Court of Appeals Rules in Favor of Non-Assignment Clause Applying
to Glass Shops
A Minnesota Court of Appeals has affirmed the idea that, in Minnesota,
a "non-assignment" clause in an insurance policy protects insurers
from having to deal directly with auto glass shops, in a consolidated
case involving Star Windshield Repair vs. Western National Insurance
Co., The Glass Network and Auto Glass Express vs. Austin Mutual
Insurance Co. and State Farm Mutual Automobile Insurance
Co. vs. Archer Auto Glass. (CLICK
HERE for related story involving Star Windshield Repair.)
All three cases had been argued previously in District Court and
while in the first two, the District Courts had concluded that anti-assignment
language in the insurance policies precluded assignment of post-loss
auto-glass claims, in the third the court concluded that the assignment
of a post-loss claim was not precluded by policy language and that
glass shops could seek payment directly from insurers. The latter
of these was reversed with today's decision.
In each case, an insured's vehicle's glass was damaged and he/she
contacted a glass shop to fix or replace the glass. Each repair
company's agreement contained an assignment clause by which the
insured assigned to the company any claim for insurance proceeds.
Each glass shop billed the involved insurers directly, but in an
amount less than was billed. After arbitrators ruled in favor of
the glass shops, the insurers took the issue to district court.
In the cases of Star Windshield Repair vs. W. National Insurance
Co. and Auto Glass Express vs. Austin Mutual Insurance Co.,
the district courts ruled that the assignments were void. In the
case of State Farm Mutual Auto Insurance Co. vs. Archer Auto
Glass, the district court ruled that the anti-assignment provision
did not extend to post-loss proceeds. Both glass shops in the former
cases and the insurer in the latter appealed, and the Court of Appeals
consolidated all three before reaching today's decision.
Chuck Lloyd of Livgard & Rabuse P.L.L.P., who represented the glass
shops in all three cases, was not available for comment this afternoon.
HERE for full text of decision.
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