The United States District Court for the Southern District of Ohio granted defendant State Auto’s motion to strike plaintiffs’ class allegations, holding that the complaint itself demonstrated that the proposed class was not ascertainable and could not satisfy Rule 23(a)’s commonality and typicality requirements, nor the predominance and superiority requirements of Rule 23(b). The complaint alleged that State Auto committed fraud, breached the duty of good faith and fair dealing, and violated the Ohio Deceptive Trade Practices Act in connection with a “Defender Endorsement” in some of its homeowners policies. State Auto allegedly marketed the Defender Endorsement as providing “100% replacement cost coverage,” with an additional bonus of up to 25% of policy limits if losses exceeded limit limits. Plaintiffs’ alleged that this language created a mistaken impression that the Endorsement was required in order for a policyholder to be adequately insured. In addition, plaintiffs alleged that State Auto was able to increase policy limits through the Defender Endorsement, which resulted in higher premiums and eliminated any chance that State Auto would need to pay the 25% bonus. Further, plaintiffs alleged that they were charged for a benefit that they would never need nor realize due to State Auto’s intentional overstatement of the costs to rebuild homes. Plaintiffs sought to certify a class of persons who purchased a policy with a Defender Endorsement, “and subsequently had their policy limits and premiums unilaterally increased . . . under the guise of providing adequate replacement cost coverage.”
The court held that the class was not ascertainable because individual inquiries on a property-by-property basis were required to determine class membership. Similarly, the court held that the commonality requirement of Rule 23(a) and the predominance requirement of Rule 23(b) could not be satisfied. The court found that individual issues regarding replacement costs and appropriate coverage limits would ultimately overwhelm any common questions because State Auto’s liability would hinge on a home-by-home analysis. Additionally, the court rejected plaintiffs’ argument that reliance could be presumed or inferred for purposes of the fraud claims. Thus, an individual policyholder inquiry would be required in order to determine whether a particular policyholder paid inflated premiums based on consultations and conversations regarding the characteristics and value of their homes.
Finally, because the court found that the predominance and commonality requirements could not be satisfied, the court held that the superiority and typicality requirements for class certification would likewise fail. Accordingly, the court struck plaintiffs’ class allegations.