Defraites v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 27 January 2004
• Docket Number: No. 03-CA-1081.,03-CA-1081.
• Citation: 864 So.2d 254
• Parties: Robert DEFRAITES, Individually and as Representative of those similarly situated v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and Oasis Horticultural Services, Inc., Individually and as Representative of all those similarly situated.
• Court: Court of Appeal of Louisiana — District of US

864 So.2d 254

Robert DEFRAITES, Individually and as Representative of those similarly situated v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and Oasis Horticultural Services, Inc., Individually and as Representative of all those similarly situated.

No. 03-CA-1081.

Court of Appeal of Louisiana, Fifth Circuit.

January 27, 2004.

Rehearing Denied February 9, 2004.

Writ Denied March 12, 2004.

David L. Haik, Metairie, LA, for Robert Defraites, et al., Plaintiff/Appellee.

Wayne J. Lee, Lesli D. Harris, Stone Pigman Walther Wittmann, L.L.C., New Orleans, LA, for State Farm Mutual Automobile Insurance Company, et al., Defendant/Appellant.

Panel composed of Judges EDWARD A. DUFRESNE, JR., SUSAN M. CHEHARDY and WALTER J. ROTHSCHILD.

WALTER J. ROTHSCHILD, Judge.

Defendants, Oasis Horticultural Services, Inc. and State Farm Mutual Automobile Insurance Company, appeal from a judgment of the trial court certifying this action as a class. For the reasons stated more fully herein, we reverse the ruling of the trial court and remand the matter for further proceedings.

Facts and Procedural History

On August 2, 2002, plaintiff herein, Robert Defraites, filed the instant class petition pursuant to the provisions of La. C.C.P. art. 591, individually on his own behalf and on behalf of other plaintiffs similarly situated but yet unidentified. Plaintiff named as defendants Oasis Horticultural Services, Inc. and its liability insurance carrier, State Farm Mutual Automobile Insurance Company. Also made defendants in this action were the class of persons insured through State Farm and similarly situated as Oasis Horticultural Services but yet to be identified.

In this petition, Defraites alleged that on July 1, 2002, his vehicle was damaged in an automobile accident with a vehicle owned and operated by Oasis and its employees and insured by State Farm. Defraites alleged that his vehicle sustained both damage in cost of repairs and a diminished value attributable to the vehicle's involvement in the accident. Plaintiff further alleged that although State Farm paid for the costs to repair his vehicle, they failed to pay for the vehicle's diminished value. Defraites stated in the petition that he made a claim for diminution in value of the vehicle with State Farm, and State Farm failed to initiate loss adjustment for this item of damages within fourteen days of the notification of loss. Plaintiff argues that State Farm violated the provisions of La. R.S. 22:658(A)(3) and (4), and was therefore liable for the amount of diminution in value sustained by plaintiff as well as damages in the form of penalties pursuant to La. R.S. 22:1220(C).

In addition to his claim for individual damages, plaintiff also requested that this claim be certified as a class action on behalf of all similarly situated persons who have made or will henceforth make third party property automobile damage claims against State Farm and its insureds for damages sustained wherein State Farm failed to pay losses for diminution in value. Plaintiff also sought a defendant class to be comprised of the past and future State Farm insureds that are targets of the vehicular property damage claims asserted by members of the putative class.

On September 30, 2002, plaintiff filed a motion to certify the action as a class action pursuant to La. C.C.P. art. 592. On October 21, 2002, defendants filed exceptions, affirmative defenses and answer to plaintiff's petition. Thereafter, the parties conducted discovery on plaintiff's request to certify the class, and on December 20, 2002, defendants brought a motion for summary judgment to dismiss plaintiff's individual claims of diminution in value on the basis that plaintiff failed to submit evidence to show he was entitled to this item of damages. On the same date, defendants also brought a motion for partial summary judgment to dismiss plaintiff's class action demands based on defendants' claims that the requirements of a class action cannot be satisfied as a matter of law. By judgment dated February 5, 2003, the trial court denied both of these motions.

On March 25, 2003, plaintiff filed a memorandum for certification of plaintiff and defendant classes with attachments. Defendants filed an opposition to this memorandum on April 8, 2003. On April 16-17, 2003, the trial court conducted a hearing on plaintiff's motion for class certification. The record was left open to allow for depositions and post-hearing memoranda.

By order rendered on June 5, 2003, the trial court granted plaintiff's motion to certify both a plaintiff and defendant class, and held that all issues raised by the pleadings in this action will be tried on a class-wide basis as pertains to each class. Although defendants filed a request for written reasons, no reasons for judgment were assigned by the trial court. A suspensive appeal was granted by the trial court in this matter on July 7, 2003.

Defendants now appeal on the basis that the trial court erred in certifying this action as a class pursuant to the provisions of La. C.C.P. art. 591, et seq. Plaintiff has answered the appeal seeking damages and costs against defendants for the filing of a frivolous appeal.

Applicable Law

The judgment certifying the class in this action is appealable. Eastin v. Entergy Corp., 97-1094 (La.App. 5 Cir. 4/15/98), 710 So.2d 835. In Louisiana, the class action procedure is governed by the provisions of La.C.C.P. art. 591, et seq. Article 591 provides as follows:

Art. 591. Prerequisites; maintainable class actions A. One or more members of a class may sue or be sued as representative parties on behalf of all, only if:

(1) The class is so numerous that joinder of all members is impracticable.

(2) There are questions of law or fact common to the class.

(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class.

(4) The representative parties will fairly and adequately protect the interests of the class.

(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case.

B. An action may be maintained as a class action only if all of the prerequisites of Paragraph A of this Article are satisfied, and in addition:

(1) The prosecution of separate actions by or against individual members of the class would create a risk of:

(a) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(b) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(2) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(3) The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to these findings include:

(a) The interest of the members of the class in individually controlling the prosecution or defense of separate actions;

(b) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;

(c) The desirability or undesirability of concentrating the litigation in the particular forum;

(d) The difficulties likely to be encountered in the management of a class action;

(e) The practical ability of individual class members to pursue their claims without class certification;

(f) The extent to which the relief plausibly demanded on behalf of or against the class, including the vindication of such public policies or legal rights as may be implicated, justifies the costs and burdens of class litigation; or

(4) The parties to a settlement request certification under Subparagraph B(3) for purposes of settlement, even though the requirements of Subparagraph B(3) might not otherwise be met.

C. Certification shall not be for the purpose of adjudicating claims or defenses dependent for their resolution on proof individual to a member of the class. However, following certification, the court shall retain jurisdiction over claims or defenses dependent for their resolution on proof individual to a member of the class.

Under Louisiana law, a class action may be certified only if the numerosity, adequacy of representation, and commonality requirements are present. Billieson v. City of New Orleans, 98-1232 (La.App. 4 Cir. 3/3/99), 729 So.2d 146, 154,writ denied,00-946 (La.10/29/99), 749 So.2d 644 andwrit denied,99-960 (La.10/29/99), 749 So.2d 645. The burden of establishing that the statutory criteria are met falls on the party seeking to maintain the class action. Id.; Cooper v. City of New Orleans 01-115 (La.App. 4 Cir. 2/14/01), 780 So.2d 1158, writ denied, 01-720 (La.5/11/01), 792 So.2d 734. In order to meet class certification requirements, plaintiff must meet all of the requirements of La. C.C.P. art. 591(A) and fall within one of the sections of art. 591(B).

A trial court has great discretion in deciding whether to certify a class, and its decision will not be overturned absent manifest error. Adams v. CSX Railroads, 92-1077 (La.App. 4 Cir. 2/26/93), 615 So.2d 476. Any errors to be made in deciding class action issues should be in favor of and not against the maintenance of the class action, because a class certification order is subject to modification if later developments during the course of the trial so...