Clippinger v. Audatex North America, Inc.

CourtDistrict Court, W.D. Tennessee
DecidedMay 6, 2021
Docket2:20-cv-02501
StatusUnknown

This text of Clippinger v. Audatex North America, Inc. (Clippinger v. Audatex North America, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clippinger v. Audatex North America, Inc., (W.D. Tenn. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

JESSICA CLIPPINGER, on behalf of herself ) and all others similarly situated, ) ) Plaintiff, ) No. 2:20-cv-02501-TLP-atc ) v. ) JURY DEMAND ) AUDATEX NORTH AMERICA, INC., d/b/a ) AUDAEXPLORE, a Delaware Corporation, ) ) Defendant. )

ORDER DENYING DEFENDANT’S MOTION TO DISMISS

Plaintiff Jessica Clippinger sues Defendant Audatex North America, Inc., d/b/a AudaExplore, for inducement of breach of contract and tortious interference with the performance of a contract. (ECF No. 34 at PageID 134–36.) She also seeks a declaratory judgment. (Id. at PageID 137.) Defendant now moves to dismiss Plaintiff’s claims under Federal Rule of Civil Procedure 12(b)(6). (ECF No. 45.) Plaintiff responded in opposition and Defendant replied. (ECF Nos. 48 & 55.) For the reasons below, the Court DENIES Defendant’s motion to dismiss. BACKGROUND This is a class action brought by Plaintiff on behalf of herself and all others similarly situated. (ECF No. 34 at PageID 117.) Plaintiff alleges these facts in her complaint.1 State

1 The Court accepts all of Plaintiff’s allegations as true under Federal Rule of Civil Procedure 12. See Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (discussing Rule 12 motion to dismiss standard). Farm Mutual Automobile Insurance Company (“State Farm”) sells automobile insurance providing coverage for property damage to an insured’s vehicle. (Id. at PageID 121.) Plaintiff has an insurance contract with State Farm.2 (Id. at PageID 120.) The contract requires State Farm to cover the total loss of her vehicle. (Id. at PageID 122.) State Farm may cover that loss

by replacing the vehicle or giving Plaintiff the “actual cash value” of the vehicle. (Id.) State Farm contracts with Defendant here to help it determine “actual cash value.” Plaintiff owned a 2017 Dodge Grand Caravan SXT 2WD 4-door passenger van. (Id. at PageID 130.) Plaintiff had a wreck and the insurance adjuster considered it a total loss. (Id.) So she submitted a claim for the total loss of her vehicle, and State Farm provided a total loss valuation for her claim. (Id.) Meanwhile, Defendant is a data analysis company that provides valuation reports and claims automation software to insurers, including State Farm. (Id. at PageID 121.) And Defendant provides State Farm with vehicle valuation reports that assess the actual cash value of a total loss vehicle. (Id.) So when State Farm provided a total loss valuation for Plaintiff’s claim

on her van, it relied on Defendant’s market valuation report to determine how much to pay Plaintiff for her vehicle. (Id. at PageID 130.) Plaintiff claims that Defendant purposely and wrongfully lowers the true market value of an insured’s car by subtracting amounts without a proper basis. (Id. at PageID 118.) The Complaint alleges that Defendant “wrongfully, intentionally, and willfully interferes with State Farm’s contractual duties to provide its insureds the actual cash value of their loss vehicles by providing State Farm with valuation reports that uniformly employ improper, unreasonable, and

2 Plaintiff sues State Farm in a companion case, Jessica Clippinger v. State Farm Mut. Auto. Ins. Co., 2:20-cv-02482 (W.D. Tenn. 2020). unexplained adjustments to reduce the value of comparable vehicles specified in the valuation reports.” (Id.) And it does so by applying a “Typical Negotiation Adjustment” to lower unfairly the vehicle’s market value. (Id.) In its valuation reports, Defendant gives State Farm itemized internet sales prices for

vehicles comparable to the loss vehicle. (Id. at PageID 125.) But rather than using the actual price data for the comparable vehicles, Defendant applies a downward adjustment for typical negotiation costs. (Id.) On average, Defendant applies an 8.5% downward adjustment. (Id. at PageID 118.) But, according to Plaintiff, Defendant gives “no credible data or explanation to support” any negotiation adjustment, much less one at 8.5%. (Id. at PageID 125.) Plaintiff also alleges that Defendant “buries” the adjustment within the valuation report and even fails to show the dollar amount of the deduction. (Id. at PageID 125–28; see also ECF No. 34-1.) What is more, this typical negotiation adjustment goes against the used car industry’s market pricing. (Id. at PageID 126.) And for unexplained reasons, Defendant does not apply this typical negotiation adjustment when valuing total losses for State Farm in California. (Id.) Nor do

Defendant’s competitors typically apply this adjustment. (Id. at PageID 126–27.) In effect, Plaintiff claims that State Farm—relying on Defendant’s market valuation report—pays its insureds less than the fair market cash value of their loss vehicles. (Id. at PageID 128.) As a result, Defendant helped State Farm reduce the amount it paid out to its policy holders by 8.7%.3 (Id. at PageID 121–22.) And so, Plaintiff alleges that Defendant’s practice of undervaluing total loss vehicles by applying an unexplained Typical Negotiation Adjustment “induce[s] a breach of the contract between State Farm and its insureds,” and

3 Plaintiff alleges that, before using Defendant’s services, State Farm had reported several underwriting losses on its auto insurance business. (ECF No. 34 at PageID 121.) intentionally interferes with State Farm’s contractual relations with its insureds. (Id. at PageID 135.) Defendant now argues that Plaintiff fails to state a claim because she does not allege that Audatex “(i) specifically intended to induce State Farm to breach its contract with Clippinger,

(ii) acted maliciously, or (iii) proximately caused a breach of that contract.” (ECF No. 46 at PageID 196.) Defendant also argues that the Court should dismiss Plaintiff’s declaratory judgment claim because she “fails to assert a justiciable controversy.” (Id. at PageID 196.) This is because Plaintiff seeks a declaration about the duties of Tennessee insurers, which “would not affect any rights or obligations between Clippinger and Audatex.” (Id.) The Court now turns to the legal standard for a 12(b)(6) motion to dismiss. LEGAL STANDARD Courts assess whether a complaint states a claim upon which relief can be granted under the standards for Rule 12(b)(6), as stated in Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009), and

in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555–557 (2007). “Accepting all well-pleaded allegations in the complaint as true, the court ‘consider[s] the factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief.’” Williams v. Curtin, 631 F.3d 380, 383 (6th Cir. 2011) (quoting Iqbal, 556 U.S. at 681). To survive a motion to dismiss under 12(b)(6), a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Though a court will grant a motion to dismiss if a plaintiff has no plausible claim for relief, a court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471

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Bluebook (online)
Clippinger v. Audatex North America, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/clippinger-v-audatex-north-america-inc-tnwd-2021.