Robinson-Smith v. Government Employees Ins. Co.

• Decision Date: 01 July 2004
• Docket Number: No. CIV.A. 01-1340 PLF.,CIV.A. 01-1340 PLF.
• Parties: Jerome ROBINSON-SMITH, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Columbia

323 F.Supp.2d 12

Jerome ROBINSON-SMITH, Plaintiff, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant.

No. CIV.A. 01-1340 PLF.

United States District Court, District of Columbia.

July 1, 2004.

COPYRIGHT MATERIAL OMITTED

Charles Edgar Tompkins, Cohen, Milstein, Hausfeld & Toll, P.L.L.C., Washington, DC, for Plaintiff and Claimants.

Michael Hausfeld, Cohen, Milstein, Hausfeld & Toll, P.L.L.C., Washington, DC, Thomas V. Urmy, Jr., Todd Heyman, Shapiro Haber & Urmy LLP, Boston, MA, for Plaintiff.

Bruce Stephen Harrison, Shawe & Rosenthal, Baltimore, MD, for Defendant.

Michele A. Gallagher, Anderson Kill & Olick, LLP, Washington, DC, for Movant.

OPINION

PAUL L. FRIEDMAN, District Judge.

This matter is before the Court on defendant's motion for summary judgment and plaintiff's motion for summary judgment on the issue of liability. The Court heard oral argument on the motions on May 19, 2004. Upon consideration of the parties' motions for summary judgment, the oppositions, the replies, and the arguments of counsel, the Court concludes that plaintiff's motion for summary judgment on the issue of liability should be granted and defendant's motion for summary judgment should be denied.

II. BACKGROUND

A. Posture of the Case

Plaintiffs allege that defendant Government Employees Insurance Company ("GEICO") has, since at least June 15, 1998, violated the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. ("FLSA"), by failing to pay plaintiff Jerome Robinson-Smith and all other persons employed as Auto Damage Adjusters and Resident Auto Damage Adjusters time and one-half their regular rates of pay for all hours worked in excess of 40 hours per week. See Complaint at ¶ 1. These individuals have been classified as exempt by GEICO. See id.

The Complaint is brought as a collective action pursuant to 29 U.S.C. § 216(b) on behalf of plaintiff Jerome Robinson-Smith and all other persons who are or have been employed by defendant anywhere in the United States as Auto Damage Adjusters or Resident Auto Damage Adjusters between June 15, 1998 or November 16, 1998, respectively, and the date of final disposition of this action. See Complaint at ¶ 2. Section 216(b) provides that an action to recover liability for violations of Section 206 or Section 207 of the FLSA may be maintained by "any one or more employees for and in behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). An employee does not become a party plaintiff to such an action "unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought." Id. Over 270 employees have filed consents in this case.

Plaintiff alleges that his job has been (1) to inspect damaged automobiles as to which a claim for indemnity under policies sold by the defendant has been made or is expected to be made; (2) to enter a description of the damage into a GEICO computer; (3) to offer payment for the damage in accord with the amounts provided by the GEICO computer system; and (4) to perform related tasks such as photographing damaged vehicles and filling out forms provided by the defendant relating to their appraisals. See Complaint at ¶ 9. Plaintiff received a salary and the amount of his pay did not depend on the number of hours worked. See id. at ¶ 10. Plaintiff regularly worked in excess of 40 hours per week. Id.

For the Court's convenience, plaintiff has consolidated all of the statements of facts and the responses thereto made by both plaintiff and defendant. The Court notes that although there are lengthy oppositions to many of the asserted facts, most of them consist solely of the legal implications of the asserted facts. "In determining a motion for summary judgment, the court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion." L. Civ. R. 7(h). Because the material facts regarding plaintiff's job duties are essentially uncontested, there are no genuine issues of material fact, and resolution of the issue of liability on cross-motions for summary judgment therefore is appropriate.

B. Uncontested Material Facts

GEICO underwrites and sells automobile insurance directly to consumers. See Plaintiff's Consolidated Statement of Facts Presented by Both Plaintiff and Defendant, and Plaintiff's Statement of Facts in Reply to Defendant's Statement of Facts in Support of its Motion to Dismiss ("Con.Stmt.Facts") at 1. GEICO also services insurance policies sold by other GEICO entities. See id. at 102. GEICO receives claims on less than ten percent of its policies. See id. at 4. Auto damage claims account for 60 percent of GEICO's loss payments. See id. at 14.

GEICO has a "Claims Home Office" which is responsible for the policy and oversight of the claims function for GEICO. See Con. Stmt. Facts at 104. The auto damage division establishes auto damage policies. See id. at 106. GEICO regions are called "profit centers," and there is an auto damage director for each "profit center." See id. at 107. Auto damage adjusters, plaintiff's in this case, report to supervisors who report to auto damage managers who report to auto damage directors. See id. at 110.

Auto damage adjusters assess, negotiate and settle automobile damage claims made to GEICO. See Con. Stmt. Facts at 15. Level I adjusters, such as plaintiff, have settlement authority up to $10,000. See id. at 15. Level II adjusters have settlement authority up to $15,000. See id. An auto damage adjuster can recommend settlements in excess of his settlement authority. See id. at 17. The majority of adjusters' time is spent inspecting vehicles, writing estimates, and traveling to and from inspection sites. See id. at 142.¹ The adjusters do not determine whether GEICO is liable for a given claim and do not have the authority to deny liability, but they do determine the value of a claim once it has been determined that the claim should be paid. See id. at 143, 147. Adjusters may stop payment on certain damage items if they determine that those damage items were not caused by the accident. See id. at 147.

When evaluating a damaged part, the adjuster first determines whether the damage was caused by the accident. See id. at 25. If the damage is accident related, the adjuster assesses the cost of fixing the damage. See id. at 28. The adjuster must also determine whether the vehicle has "hidden damage" which cannot be detected without disassembling the car. See Con. Stmt. Facts at 60.

GEICO auto damage adjusters write estimates using software called "Pathways," which is licensed by Certified Collateral Corporation ("CCC") and is installed on the adjusters' laptop computers. See Con. Stmt. Facts at 21. The software uses databases to locate information on items such as parts prices. See id. at 22. Paint times and material costs are stored in the computers. See id. at 179. The information in the computer is essentially the same as the information GEICO adjusters previously looked up in books. See id. at 22. The software does provide certain prompts to aid the adjusters. For example, the software indicates when a vehicle becomes a total loss, when a more cost effective part is available, and when it would be more cost effective to replace a part. See id. The adjuster must determine, without the aid of computer programs, formulas or tables, the amount of labor time that a repair will require. See id. Adjusters make this determination based on their training and knowledge. See id. at 33. Procedural pages are stored in the computer, however, and describe the repair procedures to be followed in repairing parts. See id. at 173. If the auto damage adjuster makes a manual entry, or an entry which conflicts with the software's suggestions, the software program will mark the entry with an asterisk or pound sign. See id. at 154.

If the adjuster determines that a part can be repaired safely, the adjuster determines whether the part should be repaired or replaced. See Con. Stmt. Facts at 31. If a customer requests replacement of a part even though repair is appropriate, an auto damage adjuster would grant the request without consulting his supervisor if it were clear that the discrepancy was sufficiently small that the supervisor would approve it. See id. at 35.

If the adjuster determines that a part must be replaced, then he must determine what type of part to use. See Con. Stmt. Facts at 38. A part can be replaced with a new part made by the manufacturer of the car ("OEM part"), a new part made by someone else ("aftermarket part"), or a non-damaged used OEM part ("LKQ part"). See id. GEICO has policies which dictate use of OEM parts with respect to certain parts of cars. See id. at 246. The adjuster must determine what type of part to use and whether to take a depreciation deduction when replacing a worn part with a new one. See id. at 38, 41. Depreciation guidelines are set out in the Auto Damage Handbook, but in some cases the depreciation determination is left to the discretion of the adjuster. See id. at 186. For example, the Auto Damage Handbook states that "carpets, floor mats, upholstery, headliners, convertible tops and other soft trim will be depreciated based on the pre-loss condition as established by the adjuster." Id. at 45 (quoting Auto Damage Handbook at 115). The parties agree that GEICO has guidelines for these types of decisions, but disagree on the amount of discretion left to the adjusters. See id. Working with repair shops, there is some leeway, but auto damage adjusters must still conform with GEICO guidelines. See id. at 50-51.

Adjusters also must determine whether the vehicle is a total loss. See Con. Stmt. Facts. at 59. The computer software will flag a vehicle as a total loss if the estimated repair cost exceeds 75 percent of the market value. See id. at 156. If a...