Andrea Perry v. Allstate Indemnity Co., 953 F.3d 417

Andrea Perry’s home suffered covered water damage; parties agree replacement cost estimate is $32,965.09.
Allstate paid Perry on an Actual Cash Value (ACV) basis and deducted "depreciation," producing a net payment of $28,394.74; Allstate included labor (and CO&P) in its depreciation deduction.
The policy did not define "depreciation." Perry sued Allstate, alleging improper labor depreciation; the district court granted Allstate’s Rule 12(b)(6) motion and dismissed.
On appeal Perry conceded only Allstate Indemnity issued the policy; the Sixth Circuit held only that entity has standing and directed dismissal without prejudice of other Allstate entities.
On the merits the Sixth Circuit majority held the policy term "depreciation" is ambiguous under Ohio law and, because Perry’s interpretation (excluding labor) is reasonable, construed the ambiguity against the insurer and ruled labor may not be depreciated; the case was reversed and remanded.
Judge Readler concurred in part but dissented in part: he agreed remand was required but argued the court should not decide the substantive question now and instead allow discovery/extrinsic evidence to resolve the ambiguity.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing	Perry: could sue multiple Allstate entities as a class (juridical-link)	Allstate: only Allstate Indemnity issued Perry’s policy; others caused no injury	Only Allstate Indemnity has standing; claims against other entities dismissed without prejudice
Whether ACV "depreciation" may include labor costs	Perry: "depreciation" is ambiguous as to labor; ordinary meaning ties depreciation to wear of materials, so labor should not be deducted	Allstate: "depreciation" reasonably includes both materials and labor; Ohio Admin. Code phrase "less any depreciation" supports that view	Majority: term is ambiguous and must be construed against insurer where insured’s reading is reasonable — labor may not be depreciated; case reversed and remanded. (Concurring/dissent: would remand for discovery and not decide merits now.)

Andersen v. Highland House Co., [citation="757 N.E.2d 329"] (Ohio 2001) (ambiguous insurance terms construed strictly against insurer; insurer must show its interpretation is the only reasonable one)
Hicks v. State Farm Fire & Cas. Co., [citation="751 F. App'x 703"] (6th Cir. 2018) (similar ACV language found ambiguous under Kentucky law; labor excluded from depreciation)
Lammert v. Auto-Owners Ins. Co., [citation="572 S.W.3d 170"] (Tenn. 2019) (Tennessee Supreme Court concluded term ambiguous and construed against insurer; depreciation limited to materials)
Redcorn v. State Farm Fire & Cas. Co., [citation="55 P.3d 1017"] (Okla. 2002) (labor embedded in finished goods may be depreciated; the court treated labor and materials as fused)
Adams v. Cameron Mut. Ins. Co., [citation="430 S.W.3d 675"] (Ark. 2013) (adopted dissenting Redcorn view: labor may not be depreciated in ACV without express language)
In re State Farm Fire & Cas. Co., [citation="872 F.3d 567"] (8th Cir. 2017) (followed Redcorn majority; embedded labor can be considered in ACV valuation)
Lujan v. Defenders of Wildlife, [citation="504 U.S. 555"] (1992) (standing principles cited for requirement that injury be traceable to defendant)
Kepley v. Lanz, [citation="715 F.3d 969"] (6th Cir. 2013) (framework for applying state substantive law in federal diversity cases)