GEICO Can’t Sue or Void Invoices from Auto Glass Shops, Florida Supreme Court Says
In the long war between auto insurers and windshield repair shops, the Florida Supreme Court this week sided with glass companies, leaving GEICO with little choice but to ask lawmakers to change the law if it feels repair prices have been padded.
The court on Wednesday answered two certified questions from the 11th U.S. Circuit Court of Appeals, finding that Florida law does not grant GEICO a private cause of action or right to sue Glassco Inc., one of Florida’s largest windshield repair networks. The high court also found that GEICO cannot refuse to pay invoices as a punitive remedy when a repair shop allegedly violates statutes and does not provide a written estimate or invoice to the motorist.
“The answer to the first certified question is ‘no’: section 559.921(1) does not ‘grant an insurance company a cause of action when a repair shop does not provide any written repair estimate,'” Chief Justice Calos Muniz wrote in the opinion, seen here.
The case began after 2019. From 2016 to 2019, Glassco sought and accepted assignments of benefits on almost 1,800 windshield repair or replacement jobs in Florida, farming most of them out to subcontractor shops. GEICO paid the invoices but only at a deeply discounted rate.
Glassco sued in state court, and the state court found in favor of the glass firm in 11 claims, noting that the competitive price was, in fact, more than what GEICO had paid. Meanwhile, GEICO, one of the largest auto insurers in the country, filed its own suit in federal court, charging that the shops had committed fraud and had violated the state’s motor vehicle repair law. That act was adopted in 1980 and has been amended a few times since then.
The insurance giant also argued Glassco had made other errors, such as failing to provide written estimates and written invoices to the insureds and failing to properly notify customers that the work would be subcontracted to other shops.
The Florida Supreme Court justices noted that the Florida statute provides administrative remedies by a state agency when repair shops are accused of not following the law. To now allow GEICO to create punitive actions that are not prescribed by statute would go beyond the judicial branch’s authority, the high court wrote.
“GEICO misconceives a court’s role in interpreting and applying statutes,” the opinion reads. “A court can look to statutory purpose to illuminate the meaning of the statutory text, but statutory purpose cannot be invoked to justify ignoring the text— the Legislature’s actual work product.”
GEICO essentially urged the court “to engage in a form of ‘imaginative reconstruction—the idea that a court may implement what it is sure the legislature would have done (had it faced the question explicitly) rather than what the legislature actually did,'” the justices wrote, quoting from a 2006 court decision.
The case now goes back to the federal appeals court, which will likely dismiss GEICO’s suit. The Supreme Court also noted that if GEICO has identified a flaw in the Repair Act, “policy-based fixes are for the Legislature.”
GEICO representatives declined to comment Thursday morning.
The court decision may have less of an impact on the longstanding dispute between insurers and auto-glass shops than initially anticipated. The Florida Legislature in 2023 approved Senate Bill 1002, which ended AOBs for auto glass repair, after insurers complained for years that the arrangements had encouraged repairers to jack up prices then file excessive amounts of lawsuits against auto insurance companies.
The law also barred shops from offering gifts to insured motorists. But some insurance agents have told Insurance Journal that some shops have recently tried to offer gifts to agents, hoping to influence their policyholders’ choice of repair firms. Others have said that repair shops continue to look for ways to elevate costs when insurers foot the bill.
Background: Read More About Court’s Questions in GEICO Case