Baldwin Mutual Insurance Company v. McCain

Baldwin Mutual Insurance Company ("Baldwin Mutual") appealed a circuit court’s class certification in a suit filed by Gloria McCain. McCain owned a house insured by Baldwin Mutual. The policy provided that any covered property losses would be settled “at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace the damaged property.” McCain's house was damaged twice, she filed claims and was reimbursed by Baldwin Mutual. In each incident, an independent adjuster examined McCain's damaged property and prepared an estimate. Baldwin Mutual paid McCain's claim in accordance with the estimate prepared by the adjuster. The record contained no allegation or evidence indicating that McCain sought more money from Baldwin Mutual in connection with those claims or that she was unhappy in any way. Nevertheless, McCain’s complaint alleged Baldwin Mutual had wrongfully been reducing the amount paid on claims made on actual-cash-value policies inasmuch as its practice was to deduct some amount for depreciation not only of the damaged materials and the labor costs of initially installing those damaged materials (based on their condition prior to the covered damage and their expected life span), but also of the labor costs associated with the removal of the damaged materials. The trial court certified a class based on McCain's claims, and Baldwin Mutual appealed the certification order. The Alabama Supreme Court reversed the certification order because "the class definition proposed by McCain in her brief submitted after the class-certification hearing was materially different from the class definition offered by McCain in her original complaint." Upon remand, McCain filed a second amended complaint that retained the allegations in her first amended complaint and amended the definition of the proposed class. In response to the amended complaint, Baldwin Mutual moved for motion for a summary judgment, contending that McCain's claims were barred by res judicata based on a final judgment of the trial court in "the Adair litigation," which allegedly involved the same claims and same parties. The Alabama Supreme Court concluded the trial court erred in certifying McCain's action for class treatment because the claims of the purported class representative were subject to res judicata. View "Baldwin Mutual Insurance Company v. McCain" on Justia Law