Gov't Emps. Ins. Co. v. GlassCo Inc.
| Docket Number | 23-11056 |
| Decision Date | 07 November 2023 |
| Parties | GOVERNMENT EMPLOYEES INSURANCE COMPANY, GEICO INDEMNITY COMPANY, GEICO GENERAL INSURANCE COMPANY, Plaintiffs-Counter Defendants-Appellants, v. GLASSCO INC., Defendant-Counter Claimant-Appellee, JASON WILEMON, JOHN BAILEY, ANDREW VICTOR, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 8:19-cv-01950-KKM-JSS
Before JORDAN, ROSENBAUM, and HULL, Circuit Judges.
This appeal turns on the interpretation of Florida's Motor Vehicle Repair Act ("Repair Act"). The questions presented are sufficiently unsettled, important, and likely to recur that we believe the best course is to certify them to the Supreme Court of Florida, the final arbiter of Florida law. See Mullaney v. Wilbur, 421 U.S. 684, 691 (1975) (); In re Cassell, 688 F.3d 1291, 1292 (11th Cir. 2012) ().
The plaintiffs Government Employees Insurance Company, GEICO Indemnity Company, and GEICO General Insurance Company (collectively "plaintiff GEICO" or "GEICO") sell automobile insurance policies with comprehensive coverage (the "policy"). The defendant Glassco Inc. ("Glassco") is a windshield repair shop in Florida, and defendants Jason Wilemon, John Bailey, and Andrew Victor are the owners of Glassco (collectively the "Glassco owners").
Plaintiff GEICO sued defendants, alleging eight causes of action, all premised on defendants' purported violations of the Repair Act. The district court dismissed Count 8 and granted summary judgment in favor of the defendants on the remaining counts. Plaintiff GEICO appeals. We set forth the facts, the procedural history, the Repair Act, and the certified questions.
Beginning in 2016, Glassco provided windshield repairs to Florida individuals insured by GEICO. Glassco gave a written work order to the insureds, which they signed. Glassco's work order stated the repairs are at "no cost" to the insured. Under Florida law, an insurer, like GEICO, is not allowed to charge its insureds a deductible for windshield repairs. Fla. Stat. § 627.7288.
In the work order, the insureds assigned to Glassco all rights to insurance payments for windshield repair and/or replacement (collectively "repairs"). The insureds' assignment expressly assigned Glassco the right to make a demand for payment for the repairs and to receive "direct payment" from GEICO.
Notably, the assignment also stated, (emphasis added). GEICO's policy granted its insureds the sole discretion to select a repair shop to repair a windshield. Glassco ran its business almost entirely through independent contractors.
Pursuant to the assignment, Glassco made repairs and submitted its invoice for reimbursement to GEICO. GEICO's policy provided that GEICO would reimburse the repair shop for windshield repairs at the "prevailing competitive price" for a "competent and conveniently located" repair shop. GEICO relied, in part, on the National Auto Glass Specifications ("NAGS") to determine the "prevailing competitive price." In early 2012, GEICO circulated a letter to repair shops, stating that it would only reimburse a deeply discounted amount of NAGS's pricing standards.
Between 2016 and 2019, 1,773 of GEICO's insureds selected Glassco to repair their windshields. Glassco completed the repair work, and this appeal involves no customer complaints. Yet, for nearly all of these 1,773 claims, GEICO did not pay Glassco's full invoiced price but instead made only deeply discounted payments to Glassco.
In response, Glassco filed small claims actions in Florida state court to collect the difference between its invoiced prices and the discounted amounts GEICO paid. In state small claims court, 11 of the 1,773 cases were consolidated, tried, and resulted in a final judgment for Glassco's invoiced prices against GEICO. Glassco, Inc., a.a.o. J. Bazan et al. v. GEICO Gen. Ins. Co., 16-CC-026608, 16-CC-031286, 16-CC-029315, 16-CC-029301, 16-CC-034756, 16-CC-036273, 16-CC-037057, 16-CC-037082, 16-CC-037125, 16-CC-039072, 17-CC-000870 (Fla. Hillsborough Cnty. Ct. Small Cl. Div. Aug. 20, 2020). The state small claims court determined that "the 'prevailing competitive price' is more than the [discounted] amount GEICO paid" and that Glassco's "invoiced amount did not exceed the 'prevailing competitive price.'" Id. In so ruling, the state small claims court followed the holding in Government Employees Insurance Co. v. Superior Auto Glass of Tampa Bay, Inc., 26 Fla.L.Weekly Supp. 876a (Fla. Cir. Ct. App. Div. Mar. 27, 2018). The Florida appellate court affirmed those 11 judgments in a summary order. See GEICO Gen. Ins. Co. v. Glassco, Inc., 343 So.3d 565 (Fla. Dist. Ct. App. 2022). GEICO settled an additional 53 cases. It appears Glassco's other 1,709 cases remain pending in state court.
While these state court actions were pending, GEICO brought suit offensively against defendants in federal court. GEICO's complaint alleged that defendants violated the Repair Act in five ways, and therefore defendants were not entitled to any payment at all for any completed windshield repairs. GEICO seeks to recover over $700,000 that it paid to Glassco from 2016 onward.[1]
GEICO's alleged five Repair Act violations are: (1) Glassco subcontracted the repair work without its insured customers' knowledge or consent; and although customers signed Glassco's work orders for repairs at "no cost" to them, Glassco failed to give them the required (2) written notice of the option to obtain a written estimate; (3) written repair estimates; (4) invoices upon the completion of repairs; and (5) odometer readings on work orders and invoices.
GEICO's original complaint asserted eight causes of action based on (1) a Repair Act theory alone or (2) both a Repair Act theory and a fraud theory. Underlying all of GEICO's claims is the contention that (1) Glassco did not comply with the Repair Act, (2) Glassco is not entitled to any reimbursements at all, and (3) all of Glassco's claims presented to GEICO were thus fraudulent and unlawful.
Count 1 seeks a declaratory judgment that Glassco has no right to receive any payment by virtue of its Repair Act violations. Count 2 is a federal RICO claim, and Count 3 is a federal RICO conspiracy claim, both against the Glassco owners. Count 4 is a Florida Deceptive and Unfair Trade Practices Act claim against all defendants. Count 5 is a Florida RICO claim against the Glassco owners. Count 6 is a common law fraud claim and Count 7 is an unjust enrichment claim, both against all defendants. Count 8 is a Repair Act statutory claim against all defendants brought under Fla. Stat. § 559.921(1).
Defendants each filed a motion to dismiss GEICO's complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The district court granted defendants' motions as to GEICO's statutory Repair Act claim (Count 8) on the basis that (1) the Repair Act grants a private right of action to only "customers," (2) GEICO is not a "customer" as defined by the Repair Act, and (3) the Repair Act thus does not grant GEICO a statutory cause of action. The district court denied defendants' motions on Counts 1 through 7.
After discovery, all parties moved for summary judgment. The district court denied plaintiff GEICO's motion and granted in part and denied in part defendants' motions. Even assuming Glassco violated the Repair Act, the district court concluded that Glassco's violations (1) were at most technical violations of the Repair Act and (2) did not render Glassco's claims noncompensable vis-a-vis GEICO. Therefore, Glassco's reimbursement claims submitted to GEICO were not fraudulent or unlawful.
The district court granted judgment to the defendants on (1) Count 1, the declaratory judgment claim, and (2) Counts 2, 3, and 5, the RICO claims based on Repair Act violations and fraud, for lack of scienter and continuity required under state and federal RICO laws. As to Counts 4, 6, and 7, the district court granted judgment for all defendants to the extent those counts were based on Repair Act violations, but permitted them to continue based on GEICO's traditional fraud allegations.
GEICO filed a motion for reconsideration or, in the alternative, for certification for interlocutory review pursuant to 28 U.S.C. § 1292(b). The court denied GEICO's motion.
To appeal immediately, GEICO filed a motion to amend its complaint to remove its surviving fraud theory claims. The district court granted GEICO's motion and entered judgment for all defendants on all counts. GEICO appealed.
In GEICO's first appeal, this Court held that although GEICO attempted to amend its complaint to remove the fraud theory claims, GEICO did not sufficiently remove them, and there was no final decision. Gov't Emps. Ins. Co. v. Glassco, Inc., 58 F.4th 1338 (11th Cir. 2023). We dismissed the appeal for lack of appellate jurisdiction. Id. at 1346.
On remand, GEICO again sought leave to amend its complaint to drop further the fraud theory. The district court granted GEICO's unopposed motion, and this second appeal ensued. The operative complaint contains only claims premised on GEICO's theory that Glassco (1) violated the Repair Act in five ways, (2) was not...
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