USAA Settles Sales Tax Compensation Class Action for $39 Million

May, 2017 — The United Services Automobile Association has agreed to pay $39 million to settle a class suit in Florida challenging its practice of compensating policyholders with totaled cars for the sales tax incurred in purchasing a replacement, rather than determining tax based on the covered vehicle’s value. The parties asked the court to approve the settlement, which provides members with 100 percent of the value of their claims plus 8 percent for claims of prejudgment interest. The claims are estimated to be about $34 million. The settlement also sets aside about $46,000 in incentive payments for the five lead plaintiffs.

Garrison Property and Casualty Insurance Co. policyholder Chantal Bastian filed a proposed class action against Garrison and three other USAA-affiliated auto insurance companies in 2013 over their sales-tax compensation for totaled vehicles, later agreeing to add four named plaintiffs who were insured by the other companies.

Case Information

The plaintiffs are represented by Christopher B. Hall of Hall & Lampros LLP and Tracy L. Markham of Avolio & Hanlon PC.

The case is Bastian et al. v. United Services Automobile Association et al. (case number 3:13-cv-1454) in the U.S. District Court for the Middle District of Florida, Jacksonville Division.

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