Antitrust Law Daily Wrap Up, ANTITRUST—M.D. Fla: Auto insurers steer clear of repair shops’ tortious interference claims, (Jun 23, 2016)

By Michael Menzhuber, J.D., LL.M.

Claims of tortious interference with business relations and quantum meruit, brought by four Tennessee auto repair shops against State Farm Mutual Automobile Insurance Company and other auto insurers, were dismissed by the federal district court in Orlando (Brewer Body Shop, LLC v. State Farm Mutual Automobile Insurance Company, June 21, 2016, Presnell, G.).

Brewer Body Shop, LLC, and three other Tennessee auto repair shops filed claims against State Farm and other auto insurers. The claims alleged violations of the Sherman Act, tortious interference with business relations, and quantum meruit. After the Sherman Act claims were dismissed by the court, a magistrate judge submitted a Report and Recommendation (Report) that recommended that all of the plaintiffs’ state law claims, except for three individual tortious interference claims, should be dismissed. The plaintiffs filed an objection to the Report and the insurers filed objections to the recommendation that the three individual tortious interference claims be allowed to proceed.

The court agreed with the magistrate judge that the bulk of the plaintiffs’ tortious interference claims should be dismissed as being too vague, but it disagreed that three individual claims should be allowed to proceed on the basis that the interference had been accomplished by "improper means." The court found that, in two instances, telling the insureds that the insurance company would not guarantee the work if it were done at a plaintiff’s auto repair shop was not a false statement because, even though the insurance company was not performing the work, it could require the auto repair shop to guarantee the work. In the other instance, requiring the insured to take a vehicle to a competing auto repair shop was not a false statement because Tennessee law allows an insurer to require an insured to take his or her vehicle to a particular shop for repairs.

The court also disagreed with the magistrate judge’s finding that the plaintiffs successfully alleged an improper motive for steering their insureds away from the plaintiffs’ shops, the motive being to punish them and compel them to submit to the insurers’ pricing practices. The plaintiffs’ assertion that the repairs would not have cost any more in their shops suggested that they had already submitted to the insurers’ pricing practices and, consequently, the insurers would have had no motive to punish them.

Finally, the court agreed with the magistrate judge’s finding that the plaintiffs failed to state a claim in quantum meruit because: (1) based on their knowledge of the price each defendant was willing to pay before agreeing to perform any repairs, they could not have had a reasonable expectation of compensation; (2) the plaintiffs had not conferred a benefit on the insurers; and (3) it was a "shotgun" pleading.

The case is No: 6:14-cv-6002-Orl-31TBS.

Attorneys: Allison P. Fry (John Arthur Eaves) and Halbert Edwin Dockins, Jr. (Dockins Turnage Banks PLLC) for Brewer Body Shop, LLC., AAA Collision Center, LLC and Icon Collision Services, LLC. Elizabeth Helmer (Alston & Bird, LLP), Hal Kemp Litchford (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC) and Michael L. McCluggage (Eimer Stahl LLP) for State Farm Mutual Automobile Insurance Co. and State Farm Fire and Casualty Co. Bonnie Lau (Dentons US LLP) and Lori J. Caldwell (Rumberger, Kirk & Caldwell, PA) for Allstate Property and Casualty Insurance Co.

Companies: Brewer Body Shop, LLC; AAA Collision Center, LLC; Icon Collision Services, LLC; State Farm Mutual Automobile Insurance Co.; State Farm Fire and Casualty Co.; Allstate Property and Casualty Insurance Co.

Cases: Antitrust FloridaNews