by Debra Levy
It may have been a little later than planned, but the Independent Glass Association (IGA) made good its promise to file a lawsuit designed to settle the legalities of steering in the auto glass industry.
"We need a court to take a look at steering," said then-incoming executive director Marc Anderson at the association's annual convention last April in Columbus.
"Steering is the biggest single issue destroying our profitability," he had said at the time. "We don't believe the practices being used now are legal, and we want the courts to give us their opinion."
At the direction of the IGA board of directors, Anderson had promised a suit would be filed by the end of the year. He missed the target by just a few weeks.
IGA bills itself as the country's only association dedicated to meeting the needs of independent glass shops with 100 locations or less. The association has its roots in the auto glass business, but began outreach last year to expand its membership to include and serve the architectural glass industry. The Minneapolis-based association currently represents more than 1,600 locations in the country involved with auto glass installation.
The association has filed its lawsuit today with the U.S. District Court in Minnesota against the Safelite Group, Inc. of Delaware and a number of its related companies. In addition to the IGA itself, the suit is being brought by three other plaintiffs; two are insurance adjustors in Nebraska and Minnesota. All are identified with pseudonyms to "preclude any attempt or tendency for professional retaliation by the defendants or any of their insurance clients."
Alleged Illegal Activity
The group's annual convention, scheduled this year for February 24-26 in Orlando, Fla., will also include an update on the lawsuit.
The suit details four major areas of alleged illegal activities by Safelite:
The 22-page suit further alleges:
"Despite having been put on notice that it was disseminating false and misleading information or misleading insured customers with respect to the glass shops on the list, Safelite nevertheless has refused to modify its script and it currently continues to make said misrepresentations to call center customers."
" . despite the amount of any invoice, despite whatever payment Safelite does or could receive or authorize to be paid from the relevant insurance company in respect of any job or invoice, and despite whatever amount is truly due and owing under an insured customer's policy or the local law governing amounts due thereunder, Safelite never pays more than said set, pre-determined amount to the glass shop in respect of any job - all as determined and administered by Safelite pursuant to the authority contained in its contracts with insurance companies. Such process results in the systematic short paying and delay of payment of virtually every invoice for every job performed by IGA glass shops on every claim adjusted by Safelite,"
Surprisingly, the suit does not ask for a huge monetary award. It instead asks for payment of attorney's fees only, what the court finds fair, and that Safelite be enjoined and restrained from:
a. "Misrepresenting the nature, characteristics or qualities of IGA member independent glass shop goods or services to insured customers; namely misrepresenting that the work performed by IGA member independent glass shops may not be guaranteed or warranteed where it has reason to know otherwise, that the materials used by independent glass shops is in some manner substandard or unsafe, that the installation technicians at independent glass shops are not experienced or properly trained or certified, that insurance customers may have to pay additional, out-of-pocket charges if the Job is performed by an independent glass shop, and that independent glass shop work may not be covered by the customer's insurance policy because the glass shop is not approved, authorized, or recommended by the insurance company or its claims administrator.
b. Performing insurance claims adjusting services for others without first obtaining a license in Minnesota or any other state where a license is required for the adjusting of auto insurance claims;
c. Collecting or retaining the invoice paper service fee, or any other fees or amounts from the insurance payments that IGA member glass shops are due and owed from the insurance companies for whom Safelite provides bill processing and payment services."
Court papers were being filed at press time, so no response from Safelite has yet been filed. AGRR will keep you informed. The U.S. District Court in Minnesota is expected to have documentation posted on its website this evening, possibly within the hour. We will post a link to the appropriate website when it becomes available. Check back for more information.
Debra Levy is the publisher of AGRR magazine
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