Lawyers are awaiting a judge's decision on a motion by State Farm to toss out a case brought by a Louisiana couple accusing the carrier of price fixing and fraud in connection with their hurricane damage claim.
The suit alleges that State Farm colluded with Xactware software company to artificially depress cost estimates for repairs.
U.S. District Court Judge Stanwood Duval Jr. in New Orleans heard preliminary arguments on the matter on June 13.
Plaintiffs Kathleen and Gordon Schafer contend that State Farm inspected their property after Hurricane Katrina and, using Xactware's software which adjusts and estimates damaged property replacement cost, supplied quotes that were below actual market value.
The complaint references the price of siding vinyl, which Xactware set at $2.95 and State Farm quoted at $2.46, both of which were below the market value of $3-$4.25.
The Schafers have amended their complaint to seek class action status, which would make the couple lead plaintiffs in a case on behalf of all State Farm customers in Louisiana.
At last week's hearing the judge heard motions by the defendants to dismiss the case and strike preliminary motions seeking class-action status.
The Schafer's attorney, James A. Watkins, explained the case as, “The insured was paid x and should have been paid y.”
A memorandum in support of Xactware's motion to dismiss and strike class allegations asserts that “Xactware never dealt with plaintiffs, visited their home, or played any role in how State Farm adjusted their claim,” and as such “Xactware owed no duty to plaintiffs to advise them that State Farm used its own pricing data to adjust claims.”
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