Missouri court reinstates $17 million verdict against American Family

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A Missouri appeals court has reinstated a $17 million jury verdict against American Family Mutual Insurance Co. in a class-action lawsuit over vehicle repairs and aftermarket auto parts.

scalesbalanceThe court ruled May 5 that a Jackson County Circuit Court judge was mistaken in ruling in June 2007 that the plaintiffs failed to provide their theory of damages, according to the Kansas City Star.

The verdict covered an estimated 315,000 residents of Missouri who made claims for vehicle repairs between May 1990 and December 2004. The jury decided that American Family had used inferior, non-original equipment to repair policyholders’ damaged vehicles, the report said.

The circuit court’s decision to throw out the case came 13 weeks after the jury found in favor of policyholders, as a judge declared that the plaintiffs failed to prove the insurer breached its obligation to pay for replacement parts that were similar in quality, fit and performance to the original parts, the Star reported.

In the new ruling by the appeals court, a three-judge panel found that the plaintiffs “presented sufficient evidence for a reasonable juror to conclude that aftermarket parts are not of like kind and quality to OEM (original equipment manufacturer) parts and that American Family breached its contracts with its policyholders when it paid to return the damaged vehicle to pre-loss condition based on the nature and cost of aftermarket parts,” according to the opinion cited by the Star.

A spokesman for American Family told the newspaper it was disappointed by the ruling and considering its legal options.

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