A Missouri appeals court has reinstated a $17 million jury award in a class action lawsuit against American Family Mutual Insurance Co. over aftermarket vehicle parts. The Missouri Court of Appeals for the Western District reinstated the award in the lawsuit brought by Plaintiffs Nicholas Smith and Amy and Bryce Johnson. The lower court judge had set aside the jury award in the case. The original $17 million verdict, returned in March of 2007, covered an estimated 319,000 Missouri residents who made vehicle repair claims between May 1990 and December 2004. Jurors determined American Family allowed repair shops to use inferior, third-party equipment to repair policyholders’ damaged vehicles.
The trial judge found that the Plaintiffs hadn’t provided enough proof that they had suffered damages from the insurance company’s policy allowing aftermarket parts in accident repairs and overturned the award. The case was filed in 2000 and certified as a national class action in 2001. The Missouri Supreme Court subsequently ruled that it could apply only to Missouri customers because other states differed in how they regulate insurance company’s use of aftermarket parts.
As to the question of whether the Plaintiffs had presented sufficient evidence to prove they were harmed by the insurer’s actions, the Appeals Court found that the trial court had erred in its decision. In this regard, the Appeals Court opinion stated:
The Plaintiffs presented sufficient evidence for a reasonable juror to conclude that aftermarket parts are not of like kind and quality to OEM parts and that American Family breached its contracts with its policyholders when it paid to return the damaged vehicle to pre-loss condition based on the nature and cost of aftermarket parts.
Source: The Insurance Journal and Associated Press
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