State Farm Home Insurance Class Action Lawsuit Wins Partial Cert.

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On Wednesday, a federal judge in Georgia issued partial certification in a class action lawsuit filed by homeowners who alleged that State Farm failed to compensate homeowners for the diminished value in homes that had water damage but were fully repaired.

U.S. District Judge Marc T. Treadwell certified one of the proposed classes of homeowners in the lawsuit who alleged State Farm breached insurance contracts with homeowners when it neglected to assess for property devaluation following water damage and subsequent repairs of homes. This Class could potentially impact tens of thousands of Georgia homeowners.

Judge Treadwell denied certification of the second class of homeowners who claimed that State Farm failed to remit payment to homeowners for the decline in value, stating the situations needed to be evaluated in a case-by-case review.

“There is only a breach if in fact a class member’s property decreased in value not withstanding full repair,” Judge Treadwell explained. “That necessary determination of whether each class member suffered diminished value renders breach anything but a common question.”

In January 2014, lead plaintiffs John and Leigh Ann Thompson filed the State Farm class action lawsuit claiming that after a pipe burst in their home, their State Farm homeowners insurance paid to have the damage repaired. However, they allege that State Farm failed to perform an assessment of whether their home had suffered from a decline in value as a result, and they believe they are entitled to the value of their property decrease per the terms of their policy.

When they questioned State Farm about their right to recover the lost value on the property per the terms of their contract, the homeowners claim that they were falsely told by State Farm that they were not entitled to such compensation under their policy terms.

In their original complaint, they stated that the problem is pervasive and alleged that State Farm has developed “policies and practices for the repair of properties and the settlement of claims that omit or conceal reference to payment for diminution of value.”

While the earlier motions for Class certification included two proposed subclasses, Judge Treadwell combined these groups into a single class of homeowners who filed a claim with State Farm in the six years preceding the suit who had not received payment for the reduction in value of their homes.

Judge Treadwell refused to certify the Class based on the breach of contract claim alleging that State Farm failed to pay out the difference for the diminished value of the homes, saying that “significant questions concerning State Farm’s liability would remain for each class member,” making certification as a Class inappropriate.

Last May, the Thompsons motion for Class certification and summary judgment was denied on a declaratory relief claim, with Judge Treadwell citing lack of subject matter jurisdiction.

The plaintiffs are represented by Clint W. Sitton and Richard Kopelman of Kopelman Sitton Law Group LLC; C. Cooper Knowles of Stack & Associates PC; and Adam P. Princenthal of Princenthal & May LLC.

The State Farm Home Insurance Class Action Lawsuit is John Thompson and Leigh Ann Thompson v. State Farm Fire & Casualty Co., Case No. 5:14-cv-00032, in the U.S. District Court for the Middle District of Georgia.