Florida Supreme Court to Determine if Auto-Glass Shops can be Sued by Insurers, Federal Judges Seek Clarification

    Title: Florida Auto Insurers in High-Stakes Battle with Windshield Repair Shops

    Introduction: The Florida Legislature has recently made significant moves against windshield repair shops by banning assignment-of-benefits and prohibiting the practice of offering gifts to insureds. Now, another critical battle in this ongoing war may be decided by the Florida Supreme Court, as it examines whether insurance companies have the right to sue auto-glass repair shops in assignment-of-benefit cases. This issue has been brought to the forefront by a question certified by the U.S. 11th Circuit Court of Appeals to the Florida Supreme Court. The resolution of this matter will have far-reaching consequences for thousands of windshield repair claims.


    In a case that spans over four years, GEICO Insurance has been locked in a legal dispute with Glassco Inc. and its owners, a prominent auto glass repair company in Florida. The central question revolves around whether Florida’s Motor Vehicle Repair Act grants an auto insurer the right to take legal action against repair shops, as the law’s wording suggests that lawsuits are limited to actual customers.

    Glassco, a subcontractor for windshield repair and replacement work, had conducted numerous repairs for drivers who assigned their insurance benefits to the repair shop. GEICO auto policies allowed insured individuals to choose the repair shop of their preference. However, GEICO began paying only a deeply discounted amount based on the National Auto Glass Specifications, rather than the prevailing competitive price.

    During the period from 2016 to 2019, Glassco completed 1,773 repairs and submitted claims to GEICO. Disputes arose when GEICO only paid a fraction of the invoice, leading Glassco to file a lawsuit in small claims court. The court ruled in favor of Glassco on several claims, with 53 cases settling. However, 1,709 cases remained pending.

    In response, GEICO countered by filing a lawsuit against Glassco in federal court, alleging fraud and violation of Florida’s motor vehicle repair law. GEICO sought $700,000 in damages, equivalent to the discounted payment it provided to the repair firm. The insurance company also argued that Glassco had failed to provide written estimates and invoices to customers and neglected to adequately inform customers about subcontracting work to other repair shops.

    Glassco emphasized that the Repair Act exclusively grants a private right of action to customers, and as GEICO is not a customer, the insurer lacks standing to file the lawsuit. The federal district court agreed with Glassco’s arguments and concluded that even if Glassco violated the Repair Act, the violations were minor and did not render the company’s claims non-compensable vis-à-vis GEICO. The district court emphasized that GEICO had other avenues, such as seeking civil penalty remedies through the state Department of Agriculture and Consumer Services.

    GEICO appealed to the 11th Circuit, contending that previous court rulings have offered a broader interpretation of the term “customer,” enabling involved parties to take legal action. Additionally, GEICO argued that the Repair Act’s wording created a loophole that unintentionally insulated repair shops from liability.

    In their deliberations, the 11th Circuit judges recognized the unique nature of windshield repairs in Florida. Insurers have limited say in the matter, as they cannot require comprehensive coverage policyholders to pay a deductible, and customers possess sole discretion in selecting a repair shop. The judges acknowledged the remedial intent of the Repair Act to protect consumer customers from misunderstandings and oral estimates, which may not extend to insurers like GEICO.

    Given the lack of clear guidance and binding precedent, the 11th Circuit deemed it necessary to seek clarification from the Florida Supreme Court. They raised two significant questions for the state justices: (1) Whether an insurer has a cause of action in such situations and (2) Whether Repair Act violations nullify the shop’s invoice and prevent the repair shop from receiving payment from the insurance company.

    Conclusion: The battle between Florida auto insurers and windshield repair shops continues its relentless pursuit through the courts. The question of whether insurance companies have the right to sue auto-glass repair shops in assignment-of-benefit cases will be definitively answered by the Florida Supreme Court. The outcome of this ruling holds immense significance, considering the thousands of windshield repair claims at stake. It remains to be seen how this longstanding conflict will finally be resolved.

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