IN
THE SIXTH JUDICIAL CIRCUIT COURT
IN
AND FOR PINELLAS COUNTY, FLORIDA
RAYMOND CORBETT, CLIFTON SMITH,
and NORA ALBAUGH, on behalf
of themselves and all others
similarly situated,
Plaintiffs, Case
No: 00-6729-CI-19
vs. CLASS
REPRESENTATION
ALLSTATE INSURANCE COMPANY,
and ALLSTATE INDEMNITY COMPANY,
Defendants.
_______________________________________/
CLASS
ACTION COMPLAINT
Plaintiffs,
Raymond Corbett, Clifton Smith, and Nora Albaugh, on behalf of themselves and
all others similarly situated, file this class action pursuant to Rule
1.220(a),(b)(2) and (b)(3), seeking monetary, declaratory, and injunctive
relief for the individual Plaintiffs and the class they represent. This suit is brought against ALLSTATE
INSURANCE COMPANY and ALLSTATE INDEMNITY COMPANY (hereinafter AALLSTATE defendants@).
JURISDICTION
AND VENUE
1. This is a class action brought under
Florida Rules of Civil Procedure 1.220(a), (b)(2), and (b)(3), seeking monetary,
declaratory, and injunctive relief for the individual Plaintiffs and the class
they represent.
2. This Court has jurisdiction over the
parties and the subject matter of this litigation. There is no federal diversity
jurisdiction, as no plaintiff or class member seeks damages of $75,000 or
greater, and this case is not subject to removal to federal court.
3. Plaintiffs= action for declaratory relief is authorized by
Chapter 86 of the Florida Statutes.
4. Venue is proper in this circuit as the ALLSTATE defendants
do business in Pinellas County and Plaintiff Nora Albaugh resides in Pinellas
County.
PARTIES
5. Plaintiff Raymond Corbett is a citizen
and resident of Orange County, Florida. Plaintiff Clifton Smith is a citizen
and resident of Broward County, Florida. Plaintiff Nora Albaugh is a citizen
and resident of Pinellas County, Florida.
At all relevant times, Plaintiffs owned policies of motor vehicle
insurance through ALLSTATE INSURANCE COMPANY or ALLSTATE INDEMNITY COMPANY,
renewable semi-annually.
6. The ALLSTATE defendants are and were at
all times relevant to this action Illinois corporations. ALLSTATE INSURANCE
COMPANY is a wholly owned subsidiary of THE ALLSTATE CORPORATION, a Delaware
company. ALLSTATE INDEMNITY COMPANY is a wholly owned subsidiary of ALLSTATE
INSURANCE COMPANY. The ALLSTATE defendants are headquartered in Northbrook,
Illinois. The ALLSTATE defendants write
insurance in 49 states, including Florida, and the District of Columbia. In 1999, the ALLSTATE defendants
collectively reported net written premiums in excess of $17 billion. In Florida
alone, the ALLSTATE defendants collectively reported net written premiums in
excess of $1.2 billion.
7. The ALLSTATE defendants utilize a
standard form of automobile insurance policy which they prepare and issue to
their nationwide sales force from their home offices in Illinois. All of the ALLSTATE defendants= policyholders have the same rights,
and the ALLSTATE defendants have the same obligations under the terms of that
form policy.
8. The ALLSTATE defendants make no distinction between ALLSTATE
INSURANCE COMPANY and ALLSTATE INDEMNITY COMPANY in advertising, marketing
literature, or agent solicitations, but placement by the defendants of an
applicant or insured into either subsidiary company directly affects the amount
of premiums that will be charged for automobile insurance. ALLSTATE INSURANCE
COMPANY and ALLSTATE INDEMNITY COMPANY are sometimes referred to herein
collectively as AALLSTATE.@ At a minimum, for purposes of
selling its policies ALLSTATE disregards its corporate formalities to confuse
prospective policyholders.
FACTUAL
BACKGROUND
9. This is a class action based on a scheme
and common course of conduct perpetrated by ALLSTATE. The purpose of this
scheme was, and is, to charge policyholders additional premiums for automobile
insurance by improperly placing and maintaining policyholders in higher risk
and higher premium policies, thereby breaching their contracts with
policyholders and committing certain torts.
10. During all relevant times herein, ALLSTATE
has operated two companies, ALLSTATE INSURANCE COMPANY and ALLSTATE INDEMNITY
COMPANY.
11. ALLSTATE INSURANCE COMPANY issues a single
type of policy to all qualifying
ALLSTATE insureds, which is a Apreferred risk policy.@ This type of policy offers ALLSTATE=s lowest insurance premiums. Not
only are overall premiums charged by ALLSTATE INSURANCE COMPANY lower than
those charged by ALLSTATE INDEMNITY COMPANY, but ALLSTATE INSURANCE COMPANY
policyholders have available to them more discount programs allowing even lower
premiums than are available to policyholders through ALLSTATE INDEMNITY
COMPANY.
12. ALLSTATE INDEMNITY COMPANY issues ALLSTATE=s Ahigher risk@ policy to all other insureds. ALLSTATE INDEMNITY policies
require higher insurance premiums than those offered by ALLSTATE INSURANCE
COMPANY and do not offer similar premium discounts.
13. When a prospective or existing insured
seeks ALLSTATE insurance, he or she communicates with an ALLSTATE agent or
through a toll free ALLSTATE telephone number. The agents and operators are not
identified as representing ALLSTATE INSURANCE COMPANY or ALLSTATE INDEMNITY
COMPANY. Neither ALLSTATE INSURANCE COMPANY nor ALLSTATE INDEMNITY COMPANY have
separate agent forces in the state of Florida.
In fact, all ALLSTATE agents in the state of Florida are dually licensed
with both ALLSTATE INSURANCE COMPANY and ALLSTATE INDEMNITY COMPANY, but the
correspondence, advertising, forms and other material utilized by licensed
agents refer only to AALLSTATE.@
14. When a prospective policyholder applies for issuance or renewal of automobile
liability insurance from ALLSTATE, the ALLSTATE agent transmits it to ALLSTATE
electronically. ALLSTATE then determines, based on the information provided,
whether the applicant will receive a policy from ALLSTATE INSURANCE COMPANY or
ALLSTATE INDEMNITY COMPANY.
15. The decision to place a policyholder into
ALLSTATE INSURANCE COMPANY or ALLSTATE INDEMNITY COMPANY does not affect the
coverage, it only affects ALLSTATE=s economic recovery and the cost of the policy to the
insured. Thus, ALLSTATE has a significant economic incentive to relegate as
many insureds as possible to its Aindemnity@ policies.
16. Upon information and belief, plaintiffs
allege that all premium dollars sent in by policyholders of both ALLSTATE
INSURANCE COMPANY and ALLSTATE INDEMNITY COMPANY are commingled by ALLSTATE
into common accounts.
17. ALLSTATE=s decisions concerning placement of policyholders into
ALLSTATE INSURANCE COMPANY or ALLSTATE INDEMNITY COMPANY are required to be
governed by the Florida statutes and ALLSTATE=s rules and manuals
18. ALLSTATE files each year with the Florida
Department of Insurance, pursuant to Florida Statutes, '627.0651(13)(a), its manuals and
rules in connection with private passenger automobile insurance policies issued
in the state. These rules set forth which ALLSTATE applicants and ALLSTATE
insureds are eligible for policies with ALLSTATE INSURANCE COMPANY, as opposed
to ALLSTATE INDEMNITY COMPANY. These rules also set forth the circumstances
whereby policyholders are entitled to discounts on their premiums, or are
subject to surcharges on their premiums.
19. The ALLSTATE defendants are required by law
to follow their manuals and rules and may not act arbitrarily or capriciously
in their dealings with Florida policyholders.
20. In addition to the rules and manuals filed
by ALLSTATE, the Florida legislature has determined that certain practices by
insurance companies in the state of Florida are unfair methods of competition
or unfair or deceptive acts and practices. Included in this definition of
unfair methods of competition or unfair or deceptive acts and practices is the
following:
(g) Unfair discrimination -
Knowingly
making or permitting any unfair discrimination between individuals of the same
actuarially supportable class and essentially the same hazard, in the amount of
premium, policy fees, or rates charged for any policy or contract of accident .
. . in the benefits payable thereunder, in any of the terms or conditions of
such contract, or in any other manner whatever. Florida Statutes, '626.9541(1)(g)(2).
21. Furthermore, Florida
law provides separately that insurance rates shall not be unfairly
discriminatory and shall bear a reasonable relationship to the expected loss
and expense experience within categories of risk. Florida Statutes, '627.062.
22. It is the public policy of the state of
Florida that the business of insurance is a public trust in which public trust
all agents and insurers must serve the best interests of their insureds.
23. ALLSTATE has filed for each relevant year
herein its manual and rules setting forth the eligibility of Florida applicants
and policyholders for issuance of a policy from ALLSTATE INSURANCE COMPANY,
with the lower premiums available through such subsidiary, as opposed to
ALLSTATE INDEMNITY COMPANY with its higher premiums.
24. The ALLSTATE defendants renew their policies
with Florida residents on a semi-annual basis, and at the time of renewal
ALLSTATE is obligated to issue a policy through ALLSTATE INSURANCE COMPANY if
the insured meets the criteria in ALLSTATE=s manuals and rules
for issuance of a lower premium policy. If the ALLSTATE defendants fail to do
this, they are discriminating against such insureds who are being kept in a
class of higher risk insureds in a manner that is not actuarially supportable,
and the defendants are treating such insureds arbitrarily and capriciously.
25. The laws of the state of Florida are a part
of every Florida contract, and the laws applicable to private passenger
automobile insurers in the state, such as ALLSTATE, are a basic ingredient and
provision in every Florida automobile insurance contract, including plaintiffs
herein and the class they seek to represent.
26. The written language of the form policies
issued by ALLSTATE state that
calculations and adjustments of all premiums will be based on ALLSTATE=s rules filed with the state of
Florida. The portion of the form policies incorporated in this complaint reads:
Any calculation or adjustment of
your premium will be made using the rules, rates and forms in effect, and on
file if required, for use in your state.
CONDUCT GIVING RISE TO CLAIMS FOR
RELIEF
27. Beginning in approximately 1984 and
continuing through the current date, ALLSTATE engaged in a corporate scheme of
increasing the amount of insurance sold through its higher risk company,
ALLSTATE INDEMNITY COMPANY, relative to the amount of insurance sold through
ALLSTATE INSURANCE COMPANY, its lower risk company.
28. In order to
accomplish this, ALLSTATE, at all relevant times herein, engaged in a practice
of placing insureds qualified to receive policies from ALLSTATE INSURANCE
COMPANY into the higher risk company, ALLSTATE INDEMNITY COMPANY.
29. ALLSTATE also continued to reissue policies
to insureds in ALLSTATE INDEMNITY COMPANY year after year, in spite of the
fact that they qualified for a less expensive policy issued by ALLSTATE
INSURANCE COMPANY.
30. ALLSTATE achieved its goal of increasing
premium collections through shifting of policyholders to ALLSTATE INDEMNITY
COMPANY by several methods, perpetrated separately or in combination. These methods
include:
A. using any history of accidents by the insured or members of the
insured=s family beyond the three-year
period set forth in ALLSTATE INSURANCE COMPANY=s rules, which rules are mandated by state statutes,
including Florida Statutes, '626.9541(1)(o), and a part of every policy of insurance in the state;
B. using any history of accidents by the insured or members of the
insured=s family, even when the insured or
family member was not substantially at fault, in violation of ALLSTATE
INSURANCE COMPANY=s rules, which rules are mandated by
state statutes, including Florida Statutes, '626.9541(1)(o), and a part of every policy of insurance in
the state;
C. using the identity of a new insured=s prior insurer as grounds for placement in a higher
premium policy, even where the prior insurer was a reputable and stable
insurer;
D. using surcharges and removal of premium discounts to charge higher
premiums within ALLSTATE INDEMNITY COMPANY, contrary to its rules, which rules
are mandated by state statutes, including Florida Statutes, '626.9541(1)(o)(3)(a) and (c), and a
part of every policy of insurance in the state;
E. using traffic citations and driving records beyond the terms allowed in
its rules for placement of insureds into ALLSTATE INDEMNITY COMPANY, which
rules are a part of every policy of insurance in the state, and keeping
insureds in said company indefinitely;
F. using credit histories and credit investigations as a basis, in whole
or in part, for placing and keeping insureds into ALLSTATE INDEMNITY COMPANY,
and using adverse credit information indefinitely at each subsequent renewal,
in spite of the fact that the passage of time had rendered the credit report Aclean,@ as defined by ALLSTATE; and
G. failing to reissue policies
through ALLSTATE INSURANCE COMPANY after ALLSTATE INDEMNITY COMPANY
policyholders had qualified for lower premiums through ALLSTATE INSURANCE
COMPANY.
31. Defendant ALLSTATE INDEMNITY COMPANY
provided certain motor vehicle insurance products to plaintiffs and members of
the class through issuance of policies and semi-annual renewals of said
policies. In said policies, defendants were obligated to charge premiums for
such policies based upon the rules filed by defendants with the state of
Florida Department of Insurance (Florida DOI). These rules (including
underwriting rules), filed each year with the Florida DOI by the defendants,
allow the defendants to charge additional annual premiums on such policies in
one of three ways: a) by issuance to an insured of a policy from ALLSTATE
INDEMNITY COMPANY; b) by placing a surcharge on premiums in both ALLSTATE
INSURANCE COMPANY and ALLSTATE INDEMNITY COMPANY policies; and c) by removing
discounts on premiums in both ALLSTATE INSURANCE COMPANY policies and ALLSTATE
INDEMNITY COMPANY policies.
32. In charging
additional premiums for policies issued by ALLSTATE INDEMNITY COMPANY, ALLSTATE
represented to its insureds that it was fairly discriminating between actuarially supportable classes of high risk
versus lower risk insureds. In keeping insureds in ALLSTATE INDEMNITY COMPANY
who qualified at inception or on renewal for an ALLSTATE INSURANCE COMPANY
policy, however, ALLSTATE and the ALLSTATE defendants were unfairly
discriminating against lower risk insureds who were being kept in an
actuarially unsupportable class of high risk insureds, in violation of the
express and implied terms of their written insurance policies.
33. As a result of ALLSTATE=s scheme, residents of the state of
Florida who have policies issued by ALLSTATE INDEMNITY COMPANY have paid higher
premiums for automobile insurance than they were obligated to pay or ALLSTATE
was entitled to receive.
34. In addition, when
insureds under ALLSTATE INDEMNITY COMPANY seek insurance from another company,
they are stigmatized by the fact that they have been insured by ALLSTATE=s Ahigh risk@ insurer and are charged higher premiums by other insurance
carriers who know that ALLSTATE INDEMNITY COMPANY supposedly insures only
higher risk automobile drivers. Thus, by having been unfairly kept in the high
risk ALLSTATE INDEMNITY COMPANY, such former ALLSTATE insureds are forced to
pay higher premiums for automobile insurance from other automobile insurers.
Current ALLSTATE INDEMNITY COMPANY insureds who qualify for lower risk policies
through ALLSTATE INSURANCE COMPANY are faced with the prospect of paying higher
premiums elsewhere even if they choose to drop their ALLSTATE coverage.
USE OF ACCIDENT HISTORY
35. Florida DOI Regulation, 4-175.008, prohibits
insurers in the state of Florida from using any motor vehicle accidents older
than three years as a basis for charging additional premiums and further
prohibits the insurers from allowing such additional premium charges to remain
in effect for longer than three years.
36. Florida Statutes, ' 627.0651, states that an insurer=s rules Ashall be filed@ with the Florida DOI for approval
within the state. Furthermore, '627.0651 (13)(a) specifically requires automobile insurance carriers to
file their underwriting rules for approval within the state.
37. The ALLSTATE defendants have filed each
year with the Florida DOI their rules, all of which from 1985 to the present
state that the ALLSTATE defendants will charge additional premiums to
policyholders who are charged with accidents or are subject to motor vehicle
convictions during a policy period.
38. The rules on file with the Florida DOI by
the ALLSTATE defendants state, in conformity with the Florida regulations, as
follows with regard to such additional premiums:
An
accident is chargeable if it occurred within the 36 months ending on the
effective date of the policy and ... it was determined that the insured was
more than 50% at fault in the accident.
39. Pursuant to its contracts with plaintiff
and members of the class as defined herein, the ALLSTATE defendants are thus
allowed to charge said additional premiums for a period of only three years, and
only if the insured was more than 50% at fault. Any additional premiums charged
beyond that time period are not allowed by law nor by the contractual terms of
the motor vehicle insurance policies.
40. In spite of these limitations on the
ability of the ALLSTATE defendants to charge additional premiums to
policyholders with chargeable accidents for a period of only three years, the
ALLSTATE defendants have engaged in a practice of continuing such additional
premium charges beyond the three-year period allowed by law and by contract.
When and if the ALLSTATE defendants have eventually removed such additional
premiums, they refuse, however, to refund to the policyholder the illegal and
extracontractual charges which have been paid by the policyholder beyond the
allowable three-year period, thereby damaging the policyholder who has lost the
additional premiums paid, together with interest on these extracontractual and
illegal charges.
41. One method in which ALLSTATE circumvents
the three-year limitation on premium increases based upon accidents and
convictions is through the use of ALLSTATE INDEMNITY COMPANY.
42. ALLSTATE INDEMNITY COMPANY was created by ALLSTATE
in order to charge higher premiums and higher rates to classes of insureds
considered to be a higher risk.
43. For new policyholders, rather than issuing
a policy through ALLSTATE INSURANCE COMPANY and placing a surcharge on premiums
based upon prior accidents and convictions, ALLSTATE engages in the practice of
issuing policies to new insureds through ALLSTATE INDEMNITY COMPANY, thus
charging and collecting the higher premiums based on such driving history.
44. New policyholders with such driving
histories are then reissued ALLSTATE INDEMNITY COMPANY policies for several
years, well beyond the three-year limitation set forth in Florida=s statutes and regulations, and in
spite of such policyholders= qualification for a lower premium policy through ALLSTATE INSURANCE
COMPANY.
45. Alternatively, when an existing ALLSTATE
INSURANCE COMPANY insured has a chargeable accident or traffic citation,
ALLSTATE reissues a new ALLSTATE INDEMNITY COMPANY policy to such insured,
thereby increasing the premiums owed by the insured due to the accident or
citation.
46. Existing policyholders with such driving
histories are then reissued ALLSTATE INDEMNITY COMPANY policies for several
years, well beyond the three-year limitation set forth in Florida=s statutes and regulations, and in
spite of such policyholders= qualification for a lower premium policy through ALLSTATE INSURANCE
COMPANY.
47. ALLSTATE also used such driving histories in
such improper manner to charge higher premiums by placing Asurcharges@ on existing policies with ALLSTATE
INDEMNITY COMPANY, or by removing discounts on premiums (and thus charging
higher premiums).
USE OF NOT-AT-FAULT ACCIDENTS
48. Florida Statutes, ' 626.9541(1)(o), provides that an
automobile insurer is prohibited from imposing an additional premium solely
because the insured was involved in a motor vehicle accident unless the insurer=s file contains information from
which the insurer in good faith determines that the insured was substantially
at fault in the accident.
49.
In furtherance of its scheme to charge improper higher premiums to its
insureds, ALLSTATE has instituted a corporate policy, followed by its
underwriters, to ignore the requirement that accidents are chargeable only if
the insured is more than 50% at fault. ALLSTATE charges additional premiums
regardless of the fault of the insured, in effect shifting the burden to the
insured to prove to ALLSTATE that the insured was in fact 50% or less at fault
for the accident sought to be charged.
ASUBSTANDARD@ OR ASTANDARD@ PRIOR INSURERS
50. In furtherance of its scheme to charge
improper higher premiums to its insureds, the ALLSTATE defendants have also
engaged in the practice of using the identity of prior insurers as a grounds to
place and keep insureds in ALLSTATE INDEMNITY COMPANY.
51. ALLSTATE originally designated a group of
insurers as Asubstandard@ insurers, and stated in its rules
that if a proposed insured was previously insured by such Asubstandard@ insurers, the insured would have to
pay the higher premiums required for a policy with ALLSTATE INDEMNITY COMPANY.
The term Asubstandard insurer@ was eventually changed to Astandard insurer,@ but prior policies with the
companies on this list continued to cause insureds to be placed and kept in
ALLSTATE INDEMNITY COMPANY policies.
52. The insurance companies on the list of Asubstandard,@ and later Astandard,@ insurance companies were companies
whose agencies were predominantly located in African-American and Hispanic
communities in Florida, and the practical effect of using this criteria in
underwriting policies and placing insureds into ALLSTATE INDEMNITY COMPANY was
to cause said minority groups to be assigned higher premium policies based on
their race and ethnicity.
CREDIT REPORTS
53. The ALLSTATE defendants, in furtherance of
their scheme to charge higher premiums to their insureds, have used adverse
results from credit checks on their insureds and proposed insureds as a basis
for placing and keeping insureds in ALLSTATE INDEMNITY COMPANY.
54. The ALLSTATE defendants have made it a
company-wide practice to obtain credit reports on applicants for automobile insurance
policies and to utilize such credit reports as additional grounds for placing
and keeping applicants and insureds in ALLSTATE INDEMNITY COMPANY.
55. When a person receives an adverse credit
report based upon a past credit problem, after the expiration of time during
which no further credit problems arise, that person=s credit report becomes Aclean.@ In spite of this, ALLSTATE and the ALLSTATE
defendants continue to charge higher premiums in violation of their own rules
regarding eligibility for lower premiums through lower-cost policies. In these
instances, the ALLSTATE defendants continue to reissue policies through
ALLSTATE INDEMNITY COMPANY and continue to charge higher premiums as a result.
TOLLING OF STATUTE OF LIMITATIONS
56. Florida policyholders are unaware of the
significant differences between premiums charged by ALLSTATE INSURANCE COMPANY
and ALLSTATE INDEMNITY COMPANY and are led to believe through advertising and correspondence
that their automobile insurance is with AALLSTATE,@ regardless of the individual ALLSTATE company within which they are
placed by the home office.
57. Florida policyholders in ALLSTATE INDEMNITY
COMPANY are unaware of the fact that higher premiums are being charged to them
simply by being placed in such ALLSTATE company and are unaware that keeping
them in such company beyond the allowable three-year period violates the
provisions of their insurance policies, laws, and regulations. Plaintiffs and
class members did not discover these facts until 1999 and thereafter.
58.
The ALLSTATE defendants, through various devices of secrecy, affirmatively and
fraudulently concealed the existence of the unlawful scheme and course of
conduct from plaintiffs and class members. Among other matters, the ALLSTATE
defendants concealed, and continue to conceal, from their policyholders the
difference in premiums charged by ALLSTATE INSURANCE COMPANY and ALLSTATE
INDEMNITY COMPANY and have further concealed from Florida policyholders their
decision to keep as many Floridians as possible in the Aindemnity@ company, despite ALLSTATE=s own underwriting rules.
59.
The actions of the ALLSTATE defendants in charging additional premiums as set
forth above, and in concealing their scheme and course of conduct from class
members, continue through the date of the filing of this complaint. As a
result, the running of the statute of limitations has been suspended with
respect to any claims which plaintiffs or class members have brought as a
result of the unlawful and fraudulent course of conduct alleged in the above
paragraphs.
60. Furthermore, the causes of action as alleged
in this complaint are continuing violations of the policies of insurance, and
continuing torts, in that each time the ALLSTATE defendants improperly reissued
policies at renewal dates, the breaches and torts reoccurred. The conspiracy
between the ALLSTATE defendants continued throughout the class period alleged
herein and continues to this date.
THE
CLAIM FOR RELIEF OF RAYMOND CORBETT
61. As a result of ALLSTATE's practice of
charging illegal and extracontractual charges, Plaintiff Raymond Corbett, like
many thousands of other ALLSTATE policyholders, has sustained losses and
damages.
62. Plaintiff Raymond Corbett has been a
policyholder with ALLSTATE INDEMNITY COMPANY since 1981. He was insured under
ALLSTATE INDEMNITY COMPANY policy number 6 41 054314 08/23, providing bodily
injury liability protection, property damage coverage, and personal injury
protection coverage. His policy was a form ALLSTATE policy.
63. Plaintiff Corbett believed the promises of
ALLSTATE that he was AIn Good Hands With Allstate,@ trusted the ALLSTATE defendants
that he would be charged premiums only as allowed by law, and trusted that the
ALLSTATE defendants would treat him fairly and honestly.
64. Prior to obtaining the ALLSTATE policy,
plaintiff Corbett=s wife had been in an automobile
accident for which she was not at fault. Additionally, plaintiff Corbett had
received a traffic citation prior to issuance of the new policy in 1981. Rather
than issue him an ALLSTATE INSURANCE COMPANY policy with a surcharge, however,
the policy plaintiff Corbett was issued was from ALLSTATE INDEMNITY COMPANY,
which premiums are consistently higher than ALLSTATE INSURANCE COMPANY.
Plaintiff Corbett was not aware of the distinction between ALLSTATE INSURANCE
COMPANY and ALLSTATE INDEMNITY COMPANY, believing simply that he had insurance
with AALLSTATE,@ and that he was AIn Good Hands With Allstate.@
65. Plaintiff Corbett paid his premiums for
over 17 years, well beyond the 3-year experience period set forth in the
applicable ALLSTATE rules, in spite of the fact that neither he nor his wife
suffered any further accidents or received any traffic citations. In 1998,
plaintiff Corbett inquired of ALLSTATE as to the reason for increased premiums
and was informed that a change in assigned territories necessitated an increase
in his premiums, but was given no explanation as to the reason for the many
years he had been charged higher premiums.
66. As a result of these circumstances,
ALLSTATE charged plaintiff Corbett higher premiums for the accident and
citation which had occurred prior to 1981, well beyond the three-year period
set forth in the ALLSTATE rules and in violation of his policy of insurance, by
using the Aindemnity@ company as the means to charge and
collect higher premiums.
THE CLAIM FOR RELIEF OF CLIFTON
SMITH
67. As a result of ALLSTATE's practice of
charging extracontractual premiums, Plaintiff Clifton Smith, like many
thousands of other ALLSTATE policyholders, has sustained losses and damages.
68. Plaintiff Clifton Smith was a policyholder
with ALLSTATE INDEMNITY COMPANY from 1991 to 1998, with policies providing
bodily injury liability protection, property damage coverage, and personal
injury protection coverage. His policy was a form ALLSTATE policy. He had
previously been insured by New Alliance Insurance Company.
69. Plaintiff Smith trusted the ALLSTATE
defendants that he would be charged premiums only as allowed by law, and
trusted that the ALLSTATE defendants would treat him fairly and honestly.
70. When plaintiff Smith first became a
policyholder of ALLSTATE, he was issued, without explanation, a policy through
ALLSTATE INDEMNITY COMPANY, and thus was required to pay additional premiums
from the inception of his policy.
71. Plaintiff Smith had no accidents or traffic
citations which would justify the continued payment of the additional premiums.
72. In 1998, after having paid for a policy
through ALLSTATE INDEMNITY COMPANY for over seven years, plaintiff Smith
learned from his ALLSTATE agent that he was considered to be insured by a high
risk company (i.e., ALLSTATE INDEMNITY COMPANY). When he pointed out that he
had experienced no accidents or traffic citations in the interim, he was told
that if he did not like it, he could Afind another insurer.@
73. As a result of these actions, plaintiff
Smith paid additional premiums to ALLSTATE in excess of that allowed by his
contract, and the rules, regulations, and statutes, for a period of seven
years.
THE CLAIM FOR RELIEF OF NORA ALBAUGH
74. As a result of ALLSTATE's practice of
charging extracontractual premiums,
Plaintiff Nora Albaugh, like many thousands of other ALLSTATE policyholders,
has sustained losses and damages.
75. Plaintiff Nora Albaugh was a policyholder
with ALLSTATE INSURANCE COMPANY from approximately 1985 to 1999, through a
policy (policy number 041-555-743-09/22) providing bodily injury liability
protection, property damage coverage, and personal injury protection coverage.
Her policy was a form ALLSTATE policy.
76. Neither plaintiff Nora Albaugh nor her
husband has had a traffic citation in the past 30 or more years. In February
1992, Mrs. Albaugh lawfully parked her automobile in the parking lot at her
church. At the conclusion of the church service, while the automobile was
lawfully parked and Mrs. Albaugh was attempting to enter the automobile, the
door was hit by another automobile resulting in repairs costing $533.93, of
which Allstate paid $333.93 after payment of the Albaughs= deductible of $200.00.
77. By the terms of Nora Albaugh=s form policy from ALLSTATE,
ALLSTATE could not increase her premiums by removing discounts because of an
accident in which Nora Albaugh was not at fault or because of an accident in
which Nora Albaugh=s automobile was lawfully parked.
78. Notwithstanding that her car was lawfully
parked and that she was not at fault in the accident, ALLSTATE removed Nora
Albaugh=s discount at the time of her next
renewal of her ALLSTATE policy. ALLSTATE advised her that the discount had been
removed because of the above-described accident. As a result of its actions,
ALLSTATE collected further premiums from Nora Albaugh in violation of her
contract and the law.
CLASS ALLEGATIONS
79. Plaintiffs seek certification of a class,
pursuant to Rule 1.220 of The Florida Rules of Civil Procedure, which is
defined as follows:
ALL FLORIDA AUTOMOBILE INSURANCE
POLICYHOLDERS CURRENTLY WITH ALLSTATE INDEMNITY COMPANY WHO, BETWEEN 1984 AND
THE PRESENT, WERE ISSUED OR REISSUED AN ALLSTATE INDEMNITY COMPANY POLICY AFTER
THEY HAD QUALIFIED FOR AN ALLSTATE INSURANCE COMPANY POLICY; AND ALL FLORIDA AUTOMOBILE INSURANCE
POLICYHOLDERS WITH EITHER ALLSTATE INSURANCE COMPANY OR ALLSTATE INDEMNITY
COMPANY WHO, BETWEEN 1984 AND THE PRESENT, PAID ADDITIONAL PREMIUMS BECAUSE
THEY WERE DENIED DISCOUNTS OR WERE SURCHARGED BASED ON ACCIDENTS THAT WERE
IMPROPERLY CHARGED AGAINST THEM (hereinafter Athe class@).
To be excluded from the class are
all directors, officers, agents and/or employees of THE ALLSTATE CORPORATION
and the ALLSTATE defendants. Also to be
excluded from the class are all persons who have claims in excess of
$75,000.00.
80. This action is properly brought as a class
action under Rule 1.220 for the following reasons:
a. Although
Plaintiffs are unaware of the exact number
of class members, because the
ALLSTATE defendants are collectively
among the largest insurers of automobiles in the state of Florida, plaintiffs believe
and therefore allege that members of the class number in the thousands and are
so numerous that joinder of all members is impracticable.
b. There
are questions of law and fact common to this
action which predominate over any
questions solely affecting individual class members. Among the common questions of law and fact are:
(1) whether
the ALLSTATE defendants failed to comply with statutes, regulations, and the
approved rules with regard to the experience period set forth in such rules and
thus violated their policies of insurance with their insureds;
(2) whether
the ALLSTATE defendants charged policyholders premium increases in excess of
those allowed by statutes, regulations, and the approved rules and thus
violated their policies of insurance with their insureds;
(3) whether
the ALLSTATE defendants engaged in a practice of allowing continued billing of
excess premiums in violation of their contracts with policyholders;
(4) whether
the ALLSTATE defendants acted to conceal from policyholders their continued use
of additional premiums in violation of their contracts with policyholders;
(5)
whether the ALLSTATE defendants directed their underwriters and
employees to ignore the experience period limitations set forth in statutes,
regulations and approved rules;
(6) whether
the ALLSTATE defendants breached their policy contracts with policyholders by
failing to notify policyholders when the three-year experience period had
expired, making them eligible for lowered premiums;
(7) whether
the ALLSTATE defendants engaged in a
deliberate practice of continuing to keep insureds in ALLSTATE INDEMNITY
COMPANY during renewal periods, even after insureds were eligible for lower
premium policies issued by ALLSTATE INSURANCE COMPANY;
(8) whether
plaintiffs and the class members have sustained damages and the proper measure
of damages;
(9) whether
plaintiffs and the class members are entitled to an award of punitive damages
against the ALLSTATE defendants if the requirements of Florida Statutes are
met; and
(10) whether plaintiffs and the
class members are entitled to declaratory and injunctive relief or the
equitable relief that is requested herein.
81. Plaintiffs= claims are typical of the claims of other Class members
which arise from common policy language in ALLSTATE's standard automobile
insurance policy and from ALLSTATE rules applicable to all Florida residents.
82. Plaintiffs will fairly and adequately
protect the interests of the members of the class. Plaintiffs have no interest antagonistic to those of other class
members, and plaintiffs have retained attorneys experienced in class action and
complex litigation as counsel.
83. A class action is superior to the other
available methods for the fair and efficient adjudication of this controversy
for at least the following reasons:
a. given
the size of individual class members' claims and the expense of litigating
those claims, few, if any, class members could afford to or would seek legal
redress individually for the wrongs the ALLSTATE defendants committed against
them, and absent class members have no substantial interest in individually
controlling the prosecution of individual actions;
b. when
the liability of the ALLSTATE defendants has been adjudicated, claims of all
class members can be administered efficiently and/or determined by the Court;
c. this
action will promote an orderly and expeditious administration and adjudication
of the class claims; economies of time, effort and resources will be fostered;
and uniformity of decisions will be ensured; and
d. without
a class action, the class members will continue to suffer damages, and the
ALLSTATE defendants= violations of law will proceed without
remedy while the ALLSTATE defendants continue to reap and retain the
substantial proceeds of their wrongful conduct.
84. Plaintiffs know of no difficulty which will
be encountered in the management of this litigation which would preclude its
maintenance as a class action.
85. Plaintiffs seek preliminary and permanent
injunctive and equitable relief on behalf of the entire class, on grounds
generally applicable to the entire class, to enjoin and prevent the ALLSTATE
defendants from charging additional premiums beyond the period of time allowed
by their contracts and the statutes, regulations, and approved rules and rates,
and from engaging in the other wrongful conduct alleged herein. Plaintiffs also seek preliminary and
permanent injunctive and equitable relief on behalf of the entire class, on
grounds generally applicable to the entire class, requiring the ALLSTATE
defendants to disgorge all of their ill-gotten gains from the failure to comply
with their policies of insurance and the statutes, regulations and approved
rules regarding additional premiums, and to provide full restitution to
plaintiffs and class members of all monies wrongfully acquired.
COUNT
I
Breach
of Contract
86. Plaintiffs repeat and reallege the
allegations contained in paragraphs 1 through 85 above, as if fully set forth
herein.
87. The ALLSTATE defendants entered into
standard forms of automobile insurance policies with plaintiffs and members of
the class and were obligated by contract to comply with Florida law regarding
the charging of additional premiums for insurance.
88. By choosing to incorporate expressly within
each policy of insurance an obligation to follow the rules, rates and forms in
effect and on file for use in the state of Florida, ALLSTATE, as drafter of the
policy of insurance, agreed contractually with each ALLSTATE insured to be
bound by those rules, rates and forms.
89. In addition, the ALLSTATE defendants were
obligated by contract and law to avoid discriminatory practices against
policyholders, and to charge premiums for insurance based upon sound actuarial
practices.
90. The ALLSTATE defendants entered into
standard forms of automobile insurance policies with plaintiffs which expressly
stated that the premiums charged would be determined pursuant to the ALLSTATE
defendants= rules then in effect.
91. Each policy was valid and enforceable at
the time of the extracontractual additional premiums.
92. All conditions precedent to the ALLSTATE
defendants= liability under the standardized
forms of automobile insurance policy have been performed, including the payment
of all premiums necessary to keep the policy in effect during the times that
plaintiffs and the class members are or were insured by the ALLSTATE
defendants.
93. The ALLSTATE defendants materially breached
the terms of the standardized policy contract with plaintiffs and the class
members by, among other things, charging policyholders additional premiums in
violation of the statutes, regulations, and approved rules.
94. As a result of the ALLSTATE defendants= material breach of policy
contracts, plaintiffs and the class members have been damaged in an amount to
be determined at trial.
COUNT II
Breach of Fiduciary Duty
95. Plaintiffs repeat and reallege the
allegations contained in paragraphs 1 through 85 above, as if fully set forth
herein.
96. As alleged above, it is the public policy of
the state of Florida that the business of insurance is a public trust, and
insurers must serve the best interests of their insureds.
97. The ALLSTATE defendants have engaged in a
uniform advertising and marketing scheme throughout Florida and the nation
using the slogan AYou=re In Good Hands With Allstate.@ In fact, the standard insurance
policies issued by the ALLSTATE defendants contain the same assurances.
ALLSTATE regularly sends plaintiffs and members of the class letters containing
the same assurances.
98. The purpose of such advertising and
correspondence by ALLSTATE is to
instill a sense of trust and confidence in applicants and insureds that
ALLSTATE will indeed look out at all times for the best interests of insureds
pertaining to automobile insurance.
99. ALLSTATE knew or should have known that
plaintiffs and members of the class placed this trust and confidence in them,
and ALLSTATE accepted the confidence and trust reposed in them by plaintiffs and
the members of the class. Additionally, plaintiffs and members of the class
were existing policyholders and thus the ALLSTATE defendants were in a special
relationship of trust and confidence with plaintiffs and members of the class.
100. Plaintiffs and members of the class
generally had no prior training, expertise, or knowledge concerning automobile
insurance, including the various statutes, regulations, and rules applicable
thereto, and relied on the trust they had placed in the ALLSTATE defendants to
provide for the best interests of their insureds, who were Ain good hands.@
101. The ALLSTATE defendants created a f