Substantively Differing Laws Mean No Class for You

Substantively Differing Laws Mean No Class for You

Ferrara v. 21st Century North America Insurance Company Background

In Ferrara v. 21st Century North America Insurance Company, No. 2 CA-CV 2017-0195 (September 10, 2018), the Arizona Court of Appeals Division Two reviewed whether plaintiff Cynthia Ferrara’s (“Ferrara”) motion for class certification complied with the requirements of Rule 23, Ariz. R. Civ. P.

Ferrara was injured in a motor vehicle accident while in the course and scope of her employment. On the date of the accident, Ferrara was considered a covered person and beneficiary of an auto insurance policy provided by defendant 21st Century North America Insurance Company (“21st Century”).

Ferrara sustained injuries and received medical treatment. Since the accident occurred during her employment, she received workers’ compensation benefits covering her medical expenses. Ferrara asserted a third-party claim against the responsible driver which was eventually settled. After the settlement, Ferrara’s workers’ compensation carrier issued a lien on the third-party settlement for the medical expenses it paid. Seeking coverage pursuant to the medical payments provision of her policy, Ferrara submitted her medical bills and documents establishing she had reimbursed the workers’ compensation carrier to 21st Century.

21st Century denied her claim. The company cited Ferrara’s policy which contained an exclusion stating “We do not provide Medical Payments Coverage for any insured bodily injury…occurring during the course of employment if workers’ compensation benefits are required or available for the bodily injury.”

Ferrera Seeks Relief in District Court

Ferrara filed a lawsuit asserting breach of contract and declaratory relief, and sough class action certification pursuant to Rule 23. The proposed class was to consist of all persons or assignees who were covered by 21st Century auto policies or their affiliated underwriting entities, and who had made a claim for medical payments coverage that was denied on the basis of the workers’ compensation exclusion. The geographic scope of the class included all 33 states in which 21st Century issues policies containing the exclusion. After discovery and argument, the trial court found Ferrara failed to satisfy the requirements of Rule 23(a), and denied class certification.

Class Certification Factors Weighed by the Court

A plaintiff seeking class certification must meet all the requirements of Rule 23(a) and at least one of Rule 23(b)’s requirements. The four requirements under Rule 23(a) are commonly known as numerosity, commonality, typicality and adequacy. The trial court found Ferrara failed to establish numerosity, commonality, and typicality.

Court of Appeals Upholds Trial Court Ruling Finding No Class

The Court of Appeals focused its attention on the fact Ferrara’s proposed class incorporated the law of 33 different states. The Court of Appeals noted a party seeking certification must provide an extensive analysis of state law variations to reveal whether they pose obstacles. Sacred Health Heart Sys., Inc. v. Humana Military Healthcare Servs., Inc., 601 F.3d 1159, 1180 (11th Cir. 2010).

Ferrara did provide two matrices addressing the laws of the various states. In analyzing her matrices, the Court of Appeals found that 27 of the 33 states in Ferrara’s proposed geographic scope differed substantively from Arizona on whether an insurer has a right to recover medical payments benefits from a third-party-at-fault recovery. The Court of Appeals also noted that after discovery was conducted at the trial court level, Ferrara identified at most 20 potential class members with Ferrara being the sole potential member from Arizona.


The Court of Appeals ultimately upheld the trial court’s ruling and found Ferrara did not meet her burden of proof to show a class action was appropriate. The ruling centered on the variances in state law on a core issue and the potentially small number of class members.

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