KENNETH L. WARTICK, THOMAS MEADOWS, AND PAUL SIEDSMA APPELLANTS
UNITED SERVICES AUTOMOBILE ASSOCIATION; USAA CASUALTY INSURANCE COMPANY; USAA GENERAL INDEMNITY COMPANY; GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY; MARK L. ADAMS; AND KATHERINE S. ADAMS APPELLEES
FROM THE POLK COUNTY CIRCUIT COURT [NO. 57CV-15-104]
HONORABLE JERRY RYAN, JUDGE
Trammell Law Firm, by: Robert D. Trammell; and Walas Law
Firm, PLLC, by: Breean Walas, for appellants.
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.,
by: John Keeling Baker and Megan D. Hargraves, for appellees.
F. VIRDEN, Judge
appeal arises from a class-action lawsuit filed by appellees
Mark and Katherine Adams against appellees United Services
Automobile Association and related companies (collectively
"USAA"). In 2015, the Adamses and USAA entered into
a class-action settlement. Appellants Kenneth Wartick, Thomas
Meadows, and Paul Siedsma objected to the settlement and
attempted to intervene in the case. The Polk County Circuit
Court denied intervention and approved the settlement.
Appellants now appeal the court's rulings. We affirm.
Adamses were insureds under a USAA homeowners policy when
they suffered a covered loss in 2009. They made a claim under
the policy, and USAA paid them the actual cash value (ACV) of
their loss, meaning the cost of repairs minus an amount
attributable to age and wear and tear. However, in
calculating the ACV, USAA depreciated not only the cost of
the materials that would be used in the repairs but the cost
of labor as well.
2013, our supreme court held that an insurer cannot
depreciate labor when calculating ACV. Adams v. Cameron
Mut. Ins. Co., 2013 Ark. 475, 430 S.W.3d 675. After that
ruling, the Adamses filed a class-action lawsuit against USAA
in Polk County Circuit Court asking that they and all others
similarly situated recover the labor costs that USAA
improperly depreciated. The case was removed to federal
court, where the Adamses and USAA engaged in negotiations and
eventually entered into a class-action settlement. The
settlement provided, inter alia, that payments would
be made to those class members who timely submitted a claim
form; that USAA could pay "as much as" $3, 445, 598
to the class members; and that class counsel would receive,
without objection, $1, 850, 000 in fees, expenses, and costs.
reducing their settlement agreement to writing, the Adamses
and USAA voluntarily nonsuited their case in federal court,
refiled the case in Polk County Circuit Court, and asked that
court to approve the settlement pursuant to Ark. R. Civ. P.
23(e)(1) (2016). The Polk County
Circuit Court preliminarily approved the settlement in August
2015 and set forth requirements for those who wished to
object to the settlement, opt out of the settlement, or
intervene in the case. Included among the requirements was
that objections must be exercised individually and not as a
member of a group or subclass.
November 16, 2015, appellants filed an "Objection to
Settlement Terms" both as individuals and as
representatives of a group of veterans. They asserted, among other things, that
USAA had violated its fiduciary duty to the veterans by
entering into the settlement; that discovery should be
permitted; that the settlement was moving too quickly; that
the claim form for class members was too lengthy and complex;
that USAA had not committed to paying any particular amount
to the class members; and that the entire process had simply
produced a large attorney's fee. Appellants did not
mention intervention, other than to describe the lawyer who
signed the pleading as the "Attorney for
final-approval hearing on December 16, 2015, appellants
argued that they should be allowed to intervene in the class
action as a matter of right. The court noted, "You have
not filed a motion to intervene, is that correct?"
Appellants responded that, to the contrary, their motion to
intervene was contained in paragraph twenty-three of their
"Objection to Settlement Terms." That paragraph
reads as follows:
MOTION: A subclass of veteran [sic] should be recognized,
constituting all the residents of Arkansas that are not
members of this class, but rather, are all insureds of USAA
during the years of the settlement and therefore legal
"owners." USAA is a member-owned company. USAA does
not have the liberty to deny the truth to the member.
Background: 25 Army officers form USAA in 1922, deciding to
insure each other's automobiles. Their motto:
"Service to the Services." By 1933, those officers
exceeded the reserves required of the Texas regulator, and
$230, 000 was given back to its members. That is why the
sub-class deserves recognition. Today's members are
seeing their money spent unwisely, or, they are entitled to
hear USAA say, "Yes we did it, and let us explain."
The members do not need a Little Rock trial lawyer insist
[sic] the agreement is entered into with no admission of
anything. Five of six active duty officers in Arkansas are
USAA members. They are entitled to petition and be heard.
court ruled that appellants had not in fact moved to
intervene, citing the lack of an actual motion to intervene
and the absence of a pleading setting forth a claim in
intervention as required by Rule 24(c) of the Arkansas Rules
of Civil Procedure. The court went on to overrule
appellants' objections to the settlement, approve the
settlement, and dismiss the class action with prejudice.
the dismissal, appellants filed an "Amended Motion to
Intervene, " which the court treated as a postjudgment
motion for intervention. Upon considering the motion, the
court ruled that it did not meet the standards for
postjudgment intervention under Arkansas law. ...