Assaf v. Progressive Direct Insurance Company

[5] UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA [7] MOHAMMAD M. ASSAF, CASE NO. C19-6209 BHS [8] Plaintiff, ORDER 9 v. 10 PROGRESSIVE DIRECT INSURANCE COMPANY, [11] Defendant. [13] THIS MATTER is before the Court on Plaintiff Mohammed Assaf’s Motions for [14] Class Certification, Dkt. 58, and to Compel Compliance,1 Dkt. 125, and on Defendant [15] Progressive’s Motions to Exclude Plaintiffs’ Experts Angelo Toglia, Dkt. 94, and [16] Bernard Siskin, Dkt. 96. Progressive also filed a surreply opposing class certification, [17] Dkt. 121, and moving to strike as untimely disclosed the opinions in the Reply [18] Declaration of Assaf’s expert, Mike Harber, Dkt. 111-11. Assaf, in turn, seeks to strike [19] that surreply as itself untimely. Dkt. 121. [20] 21 1 Progressive opposes this motion (seeking reimbursement for $113 in tolls, miles, and Uber fares) as de minimus and, because the amount was paid, moot. Dkt. 127. Assaf’s Motion to 22 Compel Compliance, Dkt. 125, is DENIED. 1 The case is a putative class action alleging that Progressive fails to pay for the 2 diminished value (often referenced as “DV”) of its insureds’ vehicles under their 3 Progressive policies’ underinsured motorist coverage. Specifically, Assaf asserts that 4 Progressive’s policies promise to “pay for damages that an insured person is legally 5 entitled to recover from the owner or operator of an underinsured motor vehicle because 6 of property damage sustained by an insured person [and] caused by an accident[.]” Dkt. 7 60 at 6 (citing Dkt. 59-21 at 10). 8 Assaf seeks as damages the difference between the fair cash market value of the 9 vehicle immediately before the occurrence and its fair cash market value immediately 10 after it has been repaired—a measure that the Court used in a similar diminished value 11 case, Jenkins v. State Farm Mut. Auto. Ins. Co., No. 15-5508-BHS, 2018 WL 526993 12 (W.D. Wash., Jan 24, 2018). See also Moeller vs. Farmers Ins. Co., 173 Wn.2d 264 13 (2011). 14 Assaf contends that Progressive breached its contract with him, and acted in bad 15 faith, when it failed to compensate him for the diminished value his property suffered as 16 the result of an accident. He asserts that his claim and his experience was similar to the 17 experience of other class members. 18 In 2016, Assaf’s 2013 Honda Accord was damaged in an accident caused solely 19 by an uninsured motorist. Progressive paid McLeod’s Auto Body in Kirkland $11,394.60 20 to repair the car. Dkt. 1-1 at 5. Assaf returned the car to McLeod’s several times for what 21 he contends were lingering effects from the accident, including a loose trunk, a window 22 crack, and a leaking strut. In March 2017, Assaf retained Mike Harber to evaluate his 1 Honda. Harber opined that the car had suffered $5,800 in diminished value as a result of 2 the accident. See Dkt. 61-22. Assaf contends that his car cannot be restored to its preloss 3 condition, and that he suffered covered property damage in the form of diminished value, 4 which Progressive wrongfully failed to pay under its policies’ underinsured motorist 5 coverage. 6 Assaf seeks certification of a class consisting of 7 All PROGRESSIVE DIRECT INSURANCE COMPANY insureds with Washington policies issued in Washington State, where the insured’s 8 vehicle damages were covered under Underinsured Motorist Coverage with a date of loss on or after November 12, 2013, and 9 1. the repair estimates on the vehicle (including any supplements) totaled at least $1,000; and 10 2. the vehicle was no more than six years old (model year plus five years) and had less than 90,000 miles on it at the time of the accident; and 11 3. the vehicle suffered structural (frame) damage and/or deformed sheet metal and/or required body or paint work. [12] Dkt. 58 at 1. [13] Assaf argues that the proposed class members’ claims involve common questions [14] of fact and law: whether Progressive breached its insurance policy when it uniformly [15] failed to pay its insureds for the diminished value caused by accidents involving [16] underinsured motorists. He argues that the class claims (and Progressive’s defenses) are [17] typical, and that the common questions of law and fact predominate, making class [18] treatment of them superior to individual litigation. [19] Assaf’s claim, and to some extent his motion for class certification, relies on [20] expert opinion testimony from a statistician, Dr. Bernard Siskin, and a mechanical [21] engineer, Angelo Toglia. Both witnesses have been offered as experts in numerous cases [22] 1 in this Court and many others involving similar claims. Progressive opposes class 2 certification, Dkt. 87, and moves to exclude Siskin’s and Toglia’s expert testimony, Dkts. 3 94 and 96. 4 Progressive argues that, even with the experts’ opinions, Assaf cannot demonstrate 5 that class treatment of his claims complies with Federal Rule of Civil Procedure 23’s 6 commonality, typicality, predominance, and superiority requirements. It argues that 7 Assaf’s reliance on the Washington Supreme Court’s opinion in Moeller v. State Farm, [8] 173 Wn.2d 264 (2011), is misplaced. It argues that under Wal-Mart Stores, Inc. v. Dukes, [9] 564 U.S. 338, 350 (2011), and Federal Rule 23, common questions require common 10 answers, and Assaf’s claims do not lend themselves to common answers. Dkt. 87 at 10. It 11 also argues that Assaf’s claims are not typical and that any common questions do not 12 predominate over individual questions. 13 I. DISCUSSION 14 A. Class Certification. 15 Under Fed. R. Civ. P. 23(a), the plaintiff must satisfy four requirements: (1) 16 numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. Parsons 17 v. Ryan, 754 F.3d 657, 674 (9th Cir. 2014). In addition to these four requirements, the 18 plaintiff must satisfy at least one of the categories of Rule 23(b). Zinser, 253 F.3d at 19 1186. A class action may be maintained under Rule 23(b)(3) if “questions of law or fact 20 common to class members predominate over any questions affecting only individual 21 members,” and if “a class action is superior to other available methods for fairly and 22 efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). 1 As the party seeking class certification, Assaf bears the burden of demonstrating 2 that he has met each of the four requirements of Rule 23(a) and at least one of the 3 requirements of Rule 23(b). Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 , 1186 4 (9th Cir. 2001), amended, 273 F.3d 1266 (9th Cir. 2001). 5 Rule 23 does not set forth a mere pleading standard. Wal-Mart Stores, Inc. v. 6 Dukes, 564 U.S. 338, 350 (2011). Rather, a “party seeking class certification must 7 affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to 8 prove that there are in fact sufficiently numerous parties, common questions of law or 9 fact, etc.” Id. Before certifying a class, the Court must conduct a “rigorous analysis” to 10 determine whether the plaintiff has met the requirements of Rule 23. Zinser, 253 F.3d at 11 1186. Under Washington law, Courts err on the side of certification because a class is 12 always subject to later modification or decertification. Moeller, 173 Wn.2d at 278 . There 13 is no such presumption in favor of certification under Fed. R. Civ. P. 23. 14 Progressive does not dispute that Assaf meets Rule 23’s numerosity and adequacy 15 of representation requirements. It does argue that he has not met the remining 16 prerequisites for class certification. 17 The disputed issues are addressed in turn. 18 1. Commonality 19 To satisfy Rule 23(a)’s “common question of law or fact” requirement, the 20 plaintiff’s claims must “depend upon a common contention” that is “capable of classwide 21 resolution.” Dukes, 564 U.S. at 350 .This means that determining the truth or falsity of the 22 contention “will resolve an issue that is central to the validity of each one of the claims in 1 one stroke.” Id. The key question is whether a “classwide proceeding [will] generate 2 common answers apt to drive the resolution of the litigation.” Id. Nevertheless, the 3 commonality requirement is “construed permissively.”2 Hanlon v. Chrysler Corp., 150 4 F.3d 1011, 1019 (9th Cir. 1998). It “only requires a single significant question of law or 5 fact.” Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 589 (9th Cir. 2012). 6 Assaf relies on the Washington Court of Appeals’ opinion in Moeller v. State 7 Farm, 155 Wn. App. 133 , 148–149 (2010), as “directly on point” in support of his claim 8 that the questions he presents are sufficiently common. Dkt. 58 at 16. He argues that the 9 common questions here, as there, are: 10 (1) “whether each class member’s vehicle suffered reduction in value as a result of the vehicle having been in an accident without consideration of 11 repair related diminished value;” (2) “whether each class member’s vehicle could be returned to pre-accident 12 condition;” and (3) “whether the insurer engaged in a common and systematic course of 13 conduct designed to process physical damage claims so as to avoid acknowledging or paying DV claims.” [14] Id. (quoting Moeller, 155 Wn. App. at 149 ). [15] Progressive argues, persuasively, that because these questions do not have [16] common answers, they are not sufficiently common under Dukes and Fed. R. Civ. P. [17] 23(a). Dkt. 87 at 10. It argues that some vehicles within the class definition may have [18] diminished value, and some may not, and it is inappropriate to assume either that all of [19] the class vehicles can be returned to their pre-accident condition, or that none of them [21] 2 The predominance of the common questions over individual questions is a more 22 stringent standard. 1 can. Instead, it argues, the questions and the answers are specific to individual vehicles, 2 accidents, and repairs, making the inquiries inherently individualized. Id. 3 As to Assaf’s individual claim, Progressive argues that the specific issue is 4 whether Assaf’s Honda incurred post-repair, covered diminished value which Progressive 5 failed to pay, and if so, in what amount. And it argues that if a single answer will not 6 resolve an issue that is central to each of the class members’ claims, the class lacks the 7 necessary cohesion and commonality. Dkt. 87 at 11 (citing Parsons, 754 F.3d at 575 8 (quoting Dukes, 564 U.S. at 350 )). 9 Progressive argues that there are ten individualized questions arising from each 10 class member’s diminished value claim, and that those questions can be answered only by 11 individualized, and not common, proof. It argues that as a result, Assaf cannot 12 demonstrate that any common questions predominate over individualized questions. The 13 Court agrees and addresses below the commonality of the claims in discussing whether 14 they predominate. 15 2. Typicality 16 “[R]epresentative claims are ‘typical’ if they are reasonably co-extensive with 17 those of absent class members; they need not be substantially identical.” Hanlon, 150 18 F.3d at 1020. This requirement “ensures that ‘the named plaintiff’s claim and the class 19 claims are so interrelated that the interests of the class members will be fairly and 20 adequately protected in their absence.’” Gold v. Midland Credit Management, Inc., 306 21 F.R.D. 623 , 631 (N.D. Cal. 2014) (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147 , 22 158 n. 13 (1982)). “Typicality refers to the nature of the claim or defense of the class 1 representative, and not to the specific facts from which it arose or the relief sought.” 2 Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir.1992). Courts consider 3 “whether other members have the same or similar injury, whether the action is based on 4 conduct which is not unique to the named plaintiffs, and whether other class members 5 have been injured by the same course of conduct.” Id. at 508 . 6 Assaf argues that his claim is typical because, like the class members, he 7 purchased a Progressive auto policy with diminished value and underinsured motorist 8 coverages, and Progressive failed to disclose that coverage, adjust the loss for it, or pay 9 him for diminished value. He claims that he, like the class, is entitled to recover 10 diminished value. 11 Assaf correctly argues that differences in the amount of individual diminished value 12 damages is not enough to defeat certification. Dkt. 60 at 17 (citing Jimenez v. Allstate Ins. 13 Co., 765 F.3d 1161, 1168 (9th Cir 2014) (“So long as the plaintiffs were harmed by the 14 same conduct, disparities in how or by how much they were harmed [does] not defeat class 15 certification.”)). But he does not argue, or demonstrate, that each member of the class as 16 he defines it—those whose vehicles suffered structural or sheet metal damage, or which 17 required body work or paint—own a vehicle that cannot be repaired to its pre-accident 18 condition. He does not squarely address whether each class member suffered diminished 19 value. 20 Progressive argues that the issue is not whether there is a variation in damages, but 21 whether there is a variation among class members as to whether there is a covered DV 22 loss, at all. Dkt. 87 at 12. It also emphasizes that, unlike the majority of the class, Assaf 1 obtained an individualized expert report (Harber’s) concerning the diminished value of 2 “the subject vehicle”—his 2013 Honda—based on contacting dealers about that vehicle’s 3 trade in value. Dkt. 87 at 12 (citing 61-22 at 5). 4 Progressive argues that Assaf’s claim is atypical for several reasons. First, Assaf 5 testified that he does not believe McLeod’s properly repaired his Honda. Progressive 6 argues that, if that is true, it is not evidence that his car cannot be repaired to its pre7 accident condition, and it is not a covered claim for diminished value as he defines it or 8 under Washington law. Id. It also argues that, while Assaf asserts he personally was 9 “strung along” and thus had to pay Harber $375 for a DV Report, there is no evidence or 10 contention that any other—much less every other—class member had to go to such 11 lengths. Id. at 13. 12 Progressive also argues that McLeod’s Rule 30(b)(6) deponent (who, unlike 13 Assaf’s experts, inspected the car) testified that Assaf’s Honda was restored to its pre- 14 accident condition. If that is true, any diminished value is not the result of demonstrable 15 physical damage. A showing of such damage is required under Washington law. 16 Diminished value is recoverable only when the vehicle “sustains physical damage in an 17 accident, but due to the nature of the damage, it cannot be fully restored to its preloss 18 condition.” Moeller v. Farmers Ins. Co. of Wash., 173 Wn.2d 264, 271 (Wash. 2011); 19 Mansker v. Farmers Ins. Co. of Wash., No. C10-0511JLR, 2010 U.S. Dist. LEXIS 95690 , 20 at *22 (W.D. Wash. Sept. 13, 2010) (“[D]iminished value loss requires demonstrable 21 physical damage.”). Assaf concedes that “stigma” damages are not covered, and he does 22 not seek them here. Dkt. 115 at 9. 1 At the very least, McLeod’s Auto Body’s testimony is unrebutted evidence that 2 Assaf’s claims are not typical of the class’s. This conclusion is bolstered when the Court 3 considers, as it must, Progressive’s defenses. Assaf’s class definition, and his arguments 4 and evidence in support of certification, effectively assume that any qualifying vehicle 5 with damage requiring frame or body or paint work costing more than $1,000 cannot be 6 restored to its pre-accident condition or, put another way, suffered covered diminished 7 value. Siskin’s 2001 regression analysis of 1995–2001 repaired vehicle auction prices, 8 and his undeveloped opinion that such vehicles sell for less, even excluding stigma 9 damages, do not directly address this point. See Dkt. 61-25. 10 Assaf has not met his burden of showing that his claim is typical of the proposed 11 class’s claim. 12 3. Predominance of Common over Individual Questions. 13 Rule 23(b)(3)’s predominance inquiry “‘tests whether proposed classes are 14 sufficiently cohesive to warrant adjudication by representation.’” Tyson Foods, Inc. v. 15 Bouaphakeo, 577 U.S. 442 , 453 (2016) (quoting Amchem Products, Inc. v. Windsor, 521 16 U.S. 591, 623 (1997)). Common questions are defined by the plaintiff’s ability to make a 17 prima facie showing using the same evidence. Id. “When one or more of the central 18 issues in the action are common to the class and can be said to predominate, the action 19 may be considered proper under Rule 23(b)(3) even though other important matters will 20 have to be tried separately, such as damages or some affirmative defenses peculiar to 21 some individual class members.” Id. (internal quotations omitted); see also Pulaski & 22 Middleman, LLC v. Google, Inc., 802 F.3d 979, 988 (9th Cir. 2015) (“[D]ifferences in 1 damage calculations do not defeat class certification.”). However, “[i]f the plaintiff 2 cannot prove that damages resulted from the defendant’s conduct, then the plaintiff 3 cannot establish predominance.” Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 4 1150, 1154 (9th Cir. 2016). 5 Assaf contends that the common class questions predominate because Progressive 6 uniformly denies diminished value. He argues that the overriding common questions are 7 (1) the fair measure of DV loss and the best way to calculate it, and (2) whether 8 Progressive owes DV under its policies’ underinsured motorist coverage. He argues that, 9 because Progressive’s insurance policies are form contracts, it is particularly appropriate 10 to use the class action procedure. Dkt. 60 at 19 (citing Mortimer v. FDIC, 197 F.R.D. 11 432, 438 (W.D. Wash. 2000)). 12 Implicit in this framing is the fact of a covered DV loss. Assaf’s arguments on 13 typicality, discussed above, similarly emphasized the amount of damage and his ability to 14 accurately demonstrate it at trial, with little argument or evidence supporting the 15 necessary conclusion the class’s vehicles actually suffered a DV loss because they could 16 not be restored to their preloss condition. 17 Assaf again acknowledges that the class members’ individual actual DV damages 18 may vary, and he correctly argues that such variation is not an impediment to class 19 certification. Id. He emphasizes that his expert, Dr. Siskin, will, when the merits are 20 reached, use statistics to determine the individual losses and the class’s aggregate loss. Id. 21 at 20. He dismisses Progressive’s argument, also discussed above, that not all of the 22 vehicles in the class as he proposes to define it necessarily suffered covered diminished 1 value. Some vehicles, perhaps Assaf’s, received improper, faulty, or incomplete repairs, 2 or were restored to their preloss condition. Some others had been previously repaired. 3 Assaf asserts this is presents a factual, damages question that can be addressed at trial, 4 with Dr. Siskin’s updated opinion, based on updated data input for his model. He argues 5 that such individual questions do not predominate over the common questions he raises. [6] Id. 7 Progressive argues that individual questions predominate, indeed that they 8 overwhelm, any common questions. Dkt. 87 at 14. It accurately identifies ten such 9 individual questions, Dkt. 87 at 14–23, but the Court is most concerned with the first: 10 “Did the Vehicle Sustain Diminished Value?” Id. at 14 . Progressive argues that this 11 inquiry necessarily turns on individualized questions and proof, and that Siskin’s model 12 and his expert opinion “simply assumes that all vehicles suffer diminished value” as the 13 result of the sort of accident included in the class definition. Id. at 15 . It argues that its 14 experts contend (and Assaf’s expert Harber concedes) that some vehicles within the class 15 did not suffer a covered diminished value loss. Indeed, the proposed class includes 16 vehicles with $1,000 in damage requiring paint, which inevitably includes minor damage 17 and replaceable parts (like bumpers) that would permit the vehicle to be returned to its 18 preloss condition, and which would not lead to covered diminished value. Thus, while 19 this question is common to each class vehicle, the answer may be different for each 20 vehicle. Progressive argues, and the Court agrees, that the result is that a trial would 21 involve “thousands of mini trials” litigating highly individualized questions. Dkt. 87 at 3. [22] 1 This remains the glaring flaw in Assaf’s motion. The Court does not view the 2 evidence in the light most favorable to Assaf in evaluating whether his evidence 3 demonstrates that common questions predominate over individual questions and answers. 4 On class certification, it is the plaintiff’s burden to demonstrate that his proposed class 5 meets Rule 23’s requirements, including Rule 23(b)(3)’s requirement that any common 6 questions predominate over individual inquiries. 7 The Court need not exclude Dr. Siskin’s expert opinion to conclude that it does 8 not demonstrate that the common issues presented by Assaf’s class claims do not 9 predominate over individualized inquiries or answers.3 These issues relate not only to 10 whether a given vehicle within the class definition in fact suffered covered diminished 11 value (discussed above), but also to the cause(s) of any difference in value: Was the car 12 properly repaired? Was it in a prior accident, or did it otherwise have pre-existing 13 damage? Is the car’s value less than expected because it was poorly maintained, smoked 14 in, or is an unpopular color? 15 Nor is the Court persuaded that Siskin’s current model appropriately addresses 16 even the calculation of covered diminished value losses. This Court and others have 17 explained that Siskin’s model is “outdated” and that it is a “poor fit” factually for a 18 diminished value case involving vehicles that are much newer than the newest car in his [19] 3 Progressive also identifies as individualized issues: whether it paid a diminished value 20 claim, whether paying such a claim would exceed the policy limits, and whether the vehicle suffered qualifying damage. Dkt. 87 at 1423. It also points out that, while the class definition 21 excludes leased vehicles, Assaf does not set forth a methodology for actually excluding such vehicles. It argues, and the Court agrees, that whether the vehicle was leased is another, 22 important individualized inquiry. 1 underlying database. The oldest vehicle in that database (1995) is more than twenty-five 2 years older than the newest car within Assaf’s proposed class definition. Progressive 3 correctly points out that newer cars are more advanced, and built and repaired with better 4 technology than those in Siskin’s study, and asserts that he has not even “tweaked’ his 5 model since 2001. Dkt. 87 at 17. Assaf and Siskin do not dispute that his model and his 6 opinion would have to be further developed before it would be admissible at trial. 7 The Court concludes that any commonality between Assaf’s claim and the class’s 8 claims do not predominate over the individualized inquiries. The answers are not 9 necessarily the same. 10 Progressive is entitled to assert as a defense to Assaf’s individual claim that, based 11 on the evidence related to his claim, he did not suffer a covered diminished value loss. It 12 is entitled to explore and potentially assert that defense as to each defined class member’s 13 DV claim. 14 The Court concludes that the class claims do not present common factual or legal 15 questions and answers. Assaf’s claims are not typical of the class, and any common 16 questions do not predominate. A class action in this matter is not superior to 17 individualized resolution, despite the fact that such resolution is not efficient. 18 *** 19 The Motion for Class Certification, Dkt. 58, is DENIED. Progressive’s Motions to 20 Exclude Toglia’s and Siskin’s Expert Testimony, Dkts. 94 and 96, are DENIED as moot. 21 Assaf’s Motion to Compel Compliance, Dkt. 125, is DENIED. The Motions to Strike, 22 Dkts. 120 and 121, are DENIED as moot. 1 IT IS SO ORDERED. 2 Dated this 30th day of August, 2023. A [4] BENJAMIN H. SETTLE [5] United States District Judge