Volino v. Progressive Casualty Insurance Company

Background

Seven plaintiffs sued Progressive Casualty Insurance Company, Progressive Advanced Insurance Company, Progressive Specialty Insurance Company, and Progressive Max Insurance Company on behalf of themselves and certified classes. The plaintiffs alleged that the insurers used “Projected Sold Adjustments,” or PSAs, in valuation reports to reduce the actual cash value assigned to vehicles declared total losses. The complaint asserted breach of contract, deceptive practices under New York General Business Law § 349, and a claim seeking a declaration that the valuation method violated New York Insurance Regulation 64, 11 N.Y.C.R.R. § 216.7. The plaintiffs also sought damages and an injunction.

The insurers used Mitchell International’s WorkCenter Total Loss software. The software calculated vehicle values using comparable vehicles and, when sold-price data was unavailable, applied PSAs to listed prices to estimate eventual sale prices. The parties disputed whether the PSAs accurately reflected market prices and whether their use caused underpayment.

Plaintiffs’ Motion

The plaintiffs moved for partial summary judgment on their Regulation 64 claim. The court denied the motion because the plaintiffs lacked standing to obtain declaratory or injunctive relief. Standing is the requirement that a plaintiff show a concrete injury, a connection between that injury and the challenged conduct, and a likelihood that a favorable court decision will remedy the injury.

The court held that past underpayment did not establish a likely future injury. The plaintiffs had not provided evidence that they would remain insured by the defendants, suffer another total-loss accident, and have a future claim calculated using the challenged PSA method. The court therefore denied summary judgment on the third cause of action.

Defendants’ Motion

The defendants moved for summary judgment on all three causes of action. The court granted the motion on the third cause of action and on the complaint’s requests for declaratory and injunctive relief because of the plaintiffs’ lack of standing. The court also granted summary judgment on the plaintiffs’ theory that the PSAs violated Regulation 64.

The plaintiffs argued that the PSAs violated Regulation 64’s requirements concerning statistically valid fair-market values, data from the 90 days before a loss, and data within a 100-mile local market area. The court held that the regulation did not require every data point used in the valuation calculation to come from within those time and geographic limits. The court read the regulation as requiring values to be derived from qualifying data, while allowing additional adjustments and broader data when local information is insufficient. The court also held that the statistical-validity theory duplicated the plaintiffs’ contract and deceptive-practices theories and therefore granted summary judgment on that theory.

The court denied summary judgment on the breach-of-contract and General Business Law § 349 claims. It found evidence from which a reasonable jury could conclude that the PSAs did not reflect actual market pricing and that the resulting valuations misled consumers or caused underpayment. The court rejected the defendants’ argument that the plaintiffs lacked evidence of actual cash value, explaining that the parties presented competing evidence about whether PSA-free list prices reflected market value. The court also stated that the weight and reliability of expert Jason Merritt’s testimony were matters for the jury.

The court further denied summary judgment concerning the individual claims of Lukasik, Plotts, Goodier, England, and Verardo. It found a factual dispute about whether Lukasik clearly understood that accepting an additional $1,000 would settle his claim. It also found no evidence that certain comparable vehicles were available for purchase when the plaintiffs’ vehicles were totaled, leaving an issue about whether those plaintiffs were underpaid.

Disposition

The plaintiffs’ motion for partial summary judgment on the third cause of action was DENIED. The defendants’ motion for summary judgment was GRANTED in part and DENIED in part. It was granted on the third cause of action, the requests for declaratory and injunctive relief, and the Regulation 64 theory of liability. It was denied on the first cause of action for breach of contract and the second cause of action for violation of General Business Law § 349. Judge Lorna G. Schofield directed the Clerk of Court to close the specified motions.