 |
 |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|
|
|
|
State Farm Mutual Automobile Insurance Co. v. Lopez2/1/2001
Opinion by Justice Hinojosa
This is an interlocutory appeal from the trial court's order certifying a class. Appellees, Alicia Lopez, Adan Munoz, Jr., Juan Llanes, Diana Moreno and Albert Alaniz, sued their automobile insurance carriers, State Farm Mutual Automobile Insurance Company, an Illinois corporation, ("State Farm") and State Farm County Mutual Automobile Insurance Company, a Texas corporation, and their directors, alleging the companies wrongfully failed to pay adequate dividends to their policyholders although they amassed huge corporate surpluses. In three issues, appellants, State Farm and Wendy L. Gramm, contend the trial court abused its discretion when it certified the class because: (1) the court lacks jurisdiction; (2) appellees have pleaded no viable cause of action, and thus have not met the typicality requirement for class certification; and (3) the class representatives cannot fairly and adequately protect the interests of the class because past and present policyholders have antagonistic interests. We affirm.
A. The Lawsuit
In their Third Amended Petition, appellees allege that in 1997 State Farm reported a "surplus as regards policyholders" of over $37 billion, a dramatic increase from its 1996 reported surplus of some $7.5 billion, but that State Farm returned only "insignificant amounts" of the surplus to its policyholders in the form of dividends. Appellees claim this constitutes a malicious suppression of dividends. Appellees also allege a cause of action for breach of contract based on language common to all State Farm policies that a policyholder:
is a member of the company and shall participate, to the extent and upon the conditions fixed and determined by the Board of Directors in accordance with the provisions of law, in the distribution of dividends so fixed and determined.
Appellees allege State Farm has breached its contract with its policyholders by failing to pay dividends, or by paying insufficient dividends. Appellees also assert a cause of action for fraud, alleging that State Farm knowingly made material and false representations to its policyholders in the policies that State Farm would pay dividends out of corporate surplus "that was just and equitable in accordance with applicable law," and that State Farm maliciously suppressed dividends, which "is akin to a breach of trust." Alternatively, appellees contend State Farm committed fraud: (1) by breaching a fiduciary duty owed to its policyholders; (2) by misrepresenting that dividends might be paid, but pricing automobile insurance on the assumption that dividends would not be paid; (3) by concealing material facts from its policyholders by failing to adequately disclose policyholders' right to dividends, amount of surplus held, and policyholders' voting rights; and (4) by agreeing to pay dividends but failing to properly do so.
Appellees prayed that State Farm be ordered to pay reasonable dividends for past years and "annually hereafter," as well as pre- judgment and post-judgment interest, attorney's fees and costs.
B. The Trial Court's Order
The trial court's order is brief. It grants appellees' motion for class certification and defines the class as:
all persons and entities who are or had been policyholders of vehicle casualty policies issued by State Farm Mutual Automobile Insurance Company in the State of Texas during the years 1994, 1995, 1996, 1997, 1998, and 1999 and up to the time of trial.
The order contains no ruling as to which state's law is to be applied in the case.
C. Standard of Review
It is well established that a trial court ha
Page 1 2 3 4 5 6 7 8 9 Texas Employee Leasing Services
Employee Leasing Services
|
| |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|