Baldwin Mut. Ins. Co. v. McCain

260 So. 3d 801
CourtSupreme Court of Alabama
DecidedMarch 23, 2018
Docket1160093
StatusPublished
Cited by1 cases

This text of 260 So. 3d 801 (Baldwin Mut. Ins. Co. v. McCain) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baldwin Mut. Ins. Co. v. McCain, 260 So. 3d 801 (Ala. 2018).

Opinion

MENDHEIM, Justice.

*803Baldwin Mutual Insurance Company ("Baldwin Mutual") appeals from an order of the Montgomery Circuit Court certifying for class treatment pursuant to Rule 23, Ala. R. Civ. P., an action filed against it by Gloria Mitchell McCain. We reverse and remand.

I. Facts

This is the second time this action has been before us. In Baldwin Mutual Insurance Co. v. McCain, 176 So.3d 1195 (Ala. 2015) (" Baldwin Mutual I"), we summarized the relevant facts as follows:

"At all relevant times, McCain owned a house in Montgomery upon which she held a homeowner's insurance policy issued by Baldwin Mutual. That policy provided that any covered property losses would be settled 'at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace the damaged property.' The policy further explained 'actual cash value' as follows:
" 'Actual cash value is calculated as the amount it would cost to repair or replace covered property, at the time of loss or damage, with material of like kind and quality, subject to a deduction for deterioration, depreciation and obsolescence. Actual cash value applies to valuation of covered property regardless of whether that property has sustained partial or total loss or damage.
" 'The actual cash value of the lost or damaged property may be significantly less than its replacement cost.'
"In July 2005, McCain's house was damaged as the result of a windstorm. She filed a claim with Baldwin Mutual, and Baldwin Mutual thereafter retained an independent adjuster to examine McCain's damaged property and to prepare an estimate to repair the damage. Baldwin Mutual paid McCain's claim in accordance with the estimate prepared by the adjuster. Pursuant to a work-authorization form signed by McCain, Baldwin Mutual paid the funds directly to McCain's contractor. In June 2006, McCain filed another claim after her house suffered damage as a result of a lightning strike. After the same adjuster prepared an estimate, Baldwin Mutual paid the new claim in accordance with the adjuster's estimate. The record contains no allegation or evidence indicating that McCain sought more money from Baldwin Mutual in connection with those claims or that she was unhappy in any way with the service provided by Baldwin Mutual on those claims before she initiated this lawsuit.
"On September 29, 2010, McCain filed a complaint against Baldwin Mutual. As subsequently amended, the complaint stated one claim of breach of contract and another claim generally asserting misrepresentation and suppression of material facts. The genesis of the claims is that Baldwin Mutual had wrongfully been reducing the amount paid on claims made on actual-cash-value policies inasmuch as its practice was to deduct some amount for depreciation not only of the damaged materials and the labor costs of initially installing those damaged materials (based on their condition prior to the covered damage and their expected life span), but also of the labor costs associated with the removal of the damaged materials. It is improper and impossible to depreciate those labor costs, McCain argues, because they had *804not previously been incurred at some defined time in the past; rather, they are being incurred at the time of the current repair. For example, with regard to McCain's July 2005 claim, Baldwin Mutual recognized that the cost of removing damaged roof shingles was $420; however, $63 in depreciation was deducted from that amount, and Baldwin Mutual paid only $357 for that job, what it considered to be the actual cash value. See generally Branch v. Farmers Ins. Co., 55 P.3d 1023, 1028 (Okla. 2002) (clarifying that under Oklahoma law 'labor costs to tear off an old roof are not included as a necessary part of the replacement costs of installing a new roof' and that 'the labor costs in debris removal may not be depreciated'). Noting that hundreds or thousands of Baldwin Mutual policyholders were likely negatively affected by Baldwin Mutual's practices in this regard, McCain also sought class-action certification of her claims...."

176 So.3d at 1195-96 (footnote omitted).

The trial court in Baldwin Mutual I certified a class based on McCain's claims, and Baldwin Mutual appealed the certification order. This Court reversed the trial court's certification order because "the class definition proposed by McCain in her brief submitted after the class-certification hearing was materially different from the class definition offered by McCain in her original complaint." 176 So.3d at 1199. We noted that the trial court failed to give "Baldwin Mutual the opportunity to oppose the certification of the proposed class at a hearing conducted for that purpose pursuant to § 6-5-641[, Ala. Code 1975]," 176 So.3d at 1199, and we pretermitted "consideration of the Rule 23 issues raised by Baldwin Mutual." 176 So.3d at 1198. We remanded the case for further proceedings.

Upon remand, and with leave from the trial court, McCain filed on October 11, 2015, a second amended complaint that retained the allegations in her first amended complaint and amended the definition of the proposed class. On October 20, 2015, Baldwin Mutual answered the second amended complaint. Following further discovery, McCain on April 28, 2016, filed a motion for class certification along with a supporting brief and exhibits. On May 5, 2016, with leave of the trial court, McCain filed her third amended complaint, which corrected an error in the class definition but otherwise retained the allegations of the second amended complaint.

On May 27, 2016, Baldwin Mutual filed a motion for a summary judgment. Baldwin Mutual contended that McCain's claims were barred by the doctrine of res judicata based on a final judgment entered by the Calhoun Circuit Court in Baldwin Mutual Insurance Co. v. Adair, CV-2011-000002 ("the Adair litigation"), which allegedly involved the same claims and same parties. See Baldwin Mut. Ins. Co. v. Adair, 181 So.3d 1033 (Ala. 2014) (addressing an appeal from an order modifying a preliminary injunction entered in the Adair litigation). On the same date, Baldwin Mutual filed a response in opposition to the motion for class certification, along with a brief and evidentiary submissions.

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Cite This Page — Counsel Stack

Bluebook (online)
260 So. 3d 801, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baldwin-mut-ins-co-v-mccain-ala-2018.