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16-P-216                                             Appeals Court

    ANTHONY G. MORGAN     vs.   MASSACHUSETTS HOMELAND INSURANCE
                                COMPANY.


                            No. 16-P-216.

       Hampden.        November 9, 2016. - January 20, 2017.

           Present:   Kafker, C.J., Kinder, & Lemire, JJ.


Consumer Protection Act, Class action, Insurance. Practice,
     Civil, Class action, Consumer protection case. Motor
     Vehicle, Insurance. Insurance, Motor vehicle insurance,
     Settlement of claim, Regulation, Amount of recovery for
     loss. Words, "Actual cash value," "Retail book value."



     Civil action commenced in the Superior Court Department on
March 8, 2012.

     Motions for class certification and for summary judgment
were heard by Edward J. McDonough, Jr., J.; and the case was
heard by Bertha D. Josephson, J.


     Brett J. Vottero (Eric D. Applebaum also present) for the
plaintiff.
     Michael S. Batson (Michael C. Kinton also present) for the
defendant.


    KAFKER, C.J.      The plaintiff, Anthony G. Morgan, brought

this civil action against the defendant, Massachusetts Homeland
                                                                   2


Insurance Company (Homeland or insurer), alleging that Homeland

engaged in unfair or deceptive claim settlement practices in

violation of G. L. c. 176D, § 3(9), and G. L. c. 93A, in the

course of settling his total loss auto insurance claim.1   See

G. L. c. 93A, §§ 2, 9.   Even though the claim was settled within

two months of the accident, with the plaintiff's acceptance of

the insurer's offer, the plaintiff claimed that the insurer

violated c. 176D and c. 93A because it did not take into account

the "retail book value" of his vehicle, as required by 211 Code

Mass. Regs. § 133.05(1)(a) (2003).   The plaintiff also filed a

motion to certify a class action pursuant to G. L. c. 93A,

§ 9(2).   A judge of the Superior Court (motion judge) denied

class certification and entered a summary judgment on that count

of the complaint.   After a jury-waived trial on the plaintiff's

individual c. 93A claim, the trial judge (who was not the motion

judge) found that, although Homeland had violated c. 93A, the

plaintiff was not injured by the violation, and entered judgment

for Homeland on that count of the complaint.   On appeal, the

plaintiff argues that the judges erred by (1) denying his motion

for class certification; and (2) concluding that he was not


     1
       The complaint was in three counts. The parties stipulated
to the dismissal of count 1, which alleged breach of contract.
Counts 2 and 3 alleged c. 93A violations -- count 2 on behalf of
Morgan individually, and count 3 on behalf of a purported class
of similarly situated individuals.
                                                                     3


injured by Homeland's c. 93A violation.    Homeland cross-appeals,

challenging the trial judge's ruling that it violated c. 93A.

We conclude that the motion for class certification was properly

denied, and that there was no c. 93A violation.

     Background.    On January 9, 2011, the plaintiff's 2005

Chevrolet Colorado was significantly damaged in an accident.

Homeland, the plaintiff's auto insurer, determined the vehicle

to be a total loss.    Homeland was therefore required to offer

the plaintiff an amount for the actual cash value of the

vehicle.    See 211 Code Mass. Regs. § 133.05.2   When calculating

the actual cash value of a total loss vehicle, an insurer must

consider four factors, one of which is the "retail book value"

of a vehicle "of like kind and quality, but for the damage

incurred."3   211 Code Mass. Regs. § 133.05(1)(a).


     2
         Title 211 Code Mass. Regs. § 133.05 (2003) provides:

     "(1) Actual Cash Value. Whenever the appraised cost of
     repair plus the probable salvage value may be reasonably
     expected to exceed the actual cash value of the vehicle,
     the insurer shall determine the vehicle's actual cash
     value."
     3
       The four factors an insurer must consider in calculating
the actual cash value of a total loss vehicle are:

     "(a) the retail book value for a motor vehicle of like kind
     and quality, but for the damage incurred;

     "(b) the price paid for the vehicle plus the value of prior
     improvements to the motor vehicle at the time of the
     accident, less appropriate depreciation;
                                                                    4


    On January 12, 2011, Homeland determined the actual cash

value of the plaintiff's vehicle to be $11,891.    Homeland used a

software program generated by a third party, Certified

Collateral Corporation (CCC), which maintains a database of

vehicles for sale from dealers and private parties in various

markets.    The motion judge found that the CCC report

"incorporated a significant amount of information, including,

but not limited to, vehicle description, vehicle options,

vehicle history, the local market, the vehicle's pre-accident

condition, the value of comparable vehicles, and vehicle

mileage."   The record provides more particularly that CCC's

database "include[s] vehicles for sale at dealerships that CCC

has physically inspected and dealer and private party advertised

vehicle information from more than 1,700 publications."     Using

the vehicle's identification number and the plaintiff's zip

code, CCC compiled a list from its database of twelve comparable

vehicles available for sale in the local market.    Three of the

vehicles were listed for sale at local dealerships that CCC had

physically inspected; nine were listed for sale on Autotrader, a


    "(c) the decrease in value of the motor vehicle resulting
    from prior unrelated damage which is detected by the
    appraiser; and

    "(d) the actual cost of purchase of an available motor
    vehicle of like kind and quality but for the damage
    sustained."

211 Code Mass. Regs. § 133.05(1) (2003).
                                                                      5


publicly accessible online database of vehicles for sale from

dealers and private parties listed by age, make, model, mileage,

and city and State.4    See, e.g., Kesling v. Hubler Nissan, Inc.,

997 N.E.2d 327, 330 (Ind. 2013).     CCC then adjusted those values

for the condition of the plaintiff's vehicle, and, using a

weighted average formula, arrived at an actual cash value of

$11,891.5

     When informed of this valuation on January 20, 2011, the

plaintiff insisted that his vehicle was worth more than $14,000,

citing a report by the National Automobile Dealers Association

(NADA) that showed a "clean retail" value of $14,500.6    NADA


     4
       For each comparison vehicle, the CCC list also showed the
distance from the plaintiff's address.
     5
         The "valuation methodology" section of the CCC report
reads:

     "Vehicles located [by searching CCC's database] are
     compared to the loss vehicle, and adjustments are made for
     differences such as model, equipment, and odometer that
     results in the adjusted value for each comparable. The
     comparable vehicles are used to determine the market value.

     "This calculation is a weighted average that is based on
     the following factors:

     " -    Precision of the data (inspected versus advertised)
       -    Similarity of model, equipment, and odometer
       -    Nearness to the loss vehicle's primary garage location
       -    Recency of information."
     6
       The NADA report in the record provided values for "clean
retail" ($14,500), "clean trade-in" ($11,325), "average trade-
in" ($10,450), and "rough trade-in" ($9,375). According to the
report, "Clean Retail values reflect a vehicle in clean
                                                                    6


maintains a publicly accessible online database of used car

values in each region of the country, from which reports on

particular vehicles may be generated.     NADA, an industry trade

association, also periodically publishes "books" containing

these values in regional editions.    See Braucher, Rash and Ride-

Through Redux:   The Terms for Holding on to Cars, Homes and

Other Collateral Under the 2005 Act, 13 Am. Bankr. Inst. L. Rev.

457, 466 n.37 (2005) (Braucher).     See also FTC v. CCC Holdings

Inc., 605 F. Supp. 2d 26, 33 (D.D.C. 2009).

     After receiving the plaintiff's c. 93A demand letter on

February 11, 2011, and the NADA report, Homeland increased its

valuation of the vehicle to $13,024.66, which was found by the

motion judge to reflect "an average of the NADA, Auto[t]rader,

and CCC valuations."   Homeland subsequently increased its

valuation to $13,650, which resulted in a settlement offer of

$14,003.12.7   The plaintiff accepted a check in that amount.




condition. This means a vehicle with no mechanical defects and
passes all necessary inspections with ease. Paint, body and
wheels have minor surface scratching with a high gloss finish
and shine. Interior reflects minimal soiling and wear with all
equipment in complete working order. Vehicle has a clean title
history." "Clean trade-in" values, by contrast, reflect a
vehicle that needs "minimal reconditioning to be made ready for
resale."
     7
       This figure included the applicable sales tax, minus the
deductible. We are not called upon here to assess the
correctness of this methodology.
                                                                      7


     Discussion.   1.   Class certification.   The plaintiff claims

that the judge erred in denying his motion to certify a class of

all Homeland auto insureds who received payment for a total loss

claim.   He apparently claims a class should be certified based

on Homeland's alleged use of the CCC software to determine its

original offers, which, according to the plaintiff, did not

account for the higher "retail book value," in violation of 211

Code Mass. Regs. § 133.05(1)(a).   We disagree.

     To bring a class action under c. 93A, the plaintiff must

show that he seeks relief for an unfair or deceptive act or

practice, that the act or practice "caused similar injury to

numerous other persons similarly situated," and that he would

"adequately and fairly represent[]" such persons.     G. L. c. 93A,

§ 9(2), inserted by St. 1969, § 690.    The plaintiff must

"provide 'information sufficient to enable the motion judge to

form a reasonable judgment' that the class meets the relevant

requirements."   Bellermann v. Fitchburg Gas & Elec. Light Co.,

470 Mass. 43, 52 (2014), quoting from Weld v. Glaxo Wellcome

Inc., 434 Mass. 81, 87 (2001).   In deciding on a motion for

class certification under c. 93A, a judge must bear in mind the

"pressing need for an effective private remedy."8    Aspinall v.



     8
       A judge therefore has less discretion to deny class
certification under G. L. c. 93A than under Mass.R.Civ.P. 23(b),
as amended, 365 Mass. 767 (1974). See Bellermann, 470 Mass. at
                                                                      8


Philip Morris Cos., 442 Mass. 381, 391-392 (2004), quoting from

Fletcher v. Cape Cod Gas Co., 394 Mass. 595, 605-606 (1985).        We

review a denial of class certification under c. 93A for an abuse

of discretion.   Bellermann, 470 Mass. at 51.   We conclude that

the motion judge did not abuse his discretion in declining to

certify the plaintiff's class action, as the plaintiff failed to

provide sufficient information to support a reasonable judgment

that others were similarly situated and similarly injured.      See

id. at 54.

    We begin with the specifics of the plaintiff's case.

Homeland based its original offer on the CCC report, which

included information from Autotrader; the insurer later made

upward adjustments after considering the NADA report presented

by the plaintiff.    The record, however, provides little to no

information regarding how other putative class members' total

loss claims were calculated, negotiated, and settled.      As the

motion judge explained, "Morgan has failed to adduce any

evidence of injury to any other party."    There is also

insufficient information in the record to support a reasonable

judgment that Homeland employed a uniform approach in handling

total loss claims.   Homeland's nationwide policy provides only

that CCC reports "may" be used to calculate the actual cash



52; Kwaak v. Pfizer, Inc., 71 Mass. App. Ct. 293, 297-298
(2008).
                                                                     9


value of a total loss vehicle and that "sources [such] as

Auto[t]rader, NADA, Edmunds, Redbook and KBB [Kelly Blue Book]"

may be consulted.     Additionally, the record does not support a

reasonable judgment that reliance on the CCC software, rather

than NADA or other retail book values, similarly affected other

members of the putative class.     The plaintiff did not dispute

that "CCC valuations are sometimes higher than other

commercially available book valuations."9    Thus, the beneficial

or detrimental effect of the use of the CCC reports in

determining even the original offer would depend on each

putative class member's particular circumstances.     This

determination would further depend on each class member's zip

code and vehicle condition, based on CCC's methodology.      Thus,

there is insufficient evidence to support a reasonable judgment

that the plaintiff and the putative class members were similarly

situated.

         Moreover, we cannot discern how the plaintiff here was

actually harmed by the use of the CCC report, or how his alleged

harm compared to that of the other putative class members.

     9
       This statement appears in the parties' joint statement of
material facts in support of Homeland's motion for summary
judgment. The motion judge's decisions on the motion for class
certification and summary judgment were issued on the same day.
Although not in the record when the judge ruled on the
plaintiff's motion for class certification, we also note that
one of Homeland's supervisors testified at trial that the CCC
reports sometimes produce valuations higher than those from
NADA.
                                                                     10


After basing its original offer on the lower CCC number, which

included Autotrader listings, Homeland did consider the NADA

report in upwardly adjusting the value of the plaintiff's

vehicle.   The plaintiff then ultimately received a check close

to the amount of his original demand, approximately $14,000.

The end result was very nearly what he requested and included

consideration of retail book values presented by Autotrader and

NADA.   Whether others were so fortunate -- or not -- is

completely absent from the record.

    In sum, "the facts underlying the claims of the purported

class are too diverse" and the causal connection between

Homeland's allegedly unfair practice and any loss "is not just

difficult to identify but appears to vary widely depending on

the [insured]."    Kwaak v. Pfizer, Inc., 71 Mass. App. Ct. 293,

294, 301 (2008).    See Bellermann, 470 Mass. at 55 (certification

properly denied for class of consumers who lost power during

major ice storm; outages varied for each consumer).     Contrast

Aspinall, 442 Mass. at 382, 392 (certification properly granted

for class of consumers who purchased cigarettes allegedly

falsely advertised to contain "lowered tar and nicotine").     We

therefore discern no error in the motion judge's denial of the

plaintiff's motion for class certification.

    2.     General Laws c. 93A violation.   After trial, the judge

concluded that Homeland had violated c. 93A because its "initial
                                                                   11


valuation of $11,891 did not consider . . . retail book value"

in determining the actual cash value of the plaintiff's vehicle,

as required by 211 Code Mass. Regs. § 133.05(1)(a).10   See 211

Code Mass. Regs. § 133.08 (2003) ("A violation of any provision

of 211 CMR 133.00 shall be considered to be an unfair or

deceptive act or practice, in violation of M.G.L. c. 176D");

G. L. c. 93A, §§ 2, 9.

     Homeland claims in its cross appeal that this conclusion,

to the extent that it was based on a factual finding, was

clearly erroneous, and incorrect as a matter of law.    We agree.

It is plain from the trial record that Homeland considered

retail book value information from Autotrader in formulating its

initial settlement offer, and therefore the judge's finding that

the initial offer violated c. 93A was incorrect.   Additionally,

apart from the Autotrader information reflected in the initial

offer, Homeland's final offer also incorporated retail book

value from NADA, again reflecting Homeland's "consideration" of

retail book value, albeit later in the settlement process.

     "Whether conduct is unfair or deceptive under G. L. c. 93A

is a mixed question of law and fact."   Zabin v. Picciotto, 73
Mass. App. Ct. 141, 170 (2008).   "Although whether a particular


     10
       The judge further determined that the plaintiff was not
harmed by this c. 93A violation because Homeland's March 7
offer, accepted by the plaintiff, "took into account all the
relevant factors" in the regulation.
                                                                     12


set of acts, in their factual setting, is unfair or deceptive is

a question of fact . . . the boundaries of what may qualify

. . . as a c. 93A violation is a question of law."     Milliken &

Co. v. Duro Textiles, LLC, 451 Mass. 547, 563 (2008) (quotation

omitted).   We review the judge's findings of fact for clear

error and her conclusions of law de novo.   Zabin, 73 Mass. App.

Ct. at 170.   Moreover, to the extent the trial judge's

conclusion that Homeland violated c. 93A rested on her legal

interpretation of the meaning of the requirement in 211 Code

Mass. Regs. § 133.05(1) that the determination of the "actual

cash value of [a] vehicle . . . shall be based on a

consideration of . . . (a) the retail book value," we review

that interpretation de novo.   Ivey v. Commissioner of

Correction, 88 Mass. App. Ct. 18, 23 (2015).

    The purpose of 211 Code Mass. Regs. § 133.00 is to "promote

the public welfare and safety by establishing fair and uniform

standards for the repair of damaged motor vehicles."      211 Code

Mass. Regs. § 133.01 (2003).   As we have noted, the express

language of 211 Code Mass. Regs. § 133.08 makes a "violation of

any provision of 211 CMR 133.00 . . . an unfair or deceptive act

or practice."   More generally, 940 Code Mass. Regs. § 3.16(3)

(1993) provides that an act or practice that fails to comply

with a regulation "meant for the protection of the public's

health, safety or welfare" constitutes a violation of c. 93A if
                                                                   13


it occurs during trade or commerce and is unfair or deceptive

under the circumstances.   See Klairmont v. Gainsboro Restaurant,

Inc., 465 Mass. 165, 174 (2013).

     As previously explained, 211 Code Mass. Regs. § 133.05(1)

expressly requires an insurer calculating the actual cash value

of a total loss vehicle to consider four factors, one of which

is the "retail book value" of a vehicle "of like kind and

quality, but for the damage incurred."     211 Code Mass. Regs.

§ 133.05(1)(a).   The regulations do not, however, define "retail

book value," nor did the trial judge attempt to do so.     The

parties agreed, and the judge determined without explanation,

that NADA provides retail book values.11    The trial judge also

noted that Autotrader is "another commercial retail book value

service" (emphasis added), which the parties did not dispute.

     We begin by confirming that both the record and the case

law support the judge's findings that NADA and Autotrader

provide retail book values.    Several courts have specifically

referenced "NADA retail book value[s]."     See In re Minke, 21
B.R. 214, 214 (Bankr. D. Minn. 1982); In re Stauffer, 141 B.R.
612, 612 (Bankr. N.D. Ohio 1992); McCorvey v. McCorvey, 922 So.
2d 694, 708 (La. App. 2006).    Other courts have noted,

generally, that NADA and/or Autotrader provide such values.


     11
       The judge described NADA as a "retail book value
service."
                                                                   14


See, e.g., In re Morales, 387 B.R. 36, 49 (Bankr. C.D. Cal.

2008) (Autotrader); In re Ayres, Bankr. N.D. Cal., No. 09-56695

ASW, slip op. (Feb. 22, 2010) (Autotrader and NADA consulted to

determine "the price a retail merchant would charge"); In re

Zambuto, 437 B.R. 175, 178 (Bankr. D.N.J. 2010) (Autotrader

provides "retail prices" for vehicles in excellent or "clean"

condition).   See also Hylton, The Law and Economics of Products

Liability, 88 Notre Dame L. Rev. 2457, 2502 n.147 (2013)

(Autotrader is an "automotive retail website[]").

     We therefore conclude that in the instant case retail book

value was considered both in formulating Homeland's initial

offer, through the inclusion of Autotrader information in the

CCC comparative lists, and in the final offer, through the

inclusion of NADA information.12   The CCC report, used by


     12
       Because we need not resolve the issue to decide the case,
we decline to determine whether the CCC methodology itself
constitutes a retail book value, or, as Homeland argues, a more
sophisticated retail book value than those contained in NADA,
Autotrader, or other such services. As the parties have not
adequately briefed the proper interpretation of "retail book
value," we are not prepared to determine whether insurers must
consult so-called "'book' providers," which publish valuations
online and in "books," CCC Holdings, Inc., 605 F. Supp. 2d at
33, in considering "retail book value," or whether they may
arrive at retail book value through other means. See Warcewicz
v. Dept. of Envtl. Protection, 410 Mass. 548, 551 (1991) ("[N]o
portion of the language of a regulation should be treated as
surplusage").

     One Federal District Court has differentiated "the Books"
from total loss software systems such as CCC's, stating: "Today
there are several different methodologies and tools for
                                                               15




insurance companies to calculate total loss. One option is the
'book' providers -- [NADA], the Kelley Blue Book, the Red Book,
and the Black Book (collectively 'the Books') -- whose reports
are based on local or regional values. . . . These products are
available in hard copy and many are available electronically;
the electronic versions are updated more frequently than the
printed Books. A number of insurance companies perform some or
even most of their total loss valuations in-house using a
combination of the Books and market research conducted by
internal staff in order to obtain a more accurate and localized
valuation." CCC Holdings Inc., 605 F. Supp. 2d at 33. Although
the court was addressing an unrelated issue, it further noted
that "the Books" and total loss software systems are
"undoubtedly differentiated products," id. at 43, and "not part
of the same product market." Id. at 41. Specifically, the
software systems have "substantially different valuation
methodologies than the Books"; the Books "simply are not as
accurate, detailed, or up-to-date" as the software systems. Id.
at 42. See Braucher, 13 Am. Bankr. Inst. L. Rev. at 466
(discussing why "retail book values," including NADA, "will
routinely be too high").

     In Massachusetts, the Commissioner of Insurance expressed
his views on the use of the CCC service in a May, 1988, letter
responding to an inquiry from CCC. In that response, the
Commissioner, while cautioning that "insurer[s] may not blindly
adhere to or rely solely on the dollar amount the [CCC] service
generates" for the value of total loss vehicles, also indicated
that he had "no objection" to the use of CCC reports as "a
factor or factors in the determination of the actual cash value
or 'book' value for a total loss vehicle in compliance with [211
Code Mass. Regs. § 133.05]." Compare Pennsylvania, a State with
a regulation similar to ours. There, the regulatory agency has
formally approved the use of NADA and CCC in determining the
"retail book value" of a total loss vehicle. See 31 Pa. Code
§ 62.3(e)(1)(i) (2016) (one method insurers may use in
calculating the replacement value of a total loss vehicle is to
average two values from approved "guide sources," which
represents the "retail book value" of the vehicle); 46 Pa. Bull.
6734 (2016) (approving NADA, Red Book, and CCC as guide source
vendors).
                                                                  16


Homeland in arriving at its initial valuation of $11,891,

explicitly took into account nine listings from Autotrader,13

which, as we have noted, is a source that provides retail book

values.    Homeland's final offer undisputedly incorporated the

NADA report, which included the "retail book value" of the

plaintiff's vehicle.14    In sum, the regulatory requirements

involving the consideration of retail book value were satisfied

in the instant case, and there was no violation of c. 93A.

     Conclusion.    There was no error in the denial of the motion

for class certification or in the entry of judgment on that

count of the complaint.    Although the trial judge erred in

determining that Homeland violated c. 93A, there was no error in

the entry of judgment for Homeland on the plaintiff's individual

claim.15

                                     Order denying motion for
                                       class certification
                                       affirmed.

                                     Judgments affirmed.



     13
       The trial judge did not specifically address the
Autotrader information in the CCC report; on the record before
us, the report's content appears to be uncontested.
     14
       We note, however, that insurers would be well-advised to
consider the retail book value of a vehicle early in the
settlement process, and not to depend on insureds to bring such
information to their attention.
     15
       Accordingly, the plaintiff's request for attorney's fees
and costs is denied.