Class
Action Complaint
This is a copy of the Amended Class Action Complaint filed by
Class Counsel on September 26, 1997 (showing the current case
caption). The complaint presents the issues and claims in this
case as alleged by the Plaintiffs. These issues and claims will
be those addressed at trial set to commence on February 2, 1999:
| TAMMY SNIDER and MICHAEL AVERY, On Behalf of Themselves and All Others Similarly Situated, | ) ) ) ) |
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| vs. | ) ) ) | |
| STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, | ) ) ) ) | |
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JEANNE M. TETER, individually and not as a class representative, TAMMY SNIDER and MICHAEL E. AVERY, Plaintiffs, on behalf of themselves and all others similarly situated, by Don Barrett, G. Patrick Murphy, Thomas P. Thrash, Elizabeth J. Cabraser, Morris A. Ratner, and other named counsel, their attorneys, state their and the class' complaint against Defendant, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, as follows:
1. Plaintiff Teter resides in Marion, Williamson County, Illinois. Plaintiff Teter holds a "State Farm car policy" or a vehicle casualty insurance policy issued by Defendant State Farm ("State Farm Policy" and/or "State Farm Policies").
2a. Plaintiff Snider resides in Williamson County, Illinois. Plaintiff Snider holds a "State Farm car policy" or a vehicle casualty insurance policy issued by Defendant State Farm ("State Farm Policy" and/or "State Farm Policies").
2b. Plaintiff Avery resides in Caddo Parish, Louisiana. Plaintiff Avery holds a "State Farm car policy" or a vehicle casualty insurance policy issued by Defendant State Farm ("State Farm Policy" and/or "State Farm Policies").
3. State Farm Mutual Automobile Insurance Company is an Illinois insurance company transacting business in the State of Illinois and in all states throughout the United States, sometimes by or through its subsidiaries or affiliates.
4. This Court has jurisdiction over the subject matter hereto and the parties hereof.
5. Venue is proper in this Court.
6. Plaintiffs and the class assert no federal question. Plaintiffs' state law claim cannot be federally preempted on any grounds, and this case must be heard in a state forum. 7. Defendant State Farm advertised, solicited and sold the State Farm Policy to Plaintiffs. Under the terms of Defendant State Farm's Policy, in consideration for the premiums paid, Defendant State Farm agreed to restore Plaintiffs' vehicles to their pre-loss condition using parts of like kind and quality. The State Farm Policy specifically provides that Defendant State Farm will "pay to repair or replace the property with like kind and quality." Defendant State Farm endorsements to the policy provide that Defendant State Farm "will include in the estimate parts sufficient to restore the vehicle to its pre-loss condition. You agree with us that such parts may include either parts furnished by the vehicle's manufacturer or parts from other sources including non-original equipment manufacturers." A copy of the Vehicle Casualty Insurance Policy, including the endorsements, and collectively called "the State Farm Car Policy," is attached as Exhibit 1. The "Declaration Pages" are attached as Exhibit 2. Defendant State Farm has acknowledged that a similar endorsement to the policy did not change Defendant State Farm's obligations, but simply clarified its practices concerning vehicle repairs. Defendant State Farm acknowledges that pursuant to the terms of the Defendant State Farm Policy and endorsement, Defendant State Farm is obligated to restore a vehicle to its pre-loss condition and represents that "parts are of 'like kind and quality' when they are sufficient to restore a vehicle to its pre-loss condition." A copy of Defendant State Farm's representations in the form of responses to interrogatories in similar cases based upon a similar endorsement (also attached) are attached as Exhibit 7. Thus, based upon the State Farm Car Policy, a contract, Plaintiffs reasonably expected that their vehicles would be repaired with crash parts that were of like kind and quality and would restore their vehicles to their pre-loss condition. After Plaintiffs wrecked their vehicles, Defendant State Farm's practice and policy is to use inferior, substandard imitation crash parts (whenever possible and practicable) in the repair of Plaintiffs' vehicles.
8. Plaintiffs bring this class action to secure redress for Defendant State Farm's uniform and common practice of using inferior, imitation parts. At all times material hereto, Defendant State Farm was obligated to all its policy holders to make repairs pursuant to the same or common general terms set forth in Plaintiffs' State Farm Policy, (which includes the Endorsement Booklet) which is attached as Exhibit 1. Specifically, Defendant State Farm was obligated to undertake repairs on damaged vehicles using only parts of like kind and quality sufficient to restore the vehicles to their pre-loss condition. As a practical matter, this obligation could be met only by requiring the exclusive use in repairs of factory-authorized or OEM parts. Defendant State Farm's common practice of using inferior, imitation parts in repairs constitutes a breach of its obligation to all insureds who either received such parts in repairs or were obligated to pay the difference in price between imitation parts and the OEM parts actually installed. Exhibit 8 is a collective exhibit of affidavits from experts attesting, inter alia, that imitation parts that Defendant State Farm authorizes do not restore vehicles to their pre-loss condition. (Affidavits of Paul Tatman, Peter W. Bartlett, and Alan E. Hildebrand).
9. Plaintiffs' insured vehicles were involved in accidents causing damage to Plaintiffs' vehicles. Plaintiffs' damaged vehicles were presented to Defendant State Farm for repair. Defendant State Farm inspected Plaintiffs' vehicles and prepared estimates of repair costs. A copy of certain of these estimates is attached as Exhibit 3.
10. Upon presenting Defendant State Farm's estimate of repair costs to Plaintiffs, Defendant State Farm failed to disclose to Plaintiffs that the estimate was prepared based on the use of inferior imitation crash parts supplied by a source other than the manufacturer of the vehicle.
11. Defendant State Farm requires the use of inferior copies of vehicle crash parts, which are not authorized or sanctioned by the vehicle manufacturer, commonly referred to as "imitation crash parts," "after market crash parts," and/or "non-original equipment manufacturer's parts/non-OEM crash parts," hereinafter referred to as imitation parts. Since many of these imitation parts are manufactured in Taiwan, in the trade they are commonly referred to as "Taiwan tin," which reflects their inferior quality and craftsmanship. These inferior imitation parts are not authorized for use by vehicle manufacturers, and their incorporation into an insured vehicle will not restore the vehicle to its pre-loss condition.
12. The imitation parts are inferior in quality to the factory-authorized parts made by or for the original equipment manufacturer, in that the imitation parts have, among other defects:
a. substandard fit and appearance;
b. substandard finish;
c. substandard structural integrity and mechanical operation;
d. substandard corrosion resistance; and
e. substandard dent resistance.
13. These defects make the imitation parts inferior in quality to the parts made by or for the original equipment manufacturer, and the imitation parts are not of "like kind and quality" as the parts originally installed in the vehicle nor will use of the imitation parts restore the insured vehicle to its pre-loss condition.
14. Use of the imitation parts does the following to Plaintiffs and members of the class: (i) diminishes the vehicle's value, (ii) jeopardizes the effectiveness of the manufacturer's vehicle warranty, (iii) impairs the vehicle's structural integrity and impacts passenger safety, (iv) may detrimentally affect the vehicle's performance, (v) reduces the vehicle's resale value, and (vi) does not restore the vehicle to its pre-loss condition.
15. Defendant State Farm refused to authorize the repair of Plaintiffs' vehicles with factory-authorized parts made by or for the original equipment manufacturer. Defendant State Farm directed certain of the Plaintiffs to either (a) accept repairs to Plaintiffs' vehicles utilizing inferior imitation parts, or (b) pay the difference between the cost of the inferior imitation parts and the cost of the factory-authorized parts made by or for the original equipment manufacturer. In a common variation on this theme, the body shop repairing another plaintiff's vehicle installed OEM parts, even though State Farm only authorized and paid for inferior imitation parts, because the body shop technicians knew that imitation parts were categorically inferior and would not restore the vehicle back to its pre-loss condition. In this and numerous similar instances, the body shop absorbed the cost difference between the non-OEM parts for which State Farm paid and the OEM parts that were actually installed. Copies of certain Plaintiffs' invoices reflecting the cost of repair with the nonfactory authorized or non-OEM parts are attached. Plaintiffs' affidavits are attached.
16. Defendant State Farm entered into a common course of conduct using or paying the cost of inferior imitation parts to satisfy its repair obligations wherever such parts were available, thereby reducing its coverage obligations under its policies, all at the expense and loss to policy holders, but Defendant State Farm did not disclose these practices to its policy holders.
17. Defendant State Farm did not disclose to Plaintiffs prior to their purchase of the State Farm Policy, that Defendant State Farm would use and pay for only unauthorized inferior imitation parts (whenever possible and practicable) rather than factory-authorized parts made by or for the original equipment manufacturer, and that use of unauthorized imitation parts would not restore Plaintiffs' vehicles to their pre-loss condition.
18. Defendant State Farm was aware of its obligation to repair vehicles using "like kind and quality" parts and its obligation to restore the vehicles to their pre-loss condition. At all times material hereto, Defendant State Farm knew or should have known that the unauthorized imitation parts were not of "like kind and quality" as parts originally installed in Plaintiffs' vehicles, and the use of the inferior imitation parts would not restore the vehicles to their pre-loss condition or their pre-loss value.
19. At all times material hereto, Defendant State Farm avoided its obligations under these insurance policies, which policies used common language by only authorizing repairs by using inferior imitation parts.
20. Defendant State Farm has refused to pay or not paid to Plaintiffs or Class Members an amount equal to the difference in value of Plaintiffs' vehicles before the accident and their value after the accident, once repaired, restored, and returned to Plaintiffs. Plaintiffs are aware of other class actions suits filed against Defendant State Farm in concerning the same general practice at issue here in the states of Arkansas and Tennessee on behalf of citizens of those states, and certain suits elsewhere. Copies of certain of those complaints are attached hereto as Collective Exhibit 6.
21. Plaintiffs bring this action on behalf of themselves, and all others similarly situated, pursuant to 735 ILCS 5/2 - 801, as representatives of the following class:
All persons in the United States, except those residing in Arkansas
and Tennessee, who (1) were insured by a vehicle casualty insurance
policy issued by Defendant State Farm and (2) made a claim for
vehicle repairs pursuant to their policy and had imitation that
is, non factory-authorized and/or non-OEM parts installed in their
vehicles or else received monetary compensation determined in
relation to the cost of imitation parts, .
Excluded from the class are employees of Defendant State Farm,
its officers, its directors, its subsidiaries or its affiliates.
In addition, the following persons are excluded from the class:
(1) persons who resided in Illinois and whose policies were issued/executed
prior to April 16, 1994, and (2) persons who resided in California
and whose policies were issued/executed prior to September 26,
1996.
22. The requirements of 735 ILCS 5/2- 801, et seq., as explicated in applicable Illinois case law, have been met. The class is so numerous that joinder of all members is impracticable. 735 ILCS 5/2 - 801(1). Plaintiffs do not know the exact size of the class, since such information is in the exclusive control of Defendant State Farm. However, the exact number may be determined by appropriate discovery. Published reports state that State Farm has over 22 million auto policy holders nationwide, insures one out of every four motorists nationwide, and insures one out of every three motorists in Illinois.
23. There are questions of fact and law common to the class, which
common questions predominate over any questions affecting only
individual members. Those common questions include:
a. whether imitation parts of the kind utilized by Defendant State
Farm are of a "like kind and quality" as the original
equipment parts made by or for the original equipment manufacturer;
b. whether the use of imitation parts in the repair of Class Members'
vehicles restores the vehicles to their pre-loss condition;
c. whether the use of imitation parts in the repair of Class Members'
vehicles restores the vehicles to their pre-loss value; and
d. whether Defendant State Farm breached its duties and obligations
owed to class members or breached the standard form provisions
of its contracts (policies) with class members by its common practice
of repairing class members' vehicles with imitation parts and/or
paying class members or repair shops the cost of imitation, rather
than original equipment, parts.
24. As per 735 ILCS 5/2 - 801(3), Plaintiffs can and will fairly and adequately represent and protect the interests of the class and have no interests that conflict with or are antagonistic to the interests of the class. Plaintiffs have retained attorneys who are among the most experienced and competent in the United States in class action litigation. No conflict exists between Plaintiffs and class members because:
a. all of the questions of law and fact regarding the liability
of Defendant State Farm are common to the class and predominate
over any individual issues that may exist, such that by prevailing
on their own claims, Plaintiffs necessarily will establish Defendant
State Farm's liability to all class members;
b. without the representation provided by Plaintiffs, virtually
no class member would receive legal redress or representation
for his/her damages; and
c. Plaintiffs and their counsel have the necessary financial resources
to adequately and vigorously litigate this class action, and Plaintiffs
and counsel are aware of their fiduciary responsibilities to the
class members and are determined to diligently discharge those
duties by vigorously seeking the maximum possible recovery for
the class.
25. All class members have the same legal rights to, and interests in, the fair treatment by State Farm, the proper interpretation and implementation of the Policy, and the restoration of their vehicles to their pre-loss condition when they are damaged. Defendant State Farm engaged in a uniform or common practice regarding repairs to its insured vehicles. When Plaintiffs' or a Class Member's car needed repairs it paid for imitation parts, as set forth herein, and not "like kind and quality" as set forth in its vehicle casualty insurance policies. Plaintiffs, thus, by proving their own claims presumptively prove the claims of the class.
26. The class action is an appropriate method for the fair and
efficient adjudication of the controversy given the following:
a. Common questions of law and/or fact predominate over any individual
questions that may arise, such that there would be enormous economies
to the courts and the parties in litigating the common issues
on a classwide instead of a repetitive individual basis, 735 ILCS
5/2 - 801(2);
b. Class members' individual damage claims are too small to make
individual litigation an economically viable alternative;
c. Class treatment is required for optimal deterrence and compensation
and for limiting the court-awarded reasonable legal expenses incurred
by class members;
d. Despite the relatively small size of individual class members' claims, their aggregate volume, coupled with the economies of scale inherent in litigating similar claims on a common basis, will enable this case to be litigated as a class action on a cost-effective basis, especially when compared with repetitive individual litigation; and
e. No unusual difficulties are likely to be encountered in the
management of this class action in that all questions of law or
fact to be litigated at the liability stage are common to the
class.
27. Class certification is fair and efficient as well because prosecution of separate actions would create a risk of adjudications with respect to individual members of the class, which as a practical matter, may be dispositive of the interests of other members not parties to the adjudication or substantially impair or impede their ability to protect their interests.
28. Class certification is appropriate under Illinois law because Defendant State Farm has acted on grounds generally applicable to the class.
Count 1 -- Breach of Contract
29. Defendant State Farm's common practice regarding the use of inferior imitation parts to its insureds, Plaintiffs and Class Members, constitutes a breach of contract. The uniform insurance policy is a contract. Plaintiffs and Class Members entered these contracts with Defendant State Farm and undertook obligations, paying premiums; the use of inferior imitation parts breaches that contract to Plaintiffs and Class Members.
30. Plaintiffs and Class Members were injured or damaged as a result. The courts in Illinois and the other states enforce contracts and provide remedies for breach.
31. Therefore, Plaintiffs and Class Members are entitled to lawful
remedies attendant with the breach of contract by Defendant State
Farm.
Count 2 -- Illinois Consumer Fraud and Deceptive Business Practices Act
32. Paragraphs 1-31 are re-alleged and restated, as if fully set forth herein.
33. This Count is brought pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq.
34. At all times material hereto, Plaintiffs, the class, and State Farm were persons within the meaning of 815 ILCS 505/1(c).
35. At all times material hereto, Plaintiffs and the class were consumers within the meaning of 815 ILCS 505/1(e).
36. At all times material hereto, State Farm conducted trade and commerce within the meaning of 815 ILCS 505/1(f).
37. Section 2 of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, provides:
[U]nfair or deceptive acts or practices, including but not limited
to the use or employment of any deception, fraud, false pretense,
false promise, misrepresentation, or the concealment, suppression,
or omission of any material fact . . . in the conduct of any trade
or commerce are hereby declared unlawful . . ..
38. Defendant engaged in unfair or deceptive acts or practices in the conduct of trade or commerce within the meaning of 815 ILCS 505/2. Among the unlawful practices that Defendant engaged in was the practice of installing non-OEM crash parts in its insureds' vehicles that were inferior, substandard parts, when State Farm had promised and was obligated to undertake repairs on damaged vehicles using only parts of like kind and quality, so as to restore the vehicles to their pre-loss condition.
39. By way of false or deceptive pretenses, acts, or practices, defendant did not disclose to Plaintiffs that they were: a) using inferior, imitation parts that diminished the value of their vehicles; and/or b) paying the cost of cheaper imitation parts when available and refusing to pay for OEM parts, thereby causing class members and/or their repair shops to absorb the cost difference. 40. By using these unfair or deceptive acts or practices, State Farm reduced its coverage obligations under Plaintiffs' and class members' policies, to the continuing detriment of Plaintiffs and the class.
41. Defendant engaged in the unfair or deceptive practices described herein for the purpose of inducing reliance and with the intent of to deceive or mislead Plaintiffs and class members.
42. Defendant's actions were wilful and wanton, knowing, or at least reckless, and constitute violations of the Act.
43. As a result of these acts and practices, Plaintiffs and the class suffered damages or are threatened with damage when their vehicles are repaired using inferior, imitation parts.
Count 3 -- Injunctive/Equitable Relief
44. Paragraphs 1-43 are re-alleged and restated, as if fully set forth herein.
45. State Farm's practice and policy, whenever possible under the circumstances, is to authorize or use inferior, imitation (non-OEM) parts to repair Plaintiffs' and the class' vehicles.
46. Each time that their vehicles may be or actually are wrecked and inferior imitation parts are available, because of State Farm's policy and practice, Plaintiffs and class members' vehicles will not be restored to their pre-loss condition at State Farm's cost.
47. As such, State Farm consistently and repeatedly violated its contracts (insurance policies).
48. Because of this policy and practice, Plaintiffs and class members will not receive the benefit of the common or similar terms of contracts entered with State Farm. Plaintiffs and class members are subject to defendant's policy and practice with each contract that they enter with State Farm.
49. State Farm does not meaningfully or effectively disclose the policy of using inferior imitation parts.
50. Unless a declaration of rights and a permanent injunction are issued requiring State Farm to comply with these provisions of these contracts with Plaintiffs and class members' contracts, class members will not receive the benefit of the bargain, will have no effective means to learn about the practice and policy of defendant not to honor the terms of its policies (set forth herein), State Farm will continue not to restore Plaintiffs' and class members' vehicles to their pre-loss condition, and will otherwise continue to avoid its contractual obligations.
Relief Requested
1. An order confirming that this conditionally certified class action is properly maintainable as a class action, and appointing Plaintiffs and their undersigned counsel to represent the class;
2. An award of compensatory damages and all monetary relief authorized by law or referenced in the Complaint, including punitive, exemplary, or special damages;
3. An Order declaring the rights of the class and the obligations of State Farm under the standard contractual provisions at issue in this action;
4. An Order enjoining State Farm from using inferior, imitation non-OEM parts, from refusing to pay for original equipment parts, and from engaging in unfair or deceptive acts or practices set forth in or related to the policy and practice in the amended complaint;
5. An Order requiring State Farm to restore Plaintiffs' and class members' vehicles to their pre-loss condition, to meaningfully and effectively disclose its past policy and practice of using inferior, imitation parts and to fully remedy these past acts or practices, and to cease and desist from making any false, deceptive, or misleading representations about its practices in authorizing or repair and restoration to Plaintiffs and class members;
6. An award of prejudgment and post judgment interest;
7. An award providing for payment of costs of suit, including payment of experts' fees and expenses;
8. An award of reasonable attorneys' fees; and
9. Such other and further relief as this Court may deem proper and just.
Respectfully submitted,
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DON BARRETT
BRIAN HERRINGTON
BARRETT LAW OFFICES
404 Court Square North
Post Office Box 987
Lexington, Mississippi 39095
Telephone No. (601) 834-2376
Telephone No. (601) 834-2409
THOMAS P. THRASH
Rose Law Firm
120 East Fourth Street
Little Rock, Arkansas
Telephone No. (501) 375-9131
Telecopier No. (501) 375-1309
ELIZABETH J. CABRASER
MORRIS A. RATNER
Lieff, Cabraser, Heimann & Bernstein, LLP
Embarcadero Center West
275 Battery Street, 30th Floor
San Francisco, California 94111-3339
Telephone: (415) 956-1000
Telecopier: (415) 956-1008
MICHAEL B. HYMAN
Much Shelist Freed Denenberg Ament
Bell & Rubenstein
200 N. La Salle Street, Suite 2100
Chicago, Illinois 60601-1095
Telephone: (312) 346-3100
Telecopier: (312) 621-1484
PATRICK W. PENDLEY
Attorney at Law
58005 Meriam Street
Plaquemine, Louisiana 70764
Telephone No. (504) 687-6396
GORDON BALL
750 Nations Bank Center
550 West Main Avenue, Suite 750
Knoxville, Tennessee 37902
Telephone No. (423) 525-7028
STEVEN L. MARTINO
Jackson, Taylor & Martino, P.C.
Southtrust Bank Building,
Suite 1600
61 St. Joseph Street
Post Office Box 894
Mobile, Alabama 36602
Telephone No. (334) 433-3131
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