Volume 10, Issue 3 - May/June 2008

Long-Crack Wars 
Repair Suit Nears End
by Penny Stacey

A lawsuit concerning long-crack windshield repair that has been under review for several years in numerous U.S. courts recently might have reached a point of culmination. On March 19, the U.S. Court of Appeals for the Tenth Circuit heard an appeal of the decision in a case filed by Rich Campfield in 2005 alleging that State Farm, via its third-party administrator for glass claims, LYNX Services, interfered with its long-crack repair services. 

Campfield, the president of Ultra Bond Licensing and Ultra Bond Windshield Repair and Replacement, originally filed the suit five years ago—on February 19, 2003. (See related story about long-crack repair on page 54.)Campfield and his company, Ultra Bond, claim in court documents that “LYNX [customer service representatives] are trained to tell the State Farm insured that [cracks] longer than a dollar bill cannot be repaired because the repair will not hold.”

The plaintiffs allege that when a State Farm insured calls in a claim for a cracked windshield, if the crack is determined to be longer than six inches (considered a “long crack”), the insured is encouraged to have the windshield replaced rather than repaired and that the benefits of repair are not fully explained. By doing so, they state, State Farm and LYNX have interfered with the licensing of the Ultra Bond method of repairing long cracks.

The complaint also alleges that State Farm and LYNX “have used their market power to foreclose plaintiffs and all other repairable long-crack repair competitors from the windshield repair market.” In the suit, Campfield’s counsel, Montgomery Kolodny of Denver, also alleges that State Farm and LYNX Services have violated the Colorado consumer protection law, which prohibits tortuous interference with existing and prospective business contracts.

In a letter to the court, dated February 11, 2008, the plaintiff’s counsel cites the Colorado Revised Statutes (CRS), and writes, “This statute states Colorado’s public policy regarding the need to protect the public from monopolistic and anti-competitive behavior of insurance companies in their treatment of consumers, particularly with regard to an insurer controlling consumer choice as to repair businesses.”

The statute itself reads:

“The general assembly determines that competition is fundamental to the free market system and that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, and the best environment for democratic and social institutions. Therefore, the right of an individual to choose a repair business is a matter of statewide concern.”

Faegre & Benson LLP of Denver, representing the defendants, replied to the letter on February 19, arguing that the statute is irrelevant to the claim.

On March 19, an appeal panel reviewed the case.

Earlier Rulings
This appeal comes after many years of investigation and earlier rulings. In December 2005, Judge Robert E. Blackburn dismissed the case, claiming that “a reasonable fact-finder could not conclude that the defendants have knowingly and intentionally deceived State Farm insureds in implementing State Farm’s six-inch criterion … could not conclude that the alleged misrepresentation has had a significant public impact in the past or will have such an impact in the future,” and that there was no evidence of “a breach of an Ultra Bond license contract, or evidence that the defendants used any wrongful means to interfere with Ultra Bond’s at-will licensing contracts …” 

Noting that State Farm and LYNX had implemented the six-inch criterion in 1997 and that Campfield and Ultra Bond were aware of the policy by 1999, in his original ruling Blackburn cited Harmon v. Fred S. James & Co., in which it was ruled that “a series of unlawful acts can be viewed properly as a ‘continuing violation’ only if their character was not apparent when they were committed but became so when viewed in the light of later acts.”

Blackburn also outlined what the plaintiffs had to show in order to prove a “private cause of action under the [Colorado Consumer Protection Act (CCPA)],” of which there are five main points. He noted that Campfield and Ultra Bond would have had to prove that:

  1. State Farm and LYNX Services engaged in an unfair or deceptive trade practice;
  2. the two companies engaged in the alleged practice in the course of their business;
  3. the alleged practice significantly impacted the public as actual or potential customers of State Farm or LYNX’s goods or services; 
  4. the plaintiffs suffered an injury to a legally protected interest; and 
  5. the alleged practice caused injury.

In applying the law, Blackburn wrote that LYNX argued that the CCPA does not apply because “the public is not an actual or potential customer of LYNX’s services,” but rather that State Farm is the customer. 

Judge Blackburn disagreed with this assessment, stating that “although State Farm insureds with glass claims do not pay directly for LYNX’s claim-processing services, those insureds do use or consume LYNX’s claims-processing services when the insureds make claims for glass coverage.” 

“Apparently, the plaintiffs ask the court to indulge in the presumption that many State Farm insureds make claims based on long cracks in their windshields,” wrote Judge Blackburn. 

“Such a presumption is not a basis on which a reasonable finder of fact could conclude that a significant number of consumers are affected adversely by the defendants’ practice.”

Blackburn ruled that a reasonable fact finder could neither conclude that State Farm and LYNX “have knowingly and intentionally deceived State Farm insureds,” nor that “the alleged misrepresentation has had a significant public impact in the past, or will have such an impact in the future.”

What’s NextAt press time, Ultra Bond was awaiting the decision in the appeal. However, Campfield seemed optimistic following the March 19 hearing.

“The oral argument went well and there should be a ruling within three to four months,” he said.

Michael McCarthy, who represented State Farm, says he is “cautiously optimistic.”

“On behalf of State Farm and as the lawyer who argued the case, I’m cautiously optimistic that the case will be upheld, but I have learned that you can rarely predict from the questions that the appeals panel asked the lawyers how the panel is going to rule,” he says.

He adds, “We had a well-prepared panel of three circuit judges. They had obviously studied the case very closely and they had many questions of both sides.” 

What Does ROLAGS Say?
While long-crack repair long has been a much-debated issue, last year the American National Standards Institute (ANSI) accepted the Repair of Laminated Auto Glass Standard as an official ANSI standard (see related story in August/September 2007 AGRR, page 44); the Standard considers repair of any crack that meets other ROLAGS criteria, up to 14 inches in length, acceptable.

Penny Stacey is the editor of AGRR magazine.


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