{"id":892760,"date":"2017-08-17T11:35:28","date_gmt":"2017-08-17T17:35:28","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=892760"},"modified":"2017-08-17T11:35:28","modified_gmt":"2017-08-17T17:35:28","slug":"update-labor-depreciation-class-actions","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/","title":{"rendered":"Update on Labor Depreciation Class Actions"},"content":{"rendered":"<p>Wystan Ackerman | <a href=\"https:\/\/www.classactionsinsider.com\/2017\/08\/update-on-labor-depreciation-class-actions\/\" target=\"_blank\">Robinson &amp; Cole<\/a> | August 14, 2017<\/p>\n<p>There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor cost component of replacement cost value on property insurance claims. (For background on this issue, see my\u00a0<a href=\"https:\/\/www.classactionsinsider.com\/2017\/02\/depreciation-of-labor-costs-class-action-nebraska-supreme-court-rules-in-favor-of-insurer\/\">February 21, 2017 blog post<\/a>.) The \u201clabor depreciation\u201d litigation has been trending in favor of the insurers\u2019 position, although these two decisions demonstrate that courts continue to reach conflicting results.<\/p>\n<p>In\u00a0<em>Basham v. United Servs. Auto. Ass\u2019n<\/em>, 2017 U.S. Dist. LEXIS 118729 (D. Colo. July 28, 2017), a Colorado federal court recently granted a motion for judgment on the pleadings in favor of the insurer. The court explained that \u201c[c]overed property, such as a roof, is often the product of both materials and labor. Accordingly, repair and replacement costs comprise the cost of materials (e.g., shingles and nails), and the cost of labor (e.g., roofing contractors). Both the cost of materials and the cost of labor are therefore subject to a depreciation deduction.\u201d The court further reasoned that actual cash value coverage \u201cis designed to avoid placing the insured in a better position than he or she was in before the\u201d damage occurred, and that \u201c[w]henever property is the indivisible product of materials (stuff) and labor (work), its physical components and the assembly of those pieces will decay over time.\u201d The court rejected the plaintiffs\u2019 argument that depreciation should be applied only to the cost of the materials.<\/p>\n<p>In\u00a0<em>Arnold v. State Farm Fire &amp; Cas. Co.<\/em>, 2017 U.S. Dist. LEXIS 122051 (S.D. Ala. Aug. 3, 2017), an Alabama federal district court denied the insurer\u2019s motion to dismiss. The court wrote that \u201c[t]he defendant certainly has not attempted to show that Alabama law requires insureds, before forming an understanding of what undefined policy terms mean, to discover and ponder the myriad and largely hidden commercial and societal considerations that underlie the insurance industry and its oversight by the three branches of state government. \u201c The court further explained that \u201c[t]he defendant has identified no well-developed Alabama case law demonstrating that ACV encompasses depreciation for labor and [an Alabama Supreme Court decision] reflects that the common understanding of ACV does not encompass depreciation at all.\u201d The decision in\u00a0<em>Arnold<\/em>\u00a0appears to conflict with the decision of another Alabama federal district court in\u00a0<em>Ware v. Metropolitan Prop. &amp; Cas. Ins. Co.<\/em>, 220 F. Supp. 3d 1288 (M.D. Ala. 2016), which granted an insurer\u2019s motion to dismiss in a \u201clabor depreciation\u201d class action.<\/p>\n<p>In another recent development on this issue, on August 4, 2017, the Mississippi Insurance Department issued a bulletin stating as follows: \u201cThere is no statutory law in Mississippi prohibiting the practice of labor depreciation in the adjustment of property loss claims. If such a practice is used, the insurer should clearly provide for the depreciation of labor in the insurance policy. Likewise, if material and\/or labor depreciation is applied, the insurer should clearly set out any such depreciation on the claim estimate furnished by the insurer.\u201d\u00a0Miss. Ins. Dep\u2019t Bulletin 2017-8.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wystan Ackerman | Robinson &amp; Cole | August 14, 2017 There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor cost component of replacement cost value on property insurance claims. (For background on this issue, see my\u00a0February 21, 2017 blog post.) The&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\">Continue reading <span class=\"screen-reader-text\">Update on Labor Depreciation Class Actions<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[9895,8916,9806],"class_list":["post-892760","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-advise-consult","tag-depreciation-of-labor","tag-replacement-cost-value","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Update on Labor Depreciation Class Actions - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"description\" content=\"There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Update on Labor Depreciation Class Actions - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise &amp; Consult, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\" \/>\n<meta property=\"article:published_time\" content=\"2017-08-17T17:35:28+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:site\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\"},\"headline\":\"Update on Labor Depreciation Class Actions\",\"datePublished\":\"2017-08-17T17:35:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\"},\"wordCount\":512,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"keywords\":[\"Advise &amp; Consult\",\"Depreciation of Labor\",\"Replacement Cost Value\"],\"articleSection\":[\"Insurance Claims\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\",\"name\":\"Update on Labor Depreciation Class Actions - Advise &amp; Consult, Inc.\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\"},\"datePublished\":\"2017-08-17T17:35:28+00:00\",\"description\":\"There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"name\":\"Advise &amp; Consult, Inc.\",\"description\":\"Construction Expert Witnesses\",\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\",\"name\":\"Advise & Consult\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"contentUrl\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"width\":162,\"height\":75,\"caption\":\"Advise & Consult\"},\"image\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\",\"https:\/\/x.com\/adviseconsult\",\"https:\/\/www.linkedin.com\/company-beta\/204526\/\",\"https:\/\/www.youtube.com\/user\/MrConstructionExpert\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"caption\":\"admin\"},\"sameAs\":[\"http:\/\/www.expertwitnessinconstruction.com\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Update on Labor Depreciation Class Actions - Advise &amp; Consult, Inc.","description":"There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/","og_locale":"en_US","og_type":"article","og_title":"Update on Labor Depreciation Class Actions - Advise &amp; Consult, Inc.","og_description":"There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor","og_url":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/","og_site_name":"Advise &amp; Consult, Inc.","article_publisher":"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","article_published_time":"2017-08-17T17:35:28+00:00","author":"admin","twitter_card":"summary_large_image","twitter_creator":"@adviseconsult","twitter_site":"@adviseconsult","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/#article","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/"},"author":{"name":"admin","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7"},"headline":"Update on Labor Depreciation Class Actions","datePublished":"2017-08-17T17:35:28+00:00","mainEntityOfPage":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/"},"wordCount":512,"commentCount":0,"publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"keywords":["Advise &amp; Consult","Depreciation of Labor","Replacement Cost Value"],"articleSection":["Insurance Claims"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/","name":"Update on Labor Depreciation Class Actions - Advise &amp; Consult, Inc.","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website"},"datePublished":"2017-08-17T17:35:28+00:00","description":"There have been two recent federal district court decisions in the widespread class action litigation involving the application of depreciation to the labor","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.myconstructionexpert.com\/blog\/update-labor-depreciation-class-actions\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website","url":"https:\/\/www.myconstructionexpert.com\/blog\/","name":"Advise &amp; Consult, Inc.","description":"Construction Expert Witnesses","publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization","name":"Advise & Consult","url":"https:\/\/www.myconstructionexpert.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","contentUrl":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","width":162,"height":75,"caption":"Advise & Consult"},"image":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","https:\/\/x.com\/adviseconsult","https:\/\/www.linkedin.com\/company-beta\/204526\/","https:\/\/www.youtube.com\/user\/MrConstructionExpert"]},{"@type":"Person","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","caption":"admin"},"sameAs":["http:\/\/www.expertwitnessinconstruction.com"]}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2ztG6-3Kfm","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/892760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/comments?post=892760"}],"version-history":[{"count":1,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/892760\/revisions"}],"predecessor-version":[{"id":892761,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/892760\/revisions\/892761"}],"wp:attachment":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/media?parent=892760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/categories?post=892760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/tags?post=892760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}