CLEVELAND (Legal Newsline) -- An Ohio court of appeals has upheld a trial court’s decision to deny class certification to four independent automotive body shops in their lawsuit against Progressive Casualty Insurance Company.
The body shops sued Progressive in state court, seeking damages “for parts and labor” and declaratory relief that would require Progressive “to indemnify” the body shops “from any liability arising from their compliance with [Progressive’s] restrictions.”
Progressive responded by saying its practices and rates are competitive based on the auto repair market in Ohio.
The class the plaintiffs sought to certify included all Ohio registered auto body repair shops or registered individuals (excluding Progressive direct repair program members) that performed auto body repairs, covered by Progressive insurance policies, from Aug. 7, 2005, to the present.
At the heart of the plaintiffs’ motion was the argument that their two claims differed. The court disagreed and found the declaratory relief sought was “merely incidental” to plaintiffs’ damages claims against Progressive.
“The court emphasized that [alleged] class actions seeking certification of declaratory relief should closely be scrutinized by Ohio courts to determine their underlying purpose,” said Jeremy Gilman, a partner with the Benesch, Friedlander, Copland & Aronoff's litigation practice group said.
“If that purpose is primarily to establish a legal foundation for an award of damages, class certification under Ohio Civil Rule 23(B)(2) should be denied.”
The Eighth District Court of Appeals on Dec. 1 agreed across the board with the lower court’s ruling.
“The trial court aptly pointed out that an individualized inquiry would be necessary, not just for each potential class member, but every separate instance where such class members conducted a repair under the alleged limitations imposed by Progressive,” Judge Eileen Gallagher wrote. Judges Sean Gallagher and Mary Boyle concurred.
“The court would have to examine each repair and consider whether the additional services or parts that Progressive allegedly denied to the particular class member were necessary to restore the damaged vehicle in question to its pre-loss condition,” Eileen Gallagher wrote.
In making its decision, the court also considered that the plaintiffs’ speculation “leaves no room for Progressive to exercise its right to dispute these facts in this litigation.
"Because resolution of these disputes would require a case-by-case analysis of every Progressive repair conducted by every member of the class, we cannot say that common questions of law or fact predominate over the looming mass of individualized inquiries that would dominate this litigation,” the court wrote.
Because the decision was specific to the request for class action certification, the court made no ruling on the merits of the independent lawsuits of the four body shop owners. The court’s decision also serves as a reminder to businesses to seek professional guidance if they are the defendant in putative class actions seeking certification of both declaratory relief and money damages classes. The overlap may provide an independent basis for challenging plaintiff’s attempt to certify the declaratory relief class.
“The court’s decision was firm and decisive,” Gilman said. “This particular fact pattern, it found is not conducive to class adjudication, either as a declaratory relief or as a damages claim.”