TPAs, Insurers Urge New York Judge to Dismiss Harner Suit; Address Short Pay, Antitrust and Low Price Allegations
December 14, 2011
The insurers and third-party glass claims administrators (TPAs) involved in a federal New York suit related to failure to pay assigned claims, fraud, deceptive acts, restraint of trade, unfair business practices and tortious interference have filed motions to dismiss the suit. Two separate motions have been filed in the case, one by the insurers and one by TPAs Safelite Solutions and LYNX Services. David Harner, the owner of Auto Glass of Westchester Windshield Doctor in Westchester, N.Y., filed the suit in May.
Safelite and LYNX claim that Harner’s antitrust claims fail, because he “does not allege antitrust injury,” and that the injury he does claim is “lower prices.”
“Lower prices are, of course, good for consumers and are the consequence of competition, not the lack thereof,” write the companies.
The TPAs further claim that Harner’s complaint “makes conclusory references to harm to competition without a single factual allegation explaining how market-wide competition is affected.”
“Because plaintiff’s antitrust claim lacks ‘any allegation as to how market-wide competition [is] affected, Plaintiff fails to assert a claim on which relief may be granted,” write the TPAs. “This fundamental defect cannot be cured because plaintiff’s real complaint is that there is too much—not too little—competition, which may erode his profits, but benefits consumers and other repairers that price competitively.”
With regard to the antitrust conspiracy that Harner has alleged, the TPAs allege that the complaint “lack[s] basic information as to the subject matter [of the conspiracies], conspiratorial acts, and motives for engaging in an illegal agreement.”
“Although it is difficult to discern what plaintiff is alleging, it is clear that his conspiracy theories are implausible on their face and entirely consistent with independent competitive action,” continue the TPAs.
Further, the TPAs argue that while the case alleges that they have engaged in deceptive practices, Harner “has failed to plead any facts from which the court could infer a consumer injury or a harm to the public interest.”
On the same topic, the TPAs allege that Harner’s “interests are directly at odds with those of consumers.”
“He seeks to protect his profit margins and objects to lower pricing that benefits consumers,” write the TPA defendants.
In the insurers’ motion to dismiss, they respond to several of Harner’s allegations, including those related to “short pays.” However, they argue that New York Insurance Law says that “if an insured elects to have or her glass damage repaired by a facility other than the facility recommended by the insurer, the insurer is not financially responsible for any excess repair costs over the cost the recommended repair facility would have charged had it performed the glass damage repair.”
“Thus, insurer defendants’ reimbursement practices are consistent with New York law,” the companies write
The insurers further claim that Harner’s breach of contract claim fails as he has no contract with them and admits the same. The insurers echo the TPAs claim regarding consumer harm as well.
“Because plaintiff is a third-party business rather than a customer, his injuries are easily distinguished from consumer harm and do not implicate the public interest,” write the insurers.
Harner’s complaint, filed originally in May and amended in October, alleges that “all the defendants actions, individually, combined, and in concert, are unreasonable under the circumstances, [and] have denied [him] the right to earn income, his ability to create a sound business reputation, and have denied him his right to continue to operate his business without interference, in a free, unfettered, and profitable manner, within the framework of the law.”
He further has claimed that the TPAs noted “together, through planning and foresight, have created a contract an/or combination and/or conspiracy in the form of trust or otherwise, amongst and between those defendant insurers, by using the defendant PGW and/or the defendant LYNX, or the defendant Belron and/or the defendant Safelite, as intermediaries in an attempt to restrain trade or commerce, and to enforce a mandate to set and/or fix and/or stabilize prices, and/or to restrain trade, and/or whereby a monopoly is or may be established or maintained … ”
At press time, the court had not yet ruled on the motions.
Stay tuned to glassBYTEs.com™ for the latest developments.
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