Brewer Body Shop, LLC v. State Farm Mutual Automobile Insurance

101 F. Supp. 3d 1256, 2015 U.S. Dist. LEXIS 54836, 2015 WL 1911418
CourtDistrict Court, M.D. Florida
DecidedApril 27, 2015
DocketCase No. 6:14-cv-6002-Orl-31TBS
StatusPublished
Cited by2 cases

This text of 101 F. Supp. 3d 1256 (Brewer Body Shop, LLC v. State Farm Mutual Automobile Insurance) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brewer Body Shop, LLC v. State Farm Mutual Automobile Insurance, 101 F. Supp. 3d 1256, 2015 U.S. Dist. LEXIS 54836, 2015 WL 1911418 (M.D. Fla. 2015).

Opinion

Order

GREGORY A. PRESNELL, District Judge.

On March 2, 2015, Magistrate Judge Smith issued a Report and Recommendation (Doc. 78), recommending that the Defendants’ motions to dismiss (Docs. 9, 17, and 19) be granted and that the Plaintiffs’ Complaint (Doc. 1) be dismissed. The Plaintiffs filed an objection to the Report and Recommendation (Doc. 79), to which the Defendants responded (Does. 80-82). By their objection, the Plaintiffs contest only the recommended dismissals of their claims for quantum meruit (Count I), violation of the Tennessee Consumer Protection Act (Count III), and tortious interference with business relations (Count IV).

With respect to the quantum meruit claim, the Magistrate Judge found this claim to be without merit because the Plaintiffs had alleged the existence of contracts — referred to as “DRPs” — between the Plaintiffs and the Defendants. In their objection, the Plaintiffs allege that the DRPs are not “valid, binding contracts.” (Doc. 79 at 3). That may turn out to be the case, but at this point, the Plaintiffs have alleged the existence of these contractual relationships, and the Court is obligated to accept the allegations of the Complaint as true: Moreover, this claim is precluded for the same reasons expressed by this Court in the companion MDL cases from Florida- (Case No. 6:14-cv-310), Mississippi (Case No. 6:14-cv-6000), and Indiana (Case No. 6:14-cv-6001).

As for the tortious interference claim, Magistrate Judge Smith concluded that the allegations were implausible, in that the Plaintiffs were alleging that all of the [1260]*1260Defendants were interfering with the business of all of the Plaintiffs, including those with whom the Defendants had DRPs. (Doc. 78 at 11). Magistrate Judge Smith concluded that the generalized, shotgun nature of the Plaintiffs’ contentions does not satisfy the applicable pleading standard and recommended that, in any-amended complaint, the Plaintiffs be required to specify which Defendants interfered with which Plaintiffs. (Doc. 78 at 12). The Plaintiffs contend that this is an impractical pleading standard because it seeks to compel them to produce information “which is peculiarly within the possession and control of the Defendants.” (Doc. 79 at 5). But there is nothing in the Complaint that explains why the Defendants, but not the Plaintiffs, would have this information. Surely the Plaintiffs must have some basis to believe that certain Defendants interfered with certain of the Plaintiffs’ customers. A general allegation that some unidentified Defendants- or all Defendants-interfered with some unidentified customers of some unnamed Plaintiff does not satisfy the requirements of Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

Finally, the Plaintiffs dispute the Magistrate Judge’s conclusion that the Plaintiffs have failed to state a claim for violation of the Tennessee Consumer Protection Act of 1977 (henceforth, the “TCPA”). The Plaintiffs rely primarily on case law construing “the business of insurance” under the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-1015. This Court finds that argument to be inapposite. Rather, the Court finds persuasive the ruling in Price’s Collision Center, LLC v. Progressive Hawaii Ins. Co., Nos. 3:12-00873, 3:12-00874, 2013 WL 5782926 (M.D.Tenn. Oct. 28, 2013), in which the court found that Tenn.Code § 56-8-113 barred an auto shop’s TCPA claim against an insurer.

Accordingly, it is hereby

ORDERED that

1. Plaintiffs’ objection is OVERRULED and the Report and Recommendation of Magistrate Judge Smith is CONFIRMED AND ADOPTED; and

2. Defendants’ motions to dismiss (Docs. 9,17, and 19) are GRANTED as set forth above; and

3. The Complaint (Doc. 1) is DISMISSED. Count II (quasi estoppel) is DISMISSED WITH PREJUDICE. The remaining counts are DISMISSED WITHOUT PREJUDICE; and

4. The Plaintiffs may file an amended pleading not more than 21 days after the date of this order.

REPORT AND RECOMMENDATION

THOMAS B. SMITH, United States Magistrate Judge.

Pending before me, on referral from the presiding district judge, are Defendants’ motions to dismiss (Does. 9, 17, 19) Plaintiffs’ complaint (Doc. 1). Upon due consideration, I respectfully recommend that the motions to dismiss be granted.

I. Background

Plaintiffs are three Tennessee auto body repair shops and Defendants are 30 insurance companies that write automobile insurance in the state of Tennessee (Id., 1, ¶¶ 1-36). Plaintiffs allege that Defendants conspired to fix prices and boycott Plaintiffs in violation of § 1 of the Sherman Act, 15 U.S.C. § 1 (Id., ¶¶ 125-141). They also make claims for damages based upon quantum meruit, quasi-estoppel, statutory unfair trade practices, tortious interference with business relationships, and conversion (Id., ¶¶ 101-124). Plaintiffs’ allegations are similar to the allegations made by the plaintiffs in A & E Auto. Body, Inc. v. 21st Century Centennial Insurance Co., No. 6:14-cv-00310-Orl-31TBS, which the [1261]*1261Court summarized in its Order granting the motions to dismiss in that case:

The Defendants in this case are alleged to “exert control” over the Plaintiffs’ businesses (and the hourly rates paid by the Defendants) in a number of ways, beginning with agreements generally referred to as “direct repair programs” or “DRPs”. To participate in a particular insurer’s DRP, a repair shop typically agrees to certain concessions in regard to such things as the prices it will charge and the priority given to vehicles owned by people who have insurance through that insurer. In exchange, the repair shop is listed as a “preferred provider”. However, the Plaintiffs complain that the prices that they were permitted to charge under the DRPs were unfairly manipulated, that even repair shops that were not participating in DRPs were restricted to those price ceilings, and that repair shops that complained about these practices or tried to charge higher prices faced intimidation and boycotts from the insurers.
As a general proposition, each DRP contains language obligating the repair shop to charge the insurance company no more than the “market rate” for repairs in the general area. State Farm Mutual Automobile Insurance Company (“State Farm”), a Defendant in this case, determines this market rate. State Farm surveys the repair shops in a given area, determines the hourly rate charged by each repair technician, and then designates a rate just above the midpoint of all rates charged to be the “market rate.” However, the Plaintiffs complain that State Farm alters the survey results to achieve a “wholly artificial ‘market rate’ ” and uses this artificially lowered result to negotiate price decreases from repair shops. If a repair shop attempts to raise its hourly rate, State Farm will, among other things, remove it or threaten to remove it from the DRP.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
101 F. Supp. 3d 1256, 2015 U.S. Dist. LEXIS 54836, 2015 WL 1911418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brewer-body-shop-llc-v-state-farm-mutual-automobile-insurance-flmd-2015.