USAA Casualty Insurance Company v. Sunny Letot, Individually and on Behalf of All Others Similarly Situated

Court of Appeals of Texas·Decided February 10, 2022·No. 05-20-01019-CV·Published

Opinion

AFFIRMED and Opinion Filed February 10, 2022

S In The

Court of Appeals

Fifth District of Texas at Dallas No. 05-20-01019-CV

USAA CASUALTY INSURANCE COMPANY, Appellant V.

SUNNY LETOT, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Appellee

On Appeal from the 192nd Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-13-00156-E

MEMORANDUM OPINION

Before Chief Justice Burns, Justice Partida-Kipness, and Justice Carlyle Opinion by Chief Justice Burns USAA Casualty Insurance Company appeals the trial court’s order granting

Sunny Letot’s motion to certify a class. In six issues, USAA argues the trial court abused its discretion by (1) certifying a class that is objectively unascertainable, overly broad, and includes members who lack standing; (2) certifying a class that fails to meet the numerosity requirement; (3) certifying a class where the class claims fail to meet the commonality and typicality requirements, and common issues do not predominate over individualized issues; (4) granting Letot’s motion for class certification where Letot failed to establish that the benefits of class action outweigh

the detriments; (5) naming Letot as a class representative; and (6) certifying a class pursuant to rule of civil procedure 42(b)(2) did not move to certify a class based upon a claim for injunctive relief. We affirm the trial court’s order.

In seeking class certification, Letot alleged the following facts: Letot had nearly completed her restoration of a 1983 Mercedes Benz 300SD when, on January 2, 2009, Evan Crosby collided with her. Crosby’s vehicle was insured with USAA, and Letot filed a claim with USAA for the repair of her Mercedes. A USAA employee determined the value of Letot’s Mercedes was $2728, but the repair estimate was $8859. Thus, USAA determined the Mercedes was a “total loss.” When Letot learned of the $2728 valuation, which she believed to be well below the Mercedes’ actual value, she notified USAA that she disagreed with the valuation and refused to accept USAA’s offer of payment on her claim on January 20, 2009. Nevertheless, USAA tendered checks totaling $2738.02 to Letot. After receiving the checks, Letot’s counsel returned the checks to USAA and demanded that USAA pay Letot $10,700 in damages.

On January 22, 2009, without Letot’s knowledge or consent, USAA filed with the Texas Department of Transportation (TXDOT) an owner retained report. An owner retained report is used by insurers to notify TXDOT that it has paid a claim on a “nonrepairable or salvage motor vehicle” that the owner has retained. TXDOT then automatically marks “the motor vehicle record on this vehicle . . . accordingly in order to prevent further transfer of title of the motor vehicle until the owner has

applied for the appropriate ownership document.” USAA stated on the owner retained report that “a claim was paid to” Letot on January 21, 2009 and indicated that TXDOT “should not recognize subsequent transfer of ownership until” a salvage vehicle title was issued for the Mercedes. USAA knew that filing the report would cause TXDOT to mark the motor vehicle record on the Mercedes as “salvage,” preventing the sale or transfer of the vehicle until Letot requested a “salvage title” for the Mercedes. TXDOT stamped Letot’s title “SURRENDERED” and rendered Letot’s registration invalid such that she could not “register, operate, or permit operation of the vehicle on public roads.” Letot was unaware of this filing and its consequences until TXDOT notified her of the vehicle’s status on January 30, 2009. Letot immediately demanded that USAA inform TXDOT that the Mercedes was not salvage, but USAA took no action.

Discovery later revealed that the procedure USAA used to handle Letot’s claim was routine at USAA. USAA’s procedure was to file the owner retained reports immediately after it issued a check to a claimant, regardless of whether the claimant was given an opportunity to accept the check or whether the check was even mailed. Discovery also revealed that USAA files eighty to one hundred owner retained reports per week.

Letot sought to certify the following class:

All persons or entities that filed claims under USAA automobile insurance policies, either as first-party or third-party claimants, after which USAA determined the claimant’s vehicle to be a “total loss” and

filed an Owner Retained Report with the State of Texas stating that USAA made a claim payment to the claimant and such report was filed with the State by USAA or its agents within three days of USAA or its agents sending a check to such person allegedly attempting to pay such claim.

Letot argued that, under this definition, class members were presently ascertainable by reference to objective criteria, specifically records and data of USAA and the State of Texas; the class mechanism was limited to a specific transaction between USAA and certain automobile insurance claimants; and the criteria for class membership were not subjective and required no decision on the merits of the claims. Thus, Letot argued, the class definition met the standard for certification.

Letot argued further that the proposed class met the requirements of rule 42(a)

of the rules of civil procedure. Specifically, she argued (1) the class was so numerous that joinder of all members was impracticable, (2) there were questions of law or fact common to the class, (3) the claims or defenses of the representative parties were typical of the claims or defenses of the class, and (4) the representative parties would fairly and adequately protect the interests of the class. Finally, Letot argued questions of law or fact common to the members of the class predominated over any questions affecting only individual members, and a class action was superior to other available methods for the fair and efficient adjudication of the controversy as required by rule of civil procedure 42(b)(3).

In making these arguments, Letot identified three issues which she argued were common to the class and predominated over questions affecting only individual

members: (1) whether USAA’s common practice included filing Owner Retained Reports with TXDOT stating that a claim was paid to automobile insurance claimants before the claimants received and/or were given a chance to accept such payment and/or given knowledge of the effects of accepting such payment; (2) whether USAA filed the Owner Retained Reports identifying claimants’ vehicles as salvage without notice to the claimants; and (3) whether this practice resulted in the surrender of claimants’ vehicle titles and invalidation of their vehicle registrations. In an October 2020 supplement to her motion to certify class, Letot clarified that she only sought to certify the class with respect to her claim for conversion.

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USAA Casualty Insurance Company v. Sunny Letot, Individually and on Behalf of All Others Similarly Situated, (Tex. Ct. App. 2022).

USAA Casualty Insurance Company v. Sunny Letot, Individually and on Behalf of All Others Similarly Situated (USAA Casualty Insurance Company v. Sunny Letot, Individually and on Behalf of All Others Similarly Situated) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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