E-FILED - SC Superior Court E-Filing

E-FILED: Oct 15, 2012 5:00 PM, Superior Court of CA, County of Santa Clara, Case #1-08-CV-129264 Filing #G-47834
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time of loss or a discussion of other factors upon which State Farm may have considered in its
determination of the depreciation amount.
11. The results of my analysis also indicate that, of the 37 Claim Files which contained
the requisite data to perform my analysis 30 (81 percent) contained at least one claim item settled
for ACV where the depreciation per the CIS form matched 10 the applicable depreciation per the
SF Depreciation Guide. This analysis is set forth in Appendix 2.
12. In addition to examining depreciation on the CIS forms, I also reviewed the
Activity Logs for any discussion of the bases upon which State Farm determined the depreciation
used to settle claims. Consistent with the results of the matching analysis descried above, I found
32 instances where the Activity Logs contained language indicating that the depreciation amounts
State Farm used to settle ACV claims were based on the SF Depreciation Guide. A listing of
such instances is presented in Appendix 3.
13. In conclusion, 42.1 percent (36.6 percent direct match plus 5.5 percent probable
match) of claimed items analyzed had depreciation amounts that matched the applicable
depreciation for a specific category within the SF Depreciation Guide. As to the items that did
not match a guide category, it appears that some other, non-condition based depreciation method
was used. 11 However, further discovery is necessary to determine the derivation of the
depreciation percentages State Farm used.
14. 81 percent of Claim Files reviewed contain depreciation amounts that match the
applicable depreciation per the SF Depreciation Guide. Lastly, State Farm’s Activity Logs
contain numerous references indicating that it utilized the SF Depreciation Guide in settling ACV
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As explained above, I flag an item as a “match” if the depreciation percentage per the CIS form
is within plus or minus one percentage point of the depreciation indicated by the SF Depreciation
Guide (per the age and description of the item per the PPIF).
11
It appears that State Farm likely used some basis for depreciation other than the actual physical
pre-loss condition of the item as the “condition” of claimed items is mentioned in only 10 percent
of the Claim Files I reviewed (see discussion below) and only a subset of this 10 percent contains
a description of the physical condition of the item(s), as opposed to merely mentioning that the
condition of the item was considered in the context of determining depreciation. Moreover, I note
that neither the CIS form nor the PPIF request information regarding the pre-loss condition of
claimed items.
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Declaration of Bruce McFarlane In Support of Motion For Class Certification