Milligan v. CCC Information Services Inc.

          Argued: March 8, 2019

         Defendants-Appellants GEICO General Insurance Company ("GEICO") and CCC Information Services ("CCC") appeal from an order of the United States District Court for the Eastern District of New York (Azrack, J.), denying their motions to compel appraisal in a suit brought by Plaintiff-Appellee Lorena Milligan, a GEICO policyholder. GEICO argues that the district court erred in refusing to grant its motion to compel appraisal because Milligan's policy requires her to submit a dispute over the value of her loss to a panel of appraisers. CCC argues that the doctrine of equitable estoppel entitles it to compel Milligan to comply with the appraisal procedure in her policy. Both GEICO and CCC assert that we have jurisdiction over this interlocutory appeal pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. The order of the district court is AFFIRMED.

          Keith Altman, Excolo Law Group, Southfield, MI, (Ari Kresch, Excolo Law Group, Southfield, MI, Sharon S. Almonrode, Dennis A. Lienhardt, The Miller Law Firm, P.C., Rochester, MI, on the brief) for Plaintiff-Appellee.

          Kathleen Lally, Latham & Watkins LLP, Chicago, IL, (Mark S. Mester, Latham & Watkins LLP, Chicago, IL, Benjamin W. Snyder, Latham & Watkins LLP, Washington, DC, on the brief) for Defendant-Appellant CCC Information Services Inc.

          Merril Biscone, Rivkin Radler LLP, Uniondale, NY (Cheryl F. Korman, Rivkin Radler LLP, Uniondale, NY, on the brief) for Defendant-Appellant GEICO General Insurance Company.

          Before: Jacobs and Lynch, Circuit Judges, and Vilardo, District Judge. ^[*]

          GERARD E. LYNCH, CIRCUIT JUDGE:

         Lorena M. Milligan filed this putative class action in the United States District Court for the Eastern District of New York (Joan M. Azrack, Judge), asserting several causes of action against GEICO General Insurance Company ("GEICO"), with whom she had an insurance policy, and CCC Information Services ("CCC"), a GEICO contractor, relating to a claim she filed with GEICO following the total loss of her vehicle. GEICO and CCC both moved to compel Milligan to comply with a provision of her policy requiring her to submit disputes over the amount of loss to a panel of appraisers. Milligan opposed the motions, arguing that GEICO had not timely sought appraisal and that appraisal was inappropriate because her claims against the defendants concerned a legal dispute over the amount of coverage under her policy. The district court agreed with Milligan and denied the motions. For the reasons that follow, we AFFIRM the order of the district court.

         BACKGROUND

         Milligan leased a 2015 Lexus automobile in March 2015. The lease agreement with Lexus Financial Services, the company from which she leased the Lexus, stated the purchase price of the car as $51, 400. Milligan obtained an insurance policy with GEICO (the "Policy") to cover bodily injury and property damage to the Lexus. Approximately two months after leasing the vehicle, Milligan was involved in a rollover accident that resulted in the Lexus being damaged beyond repair. Shortly thereafter, Milligan submitted a claim to GEICO. GEICO obtained a Market Valuation Report from CCC, which valued Milligan's vehicle at $45, 924. GEICO paid Milligan's lienholder, Toyota Lease Trust, $45, 924 on the claim.

         On January 15, 2016, Milligan filed this putative class action complaint asserting claims against GEICO and CCC for breach of contract, negligence, unjust enrichment, and violations of New York insurance law, 11 NYCRR § 216.7 ("Regulation 64"), and New York General Business Law § 349 (which bans unfair and deceptive trade practices), seeking damages and declaratory and injunctive relief. The complaint invokes federal jurisdiction pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2).

         The thrust of Milligan's complaint is that GEICO violated Regulation 64, a New York State insurance regulation that requires an insurer, in the case of a total loss of a current model year vehicle, to reimburse the owner for the reasonable purchase price less any applicable deductible and depreciation allowances. As relevant herein, Regulation 64 states:

A private passenger automobile of the current model year means a current model year automobile that has not been superseded in the marketplace by an officially introduced succeeding model, or an automobile of the previous model year purchased new within 90 days prior to the date of loss. If the insured vehicle is a private passenger automobile of the current model year, the insurer shall pay to the insured the reasonable purchase price to the insured on the date of loss of a new identical vehicle, less any applicable deductible and an allowance for depreciation in accordance with [a set schedule], except [under circumstances not relevant here].

11 NYCRR § 216.7(c)(3).

         Milligan alleges that her vehicle was a "current model year" automobile as defined by Regulation 64. She contends, however, that rather than paying her the reasonable purchase price of a new identical vehicle on the date of loss less any applicable deductible and depreciation allowances, as required by Regulation 64, GEICO paid Milligan the amount contained in CCC's Market Valuation Report, which calculated her loss using the average of three similar dealer vehicles that were available or recently sold in the marketplace at the time of the valuation. Milligan's complaint sets forth class allegations suggesting that the practices alleged affected many GEICO insureds.

         On March 8, 2016, GEICO's counsel communicated a demand for appraisal to Milligan's counsel pursuant to ...