Insurance company uses inferior replacement auto parts: Breach of contract: Consumer fraud: Economic loss: Verdict

Law Reporter, Apr 2000

Avery v. State Farm Mut. Auto. Ins. Co., Ill., Williamson County Cir. Ct., No. 97-L-114, Oct. 8, 1999.

Approximately 4.7 million insurance policyholders who took their cars in for repairs discovered that imitation parts instead of genuine parts made by their vehicles' manufacturers were being used for the repairs. The parts were allegedly inferior in that they (1) did not fit as well, (2) had finish problems, (3) were more prone to corrosion, (4) were built of inferior grade materials, and (5) adversely affected the safety and resale of the vehicles.

The policyholders filed suit against their insurance company, alleging it breached its contract with them to restore damaged cars to pre-accident condition by using inferior replacement auto parts instead of the original manufacturers' parts. Additionally, plaintiffs claimed that defendant violated Illinois consumer fraud law through this practice. The policyholders received class action certification.

A jury awarded the class $456 million in compensatory damages. Subsequently, the trial judge awarded an additional $130 million in compensatory damages and $600 million in punitive damages for the consumer fraud claim, for a total damages award of approximately $1.2 billion.

Defendant has filed a motion for judgment n.o.v. or a new trial.

Plaintiffs' Counsel Don Barrett,

Katherine Barrett, and

*Richard Barrett, all of Lexington, Miss. Thomas Thrash, Little Rock, Ark.

*Patricia Littleton, Marion, Ill.

*Stephen Klimjack, Mobile, Ala.

*Steven Martino, Mobile, Ala.

Stan Baudin, Plaquemine, La. *Morris Ratner,

Richard Heimann, Scott P. Nealey, and

*Elizabeth Cabraser, all of San Francisco, Cal.

*Patrick Pendley, Plaquemine, La.

Gordon Ball, Knoxville, Tenn. *Michael B. Hyman, Chicago, Ill. Perry Craft, Nashville, Tenn.