McLaughlin Update

October 29, 2020

The lawyers at WRRSV are pleased to announce that the Circuit Court of Jackson County, Missouri on August 10, 2020, issued an order granting the plaintiffs’ motion for partial summary judgment and overruling Fire Insurance Exchange’s motion for summary judgment (the “Order”).


In the action, plaintiffs alleged that Fire Insurance Exchange (“Fire”) breached its Missouri property insurance policies by improperly depreciating labor costs when calculating the Actual Cash Value (or “ACV”) payments that it was required to make on covered property claims.


Specifically, plaintiffs moved for partial summary judgment, seeking an order from the court finding as a matter of law that Fire Insurance Exchange had breached the insurance policies by depreciating the cost of labor in determining the ACV it made to the insured class members.  class plaintiffs.  Fire also moved for summary judgment, seeking an order finding that Missouri law permitted it to depreciate labor, and therefore, that it had not breached the insurance policies.  Alternatively, Fire also argued that it was not liable regardless of whether it was entitled to depreciate labor, because (1) it paid its insureds the full cost to repair or replace the damaged property and/or (2) it made the required payment during the time permitted under the insurance policies.


Briefing on the summary judgment was complete on February 13, 2019, although the parties periodically filed with further papers with the Court as new developments in the law became known.  On August 10, 2020, the Court entered an order that granted plaintiffs’ motion for partial summary judgment.  In ruling that Fire had breached its insurance policies as a matter of law, the Court found that Fire’ widespread “practice of withholding and deducting labor costs as depreciation amounts to a breach of its insurance policy.”  Further, in connection with Fire’s motion for summary judgment, the Court rejected Fire’s arguments as to why it had not breached the policies and overruled its motion in its entirety.  A copy of the Court’s ruling can be downloaded here.


While the Court’s ruling marks a significant victory for plaintiffs and the class, the case is still ongoing.  Plaintiffs still must establish the damages, and Fire still has the opportunity to appeal from the Court’s decision.

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