In 2003, plaintiff Michael Cullen contacted State Farm to report damage to the windshield of his car. After speaking with his agent, Cullen spoke to a representative from Lynx Services LLC, a company that began handling windshield claims for State Farm in 1996. Twinsburg Glass & Mirror then repaired his windshield.
Two years later, Cullen sued State Farm, requesting class certification and a declaratory judgment that the insurer’s practices were illegal and violated obligations owed by fiduciaries pursuant to Ohio law.
In addition, Cullen asserted claims for breach of contract, bad faith and breach of fiduciary duty, and sought compensatory and punitive damages.
The complaint defined the class to include all State Farm policyholders on or after Feb. 18, 1990, and alleged State Farm had denied them full payment on windshield claims because, instead of replacing windshields, it repaired some windshields with a chemical compound that it knew or should have known was “only temporary, not entirely translucent and incapable of restoring the windshield to its pre-accident condition” and that State Farm was not “paying the insured to replace the glass,” less any deductible.
Cullen and the class demanded “damages in an amount to be determined at trial under principles of Ohio common law” or that State Farm be ordered to “tender benefits sufficient to replace the windshields in accordance with policy requirements.”
A trial court concluded Cullen and the class satisfied the requirements for certification. State Farm appealed, and the state’s Eighth District Court of Appeals affirmed.
State Farm then appealed to the State Supreme Court
“Cullen’s action seeking a declaration that State Farm’s practices are illegal and violated fiduciary obligations merely lays a foundation for a subsequent individual determination of liability and does not satisfy the requirements for class certification pursuant to Civ.R. 23(B)(2),” Justice Terrence O’Donnell wrote for the court.
The Washington Legal Foundation called the court’s decision a victory. WLF had called on the court to decertify the class. In its brief, filed last August, WLF argued that whether each policyholder was misled by the company into agreeing to windshield repair—as opposed to complete replacement—would have to be litigated on a policyholder-by-policyholder basis.
The court agreed with WLF that such a trial would be unmanageable if each of the 100,000 policyholders were called to testify regarding his unique set of reasons for agreeing to have his windshield repaired.
“There is little doubt that the only reason the plaintiffs’ lawyers sought class certification was to coerce the defendant into settling the case without regard to the merits of the plaintiffs’ claims,” WLF Chief Litigation Counsel Richard Samp said in a statement.
“Class actions of this sort—in which the claims of each policyholder turn on facts specific to him—are virtually never appropriate because they could never be brought to trial; yet they serve the purposes of the plaintiffs’ bar by imposing tremendous settlement pressure on defendants.”