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

• Decision Date: 28 April 2015
• Docket Number: No. 13–1446.,13–1446.
• Parties: Roberta FOLKS, Plaintiff–Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

784 F.3d 730

Roberta FOLKS, Plaintiff–Appellant

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendant–Appellee.

No. 13–1446.

United States Court of Appeals, Tenth Circuit.

April 28, 2015.

John M. DeStefano, Hagens Berman Sobol Shapiro, LLP, Phoenix, AZ, (Robert B. Carey, Hagens Berman Sobol Shapiro, LLP, Phoenix, AZ; and Leif Garrison, Hagens Berman Sobol Shapiro, LLP, Colorado Springs, CO, with him on the briefs), appearing for Appellant.

Marie E. Williams (Michael S. McCarthy and Jennifer K. Harrison, with her on the briefs), Faegre Baker Daniels LLP, Denver, CO, appearing for Appellee.

Before MATHESON, SEYMOUR, and McHUGH, Circuit Judges.

Opinion

MATHESON, Circuit Judge.

On April 4, 1998, a driver hit pedestrian Roberta Folks with the side mirror of his vehicle and injured her. State Farm, the driver's insurer, informed Ms. Folks she could receive basic personal injury protection (“PIP”) benefits under the driver's policy. She received $104,000 in medical expenses and essential services. On July 11, 2002, State Farm told her she had exhausted the benefits available to her under the policy.

Ms. Folks joined a lawsuit seeking additional PIP benefits in 2004. Over the course of the litigation, Ms. Folks unsuccessfully sought to certify a class on three occasions.¹ In response to her last attempt in 2011, the district court determined she failed to satisfy the requirements of Rule 23(a) and Rule 23(b)(2) and denied class certification. A jury proceeded to hear Ms. Folks's individual claims and found in her favor in 2012. The district court amended the judgment in 2013 to correct errors in the calculation of damages.

On appeal, Ms. Folks asks us to reverse the district court's denial of class certification and remand the case for reconsideration of her claim for class-wide relief.² She also argues the district court miscalculated the treble damages and statutory pre-judgment interest to which she is entitled.

Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court.

I. BACKGROUND

A. Factual History

In 1973, Colorado enacted the Colorado Auto Accident Reparations Act (“CAARA”).³ Among its provisions, CAARA required all automobile insurance providers in Colorado to include in their policies minimum PIP benefits for (1) the named insured, (2) household relatives of the named insured, (3) passengers of the vehicle, and (4) pedestrians injured by the covered vehicle. See Colo.Rev.Stat. § 10–4–707(1) (repealed 2003).⁴ CAARA also required that insurance companies offer all policyholders the opportunity to select enhanced PIP benefits, which did not place time or dollar limitations on medical expense claims and allowed for greater wage loss reimbursements. See id. § 10–4–710 (repealed 2003).

Notwithstanding CAARA, a number of insurance companies—including State Farm—did not offer or pay enhanced PIP benefits to injured pedestrians, even if the policyholder had selected enhanced PIP benefits for the policy generally. In 1998, the Colorado Court of Appeals deemed this exception—the “Pedestrian Limitation”—impermissible under the statute. See Brennan v. Farmers Alliance Mut. Ins. Co., 961 P.2d 550, 553–54 (Colo.App.), cert. denied (Colo. 1998). In response to Brennan, State Farm eliminated its Pedestrian Limitation, but lawsuits followed seeking recovery of enhanced PIP benefits.⁵

On April 4, 1998, Ms. Folks was standing in a parking lot when the side mirror of a vehicle struck and injured her. The driver had a State Farm policy, issued before Brennan, which did not extend enhanced PIP benefits to pedestrians. Before the statute of limitations ran on her claim, Ms. Folks became part of the putative class in a related class action suit—Clark v. State Farm —which tolled her claims.

In 2000, Ricky Clark, another pedestrian who was struck and injured by a State Farm-insured vehicle, filed a putative class action against State Farm, which removed the case to the U.S. District Court for the District of Colorado. Mr. Clark argued State Farm had routinely failed to offer or pay enhanced PIP benefits under § 10–4–710 and Brennan. The district court granted State Farm's motion to dismiss that claim. In Clark I, we decided Brennan applied retroactively and Mr. Clark was entitled to reformation of his insurance policy, and reversed the district court. See Clark v. State Farm Mut. Auto. Ins. Co. (Clark I ), 319 F.3d 1234, 1237–38, 1242 (10th Cir.2003).⁶

On remand, the district court determined the proper date of reformation would be December 19, 2003—the date its post-remand order was entered. Clark v. State Farm Mut. Auto. Ins. Co. (Clark II ), 292 F.Supp.2d 1252, 1270 (D.Colo.2003). In the ensuing appeal, we affirmed that (1) Mr. Clark should be awarded the extended PIP benefits State Farm was supposed to offer to its insureds, (2) State Farm could cap those benefits at $200,000, (3) the date of the district court's order was appropriate as a date of reformation, and (4) the policy could be reformed to provide extended PIP benefits only to injured pedestrians and not other potential claimants. Clark v. State Farm Mut. Auto. Ins. Co. (Clark III ), 433 F.3d 703, 714 (10th Cir.2005).

Shortly after Clark III, State Farm undertook a voluntary payment program (“VPP”) to pay extended PIP benefits to individuals who were potentially entitled to reformation under the Clark litigation. The VPP identified potential claimants, notified them they may be entitled to additional PIP benefits, invited them to contact State Farm, and in some instances sent them a check accompanying the notice.

After Clark III was remanded, the district court addressed Mr. Clark's attempt to certify a class of:

All pedestrians who received No–Fault benefits under a Colorado State Farm automobile insurance policy where the governing policy documents at the time of the accident were issued prior to January 1, 1999. Excluded from the Class are all State Farm executives, their legal counsel, and their immediate family members, the Court and its staff, and all employees of proposed Class Counsel.

Clark v. State Farm Mut. Auto. Ins. Co. (Clark IV), 245 F.R.D. 478, 480 (D.Colo.2007). The district court denied Mr. Clark's motion for class certification on multiple alternative grounds, including failure to establish numerosity under Federal Rule of Civil Procedure 23(a)(1) and failure to satisfy either Federal Rule of Civil Procedure 23(b)(2) or (b)(3). Id. at 481–83, 485–89.⁷ The district court also determined that, because State Farm's VPP resolved Mr. Clark's individual claims, his claims were moot and he was neither typical nor adequate as a class representative. Id. at 490. The Tenth Circuit affirmed the district court's denial of class certification on the mootness ground and declined to reach the district court's alternative grounds. Clark v. State Farm Mut. Auto. Ins. Co. (Clark V ), 590 F.3d 1134, 1141 (10th Cir.2009).

B. Procedural History

In May 2004, Ms. Folks joined as a named plaintiff a lawsuit Kim Nguyen brought against State Farm. The suit asserted class action claims for declaratory relief and reformation, breach of contract and failure to pay PIP benefits, violation of the No Fault Act, statutory willful and wanton breach of contract, and breach of the duty of good faith and fair dealing.⁸

State Farm moved for summary judgment, arguing Ms. Nguyen was not entitled to reformation because she was injured as a passenger, not a pedestrian, and Ms. Folks's claims were time-barred because they were filed after the three-year statute of limitations expired. The district court granted the motion. We affirmed the district court's determination that Ms. Nguyen was not entitled to reformation, but reversed the district court on Ms. Folks's claims. Folks v. State Farm Mut. Ins. Co., 299 Fed.Appx. 748, 756, 758–59 (10th Cir.2008) (unpublished).⁹ We relied on State Farm Mutual Automobile Insurance Co. v. Boellstorff, 540 F.3d 1223 (10th Cir.2008), which said a member of a putative class may pursue his or her own claims before the district court decides the class certification issue even after the otherwise non-tolled statute of limitations would have run. See Folks, 299 Fed.Appx. at 749. Because Ms. Folks belonged to the putative class in Clark and joined Ms. Nguyen's lawsuit before class certification was denied in Clark, we concluded her claims were timely. Id. at 756.¹⁰

After her case was remanded to the district court, Ms. Folks filed another motion for class certification. Because her proposed class was virtually identical to the putative class in Clark, and because Clark IV was then on appeal to the Tenth Circuit, the district court determined the eventual ruling in Clark V would determine Ms. Folks's class-based claims. The court denied her motion for class certification without prejudice.

As it happened, however, Clark V neither upheld the denial of class certification nor reversed the denial. Instead, we decided the case on the limited ground that the claims of the class representative, Mr. Clark, were moot. Thus, about one year after Clark V, Ms. Folks again moved for class certification, seeking to certify a class of:

All pedestrian insureds who received No–Fault benefits under a Colorado State Farm automobile insurance policy where the policy documents in place at the time of the accident were issued prior to January 1, 1999, and whose claims accrued on or after August 1, 1997. Excluded from the Class are all State Farm executives, their legal counsel, and their immediate family members, the Court and its staff, and all employees of proposed Class Counsel.

Aplt. App. at 66 (footnote omitted).

This proposed class is virtually identical to the class Mr. Clark proposed in Clark IV.¹¹ State Farm contested the proposed class, arguing it did not satisfy Federal Rule of Civil Procedure 23 and the putative class claims were time-barred because class action tolling protected only individual claims. A magistrate judge considered the motion for...