Lafollette et al v. Liberty Mutual Fire Insurance Company

Filing 227

ORDER entered by Judge Nanette Laughrey. Plaintiffs' unopposed motion, Doc. 226 , is granted. Accordingly, the Court decertifies the Earthquake Endorsement Subclass for lack of numerosity; (2) amends the class definition to exclude claims arising under the Earthquake Endorsement; and (3) approves Plaintiffs' amended notice documents, Doc.[226-1]. (Specker, Suzanne) Modified on 12/21/2016 to correct text indicating that a document is attached(James, Carrie).

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
ERIC LAFOLLETTE and
CAMILLE LAFOLLETTE,
Individually and on behalf of all others
similarly situated,
Plaintiffs,

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v.
LIBERTY MUTUAL FIRE
INSURANCE COMPANY,
Defendant.

No. 2:14-cv-04147-NKL

ORDER
Plaintiffs Eric and Camille LaFollette move the Court for an order (1) decertifying the
Earthquake Endorsement subclass for lack of numerosity; (2) amending the class definition to
exclude claims arising under the Earthquake Endorsement; and (3) for final approval of their
amended notice documents. [Doc. 226]. For the following reasons, the unopposed motion is
granted.

I.

Background
This is a breach of contract class action arising out of Liberty Mutual’s homeowner’s

insurance policies. The dispute in this case involves Liberty Mutual’s assessment of a $1,000
deductible on the Lafollettes’ actual cash value claim, which the Lafollettes contend should not
have been assessed under the terms of the policy. The Lafollettes sought certification of a class
of Liberty Mutual property insurance policyholders in Missouri whose ACV payments were
similarly reduced by their deductible amounts.
On August 1, 2016, the Court certified a Rule 23(b)(3) class defined as:

All persons who received an ACV payment, directly or indirectly, from
Liberty Mutual Fire Insurance Company for physical loss or damage to
their dwelling or other structures located in the state of Missouri arising
under policy Form HO 03 (Edition 04 91) and endorsements, such
payments arising from losses that occurred from April 8, 2004 to August
1, 2016, where a deductible was applied to the ACV payment for the
person’s dwelling or other structure (Coverage A and/or B).
Excluded from the Class are: (1) All persons who submitted a claim for
and received a replacement cost payment from Liberty Mutual Fire
Insurance Company under Coverage A and/or B; (2) All persons whose
payment(s) plus the amount of any deductible applied was less than
$2,500; (3) Liberty Mutual Fire Insurance Company and its affiliates,
officers, and directors; (4) Members of the judiciary and their staff to
whom this action is assigned; and (5) Plaintiffs’ Counsel.
In its order certifying the class, the Court preliminarily certified four subclasses:
(1) All parties who received an ACV payment for loss arising solely under the base
policy and/or Home Protector Plus Endorsement;
(2) All parties who received an ACV payment for loss arising under the Wind/Hail
Endorsement;
(3) All parties who received an ACV payment for loss arising under the Functional
Replacement Cost Loss Settlement Endorsement; and
(4) All parties who received an ACV payment for loss arising under the Earthquake
Endorsement.

II.

Discussion
Plaintiffs move the Court for an order (1) decertifying the Earthquake Endorsement

subclass for lack of numerosity; (2) amending the class definition to exclude claims arising under
the Earthquake Endorsement; and (3) for final approval of their amended notice documents.
[Doc. 226]. Defendant does not oppose this motion.
a.

Decertification of Earthquake Subclass

Each subclass must individually meet the Rule 23 requirements for class certification.
Paxton v. Union Nat. Bank, 688 F.2d 552, 559 (8th Cir. 1982) (“[A] class may be divided into
subclasses that are each treated as a class under this rule.”) (emphasis added); § 1790 Partial
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Class Actions and Subclasses, 7Aa Fed. Prac. & Proc. Civ. § 1790 (3d ed) (“When subclasses are
formed under subdivision [(c)(5)], each subclass must independently meet the requirements of
Rule 23.”). One of these requirements is “numerosity” under Rule 23(a)(1), which mandates that
the class be “so numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1).
Plaintiffs move for decertification of the Earthquake Endorsement Subclass for lack of
numerosity. For a claim to arise under the applicable Earthquake Endorsement, it must be
“caused by earthquake, including land shock waves or tremors before, during or after a volcanic
eruption.” [Doc. 160-11, p. 25]. As support for decertification, Plaintiffs state that they used
Defendant’s electronic claim information for claims occurring within the defined class period
and determined that a total of only four claims were caused by earthquake. Defendant also
confirmed this number. Therefore, Plaintiffs state that there are only four total potential Class
Members who have claims falling within this subclass. Such a small number of potential Class
Members, Plaintiffs contend, does not satisfy Rule 23’s numerosity requirement.
The Court agrees. Because there are only four potential claims within the Earthquake
Subclass, this subclass is not so numerous that “joinder of all members is impracticable.” Fed.
R. Civ. P 23(a)(1). Therefore, the Earthquake Endorsement Subclass does not satisfy Rule
23(a)(1)’s numerosity requirement and must be decertified.
Accordingly, the Court amends its class definition to the following, which excludes
claims caused by earthquake:

All persons who received an ACV payment, directly or indirectly, from
Liberty Mutual Fire Insurance Company for physical loss or damage to
their dwelling or other structures located in the state of Missouri arising
under policy Form HO 03 (Edition 04 91) and endorsements, such
payments arising from losses that occurred from April 8, 2004 to August
1, 2016, where a deductible was applied to the ACV payment for the
person’s dwelling or other structure (Coverage A and/or B).
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Excluded from the Class are: (1) All persons who submitted a claim for
and received a replacement cost payment from Liberty Mutual Fire
Insurance Company under Coverage A and/or B; (2) All persons whose
payment(s) plus the amount of any deductible applied was less than
$2,500; (3) All persons whose claim(s) were caused by earthquake; (4)
Liberty Mutual Fire Insurance Company and its affiliates, officers, and
directors; (5) Members of the judiciary and their staff to whom this action
is assigned; and (6) Plaintiffs’ Counsel.
For these reasons, there are only three remaining certified subclasses:
(1) All parties who received an ACV payment for loss arising solely under the base
policy and/or Home Protector Plus Endorsement;
(2) All parties who received an ACV payment for loss arising under the Wind/Hail
Endorsement; and
(3) All parties who received an ACV payment for loss arising under the Functional
Replacement Cost Loss Settlement Endorsement.
b. Amended Notice Documents
On December 15, 2016, the Court granted Plaintiffs’ motion for approval of their
proposed notice plan on the condition that Plaintiffs amend their documents to include an Opt
Out deadline of 60 days from the Notice Date, the date upon which notice is mailed. The Court
further ordered that the amended notice documents reflecting the Opt Out deadline be filed with
the Court prior to being mailed. The Court set December 29, 2016 as the deadline for mailing
class notice.
Plaintiffs have since filed their amended notice documents, which list the Notice Date as
December 29, 2016 and the appropriate 60-day Opt Out deadline of February 27, 2017. [Doc.
226-1]. The Court is satisfied that Plaintiffs properly amended their notice documents to include
these dates.
Plaintiffs also amended their notice documents to reflect the revised class definition that
the Court adopted in Part II.a., supra. This definition change was limited to adding language
excluding “(3) All persons whose claim(s) were caused by earthquake.” Because the Court has
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decertified the Earthquake Subclass and revised its class definition to reflect this exclusion, the
Court likewise approves this change to the class definition in Plaintiffs’ notice documents.

III.

Conclusion
For the previous reasons, Plaintiffs’ unopposed motion is granted.

[Doc. 226].

Accordingly, the Court decertifies the Earthquake Endorsement subclass for lack of numerosity;
(2) amends the class definition to exclude claims arising under the Earthquake Endorsement; and
(3) approves Plaintiffs’ amended notice documents. [Docs. 226 and 226-1].

s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: December 21, 2016
Jefferson City, Missouri

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