MetLife Home Insurance Class Action Moved to Federal Court

A class action lawsuit accusing Metropolitan Property and Casualty Insurance Co., known as MetLife Auto and Home, of miscalculating the cash value of home repairs in violation of Arkansas law is being moved to federal court.

The MetLife class action lawsuit was filed by plaintiff Gary Vinson on Dec. 10, 2013 in the Circuit Court of Independence County, Arkansas, but it is being transferred to the U.S. District Court in the Eastern District of Arkansas because the putative class exceeds 100, not all of the Class Members live in Arkansas, the total amount of damages could exceed $5,000,000 for all the Class Members put together, and the federal court is the proper place to litigate matters under the Class Action Fairness Act.

Vinson had a homeowners insurance policy on his home in Batesville, Arkansas, through MetLife Auto and Home.

On Feb. 18, 2013, damage was done to Vinson’s home, which was covered by his MetLife home insurance policy. According to the class action lawsuit, he submitted a claim with the insurance company within the prescribed time frame to request that MetLife cover the cost of the necessary repairs.

MetLife reportedly confirmed that the damages were indeed covered by his insurance policy and that the company would cover the cost of the damages according to the terms of Vinson’s policy. An adjuster was sent to Vinson’s home on Feb. 28, 2013, and it was determined that the damage totaled $4,984.67, including materials and labor.

MetLife subtracted $1,000 for Vinson’s deductible and $2,511.35 for depreciation. The insurance company sent Vinson a check for the remaining $1,473.32.

Vinson claims that MetLife did not depreciate the material and labor costs for the repairs properly.

“Defendant’s failure to pay the full cost of the labor necessary to repair or replace plaintiff’s damaged property in the [actual cash value] payment left plaintiff underindemnified and underpaid for their losses,” the class action lawsuit says.

Vinson cites the Arkansas Insurance Department (AID), which recently issued a bulletin concerning the calculation of depreciation in insurance payments saying that “Labor of any kind related to the repair, rebuild, or replacement of covered property cannot be depreciated.”

The bulletin was issued as a “clarification,” and made it clear that it “‘is not a new department position.'”

“It is a recognition, consistent with longstanding legal principles, that materials are subject to depreciation while labor is not,” the MetLife class action lawsuit states. “The position of the AID is also consistent with the universally accepted premise that the basic purpose of property insurance is to provide indemnity to policyholders. To indemnify means to put the insured back, in the position he or she enjoyed before the loss — no better and no worse.”

Vinson is seeking to represent all MetLife home insurance policy holders who received “actual cash value” for damages to their property in which labor was depreciated in the calculation. Vinson is asking MetLife to pay damages according to the total amount of depreciated labor costs that were withheld from the policy holders during their repairs. The damages have been estimated by MetLife to be $8.2 million.

Vinson is charging MetLife with fraudulent concealment, breach of contract and unjust enrichment.

The plaintiff is represented by Tom Thompson and Casey Castleberry of Murphy Thompson Arnold Skinner & Castleberry; and W.H. Taylor, Stevan E. Vowell and William B. Putman of Taylor Law Partners LLP.

The MetLife Home Insurance Class Action Lawsuit is Vinson v. Metropolitan Property and Casualty Insurance Co., Case No. 4:14-cv-00029, in the U.S. District Court for the Eastern District of Arkansas.