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Kleinsasser v. Progressive Direct Insurance Co.

United States District Court, W.D. Washington, Tacoma

July 19, 2018




         This matter comes before the Court on Plaintiff Mark Kleinsasser's (“Plaintiff”) motion to remand (Dkt. 14) and motion to strike declaration of Michael Silver (Dkt. 74). The Court has considered the pleadings filed in support of and in opposition to the motions and the remainder of the file and hereby denies the motions for the reasons stated herein.


         On April 1, 2016, Plaintiff filed a class action complaint against Defendants Progressive Direct Insurance Company and Progressive Max Insurance Company (collectively, “Progressive”) in Pierce County Superior Court for the State of Washington. Dkt. 1-2 (“Comp.”). Plaintiff seeks to recover diminished value on a class-wide basis and individual loss of use damages under the Underinsured Motorists Property Damage (“UIMPD” or “UMPD”) provision of his insurance contract with Progressive. Id. Plaintiff alleged that the total amount of compensatory damages would be “approximately $3, 010, 903.” Id.

         On June 28, 2017, Progressive removed the matter to this Court. Dkt. 1.

         On July 28, 2017, Plaintiff filed a motion to remand challenging both the timing of the removal and Progressive's calculation of damages. Dkt. 14. On August 28, 2017, Progressive responded. Dkt. 24. On September 1, 2017, Plaintiff replied. Dkt. 29. On October 10, 2017, the Court set the matter for an evidentiary hearing and requested additional responses. Dkt. 34. On October 17, 2017, Plaintiff filed a motion for reconsideration. Dkt. 36. On October 19, 2017, the Court denied the motion for reconsideration. Dkt. 37. On October 30, 2017, the Court set the matter for hearing on January 9, 2018. Dkt. 40. On November 10, 2018, Plaintiff filed a motion for reconsideration. Dkt. 41. On November 13, 2017, the Court denied the motion for reconsideration. Dkt. 42. On December 14, 2017, the Court granted the parties' stipulated motion to reset the hearing to February 6, 2018. Dkt. 48.

         On January 12, 2018, the parties filed supplemental briefs. Dkts. 50, 58. On January 26, 2018, the parties filed supplemental replies. Dkts. 61, 63.

         On January 24, 2018, the Court denied the plaintiffs' motion for class certification in Jenkins v. State Farm Mut. Auto. Ins. Co., C15-5508 BHS, 2018 WL 526993 (W.D. Wash. Jan. 24, 2018). Relevant to the instant matter, the Court concluded the expert report of Dr. Bernard Siskin (“Siskin”) was outdated and an improper fit to the facts of the case. Id. at *4.

         On February 6 and 7, 2018, the Court held an evidentiary hearing. Dkts. 66, 67. Progressive called Christopher Andreoli (“Andreoli”), Michael Silver (“Silver”), Dr. Michael Salve (“Salve”), and Jonathan Berg (“Berg”), and Plaintiff called Siskin and Darrell Harber (“Harber”). Id.

         On March 6, 2018, the parties submitted supplemental briefs and proposed findings of fact and conclusions of law. Dkts. 69, 72, 73.

         On March 8, 2018, Plaintiff moved to strike the supplemental declaration of Silver. Dkt. 74. On March 14, 2018, Progressive responded. Dkt. 78. On March 16, 2018, Plaintiff replied. Dkt. 81.

         On March 16, 2018, the parties filed supplemental replies. Dkts. 80, 83.


         On September 18, 2015, an uninsured driver hit Plaintiff's vehicle causing significant damage. Comp., ¶ 1.8. The vehicle was towed to a repair shop, and Plaintiff submitted a claim to Progressive. Id. ¶ 6.7. Plaintiff was without the use of his vehicle until November 24, 2015, and, on two separate occasions, he returned the vehicle to the repair shop for additional repairs. Id. ¶ 1.9. On an individual basis, Plaintiff alleges that Progressive failed to provide him with a rental car or otherwise reimburse him for the loss of use of his vehicle. Id. ¶¶ 6.7, 6.11.

         Regarding the class claim, Plaintiff alleges that Progressive's failure to compensate its insured for diminished value has been “systematic and continuous” and has affected a large number of insureds over time. Id. ¶ 5.1. As such, Plaintiff seeks certification of a class as follows:

All PROGRESSIVE insureds with Washington policies issued in Washington State, where the insured's vehicle damages were covered under Underinsured Motorist coverage, and
1. the repair estimates on the vehicle (including any supplements) totaled at least $1, 000; and
2. the vehicle was no more than six years old (model year plus five years) and had less than 90, 000 miles on it at the time of the accident; and
3. the vehicle suffered structural (frame) damage and/or deformed sheet metal and/or required body or paint work.
Excluded from the Class are (a) claims involving leased vehicles or total losses, and (b) the assigned Judge, the Judge's staff and family.

Id., ¶ 5.3. Plaintiff alleged that “the total amount sought in compensatory damages in this action will be approximately $3, 010, 903, ” based on “approximately 2107 claims” and “$1429 per claim on average as the average damages recoverable.” Id. ¶ 2.5. In the request for relief section of the complaint, Plaintiff alleges that the class is entitled to “[p]ayment of the difference between the insured vehicles' pre loss fair market values and their projected fair market values as repaired vehicles immediately after the accident.” Id., ¶ 7.1(a).

         On June 28, 2017, Progressive removed the matter to federal court asserting that the Court has jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). Dkt. 1. Progressive conducted an independent search of its database and concluded that the total amount of damages exceeds $5, 000, 000, which is the jurisdictional minimum under CAFA jurisdiction. Id. ¶¶ 19-31. Progressive submitted two declarations in support of this calculation. Frist, Silver, a master data analyst for Progressive, conducted a review of Progressive's records. Dkt. 2, Declaration of Michael Silver (“Silver Decl.”), ¶¶ 1, 3. Silver constructed search criteria that matched his understanding of Plaintiff's class definition and “identified 3, 814 claims that fit the search criteria.” Id. ¶ 8. Silver, however, “was unable to eliminate claims involving leased vehicles from the proposed class through electronic searches because Progressive does not regularly record this information as part of its claims data.” Id. ¶ 9.

         Second, Kevin Rehmke (“Rehmke”), a claims supervisor for Progressive, conducted a manual inspection of Progressive's claim files in order to determine the proportion of leased vehicles within the claims identified by Silver. Dkt. 3, Declaration of Kevin Rehmke, ¶¶ 1, 4. Rehmke declares that he did not review a sample of claims within the proposed class because “insureds do not always inform Progressive when they purchase a vehicle they had previously been leasing.” Id. ¶ 4. Instead, Rehmke reviewed a sample of claims wherein the vehicle was a total loss. Id. ¶ 5. In total-loss claims, he “could identify whether the vehicle was leased or owned by identifying total loss payments to lienholders and then reviewing the claims notes.” Id. ¶ 7. Upon review of 172 total-loss claims, he found that ten claims involved leased vehicles, or 5.8%. Id. ¶ 10. Rehmke concluded that it is reasonable to assume that 5.8% of the claims identified by Silver should be excluded from the class list. Id. ¶ 11.

         On July 28, 2017, Plaintiff moved to remand, challenging Progressive's assertion that CAFA jurisdiction existed and submitted evidence in support of his position. Plaintiff's expert, Siskin, reviewed Silver and Rehmke's declarations and claims that they made two specific errors as follows:

a. [They failed to remove] all vehicles that have only non-Class related damage (such as to lights, chrome bumpers, etc., i.e., damage that is not to frame/structure and/or body/paint);
b. [They failed to accurately] determine the percentage of leased vehicles because they have used as a starting point a biased and improper sample which dramatically understates the percentage of leased vehicles.

Dkt. 14-1 at 7-14, Declaration of Bernard Siskin (“Siskin Decl.”), ¶¶ 4-5. After explaining why Rehmke's assumptions and analysis were flawed, Siskin concludes as follows:

If I apply the expected percentage (9.5%) based upon lease rates in Washington, the Class Size would be 3, 452 claims [3, 814 claims x 90.5%] which would be $4, ...

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