GEICO Can’t Sue or Cancel Bills from Auto Glass Shops, Florida Supreme Court Says

In the long-running war between auto insurers and windshield repair shops, the Florida Supreme Court this week sided with the glass companies, leaving GEICO little choice but to ask lawmakers to change the law if it believes repair prices have been inflated.

The court answered two certified questions from 11 on Wednesday^th The U.S. Circuit Court of Appeals, finding that Florida law does not give GEICO a private cause of action or the right to sue Glassco Inc., one of Florida’s largest windshield repair chains. The high court also found that GEICO cannot refuse to pay bills as a punitive remedy when a repair shop allegedly violates the statute and fails to provide the driver with a written estimate or invoice.

“The answer to the first certified question is “no”: section 559.921(1) does not “give an insurance company a cause of action when a repair shop provides no 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 benefit awards for nearly 1,800 windshield repair or replacement jobs in Florida, most of which were awarded to subcontractor shops. GEICO paid the bills, but only at a very reduced rate.

Glassco sued in state court, and the state court found in favor of the glass company on 11 claims, noting that the competitive price was, in fact, more than GEICO paid. Meanwhile, GEICO, one of the nation’s largest auto insurers, filed its own lawsuit in federal court, alleging the shops committed fraud and violated the state’s auto repair law. This act was passed in 1980 and has been amended several times since then.

The insurance giant also alleged that Glassco made other errors, such as failing to provide written estimates and invoices to policyholders and not properly notifying customers that work would be subcontracted to other shops.

The federal district court ruled against GEICO, holding that Florida’s auto repair statute gives rights to sue only to an injured customer, not an insurance company. GEICO appealed to the 11th Circuit, and that court asked the state Supreme Court for clarity.

Florida Supreme Court justices noted that Florida statute provides for administrative remedies by a state agency when repair shops are accused of not following the law. Allowing GEICO now to create punitive actions not provided for by statute would exceed the judicial branch’s authority, the high court wrote.

“GEICO misunderstands the role of a court in interpreting and applying the statutes,” the opinion said. “A court may look to statutory purpose to illuminate the meaning of statutory text, but statutory purpose cannot be invoked to justify ignoring the text—the actual work product of the Legislature.”

GEICO essentially urged the court to “engage in a form of “imaginative reconstruction—the idea that a court can implement what it is certain the legislature would have done (had it faced the question explicitly), rather than what the legislature actually did,” the justices wrote, citing a 2006 court decision.

The case now goes back to the federal appeals court, which will likely dismiss GEICO’s lawsuit. The Supreme Court also noted that if GEICO identified a defect in the Remedies Act, “policy-based remedies are for the Legislature.”

GEICO representatives declined to comment Thursday morning.

The court’s decision may have less of an impact on the long-running dispute between insurers and auto glass shops than initially anticipated. The Florida Legislature in 2023 approved Senate Bill 1002, which ended the AOB for auto window repair after insurers complained for years that the arrangements encouraged repairers to raise prices, then file excessive lawsuits against the companies car insurance.

The law prohibited shops from offering gifts to insured drivers. But some insurance agents told Insurance Journal that some shops have recently tried to offer gifts to agents, hoping to influence their policyholders’ choice of repair firms. Others said repair shops continue to look for ways to raise costs when insurers foot the bill.

Background: Read more about the court’s questions in the GEICO case

TOPICS
Florida Auto Lawsuits