State Farm Mutual Auto Insurance Improper Subrogation Montana Class Action

Subrogation occurs when one party takes over another’s rights to collect a debt or damages. It can occur, as in this case, when an insurance company takes over the rights to collect damages after an accident. The complaint for this class action alleges that State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company “jointly administered the subrogation and claim adjustment practices” after an accident in Montana.

Mark and Molly Johnson were involved in an auto accident in Flathead County, Montana on November 2, 2017. According to the complaint, the accident happened “through the negligence of Britanie Vanmeter. (The complaint also includes a negligence cause of accident against Vanmeter.) In the accident, the Johnsons suffered property damage and Molly Johnson suffered bodily injury.

The complaint says, “The automobile accident triggered duties under [the Johnsons’] policy. Those coverages include (a) indemnity for property and damage losses, (b) medical payment reimbursement, (c) ‘Underinsured Motorists Coverage,’ and rights attendant to such coverages, including the right to be ade whole before the insureds’ tort claim is usurped or interfered with.”

The complaint alleges that State Farm Mutual paid the property damage coverage, then “wrongfully asserted an ownership right in the [Johnsons’] cause of action by an improper assertion of subrogation.”

The Johnsons were insured under a policy from State Farm Mutual. However, the complaint claims that the two State Farm insurers work together jointly to design the adjustment and subrogation strategies at issue in this case and to train adjusters in these strategies and even pay them bonuses based on profitability.

According to the complaint, the Johnsons have “unrecovered property damage losses as well as unrecovered bodily injury losses” and they were relying for these on their cause of action against Vanmeter and the underinsured coverage under their policy with State Farm Mutual.

The complaint alleges that State Farm Mutual paid some benefits for property damage and medical payments but that the Johnsons have not yet been “made whole” or compensated for their full losses in the accident. It asserts that the insurance companies did not “conduct a reasonable investigation to determine if [the Johnsons] were made whole, in violation of Montana law and that it used a “deceptive scheme” and “hidden procedure to intentionally usurp the insured’s cause of action for its own benefit,” among other things.

The class for this action is individuals and commercial and other entities

  • Who were insured by a State Farm Mutual Automobile Insurance Co. auto insurance policy or one of the defendant insurance companies in Montana,
  • Who suffered losses covered by such a policy in an accident,
  • Who received payments under the coverage of the policy,
  • Where one or more of the defendant insurance companies recovered via subrogation from a third party for some or all of such payments, and
  • The subrogation was recovered by the insurer after May 1, 2012.
Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

State Farm Mutual Auto Insurance Improper Subrogation Montana Complaint

May 1, 2020

Subrogation occurs when one party takes over another’s rights to collect a debt or damages. It can occur, as in this case, when an insurance company takes over the rights to collect damages after an accident. The complaint for this class action alleges that State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company “jointly administered the subrogation and claim adjustment practices” after an accident in Montana.

State Farm Mutual Auto Insurance Improper Subrogation Montana Complaint

Case Event History

State Farm Mutual Auto Insurance Improper Subrogation Montana Complaint

May 1, 2020

Subrogation occurs when one party takes over another’s rights to collect a debt or damages. It can occur, as in this case, when an insurance company takes over the rights to collect damages after an accident. The complaint for this class action alleges that State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company “jointly administered the subrogation and claim adjustment practices” after an accident in Montana.

State Farm Mutual Auto Insurance Improper Subrogation Montana Complaint
Tags: Auto Insurance, Insurance, Subrogation