Court restores $17M verdict in auto parts case

Tuesday, May 5, 2009 | 7:44 p.m. CDT

KANSAS CITY — A Missouri appeals court on Tuesday reinstated a $17 million verdict against American Family Mutual Insurance Co. as part of a class-action lawsuit over aftermarket vehicle parts.

The Missouri Court of Appeals for the Western District ruled that Jackson County Circuit Judge Edith Messina was wrong when she overturned a jury's decision last year against the Madison, Wis.-based insurer.

Jurors in March 2008 determined the company had damaged an estimated 319,000 Missouri residents who made vehicle repair claims between May 1990 and December 2004 by paying for the repairs based on the cost of cheaper — and plaintiffs alleged, inferior — aftermarket parts.

Messina threw out the verdict three months later, saying the plaintiffs hadn't proven that American Family hadn't paid them enough to return their vehicles to pre-accident condition.

The three-judge appellate panel disagreed, however, saying the plaintiffs "presented sufficient evidence for a reasonable juror to conclude that aftermarket parts are not of like kind and quality to (original manufacturer) parts and that American Family breached its contacts with its policyholders when it paid to return the damaged vehicle to pre-loss condition based on the nature and cost of aftermarket parts."

The case has been sent back to the trial court to consider additional relief, attorneys fees and the process for distributing the verdict to plaintiffs.

Steve Witmer, a spokesman for American Family, said the company was "disappointed" in the decision and was reviewing its legal options, including an appeal.

"We felt strongly that these business practices served our customers by providing competition for auto part prices," Witmer said. "We offer information to our customers at the time of the (repair) estimates that includes these parts, and we stand behind the quality and the fit of these parts."

Michael Waldeck, a lead attorney for the plaintiffs, welcomed the decision and said he was glad to get the case moving again.

"This case has been dragging on for more than 10 years now and it's a happy event to be vindicated with the court of appeals' decision," Waldeck said.

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 companies' use of aftermarket parts.

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