Conn. Supreme Court Rules in Favor of Glass Shops on Issue of Unilateral Contracts; Question of Fair and Reasonable Pricing Returned to Trial Court
August 19, 2009
The Connecticut Supreme Court recently ruled in favor of two auto
glass businesses, Auto Glass Express Inc. and Ed Steben Glass Co.
Inc. in a case filed against Hanover Insurance Co. The court ruled
that, when the plaintiffs were sent pricing letters by Safelite
Glass Corp., Hanover's third-party glass claims administrator, unilateral
contracts were not agreed upon-and no agreement to submit to this
pricing structure was made on the part of the glass shops.
The ruling, which was part of an appeal by the plaintiffs, overturns
a prior decision by a Connecticut trial court on the same issue.
HERE for related story.)
In the original case, the plaintiffs presented letters sent by Safelite
periodically, during the years 2000 through 2003, informing the
shops of Hanover's "pricing standards" for auto glass
work. The letters noted they were sent "in order to 'facilitate
timely payment of invoices and avoid misunderstandings,'" according
to the court's decision, released this week.
The letters also noted, "Bills that are accurate and are not
more than this pricing structure will be paid promptly as submitted."
While Hanover argued in the case that by doing the work, after reading
the letters, shops were agreeing to the pricing structure presented,
the Connecticut Supreme Court ruled that "[plaintiffs'] performance
of glass repairs did not constitute acceptance of the terms of the
"We agree with the trial court's finding that the pricing letters
conveyed to the plaintiffs offers that invited acceptance through
performance," writes the court. "We disagree, however,
that the performance of glass repairs, without more, constituted
acceptance of the terms set forth in the pricing letters."
The court notes that in the area of unilateral contracts, "whether
a contractual commitment has been undertaken is ultimately a question
of the intention of the parties."
In order to determine the intent of the parties involved, the court
looked to the pricing letters sent by Safelite on behalf of Hanover.
"According to the plain language of the pricing letters, the
only exchange proposed by defendant is its promise to pay bills
timely in exchange for the submission of bills that do not
exceed its proposed pricing structure," writes the court.
The opinion continues, "Moreover, nothing in the language of
the pricing letters, either expressly or implied, suggests that
the mere performance of glass repairs on automobiles insured by
the defendant was sufficient to bind the plaintiffs to the defendant's
prices. The pricing letters also do not indicate how the defendant
intended to address invoices that did not conform to its pricing
Thus, we agree with the Appellate Court's observation
that '[t]he [pricing] letters, therefore, do not evidence an intention
on the part of the defendant not to pay a greater amount, but rather
an intention not to pay a greater amount 'promptly.'"
The court also says that "in order for unilateral contracts
to have been formed, the plaintiffs would have been required to
accept the prices stated in those letters by submitting invoices
that conformed to those prices."
In the original case, the plaintiffs also claimed that the defendant
was breaching the terms of its insurance policies, the proceeds
of which they allege were assigned to the them by the insureds,
"by refusing to pay the amounts stated in the plaintiffs' invoices."
This claim was remanded by the Connecticut Supreme Court to the
trial court for further investigation and review. The trial court
also is to decide "whether the plaintiffs' invoices were reasonable
in the marketplace."
The glass shops were represented by AGRR columnist Chuck
Lloyd of Livgard and Lloyd, and the Richard Preston of the Law Offices
of Richard Preston. Charlene M. Russo of Charlene Russo Law Office
served as counsel for Hanover Insurance.
for a statement from the Independent Glass Association regarding
Need more info and analysis about the issues?
HERE to subscribe to AGRR magazine.