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Williams v. State Farm Mutual Automobile Insurance Co.

United States District Court, E.D. Arkansas, Western Division

October 6, 2017

KENNETH WILLIAMS, MARY WILLIAMS, and KENNETH L. WILLIAMS, on behalf of themselves and all other similarly situated PLAINTIFFS
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY DEFENDANT

          ORDER

         BACKGROUND.

         Plaintiffs Mary Williams and Kenneth L. Williams were involved in an automobile accident. The record reflects that the following then occurred:

... The Williams' vehicle was insured by Defendant State Farm Automobile Insurance Company. The other vehicle involved in the accident was insured by Allstate Insurance Company. Mary and Kenneth L. Williams were injured in the accident and received a settlement or damage award from Allstate. Plaintiffs were required to pay a portion of their recovery to Defendant State Farm as subrogation. There was no agreement between the Plaintiffs and Defendant that Plaintiffs had been “made whole” prior to the subrogation request.

See Docket Entry 30 at CM/ECF 1. The plaintiffs began this case by filing a complaint and seeking, inter alia, class certification on behalf of all others similarly situated.

         United States District Judge James M. Moody, Jr., the judge to whom this case was then assigned, granted the plaintiffs' motion for class certification. He identified the class as follows:

Residents of the State of Arkansas who, during the Class Period of October 14, 2006 through the date of resolution of this action, (a) have, had, or were covered under a contract of automobile insurance with Defendant that includes or included an optional “med pay” and/or “PIP” coverage, (b) received a payment from Defendant under such coverage, (c) recovered money through settlement or otherwise from a third-party tortfeasor, without the assistance of counsel, and (d) had a portion of such recovery taken by Defendant as subrogation or reimbursement without (i) a judicial determination that the insured was made whole or (ii) any documentation in the claim file of an agreement that the insured was made whole.

See Docket Entry 85 at CM/ECF 2.

         After a settlement conference with the undersigned, the parties settled the case. They reduced their agreement to writing (“Settlement Agreement”), and its provisions included the following:

         3. Claims Review Process and Identification of Qualifying Insureds.

A. State Farm will review the claim files and related data to identify any persons listed in the Class Data who are “Qualifying Insureds.” Qualifying Insureds are those persons who meet the following criteria: (a) they are listed in the Class Data, (b) there is no objective documentation in the relevant claim file demonstrating that the person was represented by an attorney, (c) there is no objective documentation in the person's claim file memorializing an agreement that the insured was made whole, and (d) there is no documentation that the reimbursement was not med-pay recovery.
B. For each Qualifying Insured, State Farm will calculate the Gross Subrogation Recovery Amount, defined as the subrogation recovery amount plus interest accruing at six percent per annum, from the first date of subrogation recovery through the date of 90 days after the entry of the Stay Order.
C. State Farm will complete this process and provide all required information to Plaintiff's Counsel, by no later than 180 days from entry of the Stay Order. Any person listed in the Class Data whose claim file has not been reviewed within 180 days of the entry of the Stay Order, and who did not request exclusion from the Class, shall be deemed a Qualified Insured and will receive a Payment Check calculated based upon the subrogation recovery amount in the Class Data, in accordance with Paragraph 7.
D. During this review process every thirty (30) days, State Farm will provide Plaintiff's Counsel with a report identifying, cumulatively: (a) those persons determined to be Qualifying Insureds, the subrogation recovery amount and the Gross Subrogation Recovery Amount and (b) those persons State Farm contends are not Qualifying Insureds along with documentation supporting that contention. ...
E. If Plaintiff's Counsel objects to State Farm's determination that a particular insured is not a Qualifying Insured, Plaintiff's Counsel will inform State Farm of that objection, and request any additional documents from the claims files and data, within twenty (20) days of the determination. State Farm shall respond to any such objection/request within twenty (20) days. If the parties cannot resolve the dispute over whether the documentation provided by State Farm demonstrates that the insured is not a Qualifying Insured, then the dispute will be resolved by Magistrate Judge Patricia Harris, with no right of appeal. ... Such ...

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