Edd King v. National General Insurance Company

Background

Diedre King and Edd King brought a class action against National General Insurance Company, Integon National Insurance Company, Integon Preferred Insurance Company, and MIC General Insurance Corporation. They alleged violations of section 1861.16(b) of the California Insurance Code. That law requires an agent or representative for insurers under common ownership, management, or control to offer and sell a qualified driver a Good Driver Discount policy from the insurer in that group offering the lowest rate, subject to an exemption described in the statute.

The court had certified a class concerning whether the defendants failed to offer the lowest available Good Driver Discount rate. The class included policyholders who bought California private-passenger automobile policies from the defendants and were not offered the lowest available rate within the control group. The Kings’ individual standing—their legal ability to bring the case—depended entirely on their assertion that they were not offered a lower-rate PEIC policy in June 2013. PEIC had since been dismissed from the case.

Motion and disputed issue

The Kings moved for partial summary judgment on liability under the unlawful and unfair portions of California’s unfair-competition statute. They argued that undisputed evidence showed the defendants and their jointly controlled agents failed to offer qualified policyholders the lowest available Good Driver Discount rate. The defendants opposed the motion and argued, among other things, that a factual dispute existed about whether the Kings had Article III standing, meaning the constitutional requirement that they show a concrete injury traceable to the defendants and likely to be remedied by a favorable decision.

The court focused on that standing issue. The defendants conceded that National General, Integon National, Integon Preferred, and MIC General were in the same control group during the relevant period. But they disputed whether PEIC was in that group when the Kings bought their June 2013 policy. The court explained that the key question was whether PEIC joined the control group after its April 19, 2013 acquisition or only later, on April 1, 2014. If PEIC was not in the group in June 2013, the Kings would lack standing based on that purchase.

The court had previously found enough evidence to allow the case to proceed at the class-certification stage, but it had not resolved the factual dispute. The court emphasized that a class definition is not a factual finding and that the Kings still had to prove standing. If they were found not to have standing, they could no longer seek relief for the class, and the class would have to be decertified and the case dismissed. The court therefore concluded that the standing dispute also created a material factual dispute about the defendants’ liability.

Ruling

The court denied the Kings’ motion for partial summary judgment. It did not resolve the disputed question of whether PEIC was part of the control group in June 2013, and it stated that the parties’ remaining arguments were moot.

Effect

The order left the liability issue unresolved. It did not decide that the defendants violated California law or that they did not violate it. It also left open whether the Kings can establish the standing necessary to pursue their claims and represent the certified class.