Farmers Union Mutual Insurance Co. v. Robertson

2010 Ark. 241, 370 S.W.3d 179, 2010 WL 2006406, 2010 Ark. LEXIS 279
CourtSupreme Court of Arkansas
DecidedMay 20, 2010
DocketNo. 09-619
StatusPublished
Cited by16 cases

This text of 2010 Ark. 241 (Farmers Union Mutual Insurance Co. v. Robertson) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers Union Mutual Insurance Co. v. Robertson, 2010 Ark. 241, 370 S.W.3d 179, 2010 WL 2006406, 2010 Ark. LEXIS 279 (Ark. 2010).

Opinion

DONALD L. CORBIN, Justice.

|!Appellant, Farmers Union Mutual Insurance Company, Inc., appeals the order of the Pope County Circuit Court granting the motion of Appellees, Randall and Heather Robertson, to certify'their case as a class action. As this is an interlocutory appeal from an order granting class certification, our jurisdiction is pursuant to Ark. Sup.Ct. R. l-2(a)(8) (2010). See Ark. R.App. P.-Civ. 2(a)(9) (2010). Appellant asserts three points for reversal of the order granting class certification. We find no merit and affirm.

Appellees contracted with Appellant for an “actual cash value” homeowner’s insurance policy on their real and personal property located in Atkins, Arkansas. The insurance policy provided coverage for the replacement and/or repair of Appellees’ property, and defined “actual cash value” as “replacement cost of the property at the time of loss, less depreciation, not exceeding the amount it would cost to repair or replace with material of like kind and quality.” Appellees’ property was damaged in a tornado on February 5, 2008. Appellant 12adjusted Appellees’ repair estimates and depreciated both materials and labor. Appellant tendered payment of Appellees’ claim for damages to real and personal property, and Appellees filed suit in their individual capacity alleging that Appellant had improperly paid their personal-property claim and had illegally depreciated the labor portion of their real-property claim.

Appellees later amended their complaint twice and filed a class-action complaint on behalf of themselves and similarly situated Arkansans, alleging that Appellant had a common practice of depreciating the cost of labor when adjusting real-property damage. According to the second amended complaint, Appellees sought a declaratory judgment and a request for judgment, pursuant to Ark.Code Ann. § 23-79-208 (Supp.2009), for failure to timely and properly pay an insurance claim. Appellees moved for class certification. The circuit court held a hearing where it heard argument of counsel and later entered an order granting the motion for class certification. This interlocutory appeal followed.

Rule 23 of the Arkansas Rules of Civil Procedure governs class actions and provides, in pertinent part:

(a) Prerequisites to Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties and their counsel will fairly and adequately protect the interests of the class.
(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and the court finds that the questions of law or fact common to the members of the class predominate over any questions | .-¡affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. At an early practicable time after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. For purposes of this subdivision, “practicable” means reasonably capable of being accomplished. An order under this section may be altered or amended at any time before the court enters final judgment. An order certifying a class action must define the class and the class claims, issues, or defenses.

Ark. R. Civ. P. 23(a), -(b) (2010).

This court has reviewed the requirement of Rule 23 on numerous occasions, and our law is well settled that the party seeking certification must establish six requirements: (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5) predominance, and (6) superiority. Ark. Media, LLC v. Bobbitt, 2010 Ark. 76, 360 S.W.3d 129; Teris, LLC v. Chandler, 375 Ark. 70, 289 S.W.3d 63 (2008); Mega Life & Health Ins. Co. v. Jacola, 330 Ark. 261, 954 S.W.2d 898 (1997). The determination that the class-certification criteria have been satisfied is a matter within the broad discretion of the circuit court, and this court will not reverse the circuit court’s decision absent an abuse of that discretion. Ark. Media, LLC, 2010 Ark. 76, 360 S.W.3d 129. In reviewing a class-certification order, this court focuses on the evidence in the record to determine whether it supports the circuit court’s conclusion regarding certification. Id. Neither the circuit court nor this court shall delve into the merits of the underlying claims when deciding whether the Rule 23 requirements have been met. Id. A circuit court may not consider whether the plaintiffs will ultimately prevail or even whether they have a cause of action. Id. We, thus, view the propriety of a class action as a procedural question. Id.

|4I. Typicality and Adequacy

As its first argument for reversal, Appellant contends that the circuit court abused its discretion in certifying the class because Appellees did not demonstrate that their claims are typical of the proposed class or that they are adequate class representatives. Appellant argues that Appellees failed to satisfy the typicality requirement because they have a claim for damage to personal property that the class members do not. Appellant argues further that Appellees’ claims are not subject to unique defenses such as accord and satisfaction, waiver, and estoppel that are applicable to the class members’ claims. Appellant contends that because Appellees’ claims are atypical, they are not adequate class representatives.

At the outset, we address the part of Appellant’s argument concerning the personal-property claim. Appellant’s argument is based on the premise that Appel-lees have a pending claim for personal-property damage that is unique to Appel-lees while the putative class members only have claims for real-property damage. Appellant contends that Appellees’ personal-property claim alone makes their claim atypical of the class because the common issue of depreciation of labor does not affect the personal-property claim, and thus both the claim and the defenses Appellant would raise to it are unique to Appellees. Appellant contends further that this unique and pending personal-property claim is larger in amount than Appellees’ real-property claim, and therefore creates a potential conflict of interest for Appellees as class representatives because it carries with it the opportunity for Appellees to |fiadvance their larger and unique personal-property claim to the detriment of the real-property claim shared with the class.

Despite all of Appellant’s contentions to the contrary, the record before us simply does not demonstrate that Appellees have a personal-property claim, whether it be pending in this suit or in a separate suit. Our reasoning for this conclusion is twofold.

First, although Appellees did raise a claim for personal-property damage in their original complaint, that complaint has been twice amended. Both times, the amended complaints did not incorporate by reference the original complaint.

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Bluebook (online)
2010 Ark. 241, 370 S.W.3d 179, 2010 WL 2006406, 2010 Ark. LEXIS 279, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-union-mutual-insurance-co-v-robertson-ark-2010.