UNITED STATES DISTRICT COURT - …

1 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION KENNETH WILLIAMS, MARY ) WILLIAMS, and KENNETH L. ) WILLIAMS, on behalf of themselves ) and all others similarly situated ) ) Case No. 4:11-cv-00749-JMM Plaintiffs, ) ) Judge: Hon. James M. Moody vs. ) ) THE STATE FARM MUTUAL AUTO ) JURY TRIAL DEMANDED INSURANCE COMPANY ) ) Defendant. ) _____ ) AMENDED CLASS ACTION COMPLAINT FOR DECLARATORY JUDGMENT, MONETARY RESTITUTION AND INJUNCTIVE RELIEF Come now Plaintiffs, Kenneth Williams, Mary Williams and Kenneth L. Williams on behalf of themselves and all others similarly situated, by and through the undersigned counsel, and file this Amended Complaint against State Farm Mutual Automobile Insurance Company ( Defendant or State Farm ) and state and allege as follows: INTRODUCTION 1.

2 This is a class action whereby Plaintiffs seek for themselves and all other similarly situated insured customers or former customers of Defendant, a declaratory judgment that Defendant violated Arkansas law when, as a common policy and general business practice, it received reimbursement or subrogation of payments of optional medical payment ( med pay ) and/or personal injury protection ( PIP ) coverage from its insured customer s settlement with a Case 4:11-cv-00749-KGB Document 17 Filed 12/02/11 Page 1 of 142 third-party tortfeasor, prior to reaching an agreement or receiving a judicial determination that the insured was made whole.

3 2. Plaintiffs further seek for themselves and all others similarly situated an Order requiring Defendant to pay monetary restitution, plus pre-judgment and post-judgment interest, of all of the reimbursed or subrogated proceeds of the insured s settlement with a third-party tortfeasor that State Farm illegally took prior to a judicial determination or agreement with the insured that the insured had been made whole. 3. Finally, Plaintiffs seek for themselves and all others similarly situated an injunction preventing Defendant from continuing to violate Arkansas law by receiving reimbursement or subrogation from its insured s settlement with a third-party tortfeasor, prior to a judicial determination or an agreement with the insured that the insured had been made whole.

4 JURISDICTION AND VENUE 4. Plaintiffs and all proposed class members are citizens of the state of Arkansas. Defendant s domicile residence and corporate headquarters is in Bloomington, Illinois. Therefore, the COURT has jurisdiction over this action pursuant to 28 1332 (diversity jurisdiction). As an actual controversy exists between the parties within the meaning of 28 2201 and 28 2202, this action is also brought seeking remedies pursuant to the Federal Declaratory Judgment Act. The amount in controversy in this action exceeds, $75,000, exclusive of interest and costs.

5 5. Venue is proper in this DISTRICT pursuant to 28 1391 because: (a) Defendant transacts business, or has agents who are found or transact business in this DISTRICT ; (b) Defendant markets and sells its insurance products in this DISTRICT ; and (c) the events complained of herein arose in this DISTRICT . Case 4:11-cv-00749-KGB Document 17 Filed 12/02/11 Page 2 of 143 PARTIES 6. Plaintiff Kenneth Williams resides in Pulaski County and is a citizen of the state of Arkansas. Plaintiff has contracted with Defendant for automobile insurance. Plaintiff s contract for automobile insurance covers authorized, licensed drivers and passengers of Plaintiff s vehicle.

6 Plaintiff s contract for insurance with Defendant also includes optional med-pay or PIP coverage. 7. Plaintiff Mary Williams resides in Pulaski County and is a citizen of the state of Arkansas. Mary Williams is the wife of Plaintiff Kenneth Williams. Mary Williams is covered under the automobile insurance contract that Kenneth Williams has with Defendant. 8. Plaintiff, Kenneth L. Williams, resides in Pulaski County and is a citizen of the state of Arkansas. Kenneth L. Williams is the son of Plaintiff Kenneth Williams. Kenneth L. Williams was a minor at the time of the automobile accident referenced in this Amended Complaint.

7 Kenneth L. Williams is also covered under the automobile insurance contract that Kenneth Williams has with Defendant. 9. On November 11, 2007, Plaintiffs, Mary Williams and Kenneth L. Williams were involved in an automobile accident while traveling in a vehicle that was covered under the insurance contract the Williams family has with Defendant. Kenneth L. Williams was the driver of the vehicle and Mary Williams was a passenger at the time of the accident. The driver of the vehicle at fault was insured through Allstate Insurance Company. Both Plaintiffs Mary Williams and Kenneth L.

8 Williams suffered injuries, received a settlement or damage award from the third party tortfeasor s insurer, and a portion of their recovery was paid to Defendant as subrogation or reimbursement. None of the Plaintiffs were represented by an attorney in this matter. There was no judicial determination that the Plaintiffs were made whole as a result of the payment from the Case 4:11-cv-00749-KGB Document 17 Filed 12/02/11 Page 3 of 144 third-party tortfeasor, and there was no agreement between Plaintiffs and Defendant that Plaintiffs were made whole. 10. Defendant, State Farm Mutual Automobile Insurance Company, is a mutual insurance company that owns numerous companies.

9 Defendant s corporate headquarters is located at One State Farm Plaza, Bloomington, Illinois. Defendant conducts business in Arkansas and throughout most of the UNITED STATES and Canada through insurance agents and other company personnel. COMMON FACTUAL BACKGROUND 11. According to Defendant s marketing materials it insures about one in every five cars on the road, making it the single largest auto insurer in the nation, a position that it has held since 1942. Defendant is also the largest automobile insurer in the state of Arkansas. 12. Plaintiffs, like all proposed class members, currently have, had, or were covered under, a contract of automobile insurance with Defendant that includes or included an optional med pay and/or PIP coverage which provided that Defendant would pay for reasonable medical expenses resulting from injuries sustained by its insureds in automobile accidents.

10 The contract of insurance between Plaintiffs, as well as each proposed class member, and Defendant STATES Defendant is entitled to reimbursement of those medical expenses paid under the optional med pay or PIP coverage in the event that the insured recovers money from a third-party tortfeasor responsible for the insured s injuries. 13. Defendant made payments to or on behalf of Plaintiffs, and all proposed class members, under med-pay or PIP coverage after Defendant s insureds were injured in an automobile accident which was not their fault.