Alpine Glass Inc. v. Ill. Farmers Ins. Co.

Citation643 F.3d 659
Decision Date17 June 2011
Docket NumberNo. 10–1689.,10–1689.
PartiesALPINE GLASS, INC., Appellee,v.ILLINOIS FARMERS INSURANCE COMPANY; Mid–Century Insurance Company, Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

OPINION TEXT STARTS HERE

Diane B. Bratvold, argued, Daniel J. Supalla, Steven R. Kling, on the brief, Minneapolis, MN, for appellant.Charles J. Lloyd, argued, Rachael J. Abrahamson, on the brief, Minneapolis, MN, for appellee.Before WOLLMAN, BRIGHT, and COLLOTON, Circuit Judges.WOLLMAN, Circuit Judge.

Illinois Farmers Insurance Company and Mid–Century Insurance Company (collectively, Farmers) appeal from the district court's 1 orders dismissing Farmers's counterclaim that Alpine Glass, Inc. (Alpine), violated Minnesota's anti-incentive statute, granting summary judgment in favor of Alpine on Farmers's counterclaim for breach of contract, and denying Farmers's motion to vacate the arbitration award. We affirm.

I. Background

We begin with a summary from the district court:

This is the latest round in the seemingly endless litigation between automobile insurers and auto-glass shops in Minnesota. Auto-glass shops repair or replace the windshields of customers and bill the customers' insurers. The insurers often refuse to pay the bills and accuse the auto-glass shops of trying to gouge them by charging ridiculously high prices for simple repairs. The auto-glass shops cry foul and accuse the insurers of trying to coerce consumers to accept shoddy work from cut-rate shops. Occasional attempts by the Minnesota Legislature to address this long-running dispute seem only to trigger additional rounds of litigation.

D. Ct. Order of Feb. 26, 2010, at 1.

Under Minnesota law, an insured who has purchased auto-glass coverage may select any vendor to repair or replace auto glass. Minn.Stat. § 72A.201, subd. 6(14)(16). The insurer is required to pay the vendor directly for auto-glass work and must pay “a competitive price that is fair and reasonable within the local industry at large.” Id. (quoted language at subd. 6(14)). The vendor may not offer or give the following as an inducement to the insured to purchase its goods or services: “any rebate, gift, prize, bonus, coupon, credit, referral fee, trade-in or trade-in payment, advertising or other fee or payment, or any other tangible thing or item of monetary value.” Id. § 325F.783(a)(2).

A. Factual Background

Alpine is a vendor that repairs and replaces auto glass in Minnesota. Alpine provides price quotes to its customers for auto-glass work. If the customer carries auto-glass insurance, Alpine bills the quoted amount to the customer's insurer and releases the customer from any obligation to pay the difference between the amount billed and the amount the insurer pays. In return, the customer assigns the proceeds of the insurance policy to Alpine. Between May 2003 and January 2006, Alpine performed auto-glass work for Farmers's insureds, and the insureds assigned the proceeds of their insurance policies to Alpine. Alpine billed Farmers directly for the work it had completed.

Farmers insures automobile owners in Minnesota and provides auto-glass coverage. Every policy that Farmers issued to the insureds in this case contained the MN008 endorsement, which states that the maximum amount Farmers will pay for the repair or replacement of auto glass is the “prevailing competitive price.” Most of the policies also contained the E1400 endorsement, which states that Farmers's “limit of liability for loss is the amount necessary to repair or replace safety glass.”

In June 2002 and in February 2005, Farmers sent blast faxes 2 to Alpine that listed the prices Farmers intended to pay vendors for auto-glass goods and services. Each fax stated that the pricing structure set forth in the document “supersede[d] any prior pricing agreements with Farmers.” During the relevant time frame, Farmers routinely received invoices from Alpine that did not conform with Farmers's pricing structure. Rather than paying Alpine the amount listed on the invoice, Farmers remitted a lesser amount, in accordance with the prices listed in its faxes.

This lawsuit arises from the 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.

B. Procedural History

Alpine, as assignee to the insureds, filed suit in state court seeking to consolidate the numerous claims and to compel arbitration under Minnesota's No–Fault Automobile Insurance Act. See Minn.Stat. § 65B.525. Farmers removed the action to federal district court, answered the complaint, and filed a counterclaim. The counterclaim alleged, among other things, that Alpine violated Minnesota's anti-incentive statute when it released customers from the difference between the amount Alpine billed and the amount Farmers paid, see § 325F.783, and that Alpine breached its unilateral contract with Farmers when it claimed amounts in excess of the prices listed in the blast faxes.

Alpine moved to dismiss the counterclaim. The district court granted the motion in part, dismissing six claims, including the claim alleging that Alpine violated Minnesota's anti-incentive statute. D. Ct. Order of Dec. 4, 2006, at 18. The district court allowed Farmers's breach-of-contract claim to proceed. Id. at 19. Thereafter, Farmers moved for summary judgment on its surviving claim, and Alpine moved to compel consolidated arbitration of the 1,120 short-pay claims. Following a hearing, the district court granted summary judgment in favor of Alpine on the breach-of-contract claim and ordered consolidated arbitration. D. Ct. Order of Mar. 30, 2007, at 1–2. The district court declined to decide which endorsement set Farmers's limit of liability, the MN008 or the E1400, leaving the issue to be decided in the first instance by the arbitrator.

Farmers appealed from the district court's orders dismissing its counterclaims, granting summary judgment in favor of Alpine, and ordering consolidated arbitration. While the appeal was pending, the case proceeded to arbitration. Farmers asked the arbitrator to decide which endorsement he would apply to determine the extent of Farmers's liability, and the arbitrator took the issue under advisement. Following the arbitration, the arbitrator found that “Farmers was paying a rate not based upon competitive pricing in the auto glass replacement industry in Minnesota” and that “Farmers has underpaid Alpine $400,436.63.” The arbitrator did not decide whether the MN008 or the E1400 applied because “the award is the same regardless of which policy endorsement is applicable.” We later dismissed Farmers's appeal for want of jurisdiction. Alpine Glass, Inc. v. Ill. Farmers Ins. Co., 531 F.3d 679 (8th Cir.2008).

Farmers moved to vacate the arbitrator's award, arguing that the MN008 endorsement limited its liability and that the arbitrator's failure to apply MN008 was error. The parties agreed that the “amount necessary to repair or replace” limit of E1400 was more generous than the “prevailing competitive price” limit of MN008. Following a lengthy hearing on the issue, the district court accepted their agreement and determined that the clauses did not conflict. The district court held that when a policy contains both endorsements, the E1400 governs over the MN008. The court stated:

If the arbitrator applied the E1400, then the Court agrees with his decision, and need not vacate his award. If the arbitrator applied the MN008, then the Court disagrees with his decision, but the only one who could have been harmed by that decision is Alpine, and Alpine is not complaining. For these reasons, the Court need not vacate the award at Farmers's request.

D. Ct. Order of Feb. 26, 2010, at 18. The district court denied Farmers's motion to vacate the award but, noting that “Alpine ha[d] not sought an order confirming the arbitrator's award,” did not enter an order of confirmation. Id. at 28. Nevertheless, the court entered judgment, stating that it had “adjudicated all of the claims and counterclaims that were pending before it.” Id.

Farmers appealed, and thereafter Alpine moved for an order confirming the arbitration award. The district court refused to schedule a hearing to confirm the award because it was without jurisdiction to do so. Alpine moved to dismiss the appeal, contending that the judgment was not final because the district court did not confirm the arbitration award. An administrative panel of this court denied Alpine's motion.

II. Analysis
A. Jurisdiction

The courts of appeals have jurisdiction over appeals from final decisions of the district courts. 28 U.S.C. § 1291. A district court's decision is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945). Taken together, the orders dismissing Farmers's counterclaims, granting summary judgment in favor of Alpine, compelling consolidated arbitration, and denying the motion to vacate the arbitration award ended litigation on the merits. In those orders, the district court granted the declaratory relief Alpine requested in its complaint and dismissed or denied all counts of Farmers's counterclaim with prejudice. Nothing is left for the district court to do but to confirm the arbitration award and enter judgment. See Minn.Stat. § 572.21 (“Upon the granting of an order confirming ... an award, judgment or decree shall be entered in conformity therewith and be enforced as any other judgment or decree.”). Farmers has raised its defenses to confirmation in its motion to vacate and has acknowledged that it cannot otherwise challenge the confirmation. See Minn.Stat. § 572.19, subd. 2 (requiring that an application to vacate an arbitration award be made ...

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