Campfield v. State Farm Mutual Automobile Insurance

532 F.3d 1111, 2008 U.S. App. LEXIS 14980, 2008 WL 2736656
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 15, 2008
Docket06-1442, 06-1467, 06-1469
StatusPublished
Cited by51 cases

This text of 532 F.3d 1111 (Campfield v. State Farm Mutual Automobile Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Campfield v. State Farm Mutual Automobile Insurance, 532 F.3d 1111, 2008 U.S. App. LEXIS 14980, 2008 WL 2736656 (10th Cir. 2008).

Opinion

McCONNELL, Circuit Judge.

Richard Campfield is both an owner of an auto-glass repair shop and the holder of fourteen patents for processes to repair or prevent windshield cracks. He believes, contrary to industry practice, that it is feasible — indeed, safer — to repair many windshield cracks between six and eighteen inches long rather than to replace the windshield. In 2003, apparently exasperated with his lack of success in persuading auto insurance companies to change their auto-glass repair policies, Mr. Campfield brought suit against State Farm Insurance Company and its agent, Lynx Services, Inc., challenging State Farm’s policy of recommending that insureds replace windshields damaged by longer-than-six-inch cracks. He brought claims against State Farm and Lynx for violations of the Sherman Act, violations of the Colorado Consumer Protection Act (CCPA), and tortious interference with actual and prospective contractual relations. His suit was dismissed by the district court, and we affirm, finding that Mr. Campfield failed to properly plead his antitrust claims and failed to provide sufficient evidence of a wrongful act by State Farm for purposes of the CCPA or tortious interference.

*1116 I. Background

With over 40 million policy holders, State Farm Insurance Company is one of the largest automobile insurers in the United States. Each year, State Farm insureds make approximately 1.7 million claims for glass-only damage — damage limited to a car’s glass such as a broken headlight or a windshield crack. Prior to 1997, State Farm handled glass-only claims through local personnel, resulting in regional variation in the handling of glass claims. To lower administrative costs, State Farm developed a nationwide program for handling glass-only claims. One aspect of this change was the State Farm Offer and Acceptance Program (“Program”) by which State Farm contracted with glass shops to provide services in accordance with State Farm policy and pursuant to a fixed reimbursement schedule. As part of the Program, State Farm reimbursed long crack repair at the same rate as for repair of small cracks: $50 for the first repair and $10 each for up to two additional repairs.

State Farm outsourced management of the Program to Lynx Services, Inc., a company that specialized in insurance claim processing. Lynx operated two telephone call centers to take calls from insureds, document their claims, and, if necessary, direct them to a local shop from a randomized computer generated list of Program members. Lynx representatives followed a script developed by State Farm to determine the type of windshield damage and process the claim. If the crack was within the driver’s line of sight or was longer than six inches, the representative processed the claim as a replacement without raising the possibility of repair with the caller, though the caller remained free at his own initiative to choose repair rather than replacement. Under State Farm insurance policies, the insured paid a deductible for windshield replacement but State Farm covered the entire cost of a repair.

Mr. Campfield owns an automobile glass repair shop in Grand Junction, Colorado, and is the inventor of the patented Ultra Bond repair technique. The Ultra Bond method uses a resin with a higher viscosity rating than that used by other windshield repair methods. According to Mr. Camp-field, this provides the structural integrity necessary to fill a larger crack. He claims that the Ultra Bond method can reliably repair cracks up to eighteen inches long, making the crack nearly invisible unless viewed perpendicularly to the slope of the windshield. He has licensed the Ultra Bond process for use by hundreds of glass shops nationwide. In 1998, Mr. Campfield demonstrated the Ultra Bond Process at the State Farm headquarters in an effort to gain endorsement by the insurer for repair of cracks longer than six inches, which, if successful, would have dramatically increased demand for his process. State Farm was unimpressed by Mr. Campfield’s demonstrations and retained the six-inch criterion for recommended replacement of cracked windshields.

Mr. Campfield and Ultra Bond Licensing, Inc. filed suit against State Farm and Lynx on February 19, 2003, 1 in the District Court of Colorado, alleging that the six-inch replacement criterion adopted by State Farm and followed by Lynx: (1) violated federal antitrust laws, namely Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2, and Section 4 of the Clayton Act, 15 U.S.C. § 4; (2) tortiously interfered with Ultra Bond’s actual and prospective contractual relationships; and (3) violated the Colorado Consumer Protec *1117 tion Act (“CCPA”). State Farm and Lynx filed separate motions to dismiss for failure to state a claim. The district court dismissed the antitrust claims because Mr. Campfield failed to allege a legally relevant market, but denied the motions to dismiss the state law claims.

After extensive discovery, State Farm and Lynx filed separate motions for summary judgment. The district court found that Mr. Campfield’s tortious interference claim was time barred to the extent that it was based on conduct occurring prior to February 19, 2001, and the CCPA claim was time barred to the extent that it was based on conduct prior to February 19, 2000. The court further held that each separate application of the six-inch criterion occurring subsequent to those dates started the limitations period as to that particular application.

The district court then granted the defendants’ motion for summary judgment on the CCPA claim because there was no evidence that the application of the six-inch criterion involved a knowing and intentional misrepresentation by State Farm or Lynx. The court also held that Mr. Campfield had introduced no evidence of a significant public impact necessary to support a CCPA claim, but rejected Lynx’s argument that the CCPA did not apply to its conduct because it was merely an agent acting on behalf of State Farm. The district court likewise granted the defendants’ summary judgment motion on the tortious interference claim because Mr. Campfield failed to present evidence that any Ultra Bond licensee breached a contract or that the defendants’ conduct was improper.

Mr. Campfield appeals the district court’s dismissal of his antitrust claims, the grant of summary judgment on his CCPA and tortious interference claims, and the district court’s decision not to rule on his pending objection to discovery orders prior to granting summary judgment. Both defendants cross-appeal the district court’s decision that the applicable statutes of limitations did not bar all of Mr. Camp-field’s claims, and Lynx cross-appeals the district court’s ruling that the CCPA applies to its conduct.

II. Analysis

A. Antitrust Claims

Section 1 of the Sherman Act prohibits “[ejvery contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” 15 U.S.C. § 1.

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532 F.3d 1111, 2008 U.S. App. LEXIS 14980, 2008 WL 2736656, Counsel Stack Legal Research, https://law.counselstack.com/opinion/campfield-v-state-farm-mutual-automobile-insurance-ca10-2008.