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Boncic v. Permanent General Assurance Corp.

United States District Court, W.D. Oklahoma

July 23, 2019

STACY A. BONCIC, Plaintiff,
v.
PERMANENT GENERAL ASSURANCE CORPORATION, GENERAL AUTOMOBILE INSURANCE SERVICES, INC., and AUDATEX NORTH AMERICA, INC., Defendants.

          ORDER

          SCOTT L. PALK UNITED STATES DISTRICT JUDGE.

         Before the Court is the Motion to Dismiss [Doc. No. 19] filed by Defendant Audatex North America, Inc. It is at issue. See Resp., Doc No. 21; Reply, Doc. No. 22.[1]

         I. Background[2]

         Plaintiff Stacy Boncic obtained collision and comprehensive insurance coverages for her vehicle from Defendant Permanent General Assurance Corporation (PGAC). The comprehensive coverage included losses caused by floods. Plaintiff asserts that the total due to her from PGAC was controlled by the following portion of her insurance policy:

For a loss covered under [the physical damage section of the insurance policy], we will not pay more than our Limit of Liability which is the lesser of:
a. The actual cash value, at the time of loss, of the damaged or stolen auto, or its parts if the loss is limited to parts;
b. The amount necessary to repair physical damage to the auto, or its parts if the loss is limited to parts, to return it to its pre-loss physical condition. No. amount for any diminution of value or other change in market value of the auto will be included in, or paid with, the amount to repair;
c. The amount necessary to replace the damaged or stolen auto, or its parts if the loss is limited to parts, with that of like kind and quality; or
d. Any stated limit of liability, as shown on the declarations page, for loss to custom furnishings and equipment for which you have paid the extra premium for custom furnishings and equipment coverage.

         Okla. Auto Policy 20, Doc. No. 1-2 (bold emphasis omitted) (Exhibit No. 1 to Plaintiff's state-court-filed Petition). Per the insurance policy, “‘[a]ctual cash value' means, at the time of the accident or loss, the fair market value of the stolen or damaged property. The fair market value is affected by: a. The age, mileage and physical condition of the property; and b. Depreciation and prior damage; which may reduce value.” Id. at 4 (bold emphasis omitted).

         On September 3, 2018, Plaintiff's vehicle flooded with salt water in Galveston, Texas. Plaintiff subsequently submitted an insurance claim to PGAC and Defendant General Automobile Insurance Services, Inc. (GAIS) The specific relationship between these defendants is unclear, though Plaintiff treats them as partners in the insurance claim-handling process (as the Court will do in deciding Audatex's motion). PGAC and GAIS eventually declared Plaintiff's vehicle to be a total loss.

         In handling Plaintiff's insurance claim, PGAC and GAIS utilized Autosource-a software program owned by Audatex that it sells and/or licenses to insurers-to determine the “market value” (also described as the “market driven value”) of Plaintiff's vehicle. See Autosource Market-Driven Valuation 2, Doc. No. 1-2 (Exhibit No. 6 to Plaintiff's state-court-filed Petition). In addition to evaluating the condition of various portions of Plaintiff's vehicle (e.g., mileage, seats condition, glass condition, engine condition, and transmission condition) and making adjustments to a base price for any other-than-expected wear or damage (which Plaintiff challenges), the Autosource valuation determines a vehicle's local market value based on the prices associated with other automobiles pulled from “dealer inventories, dealer advertisements, phone verified vehicles, and private party advertisements from thousands of sources including automotive publications, newspapers and Web sites.” Id. Plaintiff asserts that these comparator vehicles were not, in fact, comparable-resulting in undervaluation of her vehicle by Autosource and underpayment of the amount due to her by PGAC. Plaintiff also asserts that the Autosource valuation's adjustment of advertised prices of comparator vehicles for “typical negotiation” price decreases (approximately 5% of the comparators' advertised prices) resulted in undervaluing the comparator vehicles, thereby undervaluing her vehicle, and proposed or actual payment to her of less than actual cash value for her vehicle.[3] See Pet. ¶ 17, Doc. No. 1-2. Plaintiff also faults the Autosource valuation with inadequate explanation of how comparator vehicles' values are calculated, and she alleges that “[t]he intent and effect of the Autosource valuation is to intentionally obscure the most controversial aspects of the valuation and mislead insureds concerning the quality of the evaluation and the unlawfulness of key aspects of the [Autosource v]aluation.” Id. ¶ 19.

         Based on the Autosource valuation, PGAC and GAIS determined the fair market value of Plaintiff's vehicle (not taking into account her deductible) was $20, 338. Plaintiff alleges that this amount undervalued her vehicle by $2, 254 to $2, 429.

         Plaintiff asserts five causes of action-two of which (breach of contract and unjust enrichment) are asserted against PGAC alone, two of which (breach of the duty of good faith and fair dealing (i.e., the tort of bad faith) and fraud/constructive fraud/negligent misrepresentation) are asserted against PGAC and GAIS, and the last of which (tortious interference with a contract) is asserted against GAIS and Audatex.[4] Only the tortious interference with a contract claim against Audatex is at issue ...


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