State Farm again seeks dismissal of North Carolina actual cash value lawsuit

State Farm seeks to dismiss, in part, a North Carolina lawsuit alleging it systematically lowers actual cash values (ACVs) on total loss claims.

The suit, filed in October 2025, alleges that State Farm reduced the retail cost of vehicles comparable to total losses to reduce payouts by 4–9%. It alleges violations of North Carolina’s Unfair and Deceptive Trade Practices Act (UDTPA) and Unfair Claims Settlement Practices Act (UCSPA), as well as breach of contract specific to plaintiff Craig Brewer.

State Farm has previously denied all of the alleged violations and, specifically regarding Brewer, denies breach of contract.

Now, State Farm seeks dismissal of the UDTPA and UCSPA allegations for failure to state a claim upon which relief may be granted. The insurer also contends that the claims for declaratory relief should be dismissed for lack of subject matter jurisdiction, and for the same reason, “the entirety of Craig Brewer’s claims.”

A memorandum in support filed with the motion to dismiss calls Brewer’s amended complaint, filed in August, “a futile attempt to salvage this lawsuit,” in which two plaintiffs, Regina Barrier and Stacie Smith, were added.

“Essentially, Brewer is trying to avoid the effect of a Fourth Circuit opinion that forecloses his standing,” the memorandum states. “Beyond Brewer’s lack of standing, however, the amended complaint is fatally flawed because it relies on a reading of North Carolina’s total loss regulation that the regulation itself does not support and which the Eleventh Circuit has rejected in a case involving the CCC condition adjustment and a similarly phrased Florida statute.”

State Farm argues that the North Carolina UDTPA and UCSPA, under 11 N.C. Admin. Code § 4.0418, “does not mandate any specific methodology or process for calculating the actual cash value (‘ACV’) of a total loss vehicle.”

“Instead, the regulation says only that the total loss settlement must be ‘based upon’ comparable vehicles — that is, the settlement valuation must originate from, or be derived from, comparable vehicles,” the memorandum states. “Nothing in the regulation forbids a condition adjustment after those comparable vehicles have been identified. To the contrary, the regulation expressly contemplates that adjustments, including adjustments for condition, may be made during the valuation process. In short, the amended complaint’s premise that the CCC condition adjustment is unlawful cannot stand.”

In the memorandum, State Farm also contends that declaratory relief, as the plaintiffs seek it, can’t be granted because “only past harm arising from completed total loss settlements” is alleged. It also takes issue with Brewer as a plaintiff because his vehicle was leased. According to the memorandum, State Farm paid a total loss claim on Brewer’s vehicle twice, the second time after a court-ordered appraisal. State Farm asked the court for the appraisal about two months after the lawsuit was first filed, and sought dismissal. The court denied the motion to dismiss in February of this year.

“Brewer and State Farm then selected an appraiser and, on May 6, 2026, the appraisers agreed on an award, thereby (and per the terms of the policy) setting ACV at $62,000,” the memorandum states. “State Farm informed Brewer about its intent to send the additional payment to Genesis Finance following the appraisal award, and encouraged Brewer to dismiss this suit based on his lack of standing as a lessee. Brewer, however, refused to acknowledge his lack of standing and instead filed the amended complaint.”

The memorandum outlines how State Farm determined the ACV settlements for each plaintiff based on information provided by CCC.

First, State Farm says it provided information about each plaintiff’s total loss vehicle. Then, CCC, “using comparable vehicles, established a ‘base vehicle value’ that would reflect the value of a comparable vehicle to the insured’s vehicle immediately before it was declared a total loss.”

“To do so, CCC reviews its ‘extensive database of vehicles’ to identify comparable vehicles ‘similar to the loss vehicle based on relevant factors,'” the memorandum states. “Because no dealer-listed vehicle is perfectly comparable to the total loss vehicle in terms of attributes, mileage, options, or condition, to reach a proper base vehicle value, the comparable vehicles are adjusted.

“One adjustment made to arrive at the base vehicle value is the condition adjustment, which accounts for the difference in condition between the comparable vehicles (which are often listed for sale on dealers’ lots) and the pre-loss condition of a vehicle driven by a private party (i.e., the insured).”

State Farm says that to help accurately determine ACV, or “the pre-loss fair market value of the insured’s vehicle,” the condition adjustment is applied to compare dealer-listed vehicles with the privately-owned total loss vehicle claim.

“Put differently, the condition adjustment logically reflects the difference between a dealer-ready vehicle for sale versus a privately-owned vehicle,” the memorandum states. “CCC then takes the comparable vehicles and creates a weighted average to arrive at the base vehicle value.”

It adds that this assessment is distinct from the condition adjustment applied to the comparable vehicles, and adjusts for individual components of the total loss vehicle.

“For example, CCC accounts for the total loss vehicle’s interior components (seats, carpets, dashboard, headliner), exterior components (sheet metal, trim, paint, and glass), mechanical components (engine and transmission), and tires (front and rear),” the memorandum states. “These assessments are made on an individualized basis, with determinations as to the condition of each component (i.e., ‘good,’ ‘very good,’ ‘fair,’ ‘average private,’ etc.). Dollar adjustments, which can be positive or negative, are applied where the total loss vehicle’s components differ from the common condition baseline (which is set to ‘good’ or ‘average private’). This can (and does) often yield an upward adjustment, but it can also yield a downward adjustment. Whether the adjustment is upward or downward, however, depends entirely on the individual components of the total loss vehicle.”

In response to State Farm’s newest motion to dismiss, the plaintiffs note that the insurer outlines “the very distinction plaintiffs allege is the central issue of this case,” that is, State Farm’s second assessment is distinct from the condition adjustment applied to the comparable vehicles and adjusts for individual components of the total loss vehicle.

“The challenged software-generated reduction of comparable vehicles is separate and is, as State Farm says, ‘distinct’ from evaluating the actual total loss vehicle,” states the plaintiff’s memorandum in opposition to State Farm’s partial motion to dismiss. “Only after this challenged reduction is applied to determine the base value, State Farm ‘then turns to the total loss vehicle itself’ to make further adjustments. Those adjustments ‘depends entirely on the individual components of the total loss vehicle.'”

It adds that the parties’ agreement on these facts is important because it narrows the scope of the dispute to whether State Farm is responsible for what the plaintiffs allege, or that its actions, as State Farm contends, are “‘[t]o help accurately determine ACV’ and ‘perfectly lawful.'”

“[T]he singular disputed issue is whether State Farm’s application of the software-generated reduction of comparable vehicles for condition is unfair under the UDTPA or impermissible under the total loss regulation,” the plaintiffs’ opposition states. “The central disputed issue is whether State Farm’s uniform software-generated reduction of comparable vehicle values is impermissible under North Carolina law.”

The plaintiffs argue that “[r]egardless of whether State Farm makes any adjustments to a claimant’s total loss vehicle for condition, the Defendant still applies a software-generated deduction to the retail cost of the comparable vehicles to short total loss claims.”

The memorandum notes that the amended complaint adds that State Farm went one step past condition adjustments and made additional impermissible condition adjustments to comparable vehicles for sale in the market, which “double counted” for condition of the plaintiffs’ vehicles.

“For plaintiffs, there is nothing ‘logical’ at all in State Farm’s application of the software-generated reduction of comparable vehicles except that it is done ‘to short total loss claims,'” the memorandum states.

For example, the case’s court documents include depositions from plaintiffs Greg Crews and Regina Barrier about the total loss value calculation of his vehicle, including CCC’s Market Valuation Report, for which the memorandum provides a summary.

“State Farm rated his vehicle as ‘dealer retail’ for every category, resulting in an upward adjustment of $937.00 for the condition of the vehicle,” the memorandum states regarding Crews’s vehicle. “However, despite the fact the vehicle was considered in ‘dealer retail’ condition, State Farm applied its software-generated reduction of the cost of comparable vehicles, reducing the starting ‘base value’ of the comparable vehicles in the amount of $937.00, thus negating the upward adjustment for the ‘dealer retail’ condition of the total loss vehicle.”

It also contends that State Farm is making the same arguments for dismissal that the court has rejected but has repackaged them.

The plaintiffs argue that the threatened injury is both real and immediate, not conjectural or hypothetical.

“Plaintiffs allege that State Farm pays more than 10,000 total-loss claims each year in North Carolina using the challenged practice,” the memorandum states. “State Farm admits the practice continues and maintains that it is ‘perfectly lawful.’ …each named plaintiff has been subjected to State Farm’s uniform practice. Proposed members of the declaratory judgment class are having their total loss claims reduced by State Farm’s practice each day. Ms. Barrier, who continues to be insured by State Farm, is just as likely to be subjected to the practice as any other State Farm insured going forward.”

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