A Florida federal judge certified a class of Sunshine State drivers accusing an American Family unit of incorrectly calculating premium refunds when nonstandard auto insurance policies were canceled early.
Dorine Connor and Myrtle Pugh will be allowed to represent certain Permanent General Assurance Corp. policyholders who canceled their policy within the past five years, U.S. District Judge William P. Dimitrouleas said Friday.
Judge Dimitrouleas said the class representatives met the various requirements to be certified, as there are more than 100 PGAC customers in Florida who were charged a cancellation fee and the class representatives have claims that are common to the class, according to the order.
“Plaintiffs’ claims are typical of claims of other putative class members because they were each insured by PGAC pursuant to automobile insurance policies with identical refund of premium language,” Judge Dimitrouleas wrote. “Plaintiffs and the putative class members all allegedly suffered the same alleged injury.”
The class representatives paid monthly premiums and allege that they expected to receive 90% of their prorated unearned premiums when canceling early, but instead were charged a fee based on 10% of the premiums they hadn’t yet paid, according to the order.
When Connor canceled her policy in May 2020 with about four months left on the policy, she alleged she received an $88 penalty and received only about $152, according to the order.
Pugh said PGAC still held about $24 when she canceled her policy with about 11 months remaining, so she was expecting to have about $22 refunded, but she was instead given a $620 penalty, according to the order.
Judge Dimitrouleas agreed with the plaintiffs who argued that a class action also makes sense because the alleged damages are relatively small.
“An individual’s damages are likely to be small and insufficient for counsel to represent them individually when compared to the cost of litigating a breach of contract case against a large insurance company,” he wrote.
He also said calculating how much is allegedly owed to each class member would be relatively simple.
“Plaintiffs have proffered a uniform formula for calculating class members’ damages stemming from defendants’ uniform business practices to determine the alleged amount of improper refund,” Judge Dimitrouleas wrote. “Based on the arguments of the parties, it does not appear that computing damages using a formula would be so complex and fact-specific that it would pose an intolerable burden on the court.”
While PGAC argued that the plaintiffs were properly reimbursed and didn’t suffer any injury, Judge Dimitrouleas said that is a question of the merits of the plaintiffs’ claims that will be addressed when he rules on the insurer’s motion for summary judgment.
“PGAC’s arguments to the contrary are nothing more than the same arguments raised in its pending motion for summary judgment,” Judge Dimitrouleas wrote.
In its motion for summary judgment, PGAC said in December that it correctly refunded the plaintiffs and that they are getting the math wrong.
“Policy holders like Pugh and Connor, who elected to pay their total premium on a monthly basis, can have an outstanding balance if they cancel their policies early,” PGAC wrote. “This outstanding balance accounts for premiums due for the remaining months of the policy.”
Representatives of the parties did not immediately respond Monday to requests for comment.
Connor is represented by J. Matthew Stephens, Robert G. Methvin Jr., James M. Terrell and Courtney C. Gipson of Methvin Terrell Yancey Stephens & Miller PC and Jordan A. Shaw and Zachary D. Ludens of Zebersky Payne Shaw Lewenz.
PGAC is represented by Kimare S. Dyer and Reginald J. Clyne of Quintairos Prieto Wood & Boyer PA.
The case is Connor et al. v. Permanent General Assurance Corp., case number 9:20-cv-81979, in the U.S. District Court for the Southern District of Florida.
Original Article published at Law 360 by Ben Zigterman on April 11, 2022 and edited by Nick Petruncio.