The 2nd U.S. Circuit Court of Appeals on Thursday overturned the dismissal of a dispute between a claims automation company and a captive insurer over coverage of a $2.5 million class action over the valuation of cars damaged in crashes.
The three-judge appeals court panel said in Ameriprise Captive Insurance Co. v. Audatex North America Inc. that the insurer sufficiently alleged that the underlying class–action suit was brought because of Audatex’s loss valuation software.
The appeals court did not determine whether the Westlake, Texas-based automation technology company, owned by Solera Holdings LLC, is responsible for covering the settlement of Zuern v. IDS Property Casualty Insurance Co.
Mackenzie Zuern sued Ameriprise subsidiary IDS in Washington state court in 2019 on behalf of a proposed class who claimed the loss of their vehicles was undervalued. Ameriprise settled the suit and sued Audatex in federal court in New York to recover defense costs and the settlement, court records show.
Audatex moved for dismissal, arguing the vendor agreement between the parties did not require it to defend or cover the class action. The trial court agreed with Audatex.
An Ameriprise representative said the company is “pleased with the court’s decision,” but declined further comment.
A representative for Audatex did not respond to a request for comment.
