“Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. Cases in the series can be found by issue and by judge at this link.

Trump Sixth Circuit judge Chad Readler dissented from an important decision that will protect homeowners from insurance companies’ attempts to shrink their reimbursement amounts to their policyholders. The March 2020 case is Perry v. Allstate Indemnity Co.

When Andrea Perry’s Cleveland area home suffered serious water damage in 2015, she filed a claim with her insurance company, Allstate, for the cost of repair, which was over $30,000. The parties agreed that Allstate was obligated to pay, but the company claimed that it could deduct the cost of labor to make the repairs, which totaled thousands of dollars, from the amount owed to Perry. On behalf of herself and all other similarly situated Ohio residents, Perry filed suit in federal district court.

The lower court agreed with Allstate that labor costs could be considered part of  “depreciation,” which is allowed to be deducted from payments under the policy, and dismissed the case as a matter of law. On appeal, a three-judge panel reversed.

Judge Karen Nelson Moore wrote the majority ruling, joined by a judge nominated by George W. Bush. The majority explained that the term “depreciation” was ambiguous, and that under Ohio law, the policy should be interpreted in favor of the policyholder. In addition, the majority noted, Perry’s interpretation “has been recognized as reasonable by numerous state and federal courts, including our own,” since “depreciation traditionally refers to value lost from physical wear and tear.”

Trump judge Readler dissented from that ruling. He agreed with the majority’s interpretation of  the Ohio law and its conclusion that an insurance company must show that its interpretation was “the only one that can fairly be placed on the language in question.” But he asserted that Allstate should be able to further prolong the litigation through discovery, which could conceivably reveal that its interpretation was, in fact, the only reasonable one. This argument ignored the majority’s clear demonstration that Perry’s interpretation was reasonable as a matter of law.

The serious damage to Perry’s home occurred five years ago. Readler’s view would have further prolonged the lawsuit, and would have deprived Ohio homeowners of what one Ohio commentator has called “an important ruling in favor of policyholders.”