Class Action Alleging Breach of Contract Against American Express for Failing to Automatically Refund Various Travel Insurance Premiums Lacked Evidentiary Support because Contract Underlying Class Action Dispute Unambiguously Required Enrollees to Contact American Express as a Condition Precedent to Obtaining such Refunds California Trial Court Holds
Plaintiffs filed a class action against American Express alleging breach of contract arising from the manner in which American Express billed customers for fee-based per-trip travel insurance; the class action complaint challenged the billing practices associated with four such programs – airflight, baggage, travel delay, and hospital cash. Hoffman v. American Express Travel Related Services Co., Inc., Alameda Superior Court Case No. 2001-022881 (Cal.Super.Ct. February 6, 2009) [Slip Opn., at 2]. In broad terms, the allegations underlying the class action asserted that American Express would provide insurance to cardmembers who purchased covered travel with their American Express cards, but failed to automatically refund the insurance premiums “based on airline tickets that were later cancelled, airline tickets for passengers who were not insured under the terms of the policies, and airline charges for services other than tickets.” Id. American Express countered that its billing practices were “expressly authorized and contemplated by the contract, which disclosed the circumstances under which such charges could occur and established a process by which enrollees may obtain refunds of those charges.” Id. The first phase of the class action trial was tried to the court, sitting without a jury, to determine the relevant contract documents and to resolve disputes concerning the terms of the contract documents. Id. The trial court issued a tentative decision in November 2008, and issued its Statement of Decision on February 6, 2009.
We do not here discuss the trial court’s analysis of the documents that constitute the contract or its analyses and conclusions as to whether particular contractual provisions apply to the class action claims or the manner in which certain contract terms should be interpreted. See Hoffman, at 5 et seq. At bottom, the trial court held that the contractual terms governing the programs obligated enrollees to contact American Express for refunds, and that this requirement was a condition precedent to obtain a refund. Id., at 16-17. Moreover, the class representatives testified that they had on occasion requested credits or refunds, “thus demonstrating their understanding that this term was a condition precedent to obtaining a refund.” Id., at 17-18. The trial court also rejected plaintiffs’ invitation to use the doctrine of the implied covenant of good faith and fair dealing to rewrite the terms of the contract, id., at 19-21. Thus, while the court did not enter judgment in favor of American Express, stating that this was not a case where “an interlocutory or separate judgment is proper,” the court declared that its “findings and conclusions with respect to the contract documents and terms will be reflected in the final judgment if and when such a judgment is filed, and in any subsequent findings and conclusions the Court must make in a subsequent phase of this trial.” Id., at 22.
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