DALLAS - Last February, the Fifth Court of Appeals affirmed a ruling granting a motion to certify a class in litigation brought against the USAA Casualty Insurance Company.
The motion to certify was brought by Sunny Letot, and now the Texas Supreme Court has been asked to determine if it was proper to grant class certification in the case.
According to USAA’s petition for review, Letot submitted a property-damage claim to USAA after her car was damaged in an accident with a USAA insured. USAA determined that the vehicle’s repair cost exceeded its market value and sent Letot a check for the vehicle’s actual cash value. USAA also notified the Texas Department of Transportation that it had paid a claim on a salvage motor vehicle. Letot disputed the valuation, returned the check, and sued USAA.
Court records show the Texas Civil Justice League filed an amicus curiae brief yesterday, asserting that the Fifth Court’s opinion does not refer to the law governing USAA’s standard operating procedure that is at issue in the litigation.
“The opinion thus leaves us baffled as to how what appears to be a one-off case with small damages blossomed into a class action with hundreds or even thousands of potential claimants,” the brief states. “If the court of appeals had conducted at least a cursory analysis of the legal basis for USAA’s standard procedure, however, it would have found that USAA followed the law precisely as the Legislature wrote it and the Texas Department of Motor Vehicles administers it.”
In its brief, TCJL says that if the problem is the law on which USAA’s procedures are based, then the remedy is to ask the Texas Legislature to change it.
“This lawsuit seeks to use the leverage of class action certification to force the company to fork over a hefty sum, while leaving the company clueless about what it should have done differently to comply with the statute,” the brief states. “In short, the court of appeals issued a results-oriented decision bereft of legal analysis or reasoning.
“It cannot be permitted to stand.”
Background
In seeking class certification, Letot alleged that she had nearly completed restoration of a 1983 Mercedes Benz 300SD when Evan Crosby, who was insured by USAA, Collided with her. Letot filed a claim with USAA for repair of her Mercedes.
A USAA employee determined the value of Letot’s Mercedes was $2,728 but the repair estimate was $8,859, determining the Mercedes was a “total loss,” the Fifth Court’s opinion states. She then notified USAA that she disagreed with the valuation and refused to accept USAA’s offer of payment. Nevertheless, USAA tendered checks totaling $2,738.02 to Letot. Letot’s counsel returned the checks to USAA and demanded that USAA pay Letot $10,700 in damages.
On Jan. 22, 2009, without Letot’s knowledge or consent, USAA filed with the Texas Department of Transportation an owner retained report, which stated that “a claim was paid to” Letot and indicated that TXDOT “should not recognize subsequent transfer of ownership until” a salvage vehicle title was issued for the Mercedes, the opinion states.
Letot was unaware of the filing and its consequences until TxDOT notified her of the vehicle’s status on Jan. 30, 2009. She immediately demanded that USAA inform TxDOT that the Mercedes was not salvage, but USAA took no action, the opinion states.
According to the Fifth Court’s opinion, 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.
On appeal, USAA argued that the trial court abused its discretion by certifying the class. The Fifth Court, however, found that none of USAA’s cited authorities demonstrate that the trial court abused its discretion.
Supreme Court case No. 22-0238