In reinstating a $17-million verdict in a class-action lawsuit against American Family Insurance, a three-judge panel in Missouri ruled that aftermarket parts are not of like kind and quality to OEM parts.
The suit alleges that American Family underpaid 319,000 Missouri residents for vehicle repairs between 1990 and 2004 by writing estimates using pricing for aftermarket parts, which the suit claims are inferior to OEM parts, the Associated Press (AP) reported. The three-judge appeals court panel overturned a ruling from last year, when a circuit court judge overruled a jury’s decision ordering the insurer to pay $17 million in restitution to its underpaid claimants.
In its ruling, the panel stated that the plaintiffs in the case “presented sufficient evidence for a reasonable juror to conclude that aftermarket parts are not of like kind and quality to OEM parts and that American Family breached its contracts with its policyholders when it paid to return the damaged vehicle to pre-loss condition based on the nature and cost of aftermarket parts.”
An American Family spokesman told the AP the company believed it was serving its customers by providing “competition for auto parts prices” and that the company stands behind the quality and fit of aftermarket parts.
A trial court will now determine if any additional damages or fees should be paid by American Family.