Eastwood v. Southern Farm Bureau Casualty Insurance

291 F.R.D. 273, 2013 WL 2455950, 2013 U.S. Dist. LEXIS 78929

• Court: District Court, W.D. Arkansas
• Decided: June 5, 2013
• Docket: No. 3:11-CV-03075
• Status: Published

Opinion

MEMORANDUM OPINION AND ORDER

P.K. HOLMES, III, Chief Judge.

Currently before the Court is the Report and Recommendations (“R & R”) (Doc. 60) filed on March 19, 2013 by the Honorable Erin L. Setser, United States Magistrate Judge for the Western District of Arkansas. Also before the Court are Defendant Southern Farm Bureau Casualty Insurance Company’s (“SFB”) Objections (Doc. 61), Plaintiff Vincent Eastwood’s Response to Defendant’s Objections (Doe. 67), and Defendant’s Reply (Doc. 69). For the reasons stated herein, the Court adopts the recommendations contained in the R & R and finds that Plaintiffs Renewed Motion to Certify Class (Doe. 53) should be granted.

SFB objects to the Magistrate’s conclusion that Plaintiff carried his burden of showing that the proposed class is ascertainable and that Federal Rule of Civil Procedure 23(b)(3)’s predominance requirement has been satisfied. Plaintiff endorses the Magistrate’s recommendations and opposes SFB’s objections to the R & R.

When faced with a party’s objections to the proposed findings and recommendations of a magistrate judge, the district court must conduct a de novo review of all specified proposed findings and recommendations to which the party has raised objections. 28 U.S.C. § 636(b)(1). Having conducted this review, the Court now finds that the objections filed by Defendant offer neither law nor fact requiring departure from the R & R.

I. Factual and Procedural Background

Plaintiff, on behalf of himself and all others similarly situated, filed a complaint in the Circuit Court of Carroll County, Arkansas, against his auto insurance company, SFB, on June 20, 2011. Plaintiff had been involved in a ear accident in which he was not at fault. After the accident, SFB paid Plaintiff the policy limits of $5,000 in personal injury protection (“PIP”) to cover his medical costs. Plaintiffs insurance contract provided that subrogation of the PIP payment would be owed to SFB if Plaintiff were made whole for his losses as a result of settling with the tortfeasor or another third party.

Thereafter, Plaintiff, proceeding pro se, negotiated with the tortfeasor’s insurance earner, Progressive Insurance Company (“Progressive”), and obtained a settlement in the amount of $14,500. Upon learning of Plaintiffs settlement, SFB contacted Progressive directly and requested that Progressive reimburse SFB for $5,000, the full amount of SFB’s PIP payment to Plaintiff. Later on, when Plaintiff met with Progressive to receive his settlement check, the Progressive representative handed Plaintiff a check for $9,500, rather than the full $14,500. The Progressive representative showed Plaintiff a second cheek, made out to SFB individually for $5,000, and explained, “This is Farm Bureau’s cheek I am sending to them.” Plaintiff claims he said nothing to Progressive’s representative about the reduction of his settlement or the payment of subrogation to SFB because Plaintiff “didn’t know [he] had any option.” (Doe. 60, pp. 18-19 n. 3). Plaintiff further claims that he disputed that subrogation was owed to SFB since Plaintiff believed he had not been made whole through his settlement with Progressive.

The made-whole doctrine in Arkansas law provides that an insured should not be unjustly enriched at the expense of an insurer. Southern Farm, Bureau Cas. Ins. Co. v. Tallant, 362 Ark. 17, 24, 207 S.W.3d 468 (2005). An insurer is entitled in equity to be reimbursed for payments made on behalf of its insured, provided that the insured first has been “wholly compensated for his injuries.” Shelter Mut. Ins. Co. v. Kennedy, 347 Ark. 184, 189, 60 S.W.3d 458 (2001). The made-whole doctrine is designed to prevent an insured from obtaining a double recovery on his loss, but it cannot be enforced prematurely by an insurance company before the insured has received full compensation. Shelter Mut. Ins. Co. v. Bough, 310 Ark. 21, 28, 834 S.W.2d 637 (1992) (“Thus, while the general rale is that an insurer is not entitled to subrogation unless the insured has been made whole for his loss, the insurer should not be precluded from employing its right of subrogation when the insured has been fully compensated and is in a position where the insured will recover twice for some of his or her damages.”).

Prior to the Arkansas Supreme Court’s decision in Riley v. State Farm Mutual Automobile Insurance Co., 2011 Ark. 256, 381 S.W.3d 840 (2011), it was unclear exactly when an insurance company’s subrogation lien might arise. The Riley court decisively concluded, however, that “[t]he consensus in Arkansas case law is that a legal determination, absent agreement of the parties, of whether the insured has been made whole can occur after a settlement is reached but must occur before the insurance company is entitled to recover in subrogation.” Id. at *12, 381 S.W.3d 840. The Riley court further held that “when the parties are in disagreement, a determination made by the insurance company that the insured has been made whole does not suffice.” Id. Instead, an insurance company seeking subrogation is required to secure either a legal determination by a court that the insured was made whole or an agreement with the insured that he was made whole prior to collecting subrogation.

When Plaintiff filed his lawsuit against SFB, he requested damages on behalf of himself and all others similarly situated for subrogation payments allegedly paid to SFB in violation of Arkansas law, as announced in Riley. Plaintiff amended his class action complaint on July 28, 2011, asserting a single claim for declaratory judgment and dropping his earlier claims for breach of contract and conversion. Then SFB removed the case to this Court on September 6, 2011, due to the presence of federal diversity jurisdiction and pursuant to the Class Action Fairness Act, 28 U.S.C. §§ 1332(d) and 1453(b).

On November 28, 2011, SFB filed an amended answer and counterclaim for declaratory judgment, asserting that Plaintiff had been made whole through his settlement with Progressive and therefore had no right to recover SFB’s subrogation payment. Plaintiff responded by filing a motion for summary judgment with respect to SFB’s counterclaim, which the Court granted on July 19, 2012 (Doc. 38).¹ In dismissing SFB’s counterclaim, the Court concluded that SFB had not secured a legal determination that Plaintiff had been made whole or entered into a made-whole agreement with Plaintiff prior to obtaining a subrogation payment from the proceeds of Plaintiffs settlement with Progressive. The Court refused to evaluate whether Plaintiffs settlement with Progressive had actually made him whole for losses incurred as a result of his auto accident and found that the made-whole determination should have been made by a court prior to the payment of subrogation, pursuant to Arkansas law.

Plaintiff filed his first motion for class certification on December 15, 2011. This motion was referred to Magistrate Judge Setser, who ultimately recommended in an April 24, 2012 R & R to the Court that further discovery was required to determine whether the members of Plaintiffs proposed class were readily ascertainable. The Magistrate also opined that there were outstanding fact issues that needed to be resolved through discovery, including whether the class was sufficiently numerous to warrant certification. Because the Court agreed with the Magistrate that it was premature to rule on class certification at that time, her recommendation to deny Plaintiffs first motion for class certification was affirmed on July 19, 2012, with the proviso that Plaintiff would be free to renew the motion at a later date after the completion of discovery as to class certification issues.

On January 10, 2013, Plaintiff filed a renewed motion to certify class, which the Court again referred to Magistrate Judge Setser. Defendant filed a response in opposition to the motion on January 24, 2013, and Plaintiff filed a reply on January 31, 2013. The Magistrate issued an R & R on March 19, 2013, recommending that a class be certified. Thereafter, on April 1, 2013, SFB submitted timely objections to the R & R. Plaintiff filed a response to SFB’s objections on April 15, 2013. SFB sought and was granted leave to file a reply, which was filed on April 22, 2013. The Court then scheduled an evi-dentiary hearing for the purpose of receiving argument and evidence, including the testimony of witnesses, as to SFB’s objections to the R & R. The evidentiary hearing took place on May 6, 2013. During the hearing, SFB introduced a number of exhibits and called a witness, SFB employee and subrogation specialist Carrie Sewell, to testify. Plaintiff entered several exhibits into evidence and also called its own witness to testify, Jeffrey George Reidesel, a former insured of SFB.

II. Legal Standard

Pursuant to Federal Rule of Civil Procedure 23, certifying a class action requires a two-step analysis. First, a class action may be maintained 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; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a)(l — 4). Second, a class action will be deemed appropriate if the court finds that questions of law or fact common to class members predominate over questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Fed.R.Civ.P. 23(b)(3).

A recognized prerequisite to the class certification inquiry involves the court’s assessment of the aseertainability of the class. The requirement of aseertainability simply means that the description of a proposed class must be sufficiently definite “so that it is administratively feasible for the court to determine whether a particular individual is a member.” 7A Charles Alan Wright et al., Federal Practice and Procedure § 1760 (3d ed. 2005). “The requirement that a class be clearly defined is designed primarily to help the trial court manage the class. It is not designed to be a particularly stringent test, but plaintiffs must at least be able to establish that the general outlines of the membership of the class are determinable at the outset of the litigation.” Bynum v. District of Columbia, 214 F.R.D. 27, 31 (D.D.C.2003).

The district court retains “broad discretion in determining whether to certify a class, recognizing the essentially factual basis of the certification inquiry and ... the district court’s inherent power to manage and control pending litigation.” In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604, 616 (8th Cir.2011) (internal quotations and citations omitted). In considering SFB’s objections to the Magistrate’s R & R, the Court has analyzed the following class definition proposed by Plaintiff:

Residents of the State of Arkansas who, during the Class Period of July 8, 2006 through the date of resolution of this action,

(a) have, had, or were covered under a contract of automobile insurance with Defendant that includes or included an optional “med pay” and/or “PIP” coverage,

(b) received a payment from Defendant under such coverage, (c) recovered money through settlement or otherwise from a third-party tortfeasor, without the assistance of counsel, and (d) had a portion of such recovery taken by Defendant as sub-rogation or reimbursement without a judicial determination or agreement that the insured was made whole.

III. Discussion

SFB makes a number of objections to the R & R now before the Court. First, SFB argues that the class cannot be properly ascertained due to the possibility that an indefinite number of potential class members entered into oral or implied made-whole agreements with SFB and thus fail to meet sub-part (d) of the class definition. Second, and closely related to the first objection, SFB contends that because an undetermined number of class members made oral or implied made-whole agreements with SFB, certifying the class would require the Court to engage in an individualized, merits-based inquiry to determine whether each proposed class member should be included or excluded from the class. Because this individualized inquiry would be required according to SFB, this would also mean that questions of law or fact affecting individual class members would predominate over questions of law or fact common to the class, thus weighing against certification of the class.

Third, SFB objects that the Magistrate “cross[ed] the line between proper consideration of the merits of a ease and improper resolution of a case on the merits at the class certification stage” by evaluating and, in SFB’s view, disregarding SFB’s proof of the alleged existence of oral or implied made-whole agreements entered into by members of the proposed class. (Doe. 61, p. 17). SFB believes that the R & R contains a finding that only written made-whole agreements are legally enforceable and that written documentation in the claims files is the only acceptable proof of made-whole agreements. SFB also believes that the Magistrate improperly discounted the testimony of two SFB employees, John Bonner and Carrie Sewell, in finding that the existence of oral or implied made-whole agreements was nothing more than speculation.

Finally, SFB makes both an objection to the R & R and a request for reconsideration of an earlier order of this Court in arguing that the affirmative defense of estoppel should apply or potentially apply to Plaintiffs individual claims as well as to the claims of the proposed class.² SFB’s position is that if the estoppel defense were held to apply or potentially apply to class members’ claims, the Court would be required to conduct an individualized, merits-based inquiry into the factual circumstances surrounding each class member’s claims in order to determine whether estoppel should bar recovery. The need for such an individualized inquiry, according to SFB, would defeat the predominance requirement of Rule 23(b)(3) and militate against class certification.

Before turning to SFB’s objections to the R & R, the Court observes that many of the Magistrate’s findings were not objected to, including her finding that Rule 23(a)’s requirements for the maintenance of a class action were satisfied. The Court has reviewed the R & R’s findings as to Rule 23(a)’s requirements and affirms both the Magistrate’s reasoning and her conclusions. Accordingly, the Court finds that the proposed class is so numerous that joinder of all members is impracticable, there are questions of law or fact common to the class, the claims or defenses of Plaintiff are typical of the claims or defenses of the class, and Plaintiff as class representative will fairly and adequately protect the interests of the class.

A. Ascertainability and Predominance

The first two objections to the R & R concern the ascertainability of the class and the predominance of class issues over individual issues in light of SFB’s allegation that oral or implied made-whole agreements may exist as to an undetermined number of the proposed class members. SFB has conceded that “[ajfter an intensive file-by-file review by a team of persons, SFB identified approximately 1,300 claim files that satisfy parts (a) through (e) of the class definition and also the payment-recovery portion of part (d).” (Doe. 56, p. 3). However, according to SFB, the 1,300 insureds whose claims files were identified in the review process may not all meet the class definition. To ascertain the true composition of the class, SFB argues that “a merits determination” is necessary in order to verify “whether each insured orally or impliedly agreed that he or she was made whole before SFB received money in subro-gation.” (Doc. 61, p. 3).

SFB admits that no written, express made-whole agreements were made with any of its insureds, including the 1,300 insureds identified as otherwise meeting the class definition. SFB also admits that it obtained no judicial determinations as to the made-whole status of any of its insureds prior to asserting claims for subrogation. Further, it appears that after months of discovery on class certification issues, SFB’s only proof of the existence of so-called oral or implied made-whole agreements is limited to: (1) notes made by SFB claims representatives, (2) a handful of cancelled checks issued for the payment of subrogation to SFB, and (3) the recollections of SFB’s employees as to their understanding of whether SFB’s insureds agreed they had been made whole prior to paying subro-gation.

Rather than identify which of the 1,300 insureds in the proposed class allegedly entered into these oral or implied made-whole agreements, SFB suggests that any number of potential class members may have entered into such agreements. The vagueness of SFB’s claims and lack of decisive evidence form the very basis of SFB’s argument that the class cannot be properly ascertained without resorting to individualized proof. Plaintiff is helpless to defend against this argument, as only SFB is in the position to submit proof of these hypothetical agreements, and SFB believes the only way to uncover such proof is to evaluate all 1,300 claims files, one by one.

In addition, SFB goes so far as to suggest that any “evidence of agreement” — no matter how compelling — could require the Court to engage in a merits-based, case-by-case analysis of each potential class member’s claims file. SFB believes it “has no burden to convince the Court that such agreements actually exist in specific files or that they exist in given numbers.” (Doc. 69, p. 2).

1. Propriety of the R & R’s inquiry into the merits of SFB’s opposition to class certification

The mere possibility that certain class members may have entered into oral or implied made-whole agreements does not, in and of itself, foreclose the Court’s ability to generally define a class, particularly at this early stage in the litigation. As is explained in further detail below, the Court affirms the Magistrate’s conclusion that there has not been sufficient evidence presented by SFB to show that any made-whole agreements actually exist. Furthermore, the Court finds it highly improbable that SFB will discover other, better proof in the future to establish the existence of these made-whole agreements. The Court disagrees with SFB that the R & R made a finding that made-whole agreements or evidence of made-whole agreements must be exclusively in writing. The Magistrate made no such assumption or conclusion. Instead, the Magistrate examined and tested SFB’s proof — both written and oral — of the existence of either oral or implied made-whole agreements with potential class membei’s. The Magistrate ultimately found that the proof presented by SFB did not constitute evidence of made-whole agreements and was merely speculative in nature. The Court observes that if the Magistrate had not examined this proof and had summarily refused to certify the class simply because SFB was opposed to certification, this failure to test SFB’s proof would have been error.

At the class certification stage, a court is tasked with engaging in a preliminary inquiry “to determine the nature of the evidence that would be sufficient, if the plaintiffs general allegations were true, to make out a prima facie ease for the class.” Blades v. Monsanto Co., 400 F.3d 562, 567 (8th Cir.2005). Performing this preliminary inquiry for class certification purposes “may require the court to resolve disputes going to the factual setting of the ease, and such disputes may overlap the merits of the case.” Id. The Supreme Court reiterated this point in the case of Wal-Mart Stores, Inc. v. Dukes, in which it made clear that “sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question, and that certification is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” - U.S. -, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011) (internal quotations and citations omitted). In performing this “rigorous analysis” prior to determining whether a class should be certified, a court may be obligated to inquire about some issues that overlap with the merits of the plaintiffs underlying claims. Such overlap, according to the Supreme Court in Dukes, “cannot be helped.” Id. Accordingly, the Court finds that the Magistrate did not exceed the scope of her charge in conducting a preliminary inquiry, for class certification purposes, as to the existence of proof of oral or implied made-whole agreements.

2. SFB’s evidence of oral or implied made-whole agreements

SFB maintains that it entered into oral or implied made-whole agreements with insureds, including members of the proposed class, and that evidence pointing to the existence of these agreements must defeat class certification. The Court observes that the burden of proof that made-whole agreements exist lies solely with SFB, not Plaintiff. Riley, 2011 Ark. 256 at *12, 381 S.W.3d 840. The Court cannot assume that agreements were made simply because subrogation payments were collected by SFB after insureds entered into settlements with third parties. See id. (insurance company cannot unilaterally determine that an insured has been made whole; burden of proof rests on insurer to show evidence of made-whole agreement when “parties are in disagreement”); see also Lopez v. United Auto. Ins. Co., 2013 Ark.App. 246, *7, — S.W.3d —, —, 2013 WL 1682214 (Ark.Ct.App.2013) (“It was not until Riley that the supreme court clarified that the burden of proof regarding whether the insured had been made whole was on the insurer.”). Moreover, Plaintiff is not obligated to sift through SFB’s claims files prior to class certification to “prove a negative” — in other words, to demonstrate to the Court that all 1,300 class members did not make oral or implied made-whole agreements with SFB.

SFB’s proof of the existence of made-whole agreements with proposed class members was presented at the May 6, 2013 hearing conducted by the Court and, prior to the hearing, in briefing submitted to the Court. During the healing, SFB introduced several pages of notes written by SFB’s claims representatives and subrogation specialists pertaining to 67 separate insureds’ claims files. (Def.’s Hr’g Ex. 1-67). These notes reference settlements between third-party carriers and insureds and also document SFB’s attempts to obtain subrogation payments from both third-party carriers and insureds. In some cases, the notes refer to subrogation payments received by SFB in the form of personal checks from insureds or checks sent by third-party insurance companies to “SFB as subrogee” of a particular insured. SFB provided the Court with examples of both of these types of cheeks — personal checks from insureds, which SFB admits are the exception to the rule, and checks from third-party carriers listing SFB “as subrogee.” After reviewing all of this evidence, the Court finds that the file notes and checks do not constitute proof of the existence of made-whole agreements between SFB and its insureds. The notes and checks are simply evidence that subrogation payments were demanded by and paid to SFB. More evidence than this is required to establish the existence of made-whole agreements, even assuming that a made-whole agreement may be oral or implied.

The Riley decision stands in part for the proposition that “an insurance company and its insured are permitted to reach an agreement that the insured has been made whole without the necessity of a judicial determination,” 2011 Ark. 256 at *16, 381 S.W.3d 840; however, such “agreement” cannot be evidenced by an insured’s payment of subrogation funds to its insurer, without more. Even an implied-in-fact contract must demonstrate the intention of the parties through their acts or other circumstances. Pettus v. McDonald, 343 Ark. 507, 513, 36 S.W.3d 745 (2001). An insured’s payment of a subrogation demand does not necessarily mean that payment was made due to the insured’s belief or understanding that he had been made whole prior to payment. “Both express and implied contracts are founded upon mutual assent of the parties and require a meeting of the minds.” K.C. Props. of N.W. Ark., Inc. v. Lowell Inv. Partners, LLC, 373 Ark. 14, 29, 280 S.W.3d 1 (2008). Therefore, when an insured pays an amount demanded by SFB, it cannot be presumed that SFB and the insured had a meeting of the minds and mutually agreed that subrogation was owed because the insured had been made whole. Nor can agreement be proven simply because an insured kept silent or failed to object to a subrogation payment, particularly when subrogation was demanded directly from third-party carriers, as SFB admits occurred in a large majority of the proposed class members’ cases.

At the May 6 hearing, Plaintiff submitted multiple examples of subrogation demand letters that SFB sent to third-party insurance carriers. After examining these demand letters, it appears that those sent pre-Riley are each titled “Subrogation Lien Notice & Demand.” See, e.g., PL’s Hr’g Ex. 1, letter to State Farm dated July 27, 2010. The letters often list specific subrogation amounts “owed” by each insured and specifically request that SFB’s name be included on all settlement drafts. Id. They also state: “If a settlement has already been made with our insured, please provide a copy of the release and also a copy of the endorsed draft.” Id.

Post-Riley demand letters are the same in tenor and content as pre-Riley letters, except these demands are no longer improperly characterized as “liens.”³ Further, SFB’s post-Riley demand letters now instruct third-party insurers to “contact [SFB] regarding our potential subrogation claim before reaching a settlement so that our subrogation right is protected and your company is not exposed to additional liability under existing Arkansas law.” See, e.g., PL’s Hr’g Exhibit 1, letter to State Farm dated September 29, 2011 (emphasis added). These post-Riley letters also include SFB’s mailing address and advise third-party carriers to mail all subrogation payments, in the amounts provided, directly to SFB. Id.

It appears to the Court from reviewing these subrogation demand letters that SFB had a routine practice of: (1) specifying to third parties the exact subrogation amounts “owed” by insureds; (2) soliciting these amounts from third parties without knowing whether settlements had been finalized; and (3) soliciting these amounts without knowing how much insureds had been offered or had received in their settlements. These demand letters therefore show it is unlikely that SFB routinely entered into made-whole agreements with insureds prior to making subro-gation demands of third parties, as such agreements could not have been valid unless the insureds believed they had been made whole for their losses through settlement. Here, it appears that SFB made subrogation demands for specific amounts “owed” without knowledge of or regard for the total settlement amounts received by insureds, or, potentially, before settlements had even been reached.

In addition to the file notes and checks, SFB also offered the deposition and affidavit testimony of John Bonner and Came Sewell, two of SFB’s employees with knowledge of the subrogation policies of the company, to support SFB’s argument that oral or implied made-whole agreements actually exist in the claims files of the proposed class members. As explained above, the Magistrate was within her discretion to examine this evidence to determine whether it presented sufficient justification to refuse to certify the class on the grounds argued by SFB. Mr. Bonner, SFB’s Assistant Claims Manager and designated Rule 30(b)(6) representative, provided deposition testimony that both the Magistrate and the Court reviewed. In the R & R, the Magistrate concluded, as does this Court, that Mr. Bonner’s testimony offered nothing more than mere speculation that oral or implied made-whole agreements were made between SFB and its insureds. Mr. Bonner pointed to no proof of agreement other than the fact that subrogation payments were made and that claims files were devoid of notes indicating that any of the proposed class members objected to the payments.

As for Ms. Sewell’s testimony, SFB maintains in its objections that the Magistrate gave no weight to Ms. Sewell’s affidavit, “even though her testimony provides support for the existence of oral and implied agreements.” (Doe. 61, p. 10). Indeed, SFB quotes from Ms. Sewell’s affidavit at length in its objections to the R & R and even goes so far as to claim in its reply brief that Ms. Sewell’s testimony alone is sufficient for a fact-finder to conclude that oral or implied made-whole agreements actually exist among the claims files of the potential class members. (Doc. 69, p. 2). Because Ms. Sewell’s testimony is regarded by SFB as important to its claim that oral or implied agreements exist, the Court was pleased to hear directly from Ms. Sewell when she testified at the May 6 hearing regarding SFB’s practice of collecting subrogation payments and her own perception of whether insureds had entered into made-whole agreements with SFB.

Ms. Sewell testified as follows regarding how she was trained as a subrogation specialist to recognize an insured’s made-whole agreement:

Q. [Wjhen Southern Farm Bureau receives a reimbursement check from a third party, from Southern Farm Bureau’s perspective, the insured consented to the payment and has agreed they have been made whole. Is that how you were trained?

A. Yes.

Q. Okay. So anytime that you receive a payment from a third party, whether you’ve had any discussion with anybody or not, you’ve been trained that the person’s made whole if they don’t tell you otherwise?

A. Correct.

Q. Okay. So how could there be a meeting of the minds if you’ve never had a conversation with the other party, with your insured?

A. I’m not sure.

(Doc. 74, p. 74).

Ms. Sewell also testified that in her opinion, any time an insured sent funds to SFB, this meant a made-whole agreement had been made:

Q. You testified earlier that you deduced that there was a made whole agreement?

A. Yes.

Q. Correct? Can you tell me how, in looking at a piece of paper that contains nothing more than a check on it, you can deduce that there was a meeting of the minds?

A. With the insured signing over the funds to Farm Bureau, I think that’s an agreement.

Q. Agreement to what?

A. An agreement that they are wanting to reimburse Farm Bureau back.

Q. Is it — I understand that they’re paying Farm Bureau back, what — how do you deduce from this that they felt that they had received a double recovery from Farm Bureau or from the third party and wanting to pay you back?

A. In my opinion, I think that they were dis — if they did not agree that they were being made whole, that they wouldn’t have signed the check over.

Q. Okay. But you agree with me that Southern Farm Bureau, as a business practice, does not engage in conversations with its insureds about the made whole doctrine and double recovery and things of that nature, correct?

A. Right.

Id. at pp. 79-80.

Q. So anytime that you receive money back from a — one of your insureds, you make the assumption that they are made whole?

A. Yes.

Q. And you, as one of two subrogation specialists for Farm Bureau, that is your policy?

A. Yes.

Id. at p. 86.

Finally, Ms. Sewell testified that SFB employees do not engage in discussions with insureds about whether the insureds feel they have received “too much money” or “a double recovery” as a result of settlement with a third party. Id. at pp. 77 & 88. Further, she testified that SFB calculates how much an insured owes in subrogation as follows:

Q. Okay. And when [the insureds] call and say how much do we owe Farm Bureau back, do you say, well, I guess that depends?

A. When they ask that question, I will pull up the medical logs and say this is the — this is the amount we’ve paid out.

Q. And you just give them the amount that the computer file shows as owed?

A. Correct.

Q. Do you ask them have you received a double recovery from your settlement?

A. No. I don’t ask that question.

Q. Okay. Do you ask them, or do you inform them, do you know you don’t have to pay us this back as our insured unless you feel you are made whole?

A. Not in those specific terms, I don’t; no.

Q. Do you tell anyone you don’t have to pay us back until unless — and that if you disagree with paying us back, we are required to get a court order?

A. No, no.

Q. Ever?

A. No.

Id. at pp. 78-79.

Considering Ms. Sewell’s testimony at the May 6 hearing, it is evident that the Magistrate correctly concluded that the existence of legally enforceable made-whole agreements between SFB and members of the prospective class is speculative at best. Indeed, if Ms. Sewell’s testimony constitutes the strongest evidence SFB possesses as to the existence of such agreements, then it is probable that no such agreements were made.⁴ Class certification should not be denied due to a mere possibility that, in the future, evidence may show that some class members do not meet the class definition and must be excluded. Van Sweden Jewelers, Inc. v. 101 VT, Inc., 2012 WL 4127824, at *4 (W.D.Mich. Sept. 19, 2012) (where plaintiff offered evidence that defendants engaged in standardized conduct with regard to class members, defendants’ speculation that some class members should be excluded due to their consent to defendants’ actions was insufficient to defeat class certification); Agne v. Papa John’s Int’l, Inc., 286 F.R.D. 559, 567 (W.D.Wash.2012) (defendant’s speculation that potential class members may have entered into oral consent agreements with defendant, absent persuasive evidence of such agreements, was insufficient to defeat class certification); Mazzei v. The Money Store, 288 F.R.D. 45, 68 (S.D.N.Y.2012) (even though defendants “raise[d] the specter” that some if not all class members could be barred from recovery due to their knowing and voluntary payment of allegedly improper fees, this “pure speculation” alone was insufficient to defeat class certification).

3. Issues of law and fact common to the class

The Magistrate identified the following mixed question of law and fact applicable to the class: did SFB systematically deprive its insureds of any consideration of their made-whole rights?

In addition, the Court has identified the following facts that are common to the class. First, none of the 1,300 potential class members identified by SFB entered into written made-whole agreements. Second, no judicial determinations were made regarding the made-whole status of any potential class members. Third, SFB’s claims files did not contain notes l’eferencing “made whole agreements” with any potential class members. Fourth, SFB lacked manuals, protocols, policies, or other written procedures that defined what a made-whole agreement was or explained what constituted a made-whole agreement. Fifth, SFB provided no training to its subrogation specialists regarding how to identify whether insureds had been made whole or whether insureds agreed they had been made whole. Sixth, SFB’s employees were not trained to discuss with insureds whether the insureds believed they had been made whole or agreed they had been made whole prior to the payment of subrogation. Seventh, SFB did not have a practice of requiring its employees to ask insureds whether the insureds believed they had received double recoveries in their settlements with third-party insurer’s. Eighth, SFB collected subrogation payments from at least a large majority of potential class members by directly soliciting such payments from third-party insurers. Lastly, ninth, SFB had a practice of sending third-party insurers subrogation lien notices and requesting that SFB’s name be placed on settlement checks made out to insureds.

Considering the above issues of law and fact, as well as the common issues that are encompassed by the class definition proposed by Plaintiff, the Court finds that common issues predominate over individual issues, and, on balance, the proposed class meets Rule 23(b)(3)’s predominance requirement.

B. SFB’s Affirmative Defense of Es-toppel

SFB’s final objection pertains to both the Magistrate’s findings in the R & R and this Court’s prior order on summary judgment with respect to SFB’s estoppel defense. SFB contends that it should be allowed to raise the affirmative defense of estoppel in the course of this litigation, potentially to bar any and all class members’ claims, if applicable. SFB also maintains that each class member’s individual claims and the facts surrounding them will have to be examined in order to determine whether the affirmative defense applies. Such an individualized inquiry, SFB argues, shows that individual issues predominate over common issues.

The affirmative defense of estoppel was considered and stricken with respect to Plaintiffs individual claims on summary judgment. (Doc. 38). At the time the Court determined that estoppel was inapplicable to Plaintiffs claims, the class had not yet been certified, and no class claims were before the Court. SFB now urges the Court to reconsider its ruling striking the estoppel defense as to Plaintiff, arguing that Plaintiff “had a duty to speak when control [of his settlement funds] was transferred to SFB before his eyes.” (Doc. 61, p. 16).

First, the Court declines SFB’s invitation to reconsider its earlier ruling regarding the inapplicability of the estoppel defense to Plaintiffs individual claims. As noted by the Court in its order on summary judgment (Doe. 38), Plaintiff had no meaningful opportunity to object to SFB’s appropriation of a portion of his third-party settlement because SFB solicited its payment directly from the third-party carrier, without first obtaining a judicial determination that Plaintiff had been made whole or Plaintiffs agreement that he had been made whole through the settlement. From reviewing the evidence presented in the case thus far, the Court believes that the vast majority of proposed class members, like Plaintiff, had no meaningful opportunity to object to SFB’s subrogation payments.

SFB admits that its routine business practice was to send subrogation demand notices to third-party carriers when SFB became aware that its insureds had entered into settlements with third parties. A review of multiple examples of these demand letters reveals, however, that SFB had a practice of sending them before they had confirmation that settlements had been finalized with insureds. See, e.g., Pl.’s Hr’g Ex. 1, letter addressed to State Farm dated September 29, 2011. In addition, letters sent to third-party insurers pre-Riley, but still within the proposed class period, explicitly requested that SFB’s name be included on any settlement draft. See, e.g., Pl.’s Hr’g Ex. 1, letter to State Farm dated July 27, 2010. To the Court, these demand letters collectively indicate that SFB intended for third-party carriers to pay subrogation demands directly to SFB, bypassing the insureds.

It is therefore likely that, as to the majority of potential class members, regardless of the dates of their claims, the estoppel defense will not be available to SFB because subrogation payments were solicited and received directly from third party insurers, constructively depriving class members of the opportunity to object. Indeed, it is meaningless for an insured to “object” once a check for subrogation payment is written to SFB and the insured’s settlement is reduced by the amount of SFB’s payment. SFB received subrogation payments directly from third-party carriers in at least a large majority of class members’ eases.⁵ Therefore, the Court is convinced that a large majority of the 1,300 potential class members — perhaps on the order of 98% of the class, as has been suggested by Plaintiffs counsel — are similarly situated to Plaintiff and had no opportunity to meaningfully object before payments were made.

The Court leaves open the possibility, however, that in a small number of individual class members’ cases, the estoppel defense could apply. For instance, if an insured paid subrogation directly to SFB with the insured’s personal check, an argument could be made that the insured had the opportunity or duty to object prior to making the payment. Even in such a case, however, the estoppel defense would be susceptible to proof and argument, and the Court would be tasked with determining whether the defense would apply to diminish or eliminate the class member’s claims.⁶

Despite the possibility that the estoppel defense may be applicable to a limited number of class members’ claims, the proposed class still satisfies the predominance requirement. “After all, Rule 23(b)(3) requires merely that common issues predominate, not that all issues be common to the class.” Smilow v. Southwestern Bell Mobile Sys., 323 F.3d 32, 39 (1st Cir.2003); Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 296 (1st Cir.2000) (potential exclusion of certain class members from the class due to statute of limitations defense did not warrant refusal to certify the class, as “the mere fact that such concerns may arise and may affect different class members differently does not compel a finding that individual issues predominate over common ones.”); In re Prudential Ins. Co. Am. Soles Practice Litig. Agent Actions, 148 F.3d 283, 315 (3d Cir. 1998) (“[T]he presence of individual questions does not per se rule out a finding of predominance.”); Merk v. Jewel Food Stores Div., Jewel Companies, Inc., 702 F.Supp. 1391, 1395-96 (N.D.Ill.1988) (existence of affirmative defenses of waiver and estoppel did not require denial of class certification, even if some or all class members’ claims would be affected); 32B Am.Jur.2d Federal Courts § 1758 (2d ed. 2013).

The Court finds that common class issues predominate in the case at bar, even though individual issues arising from SFB’s assertion of its affirmative defense may present themselves. Given the small number of clearly identifiable class members against whom the affirmative defense may be raised, and weighing this fact against the many factors discussed above and in the findings contained in the R & R, on balance class certification is appropriate.

IV. Conclusion

The Coui’t agrees with the Magistrate’s analysis that a class action appeal’s to be the superior method of proceeding in this case, “given the number of potential class members and the relatively small amount of their claims and also given the fact that Plaintiff appears to be an adequate class representative and has diligently pursued this action.” (Doc. 60, p. 21).

The Court finds that the approximately 1,300 potential claimants who have been identified by SFB constitute a class with similar claims that satisfies Rule 23(a)’s require-mente of numerosity, commonality, typicality, and adequacy. As to SFB’s objection that the class is unaseertainable, the Court finds this objection to be without merit, as SFB has offered no competent proof that any oral or implied made-whole agreements actually exist, and SFB concedes that the 1,300 potential class members otherwise meet the proposed class definition. Further, SFB has presented no evidence or argument that persuades that Court that future discovery will yield proof of made-whole agreements. With that said, the Court does not discount the possibility that SFB may establish in the future the existence of oral or implied agreements as to one or more class members. Such evidence, if found, should be presented to the Court for evaluation on a case-by-case basis to determine whether any agreement was made and whether the class member affected should be excluded from the class. Such an inquiry would not require the Court to engage in a made-whole analysis as to any class member.

The Court also finds that the Magistrate did not exceed the proper scope of her charge in conducting a preliminary inquiry as to the relative merits of SFB’s arguments in opposition to class certification. Such a limited merits-based inquiry is proper when done, as here, for the purpose of determining whether a class should be certified. Moreover, the Court agrees with the R & R’s conclusion that Plaintiff has satisfied Rule 23(b)(3)’s predominance requirement, as the questions of law and fact that are common to the class predominate over individual questions. The possibility of SFB asserting the affirmative defense of estoppel is also limited, as described above, to certain factual situations involving a small number of potential class members and therefore does not defeat predominance. The Court finds that it is capable of addressing the applicability of the estoppel defense as to the limited number of class members to whom such defense would potentially apply without taxing the Court’s time and resources.

IT IS THEREFORE ORDERED that, for the above stated reasons, the Report and Recommendations (Doc. 60) is hereby ADOPTED IN ITS ENTIRETY.

IT IS FURTHER ORDERED that Plaintiffs Motion to Certify Class (Doe. 53) is GRANTED. As noted in the Court’s text only order of April 4, 2013, the Court will issue a revised scheduling order setting a trial date and related deadlines in this case.

ERIN L. SETSER, United States Magistrate Judge.

MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION

Currently before the undersigned is Plaintiffs Renewed Motion to Certify Class (Doc. 53).¹ The Defendant has filed a Response (Docs. 55, 56), and the Plaintiff has filed a Reply thereto (Doc. 58). For the reasons set forth below, the undersigned recommends that Plaintiffs motion be GRANTED and that the requested class be certified pursuant to Fed.R.Civ.P. 23(b)(3).

BACKGROUND

On May 24, 2010, Plaintiff Vincent Eastwood was involved in a car accident for which he was not at fault. At the time of the accident, Plaintiff was covered under a motor vehicle insurance policy issued by Defendant Southern Farm Bureau Casualty Insurance Company. Defendant paid the limit of the insurance policy’s $5,000 medical benefit coverage to Plaintiff and Plaintiff then made a claim for bodily injury damages against Progressive Insurance Company (Progressive), the insurance carrier for the individual at fault in Plaintiff’s car accident.

The insurance policy issued by Defendant to Plaintiff contained a subrogation provision, which provided:

When a recipient of benefits under Coverage Medical and Hospital Benefits ... recovers in tort for injury, either by settlement, or by judgement, we will have a right of reimbursement and credit out of the tort recovery or settlement.... We shall have a lien upon said recovery to the extent of our said payments.

We shall be entitled to a recovery only after you, or any covered person has been fully compensated for damages.

(Doc. 54-1 at pg. 12.)

In a letter to Progressive dated August 26, 2010, Defendant advised Progressive:

Please be advised that we have been called upon to make payment under our insured’s policy for damages incurred in the above referenced accident. Our investigation reveals that the liability in this matter rests with your insured.

Our policy affords us the right of subrogation to the extent of any payments made. Therefore, we will be looking to your company for reimbursement.

As there may be additional payments made, we ask you to please contact us for the current subrogation amount.

If a settlement has already been made with our insured, please provide a copy of the release and a copy of the endorsed draft.

Please acknowledge receipt of this demand in writing at your earliest convenience____

(Doe. 54-2.)

Thereafter, Plaintiff, acting without an attorney, settled his claim with Progressive for $14,500. According to Plaintiff, after he signed the settlement paperwork, the Progressive representative “handed [him] a check for $9,500, and said, ... ‘This is Farm Bureau’s check I am sending to them.’” (Doe. 56 Ex. G at pg. 45.) Plaintiff did not say anything in response to the Progressive representative because he “didn’t know [he] had any option” at that time. {Id. at pg. 59.) Progressive’s records reflect that on November 15, 2010, they issued a check for $5,000 made payable to Defendant as “subrogee” for Plaintiff. (Doc. 54-3.)

Plaintiff contends that Defendant violated Arkansas law, as set forth in Riley v. State Farm Mut. Auto. Ins. Co., 381 S.W.3d 840 (Ark.2011), by obtaining subrogation from Progressive without either Plaintiffs agreement or a judicial determination that Plaintiff had been made whole. Plaintiff purports to bring this action on behalf of himself and a class of persons similarly situated, seeking the following relief:

* A declaratory judgment that Defendant’s actions of receiving subrogation or reimbursement from its insuredsf] recovery from a third-party tortfeasor prior to a made-whole judicial determination or agreement violates Arkansas law;

* An order demanding that Defendant pay monetary restitution, including pre-judgment and post-judgment interest ] to the Plaintiff, and all proposed class members, of 100% of the subro-gated or reimbursed proceeds that Defendant has illegally taken from its insureds; and

* enter an order permanently enjoining Defendant from receiving subrogation or reimbursement from its insureds prior to reaching an informed agreement with its insureds that the insured has been made whole or receiving a judicial determination that the insured has been made whole.

In the motion for class certification, Plaintiff seeks to certify the class pursuant to Federal Rule of Civil Procedure 23(b)(3), or, alternatively, pursuant to Federal Rule of Civil Procedure 23(b)(2). Plaintiff identifies the proposed class as residents of the State of Arkansas who, during the class period of July 8, 2006 through the date of resolution of this action:

(a) have, had, or were covered under a contract of automobile insurance with Defendant that includes or included an optional “med pay” and/or “PIP” coverage,

(b) received a payment from Defendant under such coverage, (e) recovered money th[r]ough settlement or otherwise from a third-party tortfeasor, without the assistance of counsel, and (d) had a portion of such recovery taken by Defendant as sub-rogation or reimbursement without a judicial determination or agreement that the insured was made whole.

(Doc. 3 ¶ 22.)

DISCUSSION

To obtain class certification, Plaintiff has the burden of showing that the requirements of Rule 23 have been met. Luiken v. Domino’s Pizza, LLC, 705 F.3d 370, 372 (8th Cir.2013). A district court is accorded broad discretion to decide whether certification is appropriate and the inquiry may require the court to resolve disputes going to the factual setting of the case, which disputes may overlap the merits of the ease. Id.

Rule 23(a) of the Federal Rules of Civil Procedure sets out four prerequisites for class certification:

(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; and

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

Once Rule 23(a)’s requirements are met, the class must also show that it meets the definition of at least one type of class under Rule 23(b). Moreover, in addition to Rule 23’s explicit requirements, there is an implicit requirement that class membership be ascertainable by some objective standard. Haney v. Recall Center, 282 F.R.D. 436, 439 (W.D.Ark.2012); 4 F.R.D. 432, 444 (D.Minn. 2012); Walls v. Sagamore Ins. Co., 274 F.R.D. 243, 250-51 (W.D.Ark.2011).

Ascertainable Class

Plaintiff argues that members of the proposed class can be readily identified through Defendant’s records. Plaintiff points out that in response to discovery requests, Defendant identified approximately 1,300 policyholders ² who met the objective criteria in the class definition, and Plaintiffs counsel’s review of these 1,300 claim files confirmed that there was not a single made-whole judicial determination or a single written made-whole agreement. Plaintiff maintains that this is corroborated by the deposition testimony of John Bonner, Defendant’s Assistant Claims Manager and Federal Rule of Civil Procedure 30(b)(6) representative, who could not identify any written made-whole agreements between Defendant and its insureds and who testified that Defendant had no manual and/or policy concerning the proper protocol for subrogation and/or made-whole determinations.

Defendant argues that membership in the proposed class is not ascertainable, as:

Evidence produced in discovery and other evidence establishes that an indeterminate number of insureds orally agreed with [Defendant] that they were made whole, without such agreements having been documented in the files. There is also sufficient evidence from which such agreements may be implied. Some insureds endorsed a check that was made payable jointly to [Defendant] and the insured or wrote a separate check to [Defendant] in payment of the subrogation amount, implicitly agreeing in fact that they were made whole.

(Doc. 56 at pg. 3.)

Defendant submits an affidavit from Carrie Sewell, who has worked as a subrogation specialist for Defendant since 2002, stating that Defendant does not have a manual or written procedures for handling med-pay subrogation and that she received her “training on the job from supervisors.” Ms. Sewell states:

A claim file rarely documents every conversation with an insured, but in my experience there are various communications that indicate that,the insured has decided that he or she is made whole. As the insurer, we rely upon what the insureds tell us about whether they have any more expenses to submit and whether they believe their claim is complete____ If an insured gives any indication that he or she still has medical expenses to submit or that there may be future expenses related to ongoing treatment, [Defendant] works with the insureds either to reduce its subrogation claim or to waive any subrogation altogether. In every claim that I am involved in where there is a potential claim for subrogation, there is open communication with the insured about the subrogation issue, and I never force the insured to agree to a subrogation payment. I carefully listen to the insured, and if I receive any indication from the insured that he or she may not be made whole, I discuss that issue with the insured and do not proceed with accepting subrogation unless I understand that the insured either has no un-reimbursed expenses, is not going to incur additional expenses, or has agreed that [Defendant] should receive the subrogation payment.

(Doc. 56-3.) Ms. Sewell cites fourteen examples of “claims in which the insured was either made whole before the subrogation payment was made or there was an understanding between the insured and the company’s representative that the insured was made whole, even if those words were not expressly used in the conversations.” (Id.) These fourteen examples consist primarily of instances when an insured endorsed a check made jointly payable to the insured and Defendant, or sent Defendant a personal check for the subrogation amount.

Mr. Bonner, the Assistant Claims Manager designated as Defendant’s Rule 30(b)(6) representative, testified that prior to the Riley decision, Defendant’s subrogation procedures typically entailed an adjuster sending out a letter notifying the third-party’s insurance earner, as well as the Defendant’s insured, that Defendant “may have a subrogation interest.” Mr. Bonner acknowledged that letters sent out in the past, though “[n]ot all of them,” to third-party insurance carriers were captioned “Subrogation Lien Notice and Demand Packet” and requested that Defendant’s name be included on any settlement draft. (Doc. 56-1 at pg. 7, 15-17.) Mr. Bonner also acknowledged that Defendant’s subrogation process did not include entering into a written made whole agreement with its insured, nor did it include making a made-whole determination, but contended that there could have been a verbal or implied agreement, as explained by Ms. Sewell in her affidavit. When asked whether this was speculation, Mr. Bonner acknowledged that it was but pointed to a particular claim file in which the subrogation specialist noted a conversation the specialist had engaged in with the insured regarding outstanding medical bills, and “[n]owhere in there are there any notes that the insured did not agree or would not have agreed to us recovering our medical.” (Id. at pg. 10.) When asked whether he would agree that in “probably 98 percent of the [1300] claim files sent[,] ... [Defendant] received subrogation back from the third party directly,” Mr. Bonner acknowledged, “I don’t doubt that there are many that way ...[,] but I don’t know the num-ber____A large majority.” (Id. at pgs. 11-12.)

As stated by this Court is ruling on the parties’ motions for summary judgment, Riley stands for the proposition that, absent a judicial determination that an insured has been made whole, “only a mutual agreement” between the insured and Defendant about the insured’s made-whole status would permit the Defendant to collect a subrogation payment from an insured’s settlement proceeds. The burden of proof is on the Defendant to make an agreement with the insured as to the made-whole issue and it does not suffice that the Defendant made its own determination that the insured was made whole. (Doc. 38 at pgs. 6-7.) Further, the Coui’t rejected the Defendant’s assertion of the defense of estoppel, noting that the Plaintiff had no opportunity to object before Defendant appropriated $5,000 of his settlement money. The Court reasoned that Defendant bypassed Plaintiff and asserted its claim for subrogation directly with the third party insurer, who then issued a check made out to Defendant individually, and the check was cashed by Defendant before Plaintiff had the opportunity to object. (Id. n. 1.)

The undersigned sees no merit to Defendant’s argument that the proposed class is not ascertainable.

As to Defendant’s contention that an indeterminate number of insureds orally agreed with Defendant that they were made whole without such agreements having been documented in the files, Mr. Bonner, Defendant’s corporate representative, acknowledged that this was merely speculation. See Ague v. Papa John's Intern., Inc., 286 F.R.D. 559, 567 (W.D.Wash.2012) (in putative class action alleging defendants violated the law by sending unsolicited text messages, defendants’ speculation that customers may have given their express consent to receive text message advertising was not sufficient to defeat class certification); Van Sweden Jewelers, Inc. v. 101 VT, Inc., 2012 WL 4127824, *4 (W.D.Mich. Sept. 19, 2012) (where plaintiff offered evidence that defendants engaged in standardized conduct with regard to class members, defendants’ speculation of basis for exclusion for some class members could not defeat class certification). Mr. Bonner could not point to any particular evidence of such an oral agreement in the 1,300 claim files provided to Plaintiffs counsel. Further, the affidavit from Ms. Sewell, a subrogation specialist for the Defendant, stating that “there is open communication with the insured about the subrogation issue” and “there are various communications that indicate that the insured has decided that he or she is made whole” is inconsistent with Mr. Bonner’s testimony. Mr. Bonner acknowledged that letters sent out in the past to third-party carriers, as well as to the Defendant’s insureds, were captioned “Subrogation Lien Notice and Demand Packet” and requested that Defendant’s name be included on any settlement check. Mr. Bonner further acknowledged that Defendant’s subrogation process did not include making a made-whole determination and that in a “large majority”— aceoi’ding to Plaintiffs counsel, up to 98 percent — of the 1,300 claim files at issue, Defendant received subrogation back directly from the third party carrier. Thus, Defendant has not established that there is an indeterminate number of insureds in the 1,300 claim files at issue with whom it negotiated and entered into a verbal, mutual made-whole agreement. This challenge to the aseertaina-bility of class membership is, therefore, rejected.

The undersigned likewise sees no merit to Defendant’s argument that class membership is not ascertainable because there are instances in which a made-whole agreement can be implied — specifically, in instances in which the insured endorsed a check made payable jointly to Defendant and the insured, or in which the insured wrote a separate check to Defendant in payment of the subro-gation amount. The simple fact that an insured endorsed a check or wrote a separate check does not establish that the insured entered into an implied made-whole agreement with the Defendant. Given Defendant’s practices of sending out lien notices and requesting that its name be included on settlement checks, it cannot be said that, by endorsing a joint cheek or writing a separate cheek for the subrogation amount, the insureds assented to the subrogation or had a meeting of the minds with the Defendant on the made-whole issue. In fact, the insureds may very well have not known, as the named Plaintiff alleges to have not known, that they “had any option.” An implied agreement cannot be inferred from such circumstances. See K.C. Properties of N.W. Ark, Inc. v. Lowell Inv. Partners, LLC, 373 Ark. 14, 29, 280 S.W.3d 1 (Ark.2008) (both express and implied contracts are founded upon mutual assent of the parties and require a meeting of the minds). Further, again, Mr. Bonner acknowledged that Defendant’s subrogation process did not include making a made-whole determination, and thus, Defendant cannot meet its burden of proof that it made an agreement with the insured as to the made-whole issue by simply relying on the fact the insured endorsed a joint check or wrote a separate check for the subrogation amount.

Based upon the foregoing analysis, the undersigned finds that Plaintiff has met his burden of establishing that the proposed class members can be readily ascertained. There are 1,300 claims files that have been identified as potentially meeting the objective criteria of the class definition. Plaintiffs counsel indicates that his review of the 1,300 files confirmed that there is not a single made-whole judicial determination or written made-whole agreement in these files. If there is proof in any of the 1,300 files of an unwritten made-whole agreement with the Defendant, then the insured should be excluded from the class. An endorsed check or a separate check written by the insured for the subrogation amount will not suffice to exclude an insured from the class. Thus, to be excluded from the class, there must be some documentation in the insured’s claim file that the Defendant negotiated the made-whole issue with the insured and they entered into a mutually assented to, verbal made-whole agreement.

Rule 23(a)(1) — Numerosity

The numerosity requirement of Rule 23(a)(1) requires the Court to consider whether the class is “so numerous that joinder of all members is impracticable.” There are no particular rules governing the necessary size of the class, but the most obvious factor is the number of persons in the proposed class. See Paxton v. Union Nat. Bank, 688 F.2d 552, 559 (8th Cir.1982). In addition to size, the Court may consider the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining the putative members. See id. at 559-560.

Defendant concedes that at least 1,300 potential class members have been identified and merely argues that the “fact that the proposed class is not ascertainable disposes of the question of numerosity.” (Doc. 56 at pg. 11.) The undersigned has found that class membership is ascertainable as discussed above. Further, Plaintiff alleges that Defendant violated Arkansas law on a class-wide basis by engaging in a practice of obtaining subrogation without a judicial made-whole determination or a made-whole agreement; Plaintiff seeks class-wide relief in the form of reimbursement of subrogated proceeds; the size of each insured’s claim for reimbursement would likely discourage insureds from filing separate lawsuits; and it would certainly be inconvenient to try potentially 1,300 separate lawsuits or to join potentially 1,300 insureds as named plaintiffs. Accordingly, the undersigned finds that Rule 23(a)(l)’s numerosity requirement is met.

Rule 23(a)(2) — Commonality

“Commonality requires the plaintiff to demonstrate that the class members ‘have suffered the same injury.’ ” Wal-Mart Stores, Inc. v. Dukes, — U.S. —, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011). The class members’ claims “must depend upon a common contention ... [that is] of such a nature that it is capable of class wide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Id.

Plaintiff alleges that Defendant violated Arkansas law by engaging in a common classwide practice of collecting subrogation without obtaining a judicial made-whole determination or entering into a made-whole agreement with the insured. Defendant does not appear to challenge Plaintiffs contention that the commonality requirement has been met. The undersigned would note that while Defendant denied having a manual or written procedures for handling subrogation, Mr. Bonner, Defendant’s representative, acknowledged that Defendant’s subrogation process did not include making a made-whole determination and he could not contest that in up to 98 percent of the 1,300 claim files at issue, Defendant received subrogation back directly from the third party carrier. The undersigned, therefore, finds that the commonality requirement has been met, as it appears that Defendant had an unofficial policy of seeking subrogation directly from third party earners without seeking a judicial determination on the made-whole issue or negotiating a made-whole agreement with its insureds. This unofficial policy forms the basis for the class members’ common claim. See Ross v. RBS Citizens, N.A., 667 F.3d 900, 909-10 (7th Cir.2012) (bank employees satisfied commonality requirement where, although there might have been slight variations in how bank enforced its overtime policy, class of employees maintained a common claim that bank broadly enforced an unofficial policy denying employees earned-overtime compensation), pet. for cert, filed (Aug. 1, 2012).

Rule 23(a)(3) and (4) — Typicality and Adequacy

The adequacy and typicality requirements of Rule 23 “ ‘serve as guideposts for determining whether maintenance of a class action is economical and whether the named plaintiffs claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.’ ” In re Milk Products Antitrust Litigation, 195 F.3d 430, 436 (8th Cir.1999) (quoting Amchem, Prods., Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)).

Defendant argues that Plaintiff is an inadequate class representative because: (a) he lacks standing to seek declaratory and in-junetive relief, as he cancelled his policy with Defendant in September 2010; and (b) his testimony and the history of this litigation indicate a lack of concern for his responsibilities as a class representative and a failure to vigorously pursue the interests of potential class members. The undersigned will address each argument in turn.

As to Plaintiffs standing to seek injunctive relief, Plaintiff seeks an order permanently enjoining Defendant from receiving subrogation in the future without first reaching a made-whole agreement with its insured or obtaining a judicial made-whole determination. Standing to seek injunctive relief requires a plaintiff to show a likelihood of a future injury. See Meuir v. Greene County Jail Employees, 487 F.3d 1115, 1119 (8th Cir.2007). As Plaintiff has cancelled his policy with Defendant, he no longer faces a threat of continued harm from the Defendant. Accordingly, the undersigned agrees that Plaintiff does not have standing to seek the requested injunctive relief. See Clark v. Prudential Ins. Co. of America, 736 F.Supp.2d 902, 924 (D.N.J.2010) (dismissing claim for injunctive relief for lack of standing where plaintiff had cancelled her health insurance policy). The undersigned believes that Plaintiffs claim for injunctive relief is, therefore, subject to dismissal. This does not, however, render Plaintiff an inadequate class representative, as Defendant already has a duty under Riley to reach a made-whole agreement or obtain a judicial determination prior to collecting subrogation. Thus, injunctive relief requiring the Defendant to do this is unnecessary to protect the interests of the class.

As to Plaintiffs standing to seek declaratory relief, Plaintiff seeks a declaratory judgment that Defendant’s receipt of subrogation prior to a made-whole judicial determination or agreement violates Arkansas law and an order demanding that the subrogated proceeds of the class members be returned to them. To demonstrate standing to seek declaratory relief, a plaintiff must “ ‘demonstrate that he has suffered [an] injury in fact, that the injury is fairly traceable to the actions of the defendant, and that the injury will likely be redressed by a favorable decision.’ ” County of Mille Lacs v. Benjamin, 361 F.3d 460, 463 (8th Cir.2004) (quoting Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997)). Plaintiff alleges that he and the class members suffered an injury traceable to the Defendant’s actions: Plaintiff and the class members had a portion of their insurance recovery illegally taken by Defendant as subrogation. Further, the alleged injury of Plaintiff and the class members can be redressed by a declaratory judgment in their favor declaring Defendant’s actions illegal and requiring the Defendant to reimburse the subrogation payments to Plaintiff and the class members. Accordingly, the undersigned finds that Plaintiff has standing to seek declaratory relief.

As to Defendant’s argument that Plaintiff’s testimony and the history of this litigation indicate that he is not an adequate class representative, “[a] named plaintiff who lacks the desire to Vigorously pursue’ the interests of potential class members is not a fair and adequate representative of the class.” In re Milk Products Antitrust Litigation, 195 F.3d at 437. In arguing that Plaintiff is not an adequate class representative, Defendant points to Plaintiffs deposition testimony, in which he denied having any kind of responsibility for the claims of other class members or for any costs of the lawsuit. Plaintiff further testified, however, that he understands that he is representing a class of “1,300-some-odd people that feel like they were taken advantage of’ and “had the same thing happen to them that [he] did,” and that his responsibility to the class members is to “[s]tand up for what’s right.” (Doe. 56 Ex. G at pgs. 83-85.) The undersigned finds that Plaintiffs deposition testimony reflects that he has “a basic understanding of the class claims as well as an understanding of his ... duties as the class representative and a willingness to fulfill those duties.” See Foster v. Apache Corp., 285 F.R.D. 632, 645 (W.D.Okla.2012). The undersigned would also note that Plaintiffs self-interested pursuit of his own claim for a declaratory judgment and restitution will adequately protect the interests of the class members, who have the same type of claim and would be entitled to the same relief. Id.

Defendant argues that Plaintiffs “extraordinarily long delay in pursuing class certification also indicates a general disregard for the claims of the putative class members and the rules designed to protect their interests.” (Doc. 56 at pg. 14.) Plaintiff filed his original motion for class certification by the deadline agreed upon by the parties in their Federal Rule of Civil Procedure 26(f) report, which deadline the Court adopted and set out in its final scheduling order. In his original motion, Plaintiff noted that discovery had been requested regarding the claimants from which Defendant collected subrogation, but the discovery had not been received as of the time of the filing of the motion. (Doc. 24 at pg. 7.) After conducted a hearing on the original motion for class certification, the undersigned entered a report and recommendation, recommending that the motion be denied as premature, as it appeared further discovery was necessary to determine whether the members of the class were readily ascertainable and there were also dispositive motions pending that could impact the issues relating to class certification. (Doc. 34.) The Court, upon Defendant’s motion, thereafter, stayed discovery pending a ruling on the dispositive motions. (Docs. 35.) The Court subsequently entered an order adopting the undersigned’s report and recommendation and denying the original motion for class certification without prejudice. (Doc. 37.) On the same date of that ruling, the Court ruled on the parties’ dispositive motions and granted Plaintiff two weeks to file a renewed motion for class certification. (Doc. 38.) The Court subsequently granted Plaintiffs unopposed motion for an extension of time in which to file the renewed motion for class certification, acknowledging that further discovery was necessary. (Docs. 39-41.) Plaintiff then sought another extension, again, without objection from Defendant, explaining that there was a delay in discovery (which consisted of approximately 20,000 pages of documents) being provided, as opposing counsel had a death in his family. (Doc. 50.) The Court reset the deadline for filing the motion for class certification, and the renewed motion was filed by this deadline. (Doc. 51, 53.)

The above history of the litigation does not reflect a lack of diligence on Plaintiffs part. Delays in filing the current motion for class certification were attributable to the delayed production of discovery, the voluminous nature of discovery, and issues in the dispositive motions that needed to be first addressed. Ultimately, both of Plaintiffs motions for class certification were filed by the deadlines set by the Court. The undersigned, therefore, sees no merit to Defendant’s argument that Plaintiff has failed to vigorously pursue this action.

Defendant also argues that Plaintiff has “shown a lack of attention to the details of the case.” (Doe. 56 at pg. 13.) Defendant points to the fact that Plaintiff acknowledged that he did not notice that the original complaint referred to him by the wrong name and incorrectly identified him as the passenger rather than the driver; that Plaintiff did not review the second amended complaint currently before the Court before it was filed; and that he did not know why the claim for breach of contract, which was included in the original complaint, was omitted from the second amended complaint. The undersigned, likewise, sees no merit to this argument, as Plaintiff appeared for deposition; he has participated in telephonic and in-person meetings with counsel; he has a basic understanding of the nature of the action; and he has reviewed numerous documents relating to the action. See Powers v. Government Employees Ins. Co., 192 F.R.D. 313, 318 (S.D.Fla.1998) (it is not necessary for named class representative to be knowledgeable, intelligent or have a firm understanding of the legal or factual basis on which the case rests, especially in cases involving complex areas of the law; while named plaintiff was not well-versed in insurance law or the intricacies of her case, this did not warrant a finding that she was inadequate to represent the class, where record revealed that she played an active role in the litigation by appearing for deposition, producing documents and conferring with counsel).

Based upon the foregoing, the undersigned finds that Plaintiff has satisfied the typicality and adequacy-of-representation requirements of Rule 23.

Rule 23(b)(3)’s Requirements

As stated above, in addition to meeting the requirements of Rule 23(a), Plaintiff must meet the requirements of one of the provisions of Rule 23(b). Plaintiff seeks certification under Rule 23(b)(3), or, alternatively, under 23(b)(2). The undersigned finds certification under Rule 23(b)(3) appropriate and, therefore, finds it unnecessary to address the requirements of 23(b)(2).

Certification under Rule 23(b)(3) is appropriate if: (1) questions of law or fact common to the members of the class predominate over questions affecting only individual members; and (2) a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Predominance under Rule 23(b)(3) parallels Rule 23(a)(2) in that both rules require that common questions exist. However, the predominance criterion under Rule 23(b)(3) is much more demanding. Amchem Prods., Inc., 521 U.S. at 623-24, 117 S.Ct. 2231. This rule tests whether the proposed class is “sufficiently cohesive to warrant adjudication by representation.” Id. at 623, 117 S.Ct. 2231.

When determining whether common questions predominate, a court must conduct a limited preliminary inquiry, looking behind the pleadings, but that inquiry should be limited to determining whether, if the plaintiffs’ general allegations are true, common evidence could suffice to make out a prima facie case for the class. While limited in scope, this analysis should also be rigorous.

In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 618 (8th Cir.2011) (internal citations and quotation marks omitted), cert. dismissed, — U.S.—, 133 S.Ct. 1752, 185 L.Ed.2d 806 (2011).

Defendant argues that “the need to conduct individual merits determinations on the question whether each insured agreed that he or she was made whole, and to what extent, is a central, individual issue that predominates over common issues.”³ (Doc. 56 at pg. 19.) As stated above, Plaintiff alleges that Defendant engaged in a common practice of collecting subrogation without seeking a judicial determination on the made-whole issue or negotiating a made-whole agreement with its insured. The evidence seems to support that this was a common practice, as Mr. Bonner acknowledged that Defendant’s subrogation process did not include making a made-whole determination and he could not contest that in up to 98% of the 1,300 claim files at issue, Defendant received subrogation back directly from the third party carrier.

It, therefore, appears that a common question of whether the Defendant systematically deprived its insureds of any consideration of their made-whole rights predominates over any isolated instances in which there may be evidence that an insured actually entered into a made-whole agreement. As stated above, if there is proof in any of the 1,300 files of such an agreement, then the insured should, in any event, be excluded from the class. Further, the relief Plaintiff is seeking on behalf of the class is (1) a declaratory judgment that Defendant’s collection of sub-rogation prior to a made-whole judicial determination or agreement violates Arkansas law; and (2) reimbursement of the subrogat-ed proceeds to the class members based on Defendant’s failure to obtain a made-whole judicial determination or agreement. The Plaintiff is not seeking an actual made-whole determination on behalf of the class and the Court has already held that it would be inappropriate to make such a determination in this action. (Doc. 38 at pg. 8.) See Diaz v. Blue Cross and Blue Shield of Mont., 363 Mont. 151, 267 P.3d 756, 766 (2011) (finding common question presented for declaratory and injunctive relief, to which a single answer would affect all class members: could the defendant withhold payment of medical expenses or accept reimbursement of medical expenses paid by a third-party’s insurer before it conducted a made-whole analysis? Any individualized determinations regarding whether class members had been made whole would not occur in the context of the class action claim); Ferguson v. Safeco Ins. Co., 342 Mont. 380, 180 P.3d 1164, 1169-70 (2008) (affirming class certification where plaintiff sought class-wide declaratory relief and order compelling return of subrogation amounts; plaintiff alleged that defendant systematically deprived class members of consideration of their made-whole rights; class claims did not seek a determination of entitlements for each class member and the payment of damages, but, rather, a declaratory ruling that would compel defendant to follow the made-whole legal standard in its subrogation program)⁴; cf. Vandenbrink v. State Farm Mut. Auto. Ins. Co., 2012 WL 3156596, *3 (M.D.Fla. Aug. 3, 2012) (denying class certification where threshold inquiry was individual in nature — whether the Plaintiffs were made whole through their settlements); Adelstein v. Unicare Life and Health Ins. Co., 2000 WL 35808378, *2 (M.D.Fla. Dec. 27, 2000) (plaintiff sought certification of a class consisting of insureds from whom Defendant had collected subrogation in instances in which proceeds had been insufficient to make whole the insureds; court denied class certification, finding that “made-whole” determination would be class-member specific) (emphasis added). Further, the undersigned notes that if the relief requested is granted on a class-wide basis, Defendant may still pursue a separate judicial determination against any particular insured who Defendant believes was, in fact, made whole.

Finally, in determining whether the superiority requirement of Rule 23(b)(3) is satisfied, the Court must look at four factors: (1) the class members’ interest in individually controlling their separate actions; (2) the extent and nature of existing litigation by class members concerning the same claims; (3) the desirability of concentrating the litigation in the particular forum; and (4) the likely difficulties in the management of a class action. Fed.R.Civ.P. 23(b)(3). The class members’ interest in individually controlling their separate actions appears minimal, given the number of potential class members and the relatively small amount of their claims and also given the fact that Plaintiff appears to be an adequate class representative and has diligently pursued this action. Further, the undersigned is not aware of any existing litigation involving the same claims and, given that the class is comprised of Arkansas residents, the Western District of Arkansas appears to be a suitable forum. As to the last factor, this case does not appear to involve exceptional difficulty in managing it as a class action and judicial efficiency considerations favor certification.

CONCLUSION

Based upon the above, the undersigned finds that the requirements of Rule 23(a) and 23(b)(3) have been met. The undersigned, therefore, recommends that Plaintiff’s Renewed Motion to Certify Class (Doc. 53) be GRANTED with regard to Plaintiffs request for declaratory relief. As the undersigned believes that Plaintiff lacks standing to pursue injunctive relief, the undersigned recommends that his claim for injunctive relief be DISMISSED.

The undersigned further finds that Plaintiffs counsel in this case appears capable of fairly and adequately representing the interests of the class. Accordingly, the undersigned recommends appointing Plaintiffs counsel that have entered an appearance in this case as class counsel under Fed.R.Civ.P. 23(g).

Finally, assuming an order is entered adopting this Report and Recommendation and granting class certification, the undersigned recommends that, in accordance with Rule 23(c)(2)(B) of the Federal Rules of Civil Procedure, Plaintiffs counsel should have 10 days from the date of that order in which to submit a proposed method and form for notifying the class members of this action.

The parties have fourteen days from receipt of our report and recommendation in which to file written objections pursuant to 28 U.S.C. 636(b)(1). The failure to file timely objections may result in waiver of the right to appeal questions of fact. The parties are reminded that objections must be both timely and specific to trigger de novo review by the district court.

DATED this 19th day of March, 2013.

1 . In the same order, the Court also denied a separate motion (Doc. 20) filed by Plaintiff for partial summary judgment of his affirmative claims for breach of contract and conversion. However, Plaintiff’s amended complaint no longer pleaded causes of action for breach of contract and conversion, and instead asserted a single claim for declaratory judgment. The Court declined to consider granting Plaintiff summary judgment on causes of action that had been dropped from the amended complaint.

2 . In an earlier order (Doc. 38), the Court held that the estoppel defense was inapplicable to Plaintiff's individual claims.

3 . The Arkansas Supreme Court made clear in the Riley case that an insurance company’s letter and demand for subrogation payment did not constitute an actual lien. Riley, 2011 Ark. 256 at *14, 381 S.W.3d 840.

4 . Despite the fact that no made-whole agreements are likely to exist, the proposed class of insureds is likely to include some number of individuals who were actually made whole through their settlements with third parties. This Court, however, will not engage in judicial made-whole determinations in the instant litigation.

5 . When Mr. Bonner was asked under oath whether he agreed that in "probably 98 percent of the [1,300] claim files ... Southern Farm Bureau received subrogation back from the third party directly,” he responded as follows: "I don't doubt that there are many that way. Yes, we received several; but I don't know the number.” (Doc. 56-1, p. 11). Mr. Bonner later clarified that he thought "[a] large majority” of the 1,300 class members’ subrogation payments were made directly to SFB by third-party carriers. Id. at p. 12. Ms. Sewell testified at the May 6 hearing that she agreed it was a "very large percentage” of cases in which subrogation was obtained by SFB directly from third-party insurers. (Doc. 74, p. 75).

6 . Even when an insured paid subrogation with a personal check, there is still the possibility that the estoppel defense may not apply, and further evidence will be required to establish estoppel. For example, during the May 6 hearing, Plaintiff called as a witness Jeffrey George Reidesel, a former insured of SFB and potential member of the 1,300-person class. Mr. Reidesel stated that he visited SFB’s offices and presented his claims adjustor with a personal check for $5,000 in response to SFB’s demand for subrogation. However, Mr. Reidesel also testified that at the time he paid subrogation to SFB, he was "unwilling” to make the payment, did not agree that he had been made whole through settlement, and made the payment "[gjrudgingly.” (Doc. 74, pp. 103 & 108). Mr. Reidesel testified that he mistakenly thought that SFB’s PIP payment was "a loan" that he was legally obligated to re-pay when SFB demanded payment. All of these facts may be material to determining whether an es-toppel defense is applicable despite the fact that Mr. Reidesel paid subrogation to SFB with a personal check.

1 . As will be explained below, Plaintiff's original motion for class certification was denied without prejudice. (Docs. 23, 34, 37.)

2 . According to Defendant, it initially produced information concerning 1,424 potentially relevant claims, but subsequently determined that some of these claims did not meet one or more of the criteria in the class definition. Defendant concedes that the exact number of relevant claims is not material to the issue of class certification (Doc. 56 at pg. 3 & n. 2), and thus, the undersigned will assume that the potential class consists of approximately 1,300 insureds.

3 . Defendant also argues that the facts relevant to its affirmative defense of estoppel are case-specific and predominate over common issues. As stated above, the Court, in ruling on the parties' dispositive motions, rejected the Defendant’s assertion of the estoppel defense. Defendant argues that the Court erred in its underlying finding that Plaintiff had no opportunity to object before Defendant appropriated $5,000 of his settlement money. The undersigned sees no merit to this argument. As pointed out by the Court, Defendant bypassed Plaintiff and asserted its subrogation claim directly with Progressive and the check was made out to Defendant individually. Further, Plaintiff testified that the Progressive representative specifically advised him, "This is Farm Bureau's check I am sending to them,” and that he "didn’t know [he] had any option” to object. (Doc. 56 Ex. G at pg. 59.)

4 . In Chipman v. Northwest Healthcare Corp., 366 Mont. 450, 288 P.3d 193, 206 (2012), the Montana Supreme Court noted that since its decisions in Ferguson and Diaz, the commonality requirement had been "significantly tightened" pursuant to the United States Supreme Court’s decision in Dukes. The undersigned believes that even under this "tightened” commonality standard, class certification would have still been granted in Ferguson and Diaz and that these cases, therefore, remain as persuasive authority for the granting of class certification in the instant case.