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Prudhomme v. Geico Insurance Co.

United States District Court, W.D. Louisiana, Lafayette Division

May 14, 2015

Prudhomme, et al.
Geico Insurance Co., et al.


RICHARD T. HAIK, Sr., District Judge.

Before the Court is a Motion To Dismiss First Supplemental And Amending Petition For Property Damages, Penalties, Attorneys Fees And For Class Certification filed by Defendants, GEICO Casualty Insurance Company ("Geico Casualty") and Government Employees Insurance Company ("Government Employees") (collectively known as "GEICO"), [Rec. Doc. 29] and an Opposition Memorandum filed by Plaintiffs, Eric Prudhomme ("Prudhomme") and Elvin Jack ("Jack"), individually and on behalf of others similarly situated, [Rec. Doc. 31]. Oral argument is not necessary. For the reasons that follow, GEICO's Motion will be denied.

I. Background

Plaintiff Prudhomme was involved in an automobile accident in Lafayette Parish, Louisiana on or about February 14, 2013. At that time, Prudhomme's vehicle, a 2008 Kia Rondo LX, was covered under an insurance policy issued to Prudhomme by Government Employees. Prudhomme made a claim against the collision coverage of his policy to recover for the damage to his vehicle. In evaluating his claim Government Employees used a system known as CCC Valuescope Value ("CCC Valuescope") which Prudhomme valued the vehicle at approximately $8, 885.00. Prudhomme contends the NADA Valuation Reports for his vehicle described its value as approximately $10, 150.00. Government Employees refused to negotiate on the difference between the two values and tendered the amount of approximately $8, 885.00 to Prudhomme.

Plaintiff Jack was involved in an automobile accident on or about March 4, 2014. Jack's vehicle, a 2000 Ford Ranger V-6 Supercab truck, was insured by Geico Casualty. Jack made a claim against Geico Casualty under the collision provision of the policy. Geico Casualty determined the vehicle to be a total loss. While Jack contends the NADA Valuation Report for his vehicle described its value as approximately $4, 475.00, using the CCC Valuescope, Geico Casualty found the value of Jack's vehicle to be approximately $2, 483.00, and tendered this amount to him.

In their First Supplemental and Amending Petition, filed as a purported class action in the Fifteenth Judicial District Court, Lafayette Parish, on December 2, 2014, Plaintiffs allege that the CCC Valuescope results in unfairly low valuations of vehicles, and that although GEICO is aware of this fact, it refuses to use the NADA and/or the Kelly Blue Book values which are "the generally accepted valuation tools." R. 20. Plaintiffs further allege that GEICO knew or should have known that the NADA and/or Kelly Blue Book values are "the generally accepted valuation tools" used by individuals selling their vehicles and automobile dealerships so that, as a practical matter, with the amounts tendered by GEICO, the insured's vehicle cannot be replaced. Id. at ¶¶ 19, 20. Plaintiffs therefore allege that GEICO uses the CCC Valuescope "to intentionally undervalue total loss vehicles through the use of obscure adjustments' which systematically reduce values derived from comparables."

Plaintiffs allege, under the collision provisions of their policies with GEICO, GEICO was obligated to pay for the "loss" of their vehicles. Id. at 22. They further allege, "the parties intended and the Louisiana statutory law demands that the loss' be considered the fair market retail value of the vehicle." Id. at 23. Thus, they allege GEICO owes them "the fair retail value of their vehicle(s) as their loss' and not the lower value determined by its valuation system." Id. at 29. Plaintiffs allege they attempted to collect the difference between what GEICO paid and the actual amount of the "loss" but GEICO refused. Id. at 26. Accordingly, Plaintiffs allege that GEICO's action, refusal to pay the full amount of their "loss" under the terms and provisions of their policies, constitutes a breach of the terms and conditions of their insurance contracts.

Plaintiffs also allege that "GEICO's refusal to pay the difference in value is arbitrary, capricious and/or intentionally fraudulent" and that more than sixty days have passed since Plaintiffs' made demands for the difference, in violation of La. R.S. 22:1973(A)(and (B)(5). Id. at ¶¶ 29, 33, 34.

Additionally, Plaintiffs allege that GEICO's use of the CCC Valuescope violates La. R.S. 22:1892 (B)(5)(a), because the CCC Valuescope is not a "fair market value survey" and La. R.S. 22:1892(B)(5)(b) because it is not a "generally recognized used motor vehicle industry source."[1] Id. at ¶¶ 30, 31, 32.

After the case was removed to this Court, GEICO filed this Motion to Dismiss asserting that Plaintiffs lack standing to proceed against the entities with which they have no contractual or legal arrangement, failed to sufficiently allege a violation of La. R.S. 22:1892(B)(5), which is fatal to their claims under La. R.S. 22:1973(B)(5), breach of contract and fraud, failed to plead fraud with sufficient particularity as required by Rule 9(b), and Prudhomme's La. R.S. 1973 (B)(5) claim has prescribed.

II. Legal Standard

In considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.2007). A 12(b)(6) motion is "viewed with disfavor and is rarely granted." Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir.2011). Dismissal is appropriate only if the complaint fails to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). To satisfy this standard, the complaint must provide more than conclusions, but it "need not contain detailed factual allegations." Colony Ins. Co. v. Peachtree Constr., Ltd., 647 F.3d 248, 252 (5th Cir.2011). Yet, it must allege enough facts to move the claim "across the line from conceivable to plausible." Twombly, 550 U.S. at 570. Determining whether the plausibility standard has been met is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009).

On the other hand, with respect to fraud claims, Federal rule of Civil Procedure 9(h) requires the plaintiff to "state with particularity the circumstances constituting the fraud." Shandong Yinguang Chemical Industries Joint Stock co., Ltd v. Potter, 607 F.3d 1029, 1032 (5th Cir. 2010) quoting Fed.R.Civ.P. 9(h). What constitutes particularity' will necessarily differ with the facts of each case...." Benchmark Electronic, Inc. V.J.M. Huber Corp., 343 F.3d 719, 724 (5th ...

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