Public Policy Argument Fails for Lack of Evidence of Statute or Judicial
Statement
Barry Zalma
Jan 19, 2024
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Post 4716
Following a car accident, Kenan Watkins (“Watkins”) filed a diminished value claim with his insurer, Allstate Property and Casualty Insurance Company (“Allstate”). Allstate denied his claim. The district court held that Allstate’s policy did not violate Mississippi law and that Watkins failed to state a plausible claim. Consequently, the district court granted Allstate’s motion to dismiss and Watkins appealed.
In Kenan Watkins, individually and on behalf of all others similarly situated v. Allstate Property & Casualty Insurance Company, No. 23-60141, United States Court of Appeals, Fifth Circuit (January 12, 2024) the Fifth Circuit resolved the dispute.
BACKGROUND
Kimberly Jones (“Jones”) crashed her vehicle into Watkins’ 2021 Chevrolet Tahoe in Baldwyn, Mississippi. Watkins’ vehicle sustained substantial damage. Watkins had an insurance policy with Allstate that provided coverage for his 2021 Chevrolet Tahoe. Jones’ insurer, Safeway Insurance Company, paid $24,314.25 to Watkins for his damage claim. Watkins alleged that his car sustained an additional $13,545.00 in diminished value. Safeway Insurance Company offered the remaining $685.75 of Jones’ policy limit to Watkins. Because Jones’ policy limit did not cover the diminished value of Watkins’ vehicle, Watkins filed an uninsured motorist claim with his insurer, Allstate.
Allstate denied Watkins’ diminished value claim, relying upon a provision in its policy that excludes “any decrease in the property’s value, however measured, resulting from the loss and/or repair or replacement.” Watkins sued.
Specifically, Watkins alleged that Allstate’s automobile insurance policies impermissibly deny insurance coverage that is required by law without establishing which law required Allstate to pay for the diminished value of his truck.
The district court concluded that Watkins failed to plausibly allege that Jones’ vehicle was an “uninsured motor vehicle.” The district court also concluded that Allstate’s diminished value exclusion is valid under Mississippi law.
Because Watkins failed to state a claim upon which relief could be granted the district court granted Allstate’s motion to dismiss with prejudice. An appeal followed.
DISCUSSION
In his Complaint, Watkins alleged that “[p]ursuant to Miss. Code. Ann. § 83-11-101(2), Kimberly Jones was underinsured, and [that he] is entitled to recover from the uninsured motorist coverage provided by the Policy.”
Watkins’ mere assertions, however, re insufficient to establish that Jones’ vehicle qualified as an “uninsured motor vehicle.” The Complaint only alleges that Jones was underinsured, which is a legal conclusion. No court will accept legal conclusions as true. Thus, the district court correctly concluded that Watkins failed to make a plausible claim for relief because a reasonable inference that Allstate was liable for misconduct could not be drawn from the factual content in the Complaint and legal conclusions alone are never accepted as true.
The Fifth Circuit concluded that Allstate’s diminished value exclusion was valid under Mississippi law.
Watkins claim that the diminished value exclusion violates public policy failed because Watkins did not point to a pronouncement, either legislative or judicial, requiring that diminished value be a part of all automobile insurance policies.
Only an affirmative expression of an overriding public policy by the legislature or judiciary prompts a Court to rule that an insurance policy’s plain meaning does not control. Since neither the legislature nor the judiciary have pronounced that insurers must provide for payment of diminished value in all issued automobile policies the plain meaning of Allstate’s policy controls and Allstate’s diminished value exclusion is valid under Mississippi law.
ZALMA OPINION
Claims for diminished value of a vehicle after an accident were popular ten years ago because auto material damage policies did not deal with the issue. Insurers, like Allstate, recognized it had no intent to cover diminished value of a vehicle after an accident, did not charge a premium for the claim, and eventually wrote a clear and unambiguous exclusion to avoid paying for a loss for which it had not charged a premium. Absent some showing of a public policy requiring that coverage, the exclusion is enforceable.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
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Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
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Post 4999
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In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
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Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
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FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
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The circuit court ...
