On May 6, 2011, NP gained final approval of a national class action settlement with Allstate and its affiliated companies that write homeowner insurance. The case, originally brought by NP and co-counsel in 2004, alleged that Allstate and its affiliated companies failed to properly pay general contractor’s overhead and profit when three or more construction trades were involved in estimated structural loss repairs. The lawsuit alleged such payments are customary in the insurance industry under those circumstances, but that Allstate began eliminating such payments to its insureds to increase its own profitability.
The size of the approved class is enormous – an estimated 6,312,244 members. The benefits to the class are substantial. Class members who submit an approved claim will receive 87% or 50% of the alleged underpayment, depending on which estimating software was used in the adjustment of the claim. While not only a significant recovery on a percentage basis per class member, the fund made available to the class has an estimated gross value of almost $1.4 billion. Also, as part of the finally approved settlement, Allstate agreed to certain enhanced claim practices regarding the handling of contractor’s overhead and profit, including the disclosure of the availability of contractor’s overhead and profit for a period of two years following the date of approval.
NP aggressively litigated this case for over six years, taking approximately two dozen depositions, reviewing and synthesizing millions of pages of documents and preparing for and arguing in countless court hearings. With the assistance of nationally renowned experts, NPR performed an empirical analysis of Allstate’s claims handling practices regarding contractor’s overhead and profit, proving the widespread nature of the alleged underpayments. NP continued to advocate for the class through multiple sessions with a nationally renowned mediator. Based on the enormous size of the recovery and the excellent representation provided by NP through years of difficult litigation, the court approved an attorney fee of $63,900,000.
NP partner Michael Angelovich led the litigation for NP.
05-06-11