Court Opinion

ID: 4518783
Source: CourtListenerOpinion
Date Created: 2020-03-23 20:00:20.146769+00
Date Added: 2024-06-11T08:40:38.152273
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                                File Name: 20a0167n.06

                                           No. 19-3004

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT                                    FILED
                                                                                  Mar 23, 2020
 CHARLES CRANFIELD, individually and on behalf )                              DEBORAH S. HUNT, Clerk
 of all other Ohio residents similarly situated, )
                                                 )
          Plaintiff-Appellant,                   )
                                                                 ON APPEAL FROM THE
                                                 )
                                                                 UNITED STATES DISTRICT
 v.                                              )
                                                                 COURT     FOR      THE
                                                 )
                                                                 NORTHERN DISTRICT OF
 STATE FARM FIRE & CASUALTY COMPANY, )
                                                                 OHIO
                                                 )
          Defendant-Appellee.                    )
                                                 )

BEFORE:        SUTTON, NALBANDIAN, and READLER, Circuit Judges.

       PER CURIAM. Charles Cranfield purchased a State Farm insurance policy that provided

for “actual cash value” coverage for damage to his home. The policy and related documents

defined “actual cash value” as the “repair or replacement cost of the damaged part of the property

less depreciation and deductible.” The documents in turn defined the term “depreciation” as the

“decrease in the value of property over a period of time due to wear, tear, condition, and

obsolescence.” No further definition was provided.

       When a storm damaged Cranfield’s home, he filed a claim with State Farm. An adjuster

estimated the total cost to repair Cranfield’s home as well as how much the home had depreciated

since its original construction. State Farm and Cranfield agreed that State Farm could make

deductions from Cranfield’s recovery amount to reflect the depreciated value of the material used

to construct the home. But they disagreed whether the policy also allowed for deductions for the

depreciated value of the labor costs to construct the home. Unable to resolve his dispute with State
No. 19-3004, Cranfield v. State Farm Fire & Cas. Co.

Farm, Cranfield filed a class action in state court on behalf of himself and all other Ohioans insured

by State Farm on similar terms. Invoking our jurisdiction under the Class Action Fairness Act, 28

U.S.C. §§ 1332(d) & 1453, State Farm removed the lawsuit to federal court.

       Whether labor depreciation is properly deducted in an actual cash value insurance policy

has divided courts across the nation. Accardi v. Hartford Underwriters Ins. Co., -- S.E.2d --, 2020
WL 987541, at *3 (N.C. Feb. 28, 2020) (collecting cases). Agreeing with the majority of courts

to address the issue, the district court dismissed Cranfield’s complaint, holding that the State Farm

policy unambiguously allowed for depreciation deductions for both material and labor costs.

Cranfield appealed.

       We recently resolved this issue in Perry v. Allstate Indem. Co., -- F.3d --, 2020 WL
1284960 (6th Cir. Mar. 18, 2020). In Perry, we held that an Ohio insurer may not deduct the cost

of labor depreciation pursuant to an actual cash value insurance policy that does not expressly

provide for such deductions. Id. at *4. Because Cranfield’s policy with State Farm did not

expressly provide for labor-cost depreciation deductions, Perry commands the same result here.

Ogle v. Ohio Civil Serv. Emps. Ass’n, -- F.3d --, 2020 WL 1057389, at *1 (6th Cir. Mar. 5, 2020)

(per curiam). We therefore REVERSE the judgment of the district court and REMAND for

further proceedings consistent with this opinion.

                                                  2