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A federal appeals court has decertified a class of plaintiffs in a South Carolina lawsuit alleging that Progressive Å©·òµ¼º½ undervalued total-loss vehicles, the latest turn in multiple, similar suits against U.S. auto insurers.

The U.S. 4^th Circuit Court of Appeal this week found that Lynn Freeman, the proposed lead plaintiff in the South Carolina litigation, had not suffered a real injury. She had accepted the carrier’s payment after her crash and did not pay anything out-of-pocket beyond her deductible. Yet, she went ahead with a lawsuit claiming breach of contract by Progressive.

The lower court, the U.S. District Court for South Carolina, had certified the class of policyholders. But the appellate court allowed an interlocutory appeal in May.

“Because Freeman has failed to show that Progressive’s use of Projected Sold Adjustments caused her any injury, she lacks standing,” Judge Paul Niemeyer wrote for the majority of the three-member panel of appellate judges. “And without standing, Freeman’s claim cannot be typical of the class members’ claims. The class therefore should not have been certified.”

The crux of Freeman’s complaint, like others around the country, had to do with how a totaled vehicle is valued. The system used by Progressive looked at comparable vehicle prices. When actual sales prices were unavailable, the insurer utilized a “projected sold adjustment” to determine market value on vehicles, the court explained.

Progressive compared Freeman’s 2020 Chevrolet Equinox with similar cars, all with fewer miles on their odometers, and arrived at a $20,531 value, close to the other vehicles’ values, the court noted. Freeman still owed almost $30,000 on the Equinox, but she held loan payoff and gap insurance coverage through her Progressive policy. Still, after that coverage was applied, she still had about $5,500 left to pay off her car.

Freeman’s attorneys argued that the sold adjustment had undervalued the woman’s car, just as it has for many other motorists. But the appellate judges found that Freeman had little to complain about and that requirements of commonality between proposed class members were not satisfied.

“Because Freeman’s claim and the claims of all the purported class members are essentially individualized claims requiring mini trials as to each, we conclude that common questions do not predominate and that therefore the district court abused its discretion in certifying the class,” the panel noted in the Aug. 25 opinion.

Appellate Judge Nicole Berner dissented, contending that the majority of the panel held an erroneous view of the financial impairment to the plaintiffs, that Freeman had suffered “a classic pocketbook injury,” and the adjustment was applied to others in the class.

“When the Projected Sold Adjustment is applied, it always depresses the payout below the actual cash value,” Berner wrote. “That common question unites the class. Thus, the district court did not abuse its discretion in certifying the class and I would affirm its judgment.”

The lawsuit is one of many filed against Progressive, State Farm, USAA, Allstate, GEICO and other auto insurers in recent years, alleging widespread undervaluing of totaled vehicles by various methods. Some have succeeded in court or have settled, some have not. Several remain on appeal. In July, Progressive won a similar appeal in Pennsylvania, in which the U.S.3rd Circuit Court of Appeals decertified another class-action lawsuit. Read more here.

Photo: A Chevrolet Equinox, similar to Freeland’s model. (Adobe Stock images)

Topics Lawsuits South Carolina