Judge overturns $17 million verdict against American Family

Monday, June 25, 2007

KANSAS CITY, Mo. -- A state judge has overturned a jury's decision ordering American Family Mutual Insurance Co. to pay $17 million as part of a class-action lawsuit over aftermarket vehicle parts in Missouri.

Jackson County Circuit Judge Edith Messina ruled Friday that the plaintiffs didn't provide enough proof that they had suffered damages from the insurance company's policy allowing aftermarket parts in accident repairs.

The $17 million verdict, handed down March 9, covered an estimated 319,000 Missouri residents who made vehicle repair claims between May 1990 and December 2004. Jurors determined American Family allowed repair shops to use inferior, third-party equipment to repair policyholders' damaged vehicles.

The relatively rare instance of a judge overturning a jury's decision in a civil case thrilled American Family's attorneys, who called it "a significant victory" for the company and its policyholders.

"This allows the use of parts that the state of Missouri says it's OK to use, and it will save policyholders money," said attorney David Oliver.

Attorneys for the plaintiffs couldn't be reached for comment.

State law lets repair shops use aftermarket parts as long as they notify the owner.

The case was filed in 2000 and certified as a national class action in 2001. But the Missouri Supreme Court in 2003 ruled that it could apply only to Missouri customers because other states differed in how they regulate insurance company's use of aftermarket parts.

The suit claimed that while American Family's policies said the insurer would pay for replacement parts that were similar in quality, fit and performance to the original parts, it actually approved repair estimates including "inferior imitation crash parts" and omitted other necessary repairs.

Following the verdict, the company argued to Messina that the plaintiffs hadn't proven that American Family hadn't paid them enough to return their vehicles to pre-accident condition.

Ken Muth, a company spokesman, said the company felt using aftermarket parts was in the best interest of policyholders.

"If there are problems, they're fixed at no cost to the customer," Muth said. "So again, we think it's a big win for our customers."


Information from: The Kansas City Star, http://www.kcstar.com

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