September/October  2003

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LEGAL

Insurers Request Protective Orders in Anti-Steering Suit 

Several insurance companies have submitted motions for protective orders in the Safelite-Diamond Triumph (D-T) anti-steering suit to keep them from having to release documents to the plaintiff concerning their agreements and contracts, according to court documents obtained in the federal case, currently being processed at the federal courthouse in Scranton, Pa. D-T sued the former in March 2002, claiming that it was steering its customers via its glass claims administration services for a variety of insurance companies (see May/June 2002 AGRR, page 20). 

Insurance Companies Unite in Motion for Protective Order
The following insurance companies for which Safelite handles glass claims were included in the “Motion of Intervening Insurance Carriers for Entry of a Protective Order. The companies requested protection from turning over all of the documents Diamond Triumph has requested in the case, saying that it might release their proprietary information and/or consume unnecessary time finding documents unrelated to the case.
• AIU Insurance Co.
• American Family Mutual Insurance Co.
• American Home Assurance Co.
• American International Group Inc.
• American International Insurance Co.
• American International Insurance Co. 
of California Inc.
• American International Insurance Co. 
of Delaware
• American International Insurance Co. 
of New Jersey
• American International South Insurance Co
• Atlantic Mutual Insurance Co.
• Birmingham Fire Insurance Co. 
• California State Automobile Association Inter-Insurance Bureau
• Central Mutual Insurance Co.
• Civic Property & Casualty Co. Inc.
• Continental Casualty Co. (CAN) and Its Affiliates
• Exact Property & Casualty Co.
• Farmers Insurance Exchange
• Farm Bureau Mutual Insurance Co. of Idaho
• Farmers Insurance Co. Inc.
• Farmers Insurance Co. of Arizona
• Farmers Insurance Co. of Idaho
• Farmers Insurance Co. of Oregon
• Farmers Insurance Co. of Washington
• Farmers Insurance of Columbus Inc.
• Farmers New Century Insurance Co.
• Farmers Texas County Mutual Insurance Co.
• Federal Insurance Co., for itself and as manager of the other insurers among the Chubb Group of Insurance Companies
• Fire Insurance Exchange
• First Trenton Indemnity Co.
• GE Property & Casualty Insurance Co. and its Affiliates
• Grange Mutual Casualty Co.
• Great Lakes Casualty Insurance Co.
• Hartford Fire Insurance Co.
• Illinois Farmers Insurance Co.
• Illinois National Insurance Co.
• Infinity Property & Casualty and Its Affiliates
• Insurance Co. of the State of Pennsylvania
• Integon Corp.
• Liberty Mutual Insurance Co. and Its Affiliates
• Metropolitan Property and Casualty Insurance Co. and its Affiliates
• MIC General Insurance Co.
• Mid-Century Insurance Co.
• Mid-Century Insurance Co. of Texas
• Minnesota Insurance Co.
• National General Assurance Co.
• National General Insurance Co.
• National Grange Mutual Insurance Co., Old Dominion Insurance Co. and its Affiliates
• National Union Fire Insurance Co. of Pittsburgh, Pa.
• Nationwide Mutual Insurance Co. and its property and casualty insurance company affiliates and subsidiaries
• Neighborhood Spirit Property & Casualty Co. Inc.
• New Jersey Manufacturers Insurance Co.
• One Beacon Insurance Co.
• Peerless Insurance Co. and Its Affiliates
• Progressive Mutual Casualty Co.
• Rain & Hail LLC
• Royal & Sun Alliance
• Safeco Insurance Co. of America and Its Affiliates
• Selective Insurance Co. of America
• Selective Insurance Co. of New York
• Selective Insurance Co. of South Carolina
• Selective Insurance Co. of the Southeast
• Selective Way Insurance Co.
• Texas Farmers Insurance Co.
• The Hanover Insurance Co.
• The Premier Insurance Co. of Massachusetts
• The Travelers Indemnity Co.
• Trinity Universal Insurance Co. (Kemper Auto) and Its Affiliates
• United States Automobile Association
• Western United Insurance Co.


D-T opposed the motions—including one filed on the behalf of Safelite—for protective orders, writing “until just now, the parties to the litigation have not disagreed as to the scope of the parties’ dispute or the relevancy of the categories of documents at issue in this motion.” In addition, as exhibit 1 filed on April 25 in its brief opposing the protective order, D-T offers a chart detailing why all of the documents requested—including Safelite’s agreement’s with insurers, documents used to determine “the reasonable and customer pricing paid by insurers,” documents regarding Diamond opt-outs, call-center scripts and Safelite’s training materials—are relevant to the case.

In support of its motion for a protective order, Safelite writes that it “agrees to provide extensive discovery, but some limits should be imposed to avoid burying the parties and Court in wasteful effort.”

Among the items Safelite does not want to submit are calls not listed in Diamond Triumph’s original 
complaint.

“Safelite’s production of recorded calls and documents containing private information about callers should be limited to the 25 insureds and the claims identified in Diamond’s Amended Complaint,” the company writes in the document, filed May 14, 2003. 

In addition, Safelite has filed a motion for partial summary judgment on counts II (breach of implied duty of good faith and fair dealing under the terms of a contract between them) and IV (breach of various obligations under the Maryland Consumer Protection Act and the Virginia Consumer Protection Act).

“Based on the undisputed facts, these claims have no legal merit … Partial summary judgement at this time will avoid needless discovery and trial preparation on those claims,” writes Safelite counsel Laura E. Ellsworth of Pittsburgh-based Jones Day. The brief was submitted on April 29. Safelite says the facts in the case show that these claims are unmerited, as does the original contract between the two companies, the Network Participation Agreement (presented as evidence within the case).

Safelite writes that while Diamond Triumph claims that it “has not received as many vehicle glass jobs and [it] thinks it should have received … the agreement is clear that there were no assurances Diamond Triumph would receive any referrals of glass work from Safelite.”

In regard to the second claim, Safelite questions whether Diamond Triumph can claim that the former company committed both breach of contract and breach of implied duty of good faith.
“Though Diamond Triumph does not allege that any particular state’s law applies to this claim, Ohio and Pennsylvania are the only possible candidates,” Safelite asserts. “As a matter of law, neither Ohio nor Pennsylvania allow Diamond Triumph to claim both breach of contract and breach of an implied duty of good faith.”

Finally, on Count IV, Safelite says Diamond Triumph cannot cite the Virginia and Maryland Consumer Protection Acts in its case, because it is not a consumer.

“Both state and federal courts have repeatedly dismissed [Maryland Consumer Protection Act] actions brought by commercial entities and non-consumers,” Safelite writes.

The judge had not yet made a decision at press time.

Currently, a tentative trial date is set for September 8, 2003, in Scranton.

Safelite spokesperson Dee Uttermohlen said the company still hopes to prevail in the case.

“Safelite has and will continue to seek dismissal of all claims made by Diamond Trimuph for lack of merit and prosecute its claims against Diamond Triumph in an expeditious and efficient manner,” she said.

Officials from Diamond Triumph declined comment.

Ultra-Bond Sues State Farm and LYNX
Richard Campfield and his company, Ultra-Bond, which is based in Grand Junction, Colo., has filed suit against State Farm Mutual Automobile Insurance Co. of Bloomington, Ill., and Pittsburgh-based LYNX Services. The suit, filed on February 19 in the Federal District Court in Denver, claims that both companies “boycott his processes for windshield repair by requiring windshield replacements for repairable windshields with an edge crack longer than six inches.”

However, Campfield claims “a repairable windshield is one with a long crack which is not in the driver’s acute area.” Within the suit, Ultra Bond offers claims of restraint of trade, illegal boycott, price fixing, predatory pricing, conspiracy to monopolize, attempt to monopolize, steering, market manipulation, unfair and deceptive trade practice, tortious interference with prospective advantage and contractual relations.

“We did file motions to dismiss the action,” said State Farm spokesperson Ana Compain-Romero. “We believe their claims are without merit.”

At press time, the judge in Denver had made no decision in the case. 

HAND SHAKES
GTS Services and Harmon AutoGlass Sign National Agreement

Portland, Ore.-based GTS Services LLC and Harmon AutoGlass have announced an agreement under which GTS Services’ family of enterprise-wide software solutions will be installed throughout Harmon’s retail network. GTS will provide its GlasPac® LX and eXpress e-commerce solutions as well as additional related software and services and will provide training for Harmon operating, information technology and business associates.

“We are fully committed to helping Harmon achieve its business goals,” said Fahmy Mechael, president of GTS Services. “This is more to us than simply a sale—we are moving forward together to assure successful implementation.”

“To have one of the largest retail auto glass networks in the business choose GTS solutions to help them manage and grow their business is a significant vote of confidence in the products and services we offer, and confirmation of the leadership we have worked hard to achieve,” Mechael said.
The agreement between GTS and Harmon includes content and functionality upgrades on a continuing basis.

“We provide updates and upgrades three to six times a year to our customers for things that are dynamic in the industry, such as NAGS pricing, as well as expanded capabilities to improve operating efficiencies of our customers,” Mechael said. “We add functionalities and capabilities to our products on an ongoing basis in the form of a new release that’s part of the subscription service our customers participate in.”

EXPANSIONS
Mygrant Opens New Facilities 
Mygrant Glass Co. has announced that it is opening of its 39th and 40th auto glass distribution centers. The first of these will be located at 635-B Northwest Ave., Northlake, Ill., and can be reached at 888/492-1560. Jim Ricci will serve as regional manager of the Northlake facility, which covers 60,000 square feet.
 
The second new facility will be located at 4274 Pock Lane #200, Stockton, Calif., and can be reached at 866/982-1068. Tim Franco will manage the 28,000-square-foot Stockton distribution facility. 

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