Court Upholds Minnesota District Court Decision
The U.S. Court of Appeals for the Eighth Circuit recently
upheld a previous ruling in favor of Alpine Glass in its case involving
Illinois Farmers Insurance and Mid-Century Insurance Co.
The latest decision comes more than five years since Alpine filed suit
against the insurers in March 2006, requesting that it be allowed to engage
in arbitration with the named insurers to settle 1,120 short-pay disputes
(see related story in March/April 2010 AGRR™ magazine, page 14). Farmers
(the name under which the sister insurers are listed in the case) had
requested that the action be moved to federal district court, where it
answered the complaint and filed a counterclaim, according to court documents.
The counterclaim alleged that Alpine had violated Minnesota’s anti-incentive
statute and breach of contract and requested that the court vacate the
original $400,000 arbitration award. The U.S. District Court had granted
summary judgment in favor of Alpine in March 2010 and dismissed the counterclaim.
Farmers submitted its appeal following that decision, leading to the most
recent ruling in favor of Alpine.
The appeal order describes the original case as a “dispute between Farmers
and Alpine about how much Farmers is obligated to pay Alpine for auto-glass
goods and services rendered on behalf of Farmers’s insureds. At issue
are 1,120 short-pay claims—claims in which Farmers remitted only part
of the amount that Alpine invoiced.”
Farmers had argued in its appeal that the district court “erroneously
dismissed its counterclaim alleging that Alpine violated Minnesota’s incentive
statute,” claiming that Alpine was “incentivizing” customers to sign an
assignment of proceeds form by promising that it “would release the insured
from any obligation to pay the difference between the amounts [Farmers]
agreed to pay … ”
Farmers claimed that this was “an unlawful credit or rebate to induce
the insureds to do business with Alpine.” However, the appeals court ruled
that the state’s law regarding incentives actually was intended to “prohibit
auto glass vendors from offering incentives to insureds to choose their
Likewise, Farmers claimed that Alpine breached its contract with the insurer
by charging different prices for work than those listed in the price lists
it faxed to Alpine, and that “Alpine accepted the offers when it performed
auto glass work on behalf of Farmers’s insureds.” However, the appeals
court ruled that “Alpine rejected the offers when its actions failed to
conform to the terms of the offer[s].”
“Although Farmers frames the issue as a breach of a unilateral contract,
the real dispute is what constitutes a ‘competitive price’ and who dictates
that price,” writes the appeals court.
Farmers also appealed the district court’s denial of its request that
the court vacate the original judgment.
Washington Auto Glass Shop and Its Owners Face $726,000
Judgment in Allstate Case
A federal district court in Washington has agreed to a default judgment
against Burien, Wash.-based Auto Glass Express and Premier Auto Glass
and its owners, Michael and Trena Perkins, in a case filed in January
by Allstate Insurance (see related story in March/April 2011 AGRR™ magazine,
page 18). The default judgment totals $726,700.53—including a principle
claim of $637,724.23, more than $75,000 in interest (calculated at 12
percent), attorney fees and court costs related to insurance fraud charges.
The suit alleged that the Perkins and their companies billed and were
paid by the insurer for OEM glass, while actually “purchasing and installing
aftermarket windshields,” according to court documents. Allstate accused
the company and its owners of civil fraud, negligent misrepresentation,
violation of the consumer protection act, breach of contract, bad faith,
and violation of the criminal profiteering act in its original January
2011 complaint, and claimed that 2,572 Allstate customers “obtained fraudulent
services” through the company.
The default judgment resulted from a motion by Allstate, alleging that
while Michael Perkins advised the court in March that he would be representing
himself, Trena Perkins and the two companies in the case, he “failed to
answer, plead or otherwise defend in this action.”
The Washington state insurance commissioner’s office also had filed criminal
charges against Michael Perkins for related allegations. He pleaded guilty
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