Senior District Judge Hugh Lawson, U.S. District Court for the Middle District of Georgia. (Photo: Beau Cabell/ Macon Telegraph)

A federal judge in Macon denied class certification to plaintiffs seeking to hold Allstate Insurance liable for claims it failed to assess homeowners for the lost value they suffered due to the "stigma" of some covered property damage that was repaired. 

The April 7 ruling by Senior Judge Hugh Lawson said the claims by various members of the purported class would be "too factually dissimilar to adjudicate uniformly," Lawson wrote, and any diminution in value "may vary widely between these types of losses." 

The putative class action, filed on behalf of Calhoun couple Barbara and Benny Morrow, said their home first suffered foundational and structural damage in 2010 and made a claim to Allstate, which paid more than $50,000 to cover repairs.

In 2015, the Morrows' home suffered interior water damage and mold; Allstate again covered the loss, paying more than $9,000 for repairs.

But the inquirer failed to assess or pay for diminution in the property's value, according to the complaint.

"Despite the fact that its homeowner's policies of insurance provide coverage for diminution in value," the complaint said, Allstate "systematically fails to assess for and pay diminution in value in first-party physical damage claims and fails to establish procedures to handle diminution in value claims."

The suit said Allstate's "conduct has been, and is, in violation of Georgia law and contrary to the terms, conditions, and obligations of its own contracts of insurance."

The complaint named several Allstate entities and sought certification for all Georgia homeowners formerly or currently insured by Allstate who had filed claims for water, mold, fire, foundational or structural damage from 2010 onward and for whom the insurer had not assessed any diminution in the property's value.

Allstate sought to have the suit dismissed, arguing among other things that it was time-barred, that the Morrows had not demonstrated that their property had lost any value and that their policy did not require it to cover any such diminution.

In 2017 Lawson said the Morrows' amended complaint was sufficient to survive summary judgment and allowed it to proceed.

His recent order denying class certification said the case presented two issues: whether Allstate was required to assess for diminution of value and whether it actually paid for such diminution. 

"Defendants here seek to defend against the alleged breach of contract by demonstrating that the plaintiffs' property in fact suffered no diminution in value, which would moot their failure to assess claim," Lawson wrote. 

"And defendants intend to defend other class members' claims similarly," he continued. "That course of litigation is unlikely to produce common answers or a common resolution among all class members."

"Vast dissimilarities exist between the types of physical damage sustained by the properties in the proposed class," said Lawson. "The proposed class encompasses property damage ranging from toxic mold to water damage from an overflowing toilet. Public perception of the properties' values—and ultimately the diminution in value attributable to each property—may vary widely between these types of losses."

Thus, he said, "factual differences and uncertainties among class members make class-wide resolution implausible."

The Morrows' counsel includes Richard Kopelman and Clint W. Sitton of the Kopelman Sitton Law Group; Sandy Springs solo C. Cooper Knowles; and James Bradley, Michael Brickman and Nina Britt of Richardson, Patrick, Westbrook & Brickman in Mt. Pleasant, South Carolina.

In an email, Kopelman said the ruling did not follow with several prior decisions regarding insurers' obligations on diminution of value.

"Plaintiffs respect the court's ruling; however, they do not believe it comports with the long-standing Georgia law established by Mabry v. State Farm or Royal Capital v. Maryland Casualty, or rulings in Thompson v. State Farm, a similar matter where class certification was granted before the case ultimately was resolved," said Kopelman.

He said they are currently weighing their options, including a possible appeal.

Allstate's team of Dentons lawyers includes Nathan Garroway and Jeffrey Zachman in Atlanta, and Richard Fenton, Mark Hanover and Jacqueline A. Giannini from the Chicago office.

None of the lawyers responded to requests for comment Tuesday.