Gov't Emps. Ins. Co. v. Glassco Inc.

• Decision Date: 24 September 2021
• Docket Number: 8:19-cv-1950-KKM-JSS
• Parties: GOVERNMENT EMPLOYEES INSURANCE CO., et al., Plaintiffs, v. GLASSCO INC., et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

GOVERNMENT EMPLOYEES INSURANCE CO., et al., Plaintiffs, v. GLASSCO INC., et al., Defendants.

No. 8:19-cv-1950-KKM-JSS

United States District Court, M.D. Florida, Tampa Division

September 24, 2021

ORDER

Kathryn Kimball Mizelle United States District Judge

A windshield crack can start small but grow larger over time leading to "spider cracks" across the entire windshield.^[1] So too with litigation. What began as relatively simple disputes in state court, where Glassco sought unpaid amounts from Geico for windshield-repair claims, has grown into this federal lawsuit alleging racketeering, antitrust violations, and deceptive trade practices. This order resolves five motions for summary judgment- with mixed results for the parties.

For the reasons discussed below, the defendants' motions for summary judgment (Docs. 122, 123, 127, 128) will be GRANTED IN PART and DENIED IN PART. Geico's motion for summary judgment (Doc. 125) will be DENIED.

I. BACKGROUND ^[2]

Jason Wilemon, John Bailey, and Andrew Victor own, in equal thirds, Glassco Inc., a windshield repair shop. Glassco employs or contracts with individuals who perform windshield repairs on insured vehicles. To obtain payment for its services, Glassco submits claims to the individual customer's insurance company. Under Florida law, an insurer is required to pay for their insureds' windshield replacement with no deductible. See § 627.7288, Fla. Stat. An insurer must decide within thirty days whether to pay the claim for the windshield repair. See Id. § 626.9541(1)(i)(3)(e). An insurer's failure to pay or present sufficient reason for denying a claim can result in the repair shop suing the insurer and, if successful, obtaining attorneys' fees. See id. § 624.155.

Geico^[3] claims Glassco abused this process. (See Doc. 1.) The Court's previous order denying the motion to dismiss summarizes the alleged scheme. (Doc. 59 at 4-5.) To put it briefly, Geico alleges that Glassco submitted fraudulent claims for reimbursement on windshield repairs. (See Doc. 1 at ¶ 1.) Geico's fraud allegations break into two categories. The first set of alleged misrepresentations covers claims submitted by Glassco that (1) inflate the hours expended by the independent contractor to repair the windshield, (2) list unnecessary windshield repairs, (3) charge for unperformed windshield repairs, and (4) forge insureds' signatures on work orders and on the assignment of benefits. (See Doc. 1 at ¶¶ 90, 91, 94, 95; see also Doc. 59 at 14.) The second set of alleged misrepresentations covers claims submitted by Glassco that were infected with pervasive violations of the Florida Motor Vehicle Repair Act (Repair Act), Sections 559.901-559.9921, Florida Statutes. (See Doc. 1.) These include allegations that Glassco never provided written estimates to insureds before obtaining assignments of benefits or performing the windshield repairs. (Doc. 1 at ¶¶ 67-68); see §§ 559.905(1), 559.920, Fla. Stat. Geico alleges Glassco violated these provisions, among others. (See Doc. 1.)

Geico brings seven causes of action. (See Doc. I.)^[4] It seeks a declaratory judgment that Glassco's actions violate the Repair Act, meaning Geico has no duty to pay pending claims (Count I). Geico alleges causes of action under the federal Racketeer Influenced and Corrupt Organizations Act (RICO) (Count II), RICO conspiracy (Count III), the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) (Count IV), Florida's RICO statute (Count V), common-law fraud (Count VI), and unjust enrichment (Count VII). (See Doc. 1.) In addition to Glassco, Geico alleges its causes of action against Wilemon, Bailey, and Victor, individually. (Id.)

Each party now moves for summary judgment. (Docs. 122, 123, 125, 127, 128.)

II. LEGAL STANDARD

Summary judgment is appropriate if no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A fact is material if it might affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

A moving party is entitled to summary judgment when the nonmoving party "fail[s] to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The nonmoving party must "go beyond the pleadings and her own affidavits" and point to evidence in the record that demonstrates the existence of a genuine issue for trial. Id. at 324 (quotation omitted). The Court reviews all the record evidence and draws all legitimate inferences in the nonmoving party's favor. Cleveland v. Home Shopping Network, Inc., 369 F.3d 1189, 1192-93 (11th Cir. 2004).

The Court need not grant summary judgment simply because parties file cross-motions. United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984). That said, cross-motions for summary judgment "may be probative of the non-existence of a factual dispute when . . . they demonstrate a basic agreement concerning what legal theories and material facts are dispositive." Id. at 1555-56 (quoting Bricklayers Int'l Union, Local 15 v. Stuart Plastering Co., 512 F.2d 1017, 1023 (5th Cir. 1975)).^[5]

Rule 56's standard for summary judgment remains unaffected when the parties submit cross-motions. Am. Bankers Ins. Grp. v. United States, 408 F.3d 1328, 1331 (11th Cir. 2005). Each motion is considered on its own merits and reasonable inferences are resolved "against the party whose motion is under consideration." Torres v. Rock 8c River Food, Inc., 244 F.Supp.3d 1320, 1327-28 (S.D. Fla. 2016) (Scola, J.) (citing Am. Bankers Ins. Grp., 408 F.3d at 1331).

III. ANALYSIS

As stated earlier, each party moves for summary judgment. (Docs. 122, 123, 125, 127, 128.) This order will analyze separately each motion, starting with Bailey's.

A. Bailey's Motion for Summary Judgment

Bailey moves for summary judgment under Florida's statute prohibiting Strategic Lawsuits Against Public Participation (anti-SLAPP), section 768.295, Florida Statutes. (See Doc. 122.) He also moves for summary judgment against Geico's federal RICO claim (Count II), federal RICO conspiracy claim (Count III), Florida RICO claim (Count V), FDUTPA claim (Count IV), common-law fraud claim (Count VI), and unjust-enrichment claim (Count VII). (See Doc. 122.)

1. Anti-SLAPP

Bailey argues that Florida's anti-SLAPP statute prohibits Geico from bringing all its claims against him. (Doc. 122 at 1-5.) According to Bailey, Geico initiated this lawsuit in retaliation for Glassco's state-court lawsuits to recover unpaid portions of claims for windshield repairs that Glassco submitted to Geico. (See id. at 4.) Thus, this action is "improperly motivated to discourage" him and Glassco from vindicating their rights in state court. (Id. at 5.) As such, Bailey concludes that Geico's actions violate Florida's anti-SLAPP statute and that this Court should grant summary judgment against all of Geico's claims. (Id.)

Geico responds that Bailey's anti-SLAPP challenge fails because this lawsuit has merit and is not based primarily on the defendants exercising their First Amendment rights with respect to a public issue. (Doc. 133 at 4-6.) Geico cites numerous courts that have ruled in favor of insurers seeking declarations that no obligation exists to pay outstanding claims. (Id. at 6.) As a result, Geico concludes that the Court should deny Bailey's anti-SLAPP motion. (Id.)

Florida's anti-SLAPP statute prohibits a person from suing another "without merit and primarily because such person . . . has exercised the constitutional right of free speech in connection with a public issue ... or to petition for redress of grievances before the various governmental entities of this state, as protected by the First Amendment to the United States Constitution and [the Florida] Constitution." § 768.295(3), Fla. Stat. The First Amendment protects the right to petition the government for redress of grievances, which the Supreme Court has recognized includes "the right of access to the courts." See Bill Johnson's Rests. Inc. v. NLRB, 461 U.S. 731, 741 (1983) (citing Cal. Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972)); see also Borough of Duryea v. Guarnieri, 564 U.S. 379, 387 (2011) (“[T]he Petition Clause protects the right of individuals to appeal to courts and other forums established by the government for resolution of legal disputes."). So, the anti-SLAPP statute seems to cover lawsuits filed against Geico in Florida state court.

But whether Florida's anti-SLAPP statute applies in federal court presents a more difficult question. See Parekh v CBS Corp., 820 Fed.Appx. 827, 836 (11th Cir. 2020) (declining to decide because appellant failed to raise issue before district court). A federal court sitting in diversity must apply state substantive law and federal procedural law. Hanna v. Plumer, 380 U.S. 460, 465 (1965) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938)). Under those circumstances, we "apply Erie and its progeny to determine 'whether failure to apply the state law would lead to different outcomes in state and federal court and result in inequitable administration of the laws or forum shopping.'" Harris, 756 F.3d at 1358 (quotation omitted). But even where a state law is substantive, "[a] federal court exercising diversity jurisdiction will not apply a state law if a Federal Rule of Civil Procedure 'answers the question in the dispute.'" Carbone v. Cable News Network, Inc., 910 F.3d 1345, 1349 (11th Cir. 2018) (quoting Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398 (2010)). A federal rule "answers the question" where it is sufficiently broad to control the issue before the court and it conflicts with...