F i r e b r e a c h e d 
t h e i r 
i n s u r a n c e 
c o n t r a c t . 
The s u b s t a n t i v e i s s u e s t h a t w i l l c o n t r o l t h e outcome 
of t h e 
case i n c l u d e t h e f a c t s n e c e s s a r y t o d e t e r m i n e 
whether 
S t a n d a r d 
F i r e 
met 
i t s 
c o n t r a c t u a l 
o b l i g a t i o n s t o p l a i n t i f f s , 
and t h e r e f o r e 
t o t h e 
c l a s s . 
P l a i n t i f f s ' 
p o l i c y 
c o n t a i n s 
a 
Loss 
S e t t l e m e n t 
p r o v i s i o n 
w h i c h 
p r o v i d e s 
i n r e l e v a n t 
p a r t : 
"'We w i l l pay no more t h a n t h e a c t u a l cash 
v a l u e o f t h e 
damage u n t i l a c t u a l r e p a i r o r 
r e p l a c e m e n t 
i s complete. 
Once 
a c t u a l 
r e p a i r o r r e p l a c e m e n t i s 
complete we w i l l 
s e t t l e t h e 
l o s s a c c o r d i n g t o 
t h e p r o v i s i o n s 
of b.(1) and b.(2) above.' 
" ( I n s . P o l i c y , R. Doc. 302-2 a t 16 o f 37.) When an 
i n s u r e d makes a c l a i m on an a c t u a l cash v a l u e b a s i s , 
d e f e n d a n t i s r e q u i r e d t o i n c l u d e GCO&P i n t h e 
ACV 
40 
1091225 
payment when t h e s e r v i c e s o f a g e n e r a l 
c o n t r a c t o r 
are r e a s o n a b l y 
l i k e l y t o be r e q u i r e d . 
See, e.g., 
M i l l s 
[v. Foremost I n s . 
C o . ] , 
511 F.3d [1300] a t 
1305-06 [ ( 1 1 t h C i r . 2 0 0 8 ) ] ; Parkway A s s o c i a t e s [ , LLC  
v. H a r l e y s v i l l e Mut. I n s . 
C o . ] , 
129 Fed. Appx. 
[955] 
a t 
963 
[ ( 6 t h 
C i r . 2005)] 
[not s e l e c t e d f o r 
p u b l i c a t i o n i n 
t h e F e d e r a l 
R e p o r t e r ] . 
" P l a i n t i f f s a l l e g e t h a t e v e r y time S t a n d a r d F i r e 
d e t e r m i n e s 
t h a t an i n s u r e d ' s 
damages 
r e q u i r e t h e 
s e r v i c e s o f t h r e e o r more t r a d e s t o r e p a i r , t h e 
i n s u r e d 
i s 
e n t i t l e d 
t o GCO&P, 
and 
t h e r e f o r e 
i n d i v i d u a l i s s u e s o f 
law 
o r f a c t do n o t p r e d o m i n a t e . 
The 
C o u r t 
f i n d s 
t h a t 
p l a i n t i f f s 
can a l l e g e 
t h a t 
because an i n s u r e d r e q u i r e d t h e 
s e r v i c e s o f t h r e e o r 
more t r a d e s , 
t h a t i s e v i d e n c e t h a t she o r he was 
r e a s o n a b l y 
l i k e l y 
t o r e q u i r e t h e s e r v i c e s o f a 
g e n e r a l 
c o n t r a c t o r , 
and 
t h e r e f o r e 
d e f e n d a n t ' s 
f a i l u r e t o i n c l u d e GCO&P i n t h e i r a d j u s t m e n t was a 
b r e a c h o f c o n t r a c t . 
A l t h o u g h 
p l a i n t i f f s ' 
p r o o f 
 
might be s i m p l e and c o m p e l l i n g , 
t h e y 
f a i l t o p o i n t  
out any law t h a t would p e r m i t t h e C o u r t t o t h e n  
f o r e c l o s e 
t h e 
d e f e n d a n t 
from 
showing 
i n an  
i n d i v i d u a l case t h a t t h e i n s u r e d was n o t r e a s o n a b l y  
l i k e l y 
t o 
r e q u i r e 
t h e s e r v i c e s 
o f a 
g e n e r a l 
 
c o n t r a c t o r , and t h e r e f o r e was n o t 
u n d e r p a i d i t s ACV 
 
payment. 
"Whether t h e n a t u r e o f an i n s u r e d ' s 
damages 
 
i n d i c a t e s 
t h a t he o r she i s r e a s o n a b l y 
l i k e l y t o  
r e q u i r e t h e s e r v i c e s o f a g e n e r a l 
c o n t r a c t o r i s 
a 
f a c t u a l 
q u e s t i o n , 
r e q u i r i n g 
i n d i v i d u a l i z e d 
assessments. 
A c c o r d i n g l y , 
t h e r e i s 
no 
' c l a s s - w i d e 
 
p r o o f 
a v a i l a b l e ' t o d e c i d e whether t h e n a t u r e o f  
each i n s u r e d ' s damages were such t h a t t h e i n s u r e d  
was r e a s o n a b l y l i k e l y t o r e q u i r e t h e s e r v i c e s o f a  
g e n e r a l c o n t r a c t o r . 
See, 
e.g., 
Gene And Gene LLC 
v. 
 
B i o p a y LLC, 541 F.3d 
318 ( 5 t h 
C i r . 2008). 
S t a n d a r d 
F i r e 
p r o f f e r s t h e f o l l o w i n g example. 
I n a case 
where 
t h e i n s u r e d 
s u f f e r e d 
r o o f 
damage 
d u r i n g 
H u r r i c a n e 
K a t r i n a , t h e damage might 
r e q u i r e 
r o o f 
r e p a i r s , r e p a i r s t o c e i l i n g 
p a n e l s , and r e p a i r s t o 
41 
1091225 
c a r p e t damage. 
T h i s 
i n d i c a t e s t h a t t h r e e 
s e p a r a t e 
t r a d e s 
would 
be 
r e q u i r e d , 
i n c l u d i n g 
a 
r o o f e r , 
handyman, 
and 
c a r p e t 
company. 
S t a n d a r d 
F i r e 
contends t h a t an i n s u r e d would not r e q u i r e a g e n e r a l 
c o n t r a c t o r 
t o c o o r d i n a t e 
t h i s work. 
On 
the 
o t h e r 
hand, 
e x t e n s i v e 
damage 
t o 
the 
r o o f 
of 
a 
l a r g e 
commercial b u i l d i n g might be 
the t y p e of j o b 
t h a t 
would r e q u i r e r o o f e r s a l o n e , but would s t i l l 
r e q u i r e 
the s u p e r v i s i o n of a g e n e r a l 
c o n t r a c t o r because of 
the 
c o m p l e x i t y 
and 
scope 
of 
the 
work. 
The 
d e t e r m i n a t i o n 
of whether the s e r v i c e s of a 
g e n e r a l 
c o n t r a c t o r would be r e a s o n a b l y l i k e l y t o be 
r e q u i r e d 
i n t h e s e two examples i s a f a c t q u e s t i o n , 
t h a t 
w i l l 
be 
d i f f e r e n t 
f o r 
e v e r y 
i n s u r e d . 
T h i s 
k i n d 
of 
c a s e - b y - c a s e 
d e t e r m i n a t i o n 
i s 
i n a p p r o p r i a t e 
f o r 
c l a s s t r e a t m e n t . 
See John v. N a t ' l Sec. F i r e & Cas.  
Co. , [No. 
06-1407, Feb. 
12, 2008] 
(W.D. 
La. 2008) 
[not r e p o r t e d 
i n F. Supp. 2d] 
('This C o u r t 
f i n d s 
t h a t a case by case f a c t u a l i n q u i r y would have t o be 
made r e g a r d i n g 
the 
t y p e , 
n a t u r e and 
c o m p l e x i t y 
of 
the n e c e s s a r y r e p a i r s b e f o r e i t can be d e t e r m i n e d i f 
a 
g e n e r a l 
c o n t r a c t o r 
i s 
w a r r a n t e d . 
Such 
an 
i n d i v i d u a l i z e d 
i n q u i r y would 
n e c e s s a r i l y 
p r e v e n t 
t h i s 
t y p e 
of 
c l a i m 
from 
b e i n g 
c e r t i f i e d 
as 
a 
c l a s s . ' ) ; see a l s o M i l l s , 511 
F.3d 
a t 1306 
( f i n d i n g 
t h a t 
p l a i n t i f f s 
'would not 
be 
e n t i t l e d t o 
r e c e i v e 
payment f o r any 
t y p e of c o s t c h a r g e d by 
a 
g e n e r a l 
c o n t r a c t o r 
w i t h o u t 
showing 
t h a t 
t h e y 
would 
be 
r e a s o n a b l y 
l i k e l y t o need a g e n e r a l 
c o n t r a c t o r 
f o r 
the r e p a i r s i n i s s u e . ' ) ; Mee[ 
v. S a f e c o I n s . Co. 
of 
 
A m e r i c a ] , 
908 
A.3d 
[344] 
a t 
350 
[(Pa. 
Super. 
2 0 0 6 ) ] ( ' w h e t h e r 
use 
of 
a 
g e n e r a l 
c o n t r a c t o r 
i s 
r e a s o n a b l y 
l i k e l y depends on the n a t u r e and 
e x t e n t 
of 
the damage and 
the number of 
t r a d e s needed 
t o 
make 
r e p a i r s . 
T h i s 
l a s t 
p r i n c i p l e 
n e c e s s a r i l y 
r e q u i r e s c o n s i d e r a t i o n of the degree of 
c o o r d i n a t i o n 
or 
s u p e r v i s i o n 
of 
t r a d e s 
r e q u i r e d 
t o make 
the 
r e p a i r s . ' ) . " 
In M i l l s v. Foremost I n s u r a n c e Co., 
511 
F.3d 
1300 
(11th 
C i r . 2008), the M i l l s e s , F l o r i d a r e s i d e n t s whose m o b i l e home 
42 
1091225 
was damaged d u r i n g H u r r i c a n e 
F r a n c e s i n 
2004, f i l e d a c l a s s -
a c t i o n 
c o m p l a i n t 
i n a F l o r i d a s t a t e 
c o u r t 
a l l e g i n g 
t h a t 
Foremost had 
b r e a c h e d the terms o f i t s i n s u r a n c e p o l i c y by n o t 
i n c l u d i n g GCOP and s a l e s t a x e s i n 
t h e 
payment f o r t h e 
l o s s 
and 
t h a t Foremost had u n l a w f u l l y 
f a i l e d t o i n f o r m t h e M i l l s e s , 
e i t h e r b e f o r e 
t h e y p u r c h a s e d o r renewed t h e i r p o l i c y , t h a t 
Foremost d i d 
n o t i n t e n d t o pay GCOP o r s a l e s t a x e s on any 
p r o p e r t y l o s s e s . 
Foremost removed t h e 
case t o f e d e r a l c o u r t 
and 
f i l e d a R u l e 1 2 ( b ) ( 6 ) , Fed. R. C i v . P., motion t o d i s m i s s , 
a r g u i n g 
t h a t 
c l a s s - a c t i o n t r e a t m e n t was n o t 
a p p r o p r i a t e 
because common l e g a l o r f a c t u a l i s s u e s would n o t predominate 
over i n d i v i d u a l i s s u e s . 
On November 15, 2006, t h e d i s t r i c t 
c o u r t g r a n t e d Foremost's R u l e 1 2 ( b ) ( 6 ) m o t i o n and h e l d 
t h a t 
c l a s s 
c e r t i f i c a t i o n was n o t a p p r o p r i a t e 
because 
i n d i v i d u a l 
i s s u e s would p r e d o m i n a t e over common q u e s t i o n s o f law 
and 
f a c t . 
The M i l l s e s a p p e a l e d . 
On 
a p p e a l , t h e U n i t e d 
S t a t e s C o u r t o f A p p e a l s f o r t h e 
E l e v e n t h 
C i r c u i t 
h e l d 
t h a t , under t h e p o l i c y , "making t h e 
a c t u a l 
r e p a i r s 
f i r s t i s n o t r e q u i r e d i n o r d e r t o be p a i d 
a c t u a l cash v a l u e o f 
t h e 
damaged p r o p e r t y " and t h a t GCOP would 
be i n c l u d e d i n 
t h e 
" ' c o s t t o r e p a i r o r r e p l a c e . ' " 511 
F.3d a t 
43 
1091225 
1305. 
I t a l s o h e l d t h a t " [ t ] h e M i l l s e s would not be 
e n t i t l e d 
t o r e c e i v e payment f o r any type of c o s t c h a r g e d by a 
g e n e r a l 
c o n t r a c t o r 
w i t h o u t 
showing 
t h a t 
t h e y would 
be 
r e a s o n a b l y 
l i k e l y t o need a g e n e r a l c o n t r a c t o r f o r the r e p a i r s i n i s s u e . " 
511 F.3d 
a t 1306. 
T h e r e f o r e , 
i t h e l d t h a t the d i s t r i c t 
c o u r t 
had 
i m p r o p e r l y 
g r a n t e d 
Foremost's m o t i o n t o d i s m i s s . 
W i t h 
r e g a r d t o c l a s s - a c t i o n s u i t a b i l i t y , the E l e v e n t h C i r c u i t n o t e d 
t h a t , i n t h e i r c o m p l a i n t , 
the M i l l s e s had 
a l l e g e d t h a t t h e y 
q u a l i f i e d as 
c l a s s r e p r e s e n t a t i v e s p u r s u a n t t o each of 
the 
t h r e e grounds s e t f o r t h i n R u l e 2 3 ( b ) , 
Fed. 
R. 
C i v . P., 
but 
the d i s t r i c t c o u r t had a d d r e s s e d o n l y the predominance ground 
s e t f o r t h i n R u l e 2 3 ( b ) ( 3 ) . 
I t a l s o h e l d t h a t the 
d i s t r i c t 
c o u r t ' s d e t e r m i n a t i o n t h a t i n d i v i d u a l i s s u e s would predominate 
over common q u e s t i o n s 
of law 
and 
f a c t , based s o l e l y on 
the 
p l e a d i n g s , was premature. 
S p e c i f i c a l l y , i t n o t e d : 
i n 
was 
"[W]e 
c o n c l u d e o n l y t h a t the d i s t r i c t c o u r t e r r e d i  
d e t e r m i n i n g 
t h a t 
c l a s s 
a c t i o n 
t r e a t m e n t 
wa 
 
i n a p p r o p r i a t e as a m a t t e r of law from the 
f a c e 
of 
 
the M i l l s e s ' p a r t i c u l a r c o m p l a i n t , 
and we remand f o r 
f u r t h e r p r o c e e d i n g s . 
In so h o l d i n g , we e x p r e s s 
no 
 
o p i n i o n as t o whether c l a s s c e r t i f i c a t i o n i s or i s 
not a p p r o p r i a t e 
i n t h i s c a s e . " 
511 F.3d 
a t 1309-11 (emphasis added). 
44 
1091225 
On remand, t h e d i s t r i c t 
c o u r t 
conducted 
an 
i n - d e p t h 
e x a m i n a t i o n 
i n t o a l l 
t h e R u l e 23(a) and Rule 2 3 ( b ) , Fed. 
R. 
C i v . 
P., p r e r e q u i s i t e s r e g a r d i n g c l a s s 
c e r t i f i c a t i o n . 
See 
M i l l s v. Foremost I n s . Co., 269 F.R.D. 663 (M.D. F l a . 2010). 
The 
d i s t r i c t c o u r t s t a t e d : 
"The 
M i l l s e s 
m a i n t a i n 
t h a t 
each 
i n d i v i d u a l 
w i t h i n t h e 
p r o p o s e d c l a s s d e f i n i t i o n was a Foremost 
i n s u r e d who s u f f e r e d a c o v e r e d 
l o s s t o h i s 
o r 
h e r 
m o b i l e home and, a c c o r d i n g t o 
t h e 
e s t i m a t e s 
p r e p a r e d 
by 
Foremost, 
t h e i d e n t i f i e d 
r e p a i r s 
r e a s o n a b l y 
r e q u i r e d t h e s e r v i c e s o f a g e n e r a l c o n t r a c t o r based 
upon 
t h e 
f a c t 
t h a t 
each 
r e p a i r 
r e q u i r e d t h e 
u t i l i z a t i o n 
o f t h r e e o r more t r a d e s . 
Thus, t h e 
M i l l s e s seek t o r e c o v e r an a l l o w a n c e f o r 
GCOP t h a t 
was n o t p a i d by Foremost f o r 
t h e damage t o t h e i r 
c o v e r e d m o b i l e home as a r e s u l t o f t h e 
2004 F l o r i d a 
H u r r i c a n e s . The M i l l s e s b a s i s f o r such an a l l o w a n c e 
i s 
t h a t t h e custom and p r a c t i c e i n t h e i n s u r a n c e 
i n d u s t r y i n F l o r i d a , and t h e r e s t o f t h e U n i t e d 
S t a t e s 
a t t h e time 
p l a i n t i f f s 
and each 
c l a s s 
member's c l a i m was a d j u s t e d and p a i d by Foremost, 
was t o i n c l u d e t e n p e r c e n t (10%) overhead and 
t e n 
p e r c e n t (10%) 
p r o f i t i n 
t h e i n s u r e r ' s e s t i m a t e s on 
a l l c l a i m s i n 
w h i c h t h r e e o r more t r a d e s were used 
t o complete r e p a i r s . T h i s i s 
what t h e M i l l s e s 
r e f e r 
t o as a 'three t r a d e s r u l e . ' 
I t 
i s 
u n d i s p u t e d t h a t 
a ' t h r e e t r a d e s r u l e ' does n o t e x p r e s s l y appear i n 
the i n s u r a n c e p o l i c y language. 
I n s t e a d , t h e M i l l s e s 
advance a ' t h r e e t r a d e s r u l e ' t h e o r y o f l i a b i l i t y on  
the 
b a s i s t h a t e x p e r t 
w i t n e s s e s ' 
d e p o s i t i o n s and  
t e s t i m o n y 
e s t a b l i s h 
t h a t i t i s t h e custom and  
p r a c t i c e w i t h i n t h e i n s u r a n c e i n d u s t r y t o pay GCOP  
where t h e e s t i m a t e shows t h r e e t r a d e s o r more a r e 
 
r e q u i r e d t o complete t h e r e p a i r s . " 
269 F.R.D. a t 668-69. 
45 
1091225 
The 
d i s t r i c t c o u r t t h e n a d d r e s s e d the predominance 
and 
s u p e r i o r i t y r e q u i r e m e n t s s e t f o r t h i n R u l e 2 3 ( b ) ( 3 ) , Fed. 
R. 
C i v . P., as 
f o l l o w s : 
"a. Predominance 
"The 
e s s e n t i a l 
c o n s i d e r a t i o n 
i n 
w e i g h i n g 
predominance 
f o r R u l e 
2 3 ( b ) ( 3 ) 
c e r t i f i c a t i o n 
i s 
whether 
the 
i n d i v i d u a l 
p l a i n t i f f s 
w i l l 
need 
t o 
i n t r o d u c e 
i n d i v i d u a l i z e d 
e v i d e n c e 
o r 
advance 
i n d i v i d u a l i z e d l e g a l arguments i n o r d e r t o e s t a b l i s h 
'most o r a l l 
of the e l e m e n t [ s ] of t h e i r 
i n d i v i d u a l 
c l a i m s , ' 
i n 
which 
case 
c e r t i f i c a t i o n 
i s 
i n a p p r o p r i a t e . 
Vega 
[v. T-Mobile USA, 
I n c . ] , 
564 
F.3d 
[1256] 
a t 
1257 
[ ( 1 1 t h C i r . 2009)] 
( q u o t i n g 
K l a y [ 
v. Humana, 
I n c . ] , 
382 
F.3d 
[1241] 
a t 
1255 
[ ( 1 1 t h 
C i r . 
2 0 0 4 ) ] ) . 
More 
s p e c i f i c a l l y , 
i n 
d e t e r m i n i n g 
whether 
a 
p r o p o s e d 
c l a s s 
meets 
the 
r e q u i r e m e n t s 
f o r predominance, 
'a 
d i s t r i c t 
c o u r t 
must examine not 
o n l y the 
d e f e n d a n t ' s 
c o u r s e 
o f 
conduct 
towards 
the 
c l a s s members, but 
a l s o 
the 
c l a s s members' 
l e g a l 
r i g h t s 
and 
d u t i e s . ' 
S a c r e d 
 
H e a r t H e a l t h Sys. v. Humana M i l . H e a l t h c a r e S e r v s . , 
601 F.3d 1159, 1170 
(11th C i r . 2010). 
" I n the case of a R u l e 2 3 ( b ) ( 3 ) 
c e r t i f i c a t i o n 
m o t i o n based upon a b r e a c h of c o n t r a c t , i t i s w e l l 
t o remember t h a t ' c l a i m s f o r b r e a c h o f c o n t r a c t are 
p e c u l i a r l y 
d r i v e n 
by 
t h e 
terms 
of 
the 
p a r t i e s ' 
agreement, 
and 
common 
q u e s t i o n s 
r a r e l y 
w i l l 
predominate i f the r e l e v a n t terms v a r y i n s u b s t a n c e 
among the c o n t r a c t s . ' 
S a c r e d H e a r t H e a l t h Sys., 601 
F.3d 
a t 
1171. 
Even 
the 
e x i s t e n c e o f 
a 
form 
c o n t r a c t , 
however, 
'do[es] 
not 
guarantee 
predominance i f i n d i v i d u a l i z e d 
e x t r i n s i c 
e v i d e n c e 
b e a r s 
h e a v i l y 
on the 
i n t e r p r e t a t i o n 
of the 
c l a s s 
members' 
agreements,' 
such 
as when 
'a 
defendant 
r a i s e s s u b s t a n t i a l a f f i r m a t i v e d e f e n s e s t o b r e a c h . ' 
I d . a t 1176-1177. 
Moreover, 
i f damages a c r o s s the 
c l a s s 
cannot 
be 
computed 
by 
'some 
f o r m u l a , 
46 
1091225 
s t a t i s t i c a l 
a n a l y s i s , o r o t h e r easy o r e s s e n t i a l l y 
m e c h a n i c a l method[],' t h a t t o o 
may be s u f f i c i e n t t o 
p r e c l u d e a f i n d i n g o f predominance. 
I d . 
a t 
1179. 
"On 
a p p e a l 
i n M i l l s , 
t h e E l e v e n t h 
C i r c u i t 
e s t a b l i s h e d a c l e a r s t a n d a r d i n 
w h i c h GCOP was t o 
be 
p a i d , 
t h a t 
i s , i n 
c i r c u m s t a n c e s 
where 
t h e 
p o l i c y h o l d e r would be r e a s o n a b l y 
l i k e l y t o need a 
g e n e r a l 
c o n t r a c t o r i n r e p a i r i n g o r r e p l a c i n g o f 
t h e i r damaged p r o p e r t y . 
M i l l s a t 1306. 
Thus, i n 
o r d e r t o d e t e r m i n e whether o r 
n o t 
a p o l i c y h o l d e r i s 
e n t i t l e d t o 
t h e 
w i t h h e l d payments, i t i s l i k e l y t h a t 
the p u t a t i v e c l a s s p l a i n t i f f s 
w i l l need t o i n t r o d u c e 
e v i d e n c e 
s p e c i f i c t o t h e i r c l a i m i n o r d e r t o argue 
t h a t t h e 
use o f a g e n e r a l c o n t r a c t o r was[,] 
i n d e e d , 
r e a s o n a b l y 
l i k e l y . 
As t h e E l e v e n t h C i r c u i t has 
not 
e s t a b l i s h e d a 'three 
t r a d e 
r u l e ' 
s t a n d a r d as t h e 
M i l l s e s have a v e r r e d , t h e l i k e l i h o o d t h a t a p u t a t i v e 
c l a s s member p l a i n t i f f 
w i l l need t o argue what was 
r e a s o n a b l e under t h e c i r c u m s t a n c e s 
g i v e n h i s o r 
h e r 
s p e c i f i c 
c l a i m , c r e a t e s a l a c k o f predominance i n 
the p r e s e n t a c t i o n as t h a t argument may be d i f f e r e n t 
from a f e l l o w p u t a t i v e c l a s s member. 
" F u r t h e r m o r e , as Foremost has 
p o i n t e d o u t , t h e r e 
e x i s t d e f e n s e s t o l i a b i l i t y t h a t w i l l be r a i s e d on 
an i n d i v i d u a l b a s i s . Some o f t h e p o s s i b l e d e f e n s e s 
t o 
be r a i s e d may be overpayment o f a c l a i m by 
Foremost r e g a r d i n g a p a r t i c u l a r c l a i m a n t , o r f r a u d 
by 
t h e c l a i m a n t 
i n r e g a r d 
t o 
t h e i r 
c l a i m f o r 
p r o p e r t y damages as a r e s u l t o f t h e 2004 
F l o r i d a 
H u r r i c a n e s , 
o r whether 
t h e a p p r a i s a l p r o v i s i o n 
w i t h i n t h e p o l i c y was i n v o k e d , o r whether a c l a i m 
was a t o t a l l o s s i n which p o l i c y l i m i t s would have 
been 
p a i d by Foremost and t h e homeowner 
would 
p u r c h a s e a r e p l a c e m e n t m o b i l e home as compared t o 
r e p a i r i n g t h e i r p r e v i o u s m o b i l e home. 
I n a d d i t i o n 
t o t h e p o t e n t i a l l y i n d i v i d u a l i z e d d e f e n s e s t h a t may 
be r a i s e d , t h e r e e x i s t s a concern from t h i s C o u r t as 
t o how a r e a s o n a b l y 
l i k e l y s t a n d a r d w i l l be a b l e t o 
be 
d e t e r m i n e d on a c l a s s - w i d e 
b a s i s . 
W h i l e t h e 
M i l l s e s advance a 'three t r a d e s 
r u l e ' i n o r d e r t o 
47 
1091225 
d e t e r m i n e whether o r n o t a g e n e r a l c o n t r a c t o r was 
r e a s o n a b l y 
l i k e l y t o be needed, 
t h i s 
C o u r t 
f i n d s 
i s s u e w i t h such a r u l e . 
Even i f 
a 'three 
t r a d e s 
r u l e ' were t o be employed as t h e s t a n d a r d i n 
t h e 
i n s t a n t case, t h e a p p l i c a t i o n o f such a r u l e 
s t i l l 
does n o t f u l l y answer t h e 
q u e s t i o n o f whether o r 
n o t 
a 
g e n e r a l 
c o n t r a c t o r b e i n g 
needed was 
r e a s o n a b l y 
l i k e l y . 
" P o t e n t i a l l y , 
one 
p u t a t i v e 
c l a s s 
member 
p l a i n t i f f may argue t h a t i t 
was r e a s o n a b l e under 
t h e 
c i r c u m s t a n c e s 
t h a t a g e n e r a l c o n t r a c t o r would have 
been 
needed t o r e p a i r o r r e p l a c e 
t h e i r 
c o v e r e d 
m o b i l e home from damage caused by t h e 2004 F l o r i d a 
H u r r i c a n e s because t h r e e o r 
more t r a d e s were needed, 
and 
under 
t h e custom 
and p r a c t i c e 
w i t h i n t h e 
i n s u r a n c e 
i n d u s t r y , 
t h e 
' t h r e e 
t r a d e s 
r u l e [ ] ' 
a p p l i e s . 
T h i s i s p r e c i s e l y t h e argument r a i s e d by 
the M i l l s e s . 
A f e l l o w c l a s s member p l a i n t i f f , who 
a l s o 
s u f f e r e d damage as a 
r e s u l t 
o f t h e 2004 
H u r r i c a n e s , may argue t h a t i t was r e a s o n a b l y 
l i k e l y 
a 
g e n e r a l 
c o n t r a c t o r would have been needed t o 
r e p a i r o r r e p l a c e h i s 
o r h e r c o v e r e d 
l o s s because, 
a l t h o u g h 
o n l y one t r a d e was needed, t h e e x t e n t o f 
the damage was s e v e r e and complex thus making i t 
r e a s o n a b l y 
l i k e l y 
a g e n e r a l 
c o n t r a c t o r would be 
needed. 
K e e p i n g w i t h t h e h y p o t h e t i c a l , t h e f i r s t 
c l a s s member c l a i m a n t would r e c e i v e GCOP under t h e 
M i l l s e s ' 
' t h r e e 
t r a d e s 
r u l e ' 
w h i l e 
t h e second 
h y p o t h e t i c a l c l a s s member c l a i m a n t would n o t r e c e i v e 
GCOP. 
W h i l e i t 
may have been 
r e a s o n a b l y 
l i k e l y 
under t h e c i r c u m s t a n c e s 
t h a t a g e n e r a l 
c o n t r a c t o r 
would be needed t o r e p a i r o r r e p l a c e t h e second 
c l a s s member's c o v e r e d m o b i l e home, due t o e x t e n s i v e 
damage 
w i t h i n one 
t r a d e , 
b a s e d 
on t h e second 
h y p o t h e t i c a l 
c l a s s member 
p l a i n t i f f ; 
l a c k o f t h e 
t r a d e s 
r e q u i r e d under a 
' t h r e e 
t r a d e s 
r u l e ' f o r 
payment o f 
GCOP, t h e r e i s 
no payment o f 
GCOP. 
Thus, 
even 
though t h e second 
c l a s s member 
p l a i n t i f f ' s 
e x t e n s i v e damage made i t r e a s o n a b l y 
l i k e l y under 
t h e 
c i r c u m s t a n c e 
t h a t a g e n e r a l 
c o n t r a c t o r would be 
r e q u i r e d t o r e p a i r o r r e p l a c e t h e damaged 
m o b i l e 
48 
1091225 
home: 
the second c l a i m a n t would none the l e s s 
not 
be 
e n t i t l e d 
t o GCOP under a 
' t h r e e t r a d e s 
r u l e . ' 
Even i f the second c l a i m a n t had damage r e q u i r i n g two 
t r a d e s , t h e r e would 
s t i l l 
be no payment under 
the 
' t h r e e t r a d e s r u l e ' , w h i l e i t q u i t e p o s s i b l y c o u l d 
have been r e a s o n a b l e under the c i r c u m s t a n c e s 
t h a t a 
g e n e r a l 
c o n t r a c t o r would be 
r e q u i r e d . 
The 
above 
example p r o v i d e s as an 
i l l u s t r a t i o n of how 
the 
use 
of 
a 
'three 
t r a d e s 
r u l e ' 
w i l l 
s t i l l 
l e a v e 
the 
q u e s t i o n 
of 
whether 
a 
g e n e r a l 
c o n t r a c t o r 
was 
r e a s o n a b l y 
l i k e l y 
t o be 
needed i n the 
r e p a i r or 
r e p l a c e m e n t of a c l a s s member's damaged m o b i l e home 
i n the b a l a n c e , and i f a 'three t r a d e s r u l e ' were t o 
be 
f o l l o w e d , then predominance c e r t a i n l y does 
not 
e x i s t as the above example d e m o n s t r a t e s . 
For 
the 
i n t e r e s t s of the f i r s t h y p o t h e t i c a l c l a s s member and 
the 
i n t e r e s t s 
of 
the 
second 
h y p o t h e t i c a l 
c l a s s 
member d i v e r g e . 
"Moreover, i f 
damages a c r o s s the c l a s s cannot be 
computed by 'some f o r m u l a , 
s t a t i s t i c a l 
a n a l y s i s , or 
o t h e r easy or e s s e n t i a l l y m e c h a n i c a l m e t h o d [ ] , ' t h a t 
too 
may 
be 
s u f f i c i e n t 
t o 
p r e c l u d e 
a 
f i n d i n g 
of 
predominance. 
S a c r e d 
H e a r t , 
a t 
1179. 
In 
the 
i n s t a n t 
case, 
the 
r a i s i n g 
of 
i n d i v i d u a l i z e d 
d e f e n s e s , 
i n a d d i t i o n t o the 
l i k e l y 
c l a i m by c l a i m 
f i l e 
r e v i e w , 
shows 
a 
l a c k 
of predominance. 
In 
essence, 
one 
p u t a t i v e 
c l a s s member 
w i l l 
f a c e 
an 
a s s e r t e d d e f e n s e by Foremost t h a t the l o s s payment 
i s s u e d t o the i n s u r e d was 
i n excess 
w h i l e 
a n o t h e r 
p u t a t i v e c l a s s member w i l l f a c e the d e f e n s e t h a t the 
i n s u r e d 
f r a u d u l e n t l y s u b m i t t e d 
t h e i r 
c l a i m , 
w h i l e 
a n o t h e r 
w i l l 
f a c e 
the 
defense 
t h a t because 
the 
m o b i l e home was 
a t o t a l l o s s a g e n e r a l 
c o n t r a c t o r 
was never needed. 
In l i g h t of such a s c e n a r i o , the 
p u t a t i v e 
c l a s s members[,] 
w h i l e 
h a v i n g 
s i m i l a r 
i n t e r e s t s , would b o t h need t o s e t f o r t h s e p a r a t e 
and 
d i s t i n c t e x t r i n s i c e v i d e n c e 
i n o r d e r t o r e f u t e the 
d e f e n s e s r a i s e d by Foremost. 
Such 
i n d i v i d u a l i z e d 
p r o o f 
l e a d s 
t h i s 
C o u r t 
t o 
f i n d 
the 
l a c k 
of 
predominance i n the i n s t a n t case. 
49 
1091225 
" I t 
s h o u l d be 
n o t e d t h a t 
s e v e r a l 
c o u r t s 
have 
r e a c h e d the same c o n c l u s i o n , 
t h a t i s , 
p o s t - h u r r i c a n e 
c l a i m 
a d j u s t m e n t s 
are 
not 
a p p r o p r i a t e 
f o r 
c l a s s 
t r e a t m e n t due 
t o the 
i n d i v i d u a l i z e d f a c t s of each 
c l a i m . 
... 
"b. 
S u p e r i o r i t y and 
M a n a g e a b i l i t y 
" I f the 
d i s t r i c t 
c o u r t does not 
f i n d t h a t 
the 
predominance 
r e q u i r e m e n t 
i s 
met, 
i t must 
s t i l l 
i n q u i r e as t o the second prong of R u l e 23(b) (3) 
-¬
namely whether 'a c l a s s a c t i o n i s s u p e r i o r 
t o o t h e r 
a v a i l a b l e 
methods 
f o r 
f a i r l y 
and 
e f f i c i e n t l y 
a d j u d i c a t i n g 
the 
c o n t r o v e r s y . ' 
Fed. 
R. 
C i v . 
P. 
2 3 ( b ) ( 3 ) . 
The 
s u p e r i o r i t y i n q u i r y w i l l 
u l t i m a t e l y 
c o n s i s t 
of 
the 
c o u r t 
d e t e r m i n i n g whether 
a 
c l a s s 
a c t i o n 
i s 
an 
e f f i c i e n t 
and 
manageable method 
of 
d i s p e n s i n g 
w i t h 
the 
i s s u e s 
t o be 
l i t i g a t e d , 
and 
a 
comparison 
of 
the burdens 
of 
a 
c l a s s - a c t i o n 
s u i t 
w i t h t h o s e t h a t would o b t a i n 
i f the 
c o u r t 
r e q u i r e d 
class-members t o pursue t h e i r c l a i m s i n d i v i d u a l l y . 
However, the predominance a n a l y s i s has 
'a tremendous 
impact 
on 
the 
s u p e r i o r i t y 
a n a l y s i s 
... 
f o r 
the 
s i m p l e 
r e a s o n 
t h a t , 
the 
more 
common 
i s s u e s 
predominate 
over 
i n d i v i d u a l i z e d i s s u e s , 
the 
more 
d e s i r a b l e 
a 
c l a s s 
a c t i o n 
l a w s u i t 
w i l l 
be 
as 
a 
v e h i c l e 
f o r a d j u d i c a t i n g 
the 
p l a i n t i f f s ' 
c l a i m s . ' 
W i l l i a m s r 
v. Mohawk Indus., I n c . ] , 568 
F.3d 
[1350] 
a t 1358 
[ ( 1 1 t h C i r . 2009)] 
( K l a y [ v. Humana, I n c . ] , 
382 
F.3d 
[1241] a t 
1269 
[ ( 1 1 t h . 
C i r . 2 0 0 4 ) ] ) . 
In 
t h i s 
way, 
i f a 
d i s t r i c t 
c o u r t 
f i n d s 
' t h a t 
i s s u e s 
common 
t o 
a l l 
c l a s s 
members 
p r e d o m i n a t e 
over 
i n d i v i d u a l i s s u e s , t h e n a c l a s s a c t i o n 
w i l l 
l i k e l y 
be more manageable t h a n and 
s u p e r i o r 
t o i n d i v i d u a l 
a c t i o n s . ' I d . 
In the end, 
a f i n d i n g of s u p e r i o r i t y  
w i l l not compensate f o r a l a c k of predominance, 
and 
 
the 
e x i s t e n c e 
of 
problems 
w i t h 
r e g a r d 
t o 
 
m a n a g e a b i l i t y can 
o n l y 
s c u t t l e an o t h e r w i s e p r o p e r  
m o t i o n 
f o r 
c e r t i f i c a t i o n 
a f t e r 
predominance 
has 
 
a l r e a d y been shown. 
S a c r e d H e a r t H e a l t h Sys., 
601 
F.3d 
a t 
1184 
( q u o t i n g 
Amchem 
P r o d s . , 
I n c . 
v. 
 
Windsor, 521 
U.S. 
591, 
617, 
117 
S. C t . 2231, 
138 
L. 
50 
1091225 
Ed. 2d 689 
( 1 9 9 7 ) ) . 
T h i s C o u r t has grave c o n c e r n s 
r e g a r d i n g the m a n a g e a b i l i t y o f t h i s s u i t as a c l a s s 
a c t i o n , s p e c i f i c a l l y t h e c l a i m by c l a i m r e v i e w t h a t 
w i l l u n d o u b t e d l y be needed. 
" I n Gibbs P r o p e r t i e s Corp. v. C i g n a Corp., 
196 
F.R.D. 430, 433 
(M.D. 
F l a . 2000), 
P l a i n t i f f s were 
t h r e e F l o r i d a c o r p o r a t i o n s w h i c h p u r c h a s e d v a r i o u s 
commercial i n s u r a n c e packages from Defendants C i g n a 
F i r e 
U n d e r w r i t e r s I n s u r a n c e 
Co. 
('Cigna 
F i r e ' ) , 
Bankers 
S t a n d a r d 
I n s u r a n c e Company 
('Bankers'), 
I n s u r a n c e Company of N o r t h A m e r i c a 
('INA'), 
and 
P a c i f i c 
Employers 
I n s u r a n c e Company 
( ' P a c i f i c ' ) , 
i n s u r a n c e companies w h i c h are a l l owned by Defendant 
C i g n a 
C o r p o r a t i o n . 
The 
c r u x 
o f 
P l a i n t i f f s ' 
C o m p l a i n t was 
t h a t 
Defendants 
p u r p o r t e d t o 
s e l l 
i n s u r a n c e t o P l a i n t i f f s i n a c c o r d a n c e w i t h r a t e s and 
s c h e d u l e s 
f i l e d 
w i t h 
the 
F l o r i d a 
Department 
o f 
I n s u r a n c e ('FDOI') b u t , i n f a c t , i n s t i t u t e d v a r i o u s 
p o l i c i e s 
and p r o c e d u r e s whereby Defendants 
would 
i l l e g a l l y and i m p r o p e r l y i n f l a t e the premiums 
and 
c o l l e c t such e x c e s s i v e premiums. 
I d . 
Defendants 
c l a i m e d 
t h a t 
i n d i v i d u a l 
' m i n i - t r i a l s ' 
would 
be 
n e c e s s a r y 
f o r 
each 
c l a s s 
member 
i n 
o r d e r 
t o 
d e t e r m i n e 
damages. 
I d . 
a t 
441. 
P l a i n t i f f s 
c o u n t e r e d by a r g u i n g t h a t t h e i r c l a s s 
c e r t i f i c a t i o n 
e x p e r t a n t i c i p a t e d b e i n g a b l e t o use a f o r m u l a i n 
o r d e r 
t o 
c a l c u l a t e 
damages 
f o r 
the 
c l a s s . 
N e v e r t h e l e s s , 
the 
c o u r t 
found 
t h a t 
m a t e r i a l s 
s u b m i t t e d by the named P l a i n t i f f s showed t h a t the 
amount of damages, i f any, v a r i e d from c l a s s member 
t o c l a s s member. 
I d . 
Because the C o u r t would have 
t o 
a n a l y z e 
each 
i n d i v i d u a l 
c l a s s 
member's 
u n d e r w r i t i n g f i l e i n o r d e r t o c a l c u l a t e damages, the 
Gibbs C o u r t u l t i m a t e l y found t h a t such a t a s k makes 
management of a c l a s s a c t i o n s u i t unworkable as i t 
p e r t a i n s 
t o 
damages. 
The 
motion 
f o r 
c l a s s 
c e r t i f i c a t i o n i n Gibbs was d e n i e d . 
I d . a t 443. 
" I n the i n s t a n t c a s e , such an 
i n d i v i d u a l i z e d 
e x a m i n a t i o n o f each p o l i c y h o l d e r ' s e s t i m a t e would 
a l s o be r e q u i r e d . 
Foremost e x p r e s s e d such a c o n c e r n 
51 
1091225 
i n 
t h e i r 
motion 
o p p o s i n g 
c l a s s 
c e r t i f i c a t i o n by 
a r g u i n g t h a t c e r t i f i c a t i o n would u l t i m a t e l y 
r e s u l t 
i n 
seventeen 
thousand and t h r e e hundred 
(17,300) 
m i n i - t r i a l s . 
(Dkt. 190 P. 33) 
The 
M i l l s e s ' 
p u r p o r t e d e x p e r t w i t n e s s , K e r m i t h 
S o n n i e r , 
h i m s e l f 
had t o examine, f i l e by f i l e , each c l a i m i n 
o r d e r t o 
e s t i m a t e t h e 
number o f p o t e n t i a l c l a s s members. ... 
"  
"... 
[T]he 
c o u r t i n d e t e r m i n i n g 
m a n a g e a b i l i t y 
s h o u l d 
c o n s i d e r 
t h e p o t e n t i a l 
d i f f i c u l t i e s i n 
n o t i f y i n g c l a s s members o f t h e s u i t , c a l c u l a t i o n o f 
i n d i v i d u a l damages, and d i s t r i b u t i o n o f damages. 
Maguire v. Sandy Mac, I n c . , 145 F.R.D. 50 (D.N.J. 
1992). 
Thus, even assuming t h i s C o u r t would a p p l y 
a ' t h r e e t r a d e s r u l e , ' t h e c a l c u l a t i o n o f 
damages 
i s 
not 
r e a d i l y 
apparent 
and a p p l y i n g t h e E l e v e n t h 
C i r c u i t r e a s o n a b l y 
l i k e l y s t a n d a r d w i l l s u r e l y o n l y 
make t h e c a l c u l a t i o n o f damages more d i f f i c u l t as 
i n d i v i d u a l i n q u i r i e s f o r each c l a i m a n t must be made 
i n 
o r d e r t o d e t e r m i n e 
what was r e a s o n a b l y 
l i k e l y 
under t h e c i r c u m s t a n c e s . 
... 
"Furthermore, 
Foremost may r a i s e d e f e n s e s 
t h a t 
are founded on an i n d i v i d u a l b a s i s , as t h e i r motion 
o p p o s i n g 
c l a s s c e r t i f i c a t i o n i n d i c a t e s . 
T h e r e f o r e , 
t a k i n g t h e M i l l s e s ' 
a l l e g a t i o n s and r e a s o n i n g as 
t r u e , t h a t t h e 
payment o f GCOP i s 
e a s i l y 
c a l c u l a t e d 
by m u l t i p l y i n g t h e a c t u a l cash payment by t h e g o i n g 
r a t e f o r GCOP, twenty p e r c e n t 
( 2 0 % ) , problems 
s t i l l 
abound. As GCOP would be c a l c u l a t e d as a p e r c e n t a g e 
of t h e a c t u a l cash v a l u e payment made t o t h e c l a s s 
members, GCOP cannot be v i e w e d 
d i s t i n c t 
from a l l 
o t h e r d e c i s i o n s t h a t c o m p r i s e d t h e 
d e t e r m i n a t i o n o f 
Foremost n o t 
t o 
pay 
GCOP. The M i l l s e s ' 
s u p p l e m e n t a l 
c l a i m s p r o v i d e an e x c e l l e n t example. 
The M i l l s e s 
f i l e d two (2) a d d i t i o n a l c l a i m s f o r damage t o t h e i r 
home r e s u l t i n g from t h e 
2004 F l o r i d a H u r r i c a n e s and 
Foremost would be e n t i t l e d t o i n t r o d u c e 
e v i d e n c e 
r e g a r d i n g 
t h e 
c a l c u l a t i o n 
o f GCOP 
g i v e n t h e 
s u p p l e m e n t a l 
c l a i m s . 
The 
p o s s i b i l i t y 
t h a t t h e 
52 
1091225 
s u p p l e m e n t a l 
c l a i m s 
p a i d 
by 
Foremost 
i n c l u d e 
s u f f i c i e n t 
funds 
f o r t h e 
h i r e 
o f 
a 
g e n e r a l 
c o n t r a c t o r 
i n t h e r e p a i r o r r e p l a c e m e n t o f t h e 
i n s u r e d s home remains a q u i t e v i a b l e d e f e n s e , and 
one 
t h a t can o n l y be d e t e r m i n e d on an 
i n d i v i d u a l 
b a s i s , and o n l y t h r o u g h 
c l a i m by c l a i m a n a l y s i s . " 
269 F.R.D. 675-80. 
Some o f t h e same concerns r e g a r d i n g predominance r a i s e d 
i n t h e 
u n p u b l i s h e d d e c i s i o n s o f t h e f e d e r a l d i s t r i c t c o u r t s i n 
L o u i s i a n a i n John and Nguyen and i n t h e d e c i s i o n o f t h e 
f e d e r a l d i s t r i c t c o u r t i n 
F l o r i d a i n 
M i l l s a r e 
p r e s e n t i n t h i s 
c a s e .
7 
T h i s 
case 
w i l l 
l i k e l y 
i n v o l v e t h e i n t r o d u c t i o n o f 
e v i d e n c e r e g a r d i n g many o f t h e i n d i v i d u a l c l a i m s o f t h e c l a s s 
members. The t h r e e - t r a d e r u l e i s 
s i m p l e and can 
be a p p l i e d 
i n 
t h i s case m e c h a n i c a l l y . 
However, DeWitt has n o t c i t e d , and we 
have n o t found, any Alabama s t a t u t e s , r e g u l a t i o n s , o r c a s e l a w 
t h a t r e q u i r e s t h e a p p l i c a t i o n o f a t h r e e - t r a d e r u l e .
8 
A l s o , 
7We note t h a t , u n l i k e M i l l s , t h e c l a s s d e f i n i t i o n i n t h i s 
case a p p l i e d t h e t h r e e - t r a d e r u l e r a t h e r than a 
" r e a s o n a b l y 
l i k e l y s t a n d a r d . " 
T h e r e f o r e , some o f t h e c o n c e r n s 
p r e s e n t e d 
i n M i l l s a r e n o t p r e s e n t i n t h i s 
case. 
8 I n 
f a c t , f o r p u r p o s e s o f § 34-8-1 e t s e q . , 
A l a . 
Code 
1975, "a ' g e n e r a l c o n t r a c t o r ' i s 
d e f i n e d t o be one who, 
f i x e d p r i c e , commission, f e e , o r wage u n d e r t a k e s t o c o n s t r u c t 
d e f i n e d t o be one who, f o r a 
or 
s u p e r i n t e n d o r engage i n t h e c o n s t r u c t i o n , 
a l t e r a t i o n , 
maintenance, r e p a i r , r e h a b i l i t a t i o n , r e m e d i a t i o n , r e c l a m a t i o n , 
or d e m o l i t i o n o f 
any b u i l d i n g , highway, sewer, s t r u c t u r e , s i t e 
53 
1091225 
he has not c i t e d 
any s t a t u t e , r u l e , o r c a s e l a w t h a t would 
p r e v e n t 
N a t i o n a l S e c u r i t y from p r e s e n t i n g e v i d e n c e t o show 
t h a t t h e t h r e e - t r a d e r u l e i s 
n o t 
a v a l i d i n d i c a t o r o f whether 
i t i s 
r e a s o n a b l y f o r e s e e a b l e t h a t a g e n e r a l c o n t r a c t o r w i l l be 
n e c e s s a r y t o make t h e r e p a i r s ; from p r e s e n t i n g e v i d e n c e i n 
i n d i v i d u a l 
cases 
t o show 
t h a t 
i t was 
n o t 
r e a s o n a b l y 
f o r e s e e a b l e t h a t g e n e r a l c o n t r a c t o r s would have been n e c e s s a r y 
t o make t h e r e p a i r s r e f l e c t e d on t h e e s t i m a t e s and t o show 
t h a t t h o s e p a r t i c u l a r i n s u r e d s were n o t e n t i t l e d t o 
GCOP; and 
from p r e s e n t i n g e v i d e n c e i n i n d i v i d u a l cases t o show t h a t , 
even 
i f t h e t h r e e - t r a d e 
r u l e 
a p p l i e d , 
t h o s e 
p a r t i c u l a r 
e s t i m a t e s d i d 
n o t a c t u a l l y r e f l e c t t h a t t h r e e o r more t r a d e s 
would be i n v o l v e d i n 
t h e r e p a i r s . 
In 
f a c t , d u r i n g t h e c l a s s - c e r t i f i c a t i o n h e a r i n g , Thomas 
and 
C h r i s t o p h e r 
b o t h 
r e v i e w e d 
t h e e s t i m a t e s 
f o r DeWitt's 
c l a i m , and b o t h 
t e s t i f i e d 
t h a t t h e y d i d n o t t h i n k i t 
was 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a g e n e r a l 
c o n t r a c t o r would be 
r e q u i r e d f o r 
t h e j o b and t h a t t h e y d i d 
n o t t h i n k t h a t , as 
work, g r a d i n g , p a v i n g o r p r o j e c t o r any improvement i n 
t h e 
S t a t e o f Alabama where t h e c o s t o f t h e u n d e r t a k i n g i s f i f t y  
t h o u s a n d d o l l a r s 
($50,000) o r more 
§ 3 4 - 8 - 1 ( a ) , A l a . 
Code 1975. 
54 
1091225 
g e n e r a l 
c o n t r a c t o r s , 
t h e y would t a k e t h e j o b o f r e p a i r i n g 
DeWitt's m o b i l e home. 
A l s o , 
b o t h 
t e s t i f i e d 
t h a t 
g e n e r a l 
c o n t r a c t o r s d i d 
n o t t y p i c a l l y do r e p a i r work on m o b i l e homes. 
A l s o , d u r i n g t h e h e a r i n g , 
Paxton t e s t i f i e d 
t h a t he had 
c r e a t e d a c h a r t t h a t c o u l d be used t o c o n v e r t t h e number o f 
t r a d e 
s k i l l s 
l i s t e d on an e s t i m a t e t o t h e number o f t r a d e s 
t h a t 
would be 
r e q u i r e d 
t o make t h e r e p a i r s . 
He 
a l s o 
t e s t i f i e d , however, t h a t r e a s o n a b l e p e o p l e e d u c a t e d i n 
t h e 
f i e l d c o u l d l o o k a t t h e v e r y same e s t i m a t e and come up w i t h 
d i f f e r e n t numbers o f t r a d e s ; t h a t such s u b j e c t i v i t y was "not 
good"; 
t h a t , 
i n u s i n g 
h i s c h a r t , 
one 
c o u l d 
remove t h e 
s u b j e c t i v i t y from t h e c a l c u l a t i o n ; and t h a t t h e r e was 
s t i l l 
s u b j e c t i v i t y i n c r e a t i n g t h e c o n v e r s i o n 
c h a r t . 
Paxton a l s o 
a p p l i e d t h e c h a r t t o DeWitt's e s t i m a t e 
and d e t e r m i n e d 
t h a t 
making t h e r e p a i r s t o t h e d w e l l i n g would i n v o l v e f i v e 
t r a d e s 
and 
t h a t , i f 
r e p a i r s t o t h e s t o r a g e 
b u i l d i n g were 
i n c l u d e d , 
s i x t r a d e s would be i n v o l v e d . 
However, Thomas t e s t i f i e d 
t h a t 
Paxton's c h a r t was a r b i t r a r y , and Thomas and C h r i s t o p h e r 
b o t h 
t e s t i f i e d 
as 
t o 
i s s u e s 
t h e y 
had 
w i t h 
some 
o f t h e 
c a t e g o r i z a t i o n s i n Paxton's c h a r t . 
Thomas and 
C h r i s t o p h e r 
a l s o r e v i e w e d DeWitt's e s t i m a t e . 
Thomas t e s t i f i e d t h a t , based 
55 
1091225 
on t h e e s t i m a t e , he saw o n l y two t r a d e s and t h a t , i f 
he were 
t o 
t a k e on t h a t j o b , 
he would h i r e 
o n l y a r o o f e r and a 
c a r p e n t e r who had good handyman 
s k i l l s t o p e r f o r m t h e j o b . 
C h r i s t o p h e r 
a l s o 
t e s t i f i e d 
t h a t , i f he were t o t a k e on 
DeWitt's j o b , he would most 
l i k e l y 
h i r e two c o n t r a c t o r s 
f o r 
the j o b . 
In M e l o t v. Oklahoma Farm Bureau M u t u a l I n s u r a n c e Co., 
87 
P.3d 644 (Okla. C i v . 
App. 2003), t h e 
Oklahoma C o u r t o f C i v i l 
A p p e a l s a f f i r m e d an o r d e r c e r t i f y i n g a c l a s s o f p o l i c y h o l d e r s 
of 
Oklahoma 
Farm Bureau 
M u t u a l 
I n s u r a n c e Company 
("Farm 
Bureau") who a l l e g e d t h a t Farm Bureau had 
n o t 
i n c l u d e d GCOP 
i n 
t h e i r payments f o r ACV o r r e p l a c e m e n t c o s t s and whose Farm 
Bureau w o r k s h e e t s o r e s t i m a t e s 
i n d i c a t e d t h a t t h r e e o r more 
t r a d e s would be i n v o l v e d i n 
making t h e 
r e p a i r s t o 
t h e i n s u r e d 
p r o p e r t y . 
I n 
M e l o t , t h e p l a i n t i f f s 
were p r o c e e d i n g on b r e a c h -
o f - c o n t r a c t , b a d - f a i t h , and f r a u d c l a i m s . The f r a u d c l a i m was 
b a s e d on a l l e g a t i o n s t h a t Farm Bureau had n o t i n f o r m e d t h e 
i n s u r e d s o f i t s p r a c t i c e o f 
n o t i n c l u d i n g GCOP i n 
such 
c a s e s . 
In a d d r e s s i n g t h e 
predominance i s s u e , t h e Oklahoma C o u r t o f 
C i v i l A p p e a l s n o t e d : 
"522 The t r i a l c o u r t f u r t h e r d e f i n e d t h e c l a s s 
as t h o s e whose damage a d j u s t m e n t s by I n s u r e r d i d n o t 
56 
1091225 
i n c l u d e 
' a d e q u a t e l y c a l c u l a t e d and 
t i m e l y t e n d e r e d 
compensation' f o r g e n e r a l 
c o n t r a c t o r ' s overhead 
and 
p r o f i t . 
The r e c o r d d i s c l o s e s t h a t I n s u r e r ' s 
r e c o r d s 
r e v e a l whether payments t o an i n s u r e d d i d or d i d not 
i n c l u d e 
the 
20 
p e r c e n t . 
Those who 
were not 
p a i d 
t h a t amount would be p a r t of the 
c l a s s ; t h o s e 
who 
were would not be i n the 
c l a s s . 
"523 
A g a i n , 
on 
f i r s t 
b l u s h , 
i t would 
seem 
n e c e s s a r y t o make i n d i v i d u a l 
i n q u i r i e s h e r e , 
i n t o 
what i s 'adequate.' In t h i s r e g a r d , 
I n s u r e r 
a s s e r t s 
t h a t 
d e t e r m i n i n g 
whether damage a d j u s t m e n t s were 
a d e q u a t e l y 
c a l c u l a t e d 
depends 
on 
i n d i v i d u a l i z e d 
q u e s t i o n s 
of whether an 
i n s u r e d was 
e n t i t l e d t o 
a 
payment f o r overhead and 
p r o f i t . 
"52 4 S i g n i f i c a n t l y , I n s u r e r never a s s e r t s -- 
and 
 
the r e c o r d does not i n d i c a t e -- t h a t the q u e s t i o n 
of  
whether the 20 p e r c e n t charge s h o u l d be i n c l u d e d i n  
s e t t l i n g 
a c l a i m was 
r e s o l v e d by 
I n s u r e r 
a f t e r 
an 
 
i n d i v i d u a l 
assessment 
of 
each 
c l a i m . 
To 
the 
c o n t r a r y , 
P l a i n t i f f s ' t h e o r i e s of r e c o v e r y are based 
on 
the 
concept 
t h a t 
I n s u r e r 
f o l l o w e d 
an 
a c r o s s - t h e - b o a r d p a t t e r n 
of 
f a i l i n g 
t o pay 
the 
20 
p e r c e n t when t h r e e or more t r a d e s were i n v o l v e d , 
and 
t h a t 
t h e y 
are 
e n t i t l e d 
t o 
knowledge 
of 
and 
compensation f o r the c h a r g e , r e g a r d l e s s 
of whether 
the 
r e s u l t i n g r e p a i r c o s t s i n c l u d e d the 20 p e r c e n t 
c h a r g e . 
"525 
We 
view the m a t t e r of whether 
P l a i n t i f f s 
are e n t i t l e d t o the 20 p e r c e n t charge as a 
q u e s t i o n 
g o i n g t o the m e r i t s of the l a w s u i t . Such an i n q u i r y 
i s i n a p p r o p r i a t e i n d e c i d i n g whether a c l a s s 
s h o u l d 
be 
c e r t i f i e d . 
Lobo E x p l o r a t i o n v. Amoco Prod. 
Co., 
1999 
OK CIV APP 
112, 
514, 
991 
P.2d 
1048, 
1054. 
Put 
a n o t h e r way, 
a c o u r t cannot deny c e r t i f i c a t i o n based 
on a b e l i e f t h a t a p l a i n t i f f cannot p r e v a i l on 
the 
m e r i t s . 
M i l l e r 
v. Mackey I n t e r n . , 
I n c . , 
452 
F.2d 
424, 
427 
(5th C i r . 1971). 
57 
1091225 
"526 
R e c e n t l y , 
i n a n a l y z i n g predominance and 
commonality, 
t h e Oklahoma 
Supreme 
C o u r t 
quoted 
A r m s t r o n g v. D a v i s , 275 F.3d 849, 868 ( 9 t h C i r . 
2001): 
'[W]here 
t h e l a w s u i t 
c h a l l e n g e s 
a ... 
p r a c t i c e o r p o l i c y t h a t a f f e c t s a l l 
o f t h e p u t a t i v e 
c l a s s members ... i n d i v i d u a l 
f a c t u a l d i f f e r e n c e s 
among 
t h e 
i n d i v i d u a l 
l i t i g a n t s 
o r 
groups 
o f 
l i t i g a n t s 
w i l l 
n o t 
p r e c l u d e 
a 
f i n d i n g 
o f 
commonality.' 
Y s b r a n d v. D a i m l e r C h r y s l e r 
Corp., 
2003 OK 17, 5 21, 81 P.3d 618. Under t h e f a c t s o f 
t h i s case, we b e l i e v e t h i s r e q u i r e m e n t was 
met." 
87 P.3d 
a t 648-49. 
U n l i k e t h e 
s i t u a t i o n i n 
M e l o t , however, N a t i o n a l S e c u r i t y 
p r e s e n t e d e v i d e n c e d u r i n g t h e c l a s s - c e r t i f i c a t i o n h e a r i n g t h a t 
i t d e t e r m i n e d whether GCOP was t o 
be p a i d on a c a s e - b y - c a s e 
b a s i s ; t h a t i t 
p a i d GCOP when i t 
was r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a c o n t r a c t o r would be n e c e s s a r y i n 
making t h e 
r e p a i r s t o 
the i n s u r e d p r o p e r t y ; and 
t h a t i n d o i n g so i t f o l l o w e d Alabama 
i n s u r a n c e - i n d u s t r y s t a n d a r d s . 
As t h e 
Oklahoma C o u r t o f C i v i l 
A p p e a l s n o t e d , whether each i n d i v i d u a l member o f t h e c l a s s 
w o u l d be e n t i t l e d t o GCOP i s a q u e s t i o n 
t h a t goes t o 
t h e 
m e r i t s o f t h e a c t i o n . 
However, based on t h e 
p o s t u r e o f t h i s 
p a r t i c u l a r 
case, 
a 
r e s o l u t i o n 
o f 
t h o s e 
m e r i t s 
c o u l d 
p o t e n t i a l l y i n v o l v e t h e 
p r e s e n t a t i o n o f 
e v i d e n c e r e g a r d i n g t h e 
u n d e r l y i n g f a c t s o f each c l a s s member's i n s u r a n c e 
c l a i m . 
58 
1091225 
T h i s case i s a l s o d i s t i n g u i s h a b l e from P r e s s v. L o u i s i a n a  
C i t i z e n s F a i r P l a n 
P r o p e r t y 
I n s u r a n c e Corp., 12 So. 3d 392 
(La. C t . 
App. 2009), i n 
w h i c h t h e L o u i s i a n a C o u r t o f A p p e a l s 
u p h e l d t h e c e r t i f i c a t i o n o f a c l a s s o f p o l i c y h o l d e r s whose 
p r o p e r t y was damaged d u r i n g 
H u r r i c a n e s 
K a t r i n a and/or 
R i t a 
where t h e i n s u r e r ' s 
"adjustment 
i d e n t i f i e d 
t h r e e o r more 
t r a d e s 
i n v o l v e d i n t h e r e p a i r s and payment was based on 
C i t i z e n s ' s a d j u s t m e n t o f damages; and t h e payment d i d n o t 
i n c l u d e 20% 
GCOP." 
P r e s s , 12 So. 3d a t 393-94. I n t h a t case 
the L o u i s i a n a C o u r t o f 
A p p e a l s h e l d t h a t t h e 
common i s s u e t h a t 
p r e d o m i n a t e d was whether t h e 
i n s u r e d was e n t i t l e d t o 
GCOP when 
t h r e e o r more t r a d e s were i n v o l v e d i n making t h e r e p a i r s . 
However, t h e L o u i s i a n a C o u r t o f A p p e a l s n o t e d t h a t , i n t h a t 
case, " t h e 
c l a s s members' r i g h t t o r e c o v e r GCOP d e r i v e s 
from 
the d e f e n d a n t ' s s y s t e m a t i c 
f a i l u r e t o f o l l o w i t s 
own p o l i c i e s  
and g u i d e l i n e s w h i c h s e t 
f o r t h t h e 
r e q u i r e m e n t t o 
pay 
GCOP 
a t 
 
a f l a t r a t e o f 20% when t h e i n s u r e d ' s 
a d j u s t m e n t 
i d e n t i f i e d  
t h r e e o r 
more t r a d e s i n v o l v e d i n 
t h e 
r e p a i r s . " 
P r e s s , 12 
So. 
3d a t 396 (emphasis added). 
T h e r e f o r e , 
i t 
h e l d 
t h a t t h e 
predominance r e q u i r e m e n t had 
been s a t i s f i e d . 
However, i n t h i s 
case, DeWitt does n o t a l l e g e t h a t i t 
was N a t i o n a l 
S e c u r i t y ' s 
59 
1091225 
p o l i c y t o 
pay GCOP when t h r e e o r more t r a d e s were i n v o l v e d . 
R a t h e r , 
h i s a c t i o n i s based on a l l e g a t i o n s t h a t 
N a t i o n a l 
S e c u r i t y 
s h o u l d pay GCOP when 
t h r e e o r more 
t r a d e s a r e 
i n v o l v e d i n 
making t h e r e p a i r s t o 
t h e i n s u r e d p r o p e r t y . 
In Burgess v. Farmers I n s u r a n c e Co., 151 P.3d 92 ( O k l a . 
2006), a s t a t e d i s t r i c t c o u r t had c e r t i f i e d a c l a s s a c t i o n 
i n 
w h i c h t h e 
i n s u r e d s were s u i n g Farmers I n s u r a n c e Company, I n c . 
("Farmers"), a l l e g i n g b r e a c h o f c o n t r a c t , bad f a i t h , 
f r a u d , 
and 
d e c e i t 
based 
on 
a l l e g a t i o n s 
t h a t 
Farmers 
had 
s y s t e m a t i c a l l y f a i l e d t o 
pay 
GCOP and 
had 
w i t h h e l d i n f o r m a t i o n 
r e g a r d i n g t h e i n s u r e d s ' e n t i t l e m e n t t o such i n f o r m a t i o n . 
On 
a p p e a l , t h e 
Oklahoma C o u r t o f C i v i l A p p e a l s , 
h o l d i n g t h a t 
t h e 
d i s t r i c t 
c o u r t had exceeded 
i t s d i s c r e t i o n , 
r e v e r s e d t h e 
d i s t r i c t 
c o u r t ' s 
judgment. 
The Oklahoma 
Supreme 
C o u r t 
r e v e r s e d t h e 
judgment o f t h e 
Oklahoma C o u r t o f C i v i l A p p e a l s 
and 
h e l d 
t h a t t h e d i s t r i c t 
c o u r t had n o t exceeded 
i t s 
d i s c r e t i o n i n c e r t i f y i n g t h e c l a s s . 
W i t h 
r e g a r d t o 
t h e 
Oklahoma C o u r t o f C i v i l A p p e a l s ' h o l d i n g on predominance, 
t h e 
Oklahoma Supreme C o u r t n o t e d t h a t i t was n o t a p p r o p r i a t e t o 
c o n s i d e r t h e m e r i t s o f t h e c l a i m when 
r e v i e w i n g a c l a s s 
c e r t i f i c a t i o n and t h a t i t would r e f r a i n from r u l i n g on 
t h e 
60 
1091225 
m e r i t s of the t h r e e - t r a d e r u l e because t h a t was a q u e s t i o n f o r 
the j u r y . 
I t a l s o s t a t e d : 
"For 
t h i s 
r e a s o n , 
we 
d i s a g r e e 
w i t h 
the 
[Court 
of 
C i v i l A p p e a l s ' ] m e r i t s 
d e t e r m i n a t i o n 
t h a t 
'Farmers 
had 
no 
s t a n d a r d i z e d 
r u l e ' 
as 
a 
b a s i s 
f o r 
i t s 
c o n c l u s i o n 
t h a t i n d i v i d u a l i z e d assessments of each 
c l a i m 
would 
be 
n e c e s s a r y 
i n 
o r d e r 
t o 
d e t e r m i n e 
whether 
I n s u r e r 
p a i d 
the p r o p e r amount under 
the 
i n s u r a n c e 
c o n t r a c t . 
I n s u r e r ' s 
a s s e r t i o n t h a t 
the 
' t h r e e t r a d e r u l e ' i s i n v a l i d and/or t h a t i t d i d not 
o p e r a t e p u r s u a n t 
t o 
an 
o b j e c t i v e 
s t a n d a r d 
i n 
the 
payment of [GCOP] may 
s t i l l be r a i s e d ... a t a 
t r i a l 
on 
the 
m e r i t s , b u t 
i t i s i n a p p r o p r i a t e 
f o r us 
t o 
d e t e r m i n e 
i t s 
v a l i d i t y 
a t 
t h i s 
s t a g e 
of 
the 
p r o c e e d i n g s . 
I f I n s u r e r i s s u c c e s s f u l on the 
m e r i t s 
on 
t h i s 
i s s u e and 
the 
j u r y r e j e c t s the 
I n s u r e d s ' 
a s s e r t i o n s 
as 
t o the 
I n s u r e r ' s 
a l l e g e d 
s y s t e m a t i c 
underpayment 
of 
c l a i m s 
and 
f a i l u r e 
t o 
d i s c l o s e 
i n f o r m a t i o n 
c o n c e r n i n g 
the 
I n s u r e d s ' 
p o t e n t i a l 
e n t i t l e m e n t 
t o such payments, t h e n the r e s u l t 
w i l l 
be b i n d i n g on the e n t i r e c l a s s of 
I n s u r e d s . 
"As 
f o r 
I n s u r e r ' s 
argument 
t h a t 
i n d i v i d u a l 
i s s u e s 
predominate 
over 
q u e s t i o n s 
common t o 
the 
c l a s s , 
we 
note t h a t 
' [ f ] a c t u a l 
v a r i a t i o n s i n 
the 
i n d i v i d u a l c l a i m s 
w i l l 
not n o r m a l l y 
p r e c l u d e 
c l a s s 
c e r t i f i c a t i o n 
i f the 
c l a i m 
a r i s e s from 
the 
same 
event or c o u r s e of conduct as the c l a s s c l a i m s , 
and 
g i v e s 
r i s e t o the same l e g a l or r e m e d i a l 
t h e o r y . ' 
Y s b r a n d v. D a i m l e r c h r y s l e r Corp., 2003 OK 17, 5 21, 
81 P.3d 
618, 
627, 
c e r t . d e n i e d , 
542 U.S. 
937, 
124 
S. 
C t . 
2907, 
159 
L. 
Ed. 
2d 
812 
(2004) 
( c i t a t i o n s 
o m i t t e d ) . 
Here, the 
a c t s or o m i s s i o n s 
of 
I n s u r e r 
w h i c h c o n s t i t u t e the a l l e g e d b r e a c h e s of 
c o n t r a c t , 
bad 
f a i t h 
and/or 
f r a u d 
( s p e c i f i c a l l y , 
I n s u r e r ' s 
a l l e g e d s y s t e m a t i c 
f a i l u r e t o pay [GCOP] a t the time 
of ACV 
s e t t l e m e n t when due 
and 
f a i l u r e t o d i s c l o s e 
i n f o r m a t i o n t o I n s u r e d s c o n c e r n i n g 
[GCOP]) are 
the 
same or 
s i m i l a r 
a c t s 
or 
o m i s s i o n s 
f o r each 
c l a s s 
member. 
Even 
though damages amounts 
may 
v a r y , 
61 
1091225 
common 
q u e s t i o n s 
predominate 
where t h e a c t s o r 
o m i s s i o n s a r e t h e same. See B l a c k Hawk O i l Co. v.  
Exxon Corp., 1998 OK 70, 5 29, 969 P.2d 337, 345 
( n o t i n g t h e 
mere p o s s i b i l i t y t h a t p l a i n t i f f s ' 
p r o o f 
on 
t h e i r 
f r a u d c l a i m s might 
f a i l i s i n a p p r o p r i a t e 
grounds f o r 
d e n i a l o f c l a s s c e r t i f i c a t i o n i n case 
i n v o l v i n g a l l e g e d s t a n d a r d i z e d m i s r e p r e s e n t a t i o n s t o 
a l l members o f t h e c l a s s ) ; Lobo E x p l o r a t i o n Co. v. 
 
Amoco Prod. Co., 1999 
OK CIV 
APP 112, 
5 10, 991 
P.2d 
1048, 
1052, c e r t . d e n i e d 
(Okla. Sup. C t . , 
Nov. 10, 
1999), c e r t . d e n i e d , 529 
U.S. 1124, 
120 S. C t . 1996, 
146 L. Ed. 2d 821 
(2000)." 
In 
r e a c h i n g 
our 
d e c i s i o n 
t o 
v a c a t e 
t h e 
c l a s s -
c e r t i f i c a t i o n 
o r d e r , we a r e n o t a d d r e s s i n g 
t h e m e r i t s o f 
DeWitt's argument t h a t N a t i o n a l S e c u r i t y engaged i n a s t a n d a r d 
p r a c t i c e 
o f n o t p a y i n g 
GCOP i n cases 
where a 
g e n e r a l 
c o n t r a c t o r was n o t 
h i r e d o r 
t h e 
m e r i t s o f N a t i o n a l S e c u r i t y ' s 
a s s e r t i o n 
t h a t i t s 
p o l i c y was t o pay GCOP when i t 
was 
r e a s o n a b l y 
f o r e s e e a b l e 
t h a t a c o n t r a c t o r would be n e c e s s a r y 
and t h a t i t d e t e r m i n e d whether t o 
pay GCOP on a c a s e - b y - c a s e 
b a s i s . 
Nor do we a d d r e s s t h e 
m e r i t s o f 
t h e t h r e e - t r a d e 
r u l e . 
R a t h e r , we base our d e t e r m i n a t i o n 
on t h e f a c t 
t h a t t h e 
l i t i g a t i o n 
o f 
t h e s e 
i s s u e s 
w i l l 
l i k e l y 
i n v o l v e 
t h e 
p r e s e n t a t i o n o f 
e v i d e n c e r e g a r d i n g numerous i n d i v i d u a l c l a i m s . 
A l t h o u g h t h i s case w i l l i n v o l v e i s s u e s t h a t a r e 
common t o a l l 
c l a s s members, i t i s 
h i g h l y l i k e l y t h a t i t w i l l a l s o i n v o l v e 
i n d i v i d u a l i z e d e v i d e n c e r e g a r d i n g whether i t was 
r e a s o n a b l y 
62 
1091225 
f o r e s e e a b l e t h a t t h e s e r v i c e s of a g e n e r a l c o n t r a c t o r would be 
n e c e s s a r y i n each of t h o s e c l a i m s . 
A l s o , i t i s l i k e l y 
t h a t 
the case w i l l a l s o i n v o l v e e v i d e n c e as t o whether some o f t h e 
e s t i m a t e s 
a c t u a l l y i n d i c a t e t h a t t h r e e o r more t r a d e s would be 
i n v o l v e d i n t h e r e p a i r s . 
A d d i t i o n a l l y , as t h e U n i t e d 
S t a t e s 
D i s t r i c t C o u r t f o r t h e M i d d l e 
D i s t r i c t of F l o r i d a n o t e d i n 
M i l l s , 
N a t i o n a l 
S e c u r i t y w o u l d 
a l s o be 
a b l e 
t o r a i s e any 
a f f i r m a t i v e 
d e f e n s e s 
i t might 
have 
a g a i n s t 
i n d i v i d u a l 
i n s u r e d s . 
F i n a l l y , a l t h o u g h DeWitt has p r e s e n t e d a m e c h a n i c a l 
method f o r c a l c u l a t i n g t h e damages o f each i n s u r e d , as was t h e 
case i n M i l l s an i n d i v i d u a l r e v i e w of each c l a i m 
f i l e would 
s t i l l have t o be u n d e r t a k e n t o d e t e r m i n e t h e damages i n each 
c a s e . 
We 
note 
t h a t 
DeWitt d i d not p r e s e n t any 
e v i d e n c e 
r e g a r d i n g t h e number o f c l a i m s t h a t might a c t u a l l y be i n c l u d e d 
i n t h e c l a s s d e f i n i t i o n . 
However, i n h i s a f f i d a v i t i n s u p p o r t 
of 
N a t i o n a l 
S e c u r i t y ' s 
o b j e c t i o n 
t o 
c l a s s 
c e r t i f i c a t i o n , 
S h i v l e y , t h e c l a i m s manager f o r N a t i o n a l S e c u r i t y , 
s t a t e d : 
" S i n c e J a n u a r y 01, 2002 N a t i o n a l S e c u r i t y has opened 
a p p r o x i m a t e l y 57,818 
c l a i m 
f i l e s 
( t h i s 
i n c l u d e s 3 
major 
h u r r i c a n e s ) . 
We have 
c l o s e d 
a p p r o x i m a t e l y 
51,242 c l a i m f i l e s and have a c u r r e n t open 
i n v e n t o r y 
of 6,576 open c l a i m 
f i l e s . " 
63 
1091225 
A l s o , d u r i n g t h e c e r t i f i c a t i o n h e a r i n g , when S h i v l e y was asked 
i f 
t h e r e was a r e a s o n N a t i o n a l 
S e c u r i t y 
c o u l d n o t make a 
computer copy o f t h e images i n i t s e l e c t r o n i c f i l e s and g i v e 
them t o a t h i r d p a r t y t o r e v i e w , S h i v l e y t e s t i f i e d t h a t 
t h a t 
would i n v o l v e between 30,000 and 40,000 f i l e s and t h a t each 
f i l e 
c o n t a i n e d between 20 and 40 pages. 
T h e r e f o r e , a c l a s s 
a c t i o n 
i n t h i s 
case 
c o u l d 
p o t e n t i a l l y 
i n v o l v e 
N a t i o n a l 
S e c u r i t y ' s 
p r e s e n t i n g 
e v i d e n c e 
r e g a r d i n g 
thousands 
o f 
i n d i v i d u a l c l a i m s . 
T h e r e f o r e , i n t h i s case, common q u e s t i o n s 
of law and f a c t do n o t p r e d o m i n a t e . 
B. 
S u p e r i o r i t y 
Even though we have c o n c l u d e d t h a t common q u e s t i o n s o f 
law and f a c t do n o t p r e d o m i n a t e , p u r s u a n t t o R u l e 
2 3 ( b ) ( 3 ) 
DeWitt was a l s o 
r e q u i r e d t o show t h a t "a c l a s s 
a c t i o n i s 
s u p e r i o r t o o t h e r a v a i l a b l e methods f o r t h e f a i r and e f f i c i e n t 
a d j u d i c a t i o n o f 
t h e c o n t r o v e r s y . " 
I n i t s o r d e r g r a n t i n g c l a s s 
c e r t i f i c a t i o n , t h e t r i a l 
c o u r t 
s t a t e d : 
"The 
f o u r 
f a c t o r s 
[ i n R u l e 
2 3 ( b ) ( 3 ) ] a l l 
m i t i g a t e i n f a v o r o f c l a s s c e r t i f i c a t i o n . 
R e l a t i v e 
t o 
f a c t o r 
(A) c o n c e r n i n g t h e i n t e r e s t o f 
c l a s s 
members i n b r i n g i n g 
s e p a r a t e a c t i o n s , t h e amounts 
due t o each c l a s s member i s r e l a t i v e l y 
s m a l l . 
The 
C o u r t f i n d s t h a t each c l a s s member would have 
l i t t l e 
i n c e n t i v e t o t a k e an a c t i v e p a r t i n 
p r o s e c u t i n g t h e 
c a s e . T h e r e f o r e , g i v e n t h e r e l a t i v e l y s m a l l amounts 
64 
1091225 
due t o t h e p l a i n t i f f and each 
c l a s s member, t 
l i t i g a t i o n c o s t s f o r a s i n g l e i n s u r e d c h a l l e n g i n g 
the 
an 
a c r o s s - t h e - b o a r d 
p r a c t i c e o f an i n s u r a n c e company 
would be p r o h i b i t i v e l y h i g h r e l a t i v e t o t h e r e l i e f 
t o w h i c h t h e i n s u r e d would be e n t i t l e d . 
"As t o f a c t o r (B) 
c o n c e r n i n g s i m i l a r 
l i t i g a t i o n , 
the 
C o u r t has n o t been made aware o f any c l a s s 
a c t i o n 
l i t i g a t i o n 
p e n d i n g 
a g a i n s t 
[ N a t i o n a l 
S e c u r i t y ] r e g a r d i n g t h e 
payment o f GCOP i n 
Alabama. 
As t o f a c t o r 
(C), M o b i l e County i s 
a n a t u r a l forum 
f o r 
t h i s 
l i t i g a t i o n . 
The v a s t 
m a j o r i t y o f t h e 
c l a i m s 
i n v o l v e d a r o s e 
from 
H u r r i c a n e s 
Ivan and 
K a t r i n a . 
The c l a s s i s l i m i t e d t o Alabama 
c i t i z e n s , 
and t h e c l a s s i s l i m i t e d t o l o s s e s t h a t o c c u r r e d i n 
Alabama. T h e r e f o r e , t h e 
C o u r t f i n d s t h a t most o f t h e 
c l a s s members w i l l be r e s i d e n t s o f e i t h e r 
M o b i l e 
County o r B a l d w i n County, and t h e l o s s e s 
concerned 
are c o n c e n t r a t e d i n t h e s e two c o u n t i e s . 
"As 
t o f a c t o r 
(D) c o n c e r n i n g 
m a n a g e a b i l i t y , 
N a t i o n a l S e c u r i t y m a i n t a i n s an e l e c t r o n i c 
database 
of i t s c l a i m s f i l e s , i n c l u d i n g each r e p a i r e s t i m a t e 
p r e p a r e d by i t s a d j u s t e r s d u r i n g t h e time p e r i o d 
r e l e v a n t t o t h i s c a s e . The r e l e v a n t e s t i m a t e s would 
be 
r e v i e w e d t o see w h i c h ones i n d i c a t e d t h r e e o r 
more t r a d e s b u t d i d not i n c l u d e GCOP. As [DeWitt's] 
e x p e r t A l b e r t Paxton t e s t i f i e d , 
t h i s i s 
a r e l a t i v e l y 
s i m p l e m a t t e r o f c o u n t i n g . 
The C o u r t agrees 
from 
e x a m i n i n g t h e e s t i m a t e s f o r [DeWitt] 
t h a t t h i s i s 
not a c o m p l i c a t e d t a s k . A c c o r d i n g t o 
Mr. Paxton, one 
may a l s o t a k e t h e l i s t o f 
t h e 
terms used t o d e s c r i b e 
the v a r i o u s t r a d e s , which 
[DeWitt] s u b m i t t e d a t 
t h e 
h e a r i n g , and r e v i e w an e s t i m a t e t o see i f t h r e e 
d i f f e r e n t t r a d e s a r e l i s t e d . 
Review o f t h e f i l e s 
w i l l a l s o r e v e a l t h e i d e n t i t y and a d d r e s s e s o f 
t h e 
members o f t h e c l a s s , so t h a t n o t i c e o f t h e c l a s s 
and an o p p o r t u n i t y f o r o p t - o u t may be a f f o r d e d each 
c l a s s 
member 
under A l a . R. C i v . P. 
2 3 ( c ) ( 2 ) , 
r e q u i r i n g such n o t i c e f o r any c l a s s c e r t i f i e d under 
Rule 2 3 ( b ) ( 3 ) . 
65 
1091225 
"  
"The C o u r t f u r t h e r f i n d s t h a t a c l a s s a c t i o n i s 
a s u p e r i o r method o f a d j u d i c a t i n g t h e c l a s s members' 
c l a i m s . 
As 
shown 
above, 
i t would 
n o t be 
e c o n o m i c a l l y 
f e a s i b l e f o r each 
c l a s s member t o 
i n d i v i d u a l l y 
l i t i g a t e 
h i s 
o r 
h e r 
c l a i m . 
F u r t h e r m o r e , 
t h e 
a p p r a i s a l 
p r o c e s s 
o f f e r e d 
by 
N a t i o n a l S e c u r i t y i s 
n o t 
a s u p e r i o r method e i t h e r as 
d i s c u s s e d i n 
t h e n e x t s e c t i o n . " 
However, i n A l f a L i f e I n s u r a n c e Corp. v. Hughes, 861 So. 2d 
1088 ( A l a . 
2003), t h i s C o u r t 
s t a t e d : 
"Because i n d i v i d u a l i s s u e s predominate over t h e 
common 
c l a i m s , 
m a n a g e a b i l i t y 
d i f f i c u l t i e s 
r e n d e r 
t h i s case u n f i t f o r 
c l a s s c e r t i f i c a t i o n . 
R e y n o l d s 
 
M e t a l s [Co. 
v. H i l l ] , 825 So. 2d [100] 
a t 108 [ ( A l a . 
2 0 0 2 ) ] . 
'[T]he 
g r e a t e r t h e number o f i n d i v i d u a l 
i s s u e s , t h e l e s s 
l i k e l y i t i s t h a t a c o u r t may 
p r o p e r l y 
f i n d t h a t a c l a s s a c t i o n i s t h e s u p e r i o r 
means o f l i t i g a t i n g t h e p l a i n t i f f ' s 
c l a i m s . ' 
[Ex 
 
p a r t e ] Green Tree[ F i n . 
C o r p . ] , 723 So. 2d [6] 
a t 9 
[ ( A l a . 1 9 9 8 ) ] . The i n d i v i d u a l i z e d i n q u i r y n e c e s s a r y 
t o 
d e t e r m i n e 
t h e 
s u b j e c t i v e 
f a c t s 
i n 
each 
t r a n s a c t i o n p r e t e r m i t s t h e s u p e r i o r i t y o f 
any c l a s s -
wide r e s o l u t i o n o f d i s p u t e s . " 
861 So. 2d a t 1103-04. 
T h i s case w i l l p o t e n t i a l l y i n v o l v e t h e i n t r o d u c t i o n o f 
e v i d e n c e r e g a r d i n g thousands o f i n d i v i d u a l c l a i m s . As was 
t h e 
case i n A l f a , t h e n e c e s s i t y f o r 
such i n d i v i d u a l i z e d i n q u i r y 
outweighs t h e s u p e r i o r i t y o f t h e c l a s s - w i d e 
r e s o l u t i o n o f 
d i s p u t e s . 
A c c o r d i n g l y , 
t h i s 
case 
i s u n f i t 
f o r c l a s s 
c e r t i f i c a t i o n . See A l f a , 
s u p r a . 
66 
1091225 
For t h e s e r e a s o n s , DeWitt has 
n o t s a t i s f i e d h i s burden o f 
e s t a b l i s h i n g t h e 
predominance and 
s u p e r i o r i t y 
r e q u i r e m e n t s 
s e t 
f o r t h i n 
R u l e 2 3 ( b ) ( 3 ) , A l a . R. C i v . P. 
T h e r e f o r e , t h e t r i a l 
c o u r t exceeded i t s d i s c r e t i o n i n 
g r a n t i n g DeWitt's m o t i o n 
f o r 
c l a s s 
c e r t i f i c a t i o n .
9 
A c c o r d i n g l y , we v a c a t e t h e 
t r i a l 
c o u r t ' s 
o r d e r 
g r a n t i n g 
c l a s s 
c e r t i f i c a t i o n and remand 
t h i s 
case f o r 
p r o c e e d i n g s c o n s i s t e n t w i t h t h i s 
o p i n i o n . 
ORDER VACATED; CAUSE REMANDED. 
Malone, C.J., 
and S t u a r t , P a r k e r , and 
Shaw, J J . , c o n c u r . 
9 B a s e d on our c o n c l u s i o n r e g a r d i n g t h e 
predominance and 
s u p e r i o r i t y r e q u i r e m e n t s o f 
R u l e 2 3 ( b ) ( 3 ) , A l a . R. C i v . P., we 
p r e t e r m i t 
c o n s i d e r a t i o n o f t h e p a r t i e s ' r e m a i n i n g 
arguments 
r e g a r d i n g t h e a p p r o p r i a t e n e s s o f c l a s s c e r t i f i c a t i o n i n t h i s 
case. 
See Wyeth, s u p r a . 
We a l s o p r e t e r m i t d i s c u s s i o n o f t h e 
r e m a i n i n g c l a i m s r a i s e d by N a t i o n a l S e c u r i t y and r a i s e d i n t h e 
amicus c u r i a e b r i e f 
f i l e d by c o u n s e l f o r 
P r o p e r t y 
C a s u a l t y 
I n s u r e r s A s s o c i a t i o n o f A m e r i c a . 
67