Monday, 04 April 2022 13:44

Lawsuit Against USAA Related to Total Losses Moves Forward

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USAA’s settlement practices related to total losses are the subject of a class action lawsuit in Texas. USAA’s settlement practices related to total losses are the subject of a class action lawsuit in Texas.

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In a lawsuit stretching back more than a decade, a recent decision by an appeals court in Texas will allow a class action against USAA, related to total losses, to move forward.

The lawsuit alleges USAA routinely filed “owner retained reports” for non-repairable vehicles with the Texas Department of Transportation (DOT) immediately after issuing checks for total losses, without giving claimants adequate notice.


The lead plaintiff in the case, Sunny Letot, was hit by a USAA-insured driver in 2009. Repairs to her 1983 Mercedes-Benz were estimated at $8,859. USAA determined the car was a total loss, and mailed Letot a check for $2,738. Her attorney returned the check and demanded more than $10,000.


But without Letot’s knowledge or consent, the lawsuit argues, USAA filed a report with the Texas DOT one day after issuing the check, resulting in the vehicle being recorded as a salvage vehicle and limiting further transfer of the title.


Discovery in the lawsuit found USAA filed dozens of such reports each week. The appeals court has ruled in Letot’s favor twice since then: once overturning the lower court’s summary judgement in the case for USAA, and then in February rejecting the insurer’s appeal of the certification of the class, which includes anyone who filed a claim in which USAA filed an owner retained report within three days of issuing a check for a total loss.


“The focus is not on determining whether a vehicle was an actual salvage vehicle, but rather on the timing of USAA filing an owner retained report,” the Fifth District Court opinion stated. “At trial, Letot entered into evidence…nearly 2,000 owner retained reports filed by USAA showing a date of filing three days or less from the date of claim payment.”


An attorney for USAA said the insurer is considering further appeal options.