Class Action Alleges Ashley Furniture Misrepresents Service Plans, Fails to Investigate Claims [DISMISSED]

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A proposed class action alleges Ashley Furniture Industries has misrepresented the benefits and terms of its service plans and unfairly denied customers’ claims without proper investigation.

The 15-page lawsuit was filed by a Florida consumer who says she was persuaded to purchase a service plan for a couch she bought from Ashley after a representative indicated that “any sort of damage” would be covered. When the base of the plaintiff’s sofa “collapsed in one spot” after two years of “normal use,” however, the woman was told that “excessive damage, misuse, neglect, mishandling, and abuse” were not covered under her service plan, the suit says.

According to the lawsuit, it is Ashley’s practice to misrepresent the terms of its service plan “for the purpose of denying [] claims,” and to base those denials on allegedly “excessive” damage, misuse and neglect, without adequately investigating consumers’ claims. The filing alleges Ashley representatives receive incentives for each customer who signs up for a service plan, and are thus incentivized to “over-promise” the benefits of a plan and “not inform customers of its numerous limitations.”

The case claims that thousands of consumers have been issued “the same boilerplate denials, untethered to their specific facts,” and argues that Ashely has essentially been selling unlawful insurance policies prohibited by Florida law.

When the plaintiff purchased her sofa in October 2019 from a Tallahassee, Florida Ashley’s Furniture store, she was led to believe that buying a service contract along with the couch “was a prudent investment for her costly purchase.” Though the plaintiff was unable to view the terms of the Ashley Furniture service plan prior to her purchase, she later received a copy of the service agreement, the terms of which stated, in part, that “[a]ccidental breakage of frames, springs, and sleeper, reclining, inclining, heating, and vibrating mechanisms will be covered after the manufacturer’s warranty has expired,” the suit relays.

The case says the plaintiff submitted a claim under her service plan in October 2021 after the base of her sofa collapsed in two places. Per the complaint, the plaintiff’s claim was denied, without an opportunity for appeal, based on the defendant’s finding that “excessive damage, misuse, neglect, mishandling, and abuse” were not covered under the terms of the woman’s plan.

The lawsuit argues that Ashley had “no basis” to find that the damage fell under this exception for coverage given the plaintiff had reported that the breakage was caused by “normal use” during “normal sitting” on the couch.

Ashely uses this exception as the basis for denying consumers’ claims “with such frequency” that it is likely the defendant has a practice of failing to adequately investigate claims, the case contests.

Moreover, the lawsuit argues that Ashley’s service contracts are essentially unlawful insurance policies that the company sells without adequately defining their terms and outside of the “extensive regulations” of the insurance industry.

The lawsuit looks to cover anyone in Florida, Alabama, Montana, Alaska, Texas, Arizona, New Mexico, Mississippi, Utah, Nebraska, South Carolina, Tennessee and Virginia who purchased a service plan from Ashley Furniture during the applicable statute of limitations period.

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