Source: http://masscases.com/cases/app/91/91massappct1.html
Timestamp: 2018-06-22 17:24:17
Document Index: 441524121

Matched Legal Cases: ['§ 3', '§ 3', '§ 3', '§ 2', '§ 133', '§ 9', '§ 133', '§ 133', '§ 9', '§ 690', '§ 133', '§ 133', '§ 2', '§ 133', '§ 133', '§ 133', '§ 133', '§ 3', '§ 133', '§ 133', '§ 133']

MORGAN vs. MASSACHUSETTS HOMELAND INSURANCE COMPANY, 91 Mass. App. Ct. 1
91 Mass. App. Ct. 1
November 9, 2016 - January 20, 2017
Consumer Protection Act, Class action, Insurance. Practice, Civil, Class action, Consumer protection case. Motor Vehicle, Insurance. Insurance, Motor vehicle insurance, Settlement of claim, Regulation, Amount of recovery for loss. Words, "Actual cash value," " Retail book value ."
In a civil action alleging that the defendant automobile insurer engaged in unfair or deceptive claim settlement practices in violation of G. L. c. 176D, § 3(9), and G. L. c. 93A, the Superior Court judge did not abuse his discretion in denying the plaintiff insured's motion for class certification, where the plaintiff failed to provide sufficient information to support a reasonable judgment that others were similarly situated and similarly injured (in that the record provided little to no information regarding how other putative class members' total loss claims were calculated, negotiated, and settled; in that there was insufficient information in the record to support a reasonable judgment that the defendant employed a uniform approach in handling total loss claims or that the defendant's reliance on certain software rather than
other sources of valuation data similarly affected other members of the putative class; and in that it could not be discerned how the plaintiff was actually harmed or how his alleged harm compared to that of the other putative class members). [5-7]
In a civil action alleging that the defendant automobile insurer engaged in unfair or deceptive claim settlement practices in violation of G. L. c. 176D, § 3(9), and G. L. c. 93A, the Superior Court judge erred in concluding that the defendant had violated G. L. c. 93A, where it was plain from the trial record that the defendant considered retail book value information in formulating its initial settlement offer, and therefore the judge's finding that the initial offer violated c. 93A was incorrect, and where, in any event, the defendant's final offer also incorporated retail book value from a source cited by the plaintiff (again reflecting that the defendant considered retail book value, albeit later in the settlement process). [7-10]
KAFKER, C.J. The plaintiff, Anthony G. Morgan, brought this civil action against the defendant, Massachusetts Homeland Insurance Company (Homeland or insurer), alleging that Homeland engaged in unfair or deceptive claim settlement practices in violation of G. L. c. 176D, § 3(9), and G. L. c. 93A, in the course of settling his total loss auto insurance claim. [Note 1] See G. L. c. 93A, §§ 2, 9. Even though the claim was settled within two months of the accident, with the plaintiff's acceptance of the insurer's offer, the plaintiff claimed that the insurer violated c. 176D and c. 93A because it did not take into account the "retail book value" of his vehicle, as required by 211 Code Mass. Regs. § 133.05(1)(a) (2003). The plaintiff also filed a motion to certify a class action pursuant to G. L. c. 93A, § 9(2). A judge of the Superior Court (motion judge) denied class certification and entered a summary judgment on that count of the complaint. After a jury-waived trial on the plaintiff's individual c. 93A claim, the trial judge (who was not
the motion judge) found that, although Homeland had violated c. 93A, the plaintiff was not injured by the violation, and entered judgment for Homeland on that count of the complaint. On appeal, the plaintiff argues that the judges erred by (1) denying his motion for class certification; and (2) concluding that he was not injured by Homeland's c. 93A violation. Homeland cross-appeals, challenging the trial judge's ruling that it violated c. 93A. We conclude that the motion for class certification was properly denied, and that there was no c. 93A violation.
Background. On January 9, 2011, the plaintiff's 2005 Chevrolet Colorado was significantly damaged in an accident. Homeland, the plaintiff's auto insurer, determined the vehicle to be a total loss. Homeland was therefore required to offer the plaintiff an amount for the actual cash value of the vehicle. See 211 Code Mass. Regs. § 133.05. [Note 2] When calculating the actual cash value of a total loss vehicle, an insurer must consider four factors, one of which is the "retail book value" of a vehicle "of like kind and quality, but for the damage incurred." [Note 3] 211 Code Mass. Regs. § 133.05(1)(a).
On January 12, 2011, Homeland determined the actual cash value of the plaintiff's vehicle to be $11,891. Homeland used a software program generated by a third party, Certified Collateral Corporation (CCC), which maintains a database of vehicles for sale from dealers and private parties in various markets. The motion judge found that the CCC report "incorporated a significant
amount of information, including, but not limited to, vehicle description, vehicle options, vehicle history, the local market, the vehicle's pre-accident condition, the value of comparable vehicles, and vehicle mileage." The record provides more particularly that CCC's database "include[s] vehicles for sale at dealerships that CCC has physically inspected and dealer and private party advertised vehicle information from more than 1,700 publications." Using the vehicle's identification number and the plaintiff's zip code, CCC compiled a list from its database of twelve comparable vehicles available for sale in the local market. Three of the vehicles were listed for sale at local dealerships that CCC had physically inspected; nine were listed for sale on Autotrader, a publicly accessible online database of vehicles for sale from dealers and private parties listed by age, make, model, mileage, and city and State. [Note 4] See, e.g., Kesling v. Hubler Nissan, Inc., 997 N.E.2d 327, 330 (Ind. 2013). CCC then adjusted those values for the condition of the plaintiff's vehicle, and, using a weighted average formula, arrived at an actual cash value of $11,891. [Note 5]
When informed of this valuation on January 20, 2011, the plaintiff insisted that his vehicle was worth more than $14,000, citing a report by the National Automobile Dealers Association (NADA) that showed a "clean retail" value of $14,500. [Note 6] NADA maintains a publicly accessible online database of used car values
in each region of the country, from which reports on particular vehicles may be generated. NADA, an industry trade association, also periodically publishes "books" containing these values in regional editions. See Braucher, Rash and Ride-Through Redux: The Terms for Holding on to Cars, Homes and Other Collateral Under the 2005 Act, 13 Am. Bankr. Inst. L. Rev. 457, 466 n.37 (2005) (Braucher). See also FTC v. CCC Holdings Inc., 605 F. Supp. 2d 26, 33 (D.D.C. 2009).
After receiving the plaintiff's c. 93A demand letter on February 11, 2011, and the NADA report, Homeland increased its valuation of the vehicle to $13,024.66, which was found by the motion judge to reflect "an average of the NADA, Auto[t]rader, and CCC valuations." Homeland subsequently increased its valuation to $13,650, which resulted in a settlement offer of $14,003.12. [Note 7] The plaintiff accepted a check in that amount.
To bring a class action under c. 93A, the plaintiff must show that he seeks relief for an unfair or deceptive act or practice, that the act or practice "caused similar injury to numerous other persons similarly situated," and that he would "adequately and fairly represent[]" such persons. G. L. c. 93A, § 9(2), inserted by St. 1969, § 690. The plaintiff must "provide 'information sufficient to enable the motion judge to form a reasonable judgment' that the class meets the relevant requirements." Bellermann v. Fitchburg Gas & Elec. Light Co., 470 Mass. 43 , 52 (2014), quoting from Weld v. Glaxo Wellcome Inc., 434 Mass. 81 , 87 (2001). In deciding on a motion for class certification under c. 93A, a judge must bear in mind the "pressing need for an
effective private remedy." [Note 8] Aspinall v. Philip Morris Cos., 442 Mass. 381 , 391-392 (2004), quoting from Fletcher v. Cape Cod Gas Co., 394 Mass. 595 , 605-606 (1985). We review a denial of class certification under c. 93A for an abuse of discretion. Bellermann, 470 Mass. at 51. We conclude that the motion judge did not abuse his discretion in declining to certify the plaintiff's class action, as the plaintiff failed to provide sufficient information to support a reasonable judgment that others were similarly situated and similarly injured. See id. at 54.
We begin with the specifics of the plaintiff's case. Homeland based its original offer on the CCC report, which included information from Autotrader; the insurer later made upward adjustments after considering the NADA report presented by the plaintiff. The record, however, provides little to no information regarding how other putative class members' total loss claims were calculated, negotiated, and settled. As the motion judge explained, "Morgan has failed to adduce any evidence of injury to any other party." There is also insufficient information in the record to support a reasonable judgment that Homeland employed a uniform approach in handling total loss claims. Homeland's nationwide policy provides only that CCC reports "may" be used to calculate the actual cash value of a total loss vehicle and that "sources [such] as Auto[t]rader, NADA, Edmunds, Redbook and KBB [Kelly Blue Book]" may be consulted. Additionally, the record does not support a reasonable judgment that reliance on the CCC software, rather than NADA or other retail book values, similarly affected other members of the putative class. The plaintiff did not dispute that "CCC valuations are sometimes higher than other commercially available book valuations." [Note 9] Thus, the beneficial or detrimental effect of the use of the CCC reports in determining even the original offer would depend on each putative class member's particular circumstances. This determination
would further depend on each class member's zip code and vehicle condition, based on CCC's methodology. Thus, there is insufficient evidence to support a reasonable judgment that the plaintiff and the putative class members were similarly situated.
In sum, "the facts underlying the claims of the purported class are too diverse" and the causal connection between Homeland's allegedly unfair practice and any loss "is not just difficult to identify but appears to vary widely depending on the [insured]." Kwaak v. Pfizer, Inc., 71 Mass. App. Ct. 293 , 294, 301 (2008). See Bellermann, 470 Mass. at 55 (certification properly denied for class of consumers who lost power during major ice storm; outages varied for each consumer). Contrast Aspinall, 442 Mass. at 382, 392 (certification properly granted for class of consumers who purchased cigarettes allegedly falsely advertised to contain "lowered tar and nicotine"). We therefore discern no error in the motion judge's denial of the plaintiff's motion for class certification.
2. General Laws c. 93A violation. After trial, the judge concluded that Homeland had violated c. 93A because its "initial valuation of $11,891 did not consider . . . retail book value" in determining the actual cash value of the plaintiff's vehicle, as required by 211 Code Mass. Regs. § 133.05(1)(a). [Note 10] See 211 Code Mass. Regs. § 133.08 (2003) ("A violation of any provision of 211 CMR 133.00 shall be considered to be an unfair or deceptive act or practice, in violation of M.G.L. c. 176D"); G. L. c. 93A, §§ 2, 9.
Homeland claims in its cross appeal that this conclusion, to the
extent that it was based on a factual finding, was clearly erroneous, and incorrect as a matter of law. We agree. It is plain from the trial record that Homeland considered retail book value information from Autotrader in formulating its initial settlement offer, and therefore the judge's finding that the initial offer violated c. 93A was incorrect. Additionally, apart from the Autotrader information reflected in the initial offer, Homeland's final offer also incorporated retail book value from NADA, again reflecting Homeland's "consideration" of retail book value, albeit later in the settlement process.
"Whether conduct is unfair or deceptive under G. L. c. 93A is a mixed question of law and fact." Zabin v. Picciotto, 73 Mass. App. Ct. 141 , 170 (2008). "Although whether a particular set of acts, in their factual setting, is unfair or deceptive is a question of fact . . . the boundaries of what may qualify . . . as a c. 93A violation is a question of law." Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547 , 563 (2008) (quotation omitted). We review the judge's findings of fact for clear error and her conclusions of law de novo. Zabin, 73 Mass. App. Ct. at 170. Moreover, to the extent the trial judge's conclusion that Homeland violated c. 93A rested on her legal interpretation of the meaning of the requirement in 211 Code Mass. Regs. § 133.05(1) that the determination of the "actual cash value of [a] vehicle . . . shall be based on a consideration of . . . (a) the retail book value," we review that interpretation de novo. Ivey v. Commissioner of Correction, 88 Mass. App. Ct. 18 , 23 (2015).
The purpose of 211 Code Mass. Regs. § 133.00 is to "promote the public welfare and safety by establishing fair and uniform standards for the repair of damaged motor vehicles." 211 Code Mass. Regs. § 133.01 (2003). As we have noted, the express language of 211 Code Mass. Regs. § 133.08 makes a "violation of any provision of 211 CMR 133.00 . . . an unfair or deceptive act or practice." More generally, 940 Code Mass. Regs. § 3.16(3) (1993) provides that an act or practice that fails to comply with a regulation "meant for the protection of the public's health, safety or welfare" constitutes a violation of c. 93A if it occurs during trade or commerce and is unfair or deceptive under the circumstances. See Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165 , 174 (2013).
As previously explained, 211 Code Mass. Regs. § 133.05(1) expressly requires an insurer calculating the actual cash value of a total loss vehicle to consider four factors, one of which is the
"retail book value" of a vehicle "of like kind and quality, but for the damage incurred." 211 Code Mass. Regs. § 133.05(1)(a). The regulations do not, however, define "retail book value," nor did the trial judge attempt to do so. The parties agreed, and the judge determined without explanation, that NADA provides retail book values. [Note 11] The trial judge also noted that Autotrader is "another commercial retail book value service" (emphasis added), which the parties did not dispute.
We therefore conclude that in the instant case retail book value was considered both in formulating Homeland's initial offer, through the inclusion of Autotrader information in the CCC comparative lists, and in the final offer, through the inclusion of NADA information. [Note 12] The CCC report, used by Homeland in
arriving at its initial valuation of $11,891, explicitly took into account nine listings from Autotrader, [Note 13] which, as we have noted, is a source that provides retail book values. Homeland's final offer undisputedly incorporated the NADA report, which included the "retail book value" of the plaintiff's vehicle. [Note 14] In sum, the regulatory requirements involving the consideration of retail book value were satisfied in the instant case, and there was no violation of c. 93A.
Conclusion. There was no error in the denial of the motion for class certification or in the entry of judgment on that count of the complaint. Although the trial judge erred in determining that Homeland violated c. 93A, there was no error in the entry of judgment for Homeland on the plaintiff's individual claim. [Note 15]
[Note 1] The complaint was in three counts. The parties stipulated to the dismissal of count 1, which alleged breach of contract. Counts 2 and 3 alleged c. 93A violations -- count 2 on behalf of Morgan individually, and count 3 on behalf of a purported class of similarly situated individuals.
[Note 2] Title 211 Code Mass. Regs. § 133.05 (2003) provides:
[Note 3] The four factors an insurer must consider in calculating the actual cash value of a total loss vehicle are:
[Note 4] For each comparison vehicle, the CCC list also showed the distance from the plaintiff's address.
[Note 5] The "valuation methodology" section of the CCC report reads:
[Note 6] The NADA report in the record provided values for "clean retail" ($14,500), "clean trade-in" ($11,325), "average trade-in" ($10,450), and "rough trade-in" ($9,375). According to the report, "Clean Retail values reflect a vehicle in clean condition. This means a vehicle with no mechanical defects and passes all necessary inspections with ease. Paint, body and wheels have minor surface scratching with a high gloss finish and shine. Interior reflects minimal soiling and wear with all equipment in complete working order. Vehicle has a clean title history." "Clean trade-in" values, by contrast, reflect a vehicle that needs "minimal reconditioning to be made ready for resale."
[Note 7] This figure included the applicable sales tax, minus the deductible. We are not called upon here to assess the correctness of this methodology.
[Note 8] A judge therefore has less discretion to deny class certification under G. L. c. 93A than under Mass.R.Civ.P. 23(b), as amended, 365 Mass. 767 (1974). See Bellermann, 470 Mass. at 52; Kwaak v. Pfizer, Inc., 71 Mass. App. Ct. 293 , 297-298 (2008).
[Note 9] This statement appears in the parties' joint statement of material facts in support of Homeland's motion for summary judgment. The motion judge's decisions on the motion for class certification and summary judgment were issued on the same day. Although not in the record when the judge ruled on the plaintiff's motion for class certification, we also note that one of Homeland's supervisors testified at trial that the CCC reports sometimes produce valuations higher than those from NADA.
[Note 10] The judge further determined that the plaintiff was not harmed by this c. 93A violation because Homeland's March 7 offer, accepted by the plaintiff, "took into account all the relevant factors" in the regulation.
[Note 11] The judge described NADA as a "retail book value service."
[Note 12] Because we need not resolve the issue to decide the case, we decline to determine whether the CCC methodology itself constitutes a retail book value, or, as Homeland argues, a more sophisticated retail book value than those contained in NADA, Autotrader, or other such services. As the parties have not adequately briefed the proper interpretation of "retail book value," we are not prepared to determine whether insurers must consult so-called "'book' providers," which publish valuations online and in "books," CCC Holdings, Inc., 605 F. Supp. 2d at 33, in considering "retail book value," or whether they may arrive at retail book value through other means. See Warcewicz v. Dept. of Envtl. Protection, 410 Mass. 548 , 551 (1991) ("[N]o portion of the language of a regulation should be treated as surplusage").
[Note 13] The trial judge did not specifically address the Autotrader information in the CCC report; on the record before us, the report's content appears to be uncontested.
[Note 14] We note, however, that insurers would be well-advised to consider the retail book value of a vehicle early in the settlement process, and not to depend on insureds to bring such information to their attention.
[Note 15] Accordingly, the plaintiff's request for attorney's fees and costs is denied.