A group of insureds joined in a class action suit against their insurers to recover for a loss of value to their vehicles which were damaged in accidents. The class action was brought because each plaintiff was covered by a different insurer, while all of the insureds resided in Florida. Under the action, the suit created a Policyholder Class and a Damaged Vehicle sub-class. Basically, the suit claimed that all members of the classes were due damages because they paid premiums based on full coverage or suffered significant damage to insured vehicles, but did not receive the benefit of protection against diminished value. For the courts purposes, diminished value was held to be the difference in vehicle value between a car that has never been damaged in an accident and a vehicle that has been fully repaired after an accident. Therefore, they alleged the insurers were guilty of breaching the promise of coverage made by their insurance contracts.
The insurers filed for a declaratory judgment to dismiss the action, alleging that neither their policy wording nor Florida statutes obligated them to compensate insureds or claimants for a perceived loss of vehicle value. Therefore, the plaintiffs had no basis for recovery. The district court (which accepted the suit on a jurisdictional basis) agreed with the reasoning of the insurers and granted a dismissal. The insureds appealed.
The circuit's appellate court focused on an entirely different issue. It felt a need to determine if the plaintiffs' suit was rightfully under the jurisdiction of the district court that dismissed the suit. The higher court reasoned that the merits of the case were moot if the lower court did not have the authority to hear the case. The court reviewed the requests for damages, pertinent Florida Statutes and case law. It held that, upon initial review, the plaintiffs' claims were separate and distinct. Further, ruling that the individual claims had no basis to be aggregated (added together into a single claim), none of the plaintiffs had proven the existence of damages in the amount ($75,000) that would permit the suit to be heard by the district court under a rule of diversity. However, the appeals courts also decided that plaintiffs did have a right to present arguments or evidence to demonstrate that their case could be heard as a class action. The appeals court remanded the case to the district court to determine jurisdiction consistent with its opinion.
Rex T. Morrison, Harold Highley, et al., Plaintiffs-Appellants, versus Allstate Indemnity Company, Nationwide Mutual Fire Insurance Company, et al., Defendants-Appellees. USCTAPP 11th Cir., No. 99-14141 Filed December 6, 2000. Remanded. http://laws.findlaw.com/11th/9914141opn.html [downloaded, December 11, 2000]