The Florida Supreme Court has ruled that state law doesn’t grant an insurance company the right to deny payment and sue repair shops when a written repair estimate isn’t provided — one of the alleged Florida Motor Vehicle Repair Act violations GEICO says Glassco committed.

The ruling is the result of a counter-suit filed by GEICO against Glassco.

Glassco first filed suit against GEICO in August 2019 over alleged “deeply discounted” payments the carrier made based on the “prevailing competitive price” in the National Auto Glass Specifications (NAGS) for auto glass repair. Glassco argued that nearly all of the 1,773 claims it filed with GEICO between 2016 and 2019 were underpaid. The plaintiffs sought to collect the difference between its invoiced charges and what GEICO paid, which Glassco found to be $700,000.

GEICO countersued Glassco in federal court for more than $700,000 paid on claims from 2016 forward, alleging Glassco isn’t entitled to payment because it violated Florida’s Repair Act in five ways:

1. 1. By subcontracting repair work without its insured customers’ knowledge or consent;
   2. Failure to provide customers written notice of the option to obtain a written estimate;
   3. Failure to provide written repair estimates;
   4. Failure to provide invoices when repairs were completed; and
   5. Failure to include vehicle odometer readings on work orders and invoices.

The district court sided with Glassco on counts one, two, three, and five. The court also sided with Glassco on counts four, six, and seven but only to the extent that they were based on Repair Act violations. Count eight was dismissed.

GEICO appealed the district court’s decision in the 11th Circuit accusing Glassco of failing to inform GEICO policyholders that by signing a work contract for the repairs, Glassco would have the right to sue their insurance company under their name for non-payment.

In the GEICO v. Glassco case, the 11th Circuit judges sent two questions to Florida’s Supreme Court:

1. 1. Does Fla. Stat. § 559.921(1) grant an insurance company a cause of action when a repair shop does not provide any written repair estimate?
   2. Do the violations here under the Repair Act void a repair invoice for completed windshield repairs and preclude a repair shop from being paid any of its invoiced amounts by an insurance company?

In its Sept. 25 opinion, the Supreme Court stated, “As we have explained, section 559.921(1) creates a private right of action only for ‘[a]ny customer injured by a violation of [the Repair Act]…’ And ‘customer’ is a defined term in the statute: ‘the person who signs the written repair estimate’ or that person’s written designee.”

“Pointing to the Repair Act’s overarching purpose of preventing repair shop misconduct, GEICO says that our Court faces a choice: improvise a solution by deeming the insurer a ‘customer’ with a private right of action under the Repair Act, or render civil liability under the statute ‘meaningless’ and ‘effectively impotent.'”

The court added that “GEICO exaggerates the stakes,” noting that the Repair Act should still be enforced regardless of whether an insurance company is a statutory “customer” with a private right of action.

“GEICO essentially urges us to engage in a form of ‘imaginative reconstruction — the idea that a court may implement what it is sure the legislature would have done (had it faced the question explicitly) rather than what the legislature actually did.’ …That would exceed our authority. Even assuming GEICO has identified a flaw in the Repair Act, policy-based fixes are for the legislature.”

In answer to the second question sent from the 11th Circuit, the Supreme Court ruled that the Repair Act violations at issue “do not ‘void a repair invoice for completed windshield repairs and preclude a repair shop from being paid any of its invoiced amounts by an insurance company.'”

“The text of the Repair Act neither says nor reasonably implies that a repair shop’s violation of the disclosure requirements at issue renders a subsequent repair invoice entirely void,” the opinion states. “And what the statute does say cuts against the availability of that punitive remedy.”

If there is statutory injury from a Repair Act violation, the court says precedent provides that the objective is to make the injured party whole “to the extent that it is possible to measure his injury in terms of money.”

“To void a repair shop’s invoice after a bare statutory violation would go beyond statutorily authorized ‘damages’ and instead serve as a form of extra-statutory punishment.”

The court also notes that the precedent GEICO bases its claims regarding the second question is no longer valid following changes to the Repair Act after the case decision.

“The two basic premises underlying the Osteen decision — that the legislature intended a voiding penalty, and that the Repair Act would be ineffective without such a remedy — are no longer valid. And because Osteen is not a reliable guide to the Repair Act in its current form, the logic of that case cannot sustain GEICO’s position here.”

GEICO’s countersuit will now be considered again in the 11th Circuit Court of Appeals.

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