Allstate Insurance Parts and Labor plus

STEPHEN C. RYAN, ID #4255

STEPHEN C. RYAN, P.C.

10613 N. Hayden Road, Suite J-100

Scottsdale, Arizona 85260

(480) 443-1148

DAVID S. SHUGHART, #015299

DAVID S. SHUGHART, P.C.

5090 North 40^th Street, Suite 148

Phoenix, Arizona 85018

Attorneys for Plaintiffs

IN THE SUPERIOR COURT OF THE STATE OF ARIZONA

IN AND FOR THE COUNTY OF MARICOPA

JOSEPH AND ADRIANNA YOUNAN, )

husband and wife, ) No. CV2000-018122

)

Plaintiffs, ) COMPLAINT - BREACH OF

) CONTRACT - BAD FAITH

vs. )

)

ALLSTATE INSURANCE COMPANY, )

a foreign corporation; )

ALLSTATE PARTS AND LABOR PLUS, a )

foreign company; and John and Jane Does I-X, )

)

Defendants. )

_______________________________________)

Plaintiffs, for their Complaint against Defendants, and each of them, allege as follows:

Plaintiffs are residents of Maricopa County, State of Arizona.

All events complained of herein occurred within Maricopa County, State of Arizona.

III

The amount in controversy exceeds the jurisdictional minimum requirements of this court.

Plaintiffs request a trial by jury of all issues triable by jury.

Plaintiffs are husband and wife and residents of Maricopa County. They bring this action individually and jointly on behalf of themselves and their marital community.

Defendant Allstate Insurance Company is a foreign insurer, headquartered in Illinois, and authorized to engage in the business of selling insurance in the State of Arizona. Said Defendant has caused events to occur within the State of Arizona out of which this complaint arises.

VII

Defendant Allstate Parts and Labor Plus is, upon information and belief, an entity, company or organization owned by, managed by and controlled and directed by Defendant Allstate Insurance Company. For these reasons, Defendant Allstate Insurance Company is liable for any actions, inactions or misconduct of Defendant Allstate Parts and Labor Plus. Defendants Allstate Insurance Company and Allstate Parts and Labor Plus will hereafter be referred to as Allstate.

VIII

On and before July 25, 2000, Plaintiffs had purchased a mechanical breakdown insurance policy from Defendant Allstate, said plan being marketed under the name Allstate Parts and Labor Plus.

Defendant Allstate represented in its advertising and sales materials that this insurance protection would save Plaintiffs thousands of dollars in future repair bills.

Plaintiffs signed up for Allstate Parts and Labor Plus and paid their required premiums and, as a result, were insureds under Allstate's Parts and Labor Plus insurance policy or program at all times referred to herein.

On and before July 25, 2000, Plaintiffs insured vehicle began to experience what Plaintiffs perceived to be problems with the vehicle's transmission.

XII

On or about July 25, 2000, Plaintiffs took their vehicle to Rayco Car Service in Phoenix, Arizona for an evaluation of the vehicle's mechanical problems.

XIII

Rayco Car Service determined that the problem was with Plaintiffs transmission. Plaintiff timely reported the claim to Allstate and Allstate authorized a tear-down of the transmission.

XIV

With respect to the tear-down process, Allstate designated its own expert to attend and participate in the tear-down process on behalf of Allstate.

Defendant Allstate's expert, the exact identity of whom is presently not known by Plaintiffs because Allstate has refused to disclose the individual's identity, determined, without question, that the transmission problems diagnosed were the type of failure that would qualify for payment under Plaintiffs Allstate's Parts and Labor Plus insurance policy.

XVI

After Plaintiffs waited days for Allstate's claims personnel to confirm that the repairs would be covered, Allstate then advised Plaintiffs that the submitted claim was being denied.

XVII

Allstate's basis for denial was that Plaintiffs had effectuated a modification to their vehicle.

XVIII

To the extent that Plaintiffs had in any way modified their vehicle, the modification bore no mechanical relationship to the transmission repair/replacement that Plaintiffs were needing.

XIX

Plaintiffs informed Allstate of Allstate's incorrect denial of the claim and, after multiple discussions occurring over a period of time, Allstate stated that it realized that the claim had been wrongfully denied and Plaintiffs were told that the claim would be honored.

Within just a few hours after Allstate said the claim would be honored, however, Allstate contacted Rayco and advised Rayco that Allstate would not pay Rayco's labor charges of 13 hours for the repair, Allstate insisting that the total labor time should be only approximately 9 hours. The difference in labor time was because of Allstate's refusal to properly and fairly compensate Rayco for the hours Rayco spent tearing down and examining the transmission, a process and expense which Allstate had approved.

XXI

Plaintiffs then called Allstate to discuss the situation again and Plaintiffs were told that Allstate had decided to just deny the claim once again.

XXII

In addition, Allstate's personnel told Plaintiffs that not only was the claim being denied, but Plaintiffs Allstate Parts and Labor Plus insurance policy was being unilaterally cancelled by Allstate.

XXIII

As a result of Allstate's denial of the claim, Plaintiffs have had to personally incur the significant cost of repairing/replacing their transmission on their insured vehicle.

XXIV

Plaintiffs allege that they are typical and representative of a significant class of Allstate insureds who have had their Allstate Parts and Labor Plus claims denied improperly based upon allegations of vehicle modification.

. . . .. . . .

XXV

Count I

Breach of Contract

Plaintiffs incorporate herein by reference all previous allegations contained in this Complaint.

XXVI

The refusal by Defendant Allstate and Allstate Parts and Labor Plus to properly and timely compensate Plaintiffs with respect to their covered loss under Plaintiffs insurance policy constitutes a breach of the insurance contract.

XXVII

As a result of Defendants Allstate's breach of the contract, Plaintiffs have suffered compensatory damages in the amount of repair bills and costs necessary to repair and/or replace their transmission.

XXVIII

Wherefore, Plaintiffs request judgment against Defendants Allstate and Allstate Parts and Labor Plus, jointly and severally, for breach of contract as follows:

a) For Plaintiffs compensatory and contractual damages in an amount to be proven at trial;

b) For Plaintiffs consequential damages as proven at trial;

c) For Plaintiffs costs and expenses incurred herein;

d) For Plaintiffs attorney fees pursuant to the insurance contract and A.R.S. ' 12-341.01.; and

e) For such other and further relief as the Court deems just and proper.

XXIX

Count II

Bad Faith

Plaintiffs incorporate herein by reference all previous allegations in the Complaint.

XXX

Allstate's Parts and Labor Plus insurance policy required Allstate and any entity or subsidiary known as Allstate Parts and Labor Plus to act in good faith with respect to Plaintiffs under the insurance policy.

XXXI

Defendants, severally and jointly, have breached the covenant of good faith and fair dealing by unreasonably and knowingly denying Plaintiffs' insurance claim with no reasonable or justifiable basis for doing so.

XXXII

As a result of Defendants' conduct, Plaintiffs have been damaged as a result of their insurance claim not being paid and, in addition, Plaintiffs have suffered significant stress, frustration, anxiety and anger as a result of Defendants' wrongful conduct.

XXXIII

Defendants' several and joint conduct was so wrongful, intentional and malicious as to justify the imposition of punitive damages, not only to deter Defendants from treating other similar insureds in a like fashion, but also to deter other insurance companies from behaving in a like fashion in the future.

XXXIV

Wherefore, Plaintiffs request judgment against Defendants, jointly and severally, for bad faith and punitive damages as follows:

a) For Plaintiffs compensatory damages as proven at trial;

b) For Plaintiffs damages for emotional stress, anxiety, anger and frustration;

c) For Plaintiffs punitive damages in an amount to be determined by the jury;

d) For Plaintiffs attorney fees pursuant to the insurance contract and A.R.S. ' 12-341;

e) For Plaintiffs costs and expenses incurred herein; and

f) For such other and further relief as the Court deems just and proper.

DATED this 3^rd day of October, 2000.

STEPHEN C. RYAN, P.C.

Stephen C. Ryan

10613 N. Hayden Road, Suite J-100

Scottsdale, Arizona 85260

-and-

David S. Shughart

David S. Shughart, P.C.

5090 North 40^th Street, Suite 148

Phoenix, Arizona 85018

Attorneys for Plaintiffs