Judge grants motion for severance in Colossus class action

By Michelle Massey, East Texas Bureau | Jun 16, 2008

TEXARKANA, Ark. – Facing a multitude of arguments, Miller County Judge Kirk Johnson granted the plaintiffs' request to sever a handful of defendants from the pending Colossus class action.

USAA, ANPAC, GEICO, Claim IQ Inc. and Computer Science Corporation will continue in a separate litigation with named plaintiffs Jerry Crandall, Erlinda Soto and James Brasham.

Judge Johnson stated the "obvious reason" for his decisions is that defendants who have motions denied will "appeal any decision not favorable to them." Thus, he believes the severance is necessary to keep the litigation moving.

The newly severed defendants believe these actions are only because they refuse to settle.

"The plaintiffs maintain that separating the 'misbehaving' dilatory defendants into a time out group will help them settle the Hensley case with the supposedly well-behaved defendants," the ANPAC defendants state.

Lead plaintiffs' attorney John Goodson filed the original class action complaint on Feb 7, 2005, against Computer Science Corporations' software Colossus, Insurance Services Office's software COA, Claim IQ Inc.'s software Injury IQ and approximately 581 insurance companies who use the software.

The plaintiffs allege that the software programs are cost containment tools used to systematically undervalue bodily-injury auto claim settlements. The insurance and software companies maintain the programs provide consistent estimates of bodily-injury claims through the data inputs of insurance adjusters.

The order on severance comes on the heels of an order denying the defendants' motions regarding sufficient service of process.

Shortly after the lawsuit began, the defendants, identified as "non-settling," filed their technical motions arguing that they were not properly served due to lack of court seal, wrong court division listed, improper agent served, or not timely served. Judge Johnson denied their motions by stating they consented to jurisdiction and waived their arguments by seeking affirmative relief regarding a proposed settlement and by filing a motion for protective order.

Judge Johnson wrote, "It is a well established rule in Arkansas and other states that if a party wishes to appear specifically in a proceeding, he must clearly indicate that fact and keep out of court for all other purposes."

Further, Judge Johnson states "the defendants convoluted reasoning on the issue defies understanding and it is merely grasping at straws with the argument."

The order allowing the motion for severance also allows the naming of a new plaintiff, Miller County resident James Basham. More than 10 years ago, Bashman settled his bodily-injury claims with the insurance company and released them from further liability.

Further complicating the massive class action, the order provides that Computer Science Corporation will defend itself in both litigations. Judge Johnson maintains he will make every effort to avoid discovery duplication unless there is a "compelling reason that it should not be accepted."

Case No 2005-59-3

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