State Farm Named as Defendant in Repair-Based Class Action Lawsuit

In the first case of its kind directly related to the auto glass repair industry, State Farm Insurance has been named the defendant in a class-action lawsuit alleging damages for encouraging policyholders to have windshields repaired rather than replaced.

The suit, filed in February 2005, alleges that by including language in insurance policies that "has been used in at least some of the insuring agreements offering to waive the deductible if the windshield is repaired," that State Farm failed to meet its contractual obligation. The allegations hinge on the long-standing industry debate: does windshield repair restore the glass to its pre-loss condition? In this case, the plaintiff doesn't think so.

Among the arguments presented to prove breach of contract, Plaintiff Michael E. Cullen and his attorneys state that by repairing the windshield that the insurer "has avoided paying numerous insureds for the cost of replacing the glass (less applicable deductibles)." The Plaintiff also argues that "[t]he insuring agreements do not afford State Farm the unilateral right to elect to conduct repairs or replacements at its own expense" and that "all persons who paid premiums to State Farm with the reasonable expectation that State Farm would fully compensate them for their loss, thereby making them whole except for any applicable deductible."

The plaintiffs further allege that State Farm "has engaged in a course of conduct in establishing claims practices designed to conceal its contractual obligations and avoid paying for the full restoration of its policyholders' windshield glass."

Cullen and others related to the suit opine that a windshield repair does not restore a windshield to the same standard as a new windshield, stating in the initial class action complaint that "State Farms' longstanding policy has been to 'repair' chipped or cracked windshields with a chemical compound that is known to be incapable [of] restoring the glass to its pre-loss condition" and they argue that "no policyholder would knowingly agree to allow State Farm to patch a windshield instead of tendering a check for replacing the windshield."

"State Farm has been aware, or should have been aware, that the chemical patch is only temporary, not entirely translucent, and incapable of restoring the windshield to its pre-accident condition," says the brief.

The complaint also claims that "[i]f it were ever explained to the policyholders that they were really losing money and sacrificing the benefit of the bargain (full payment for covered loss under their policies of insurance), no one would ever enter into such an agreement" and that "State Farm used the 'repair' option under the terms of the policy and paid for the windshield 'repair' work performed by Twinsburg Glass and Mirror. Upon information and belief, State Farm paid Twinsburg Glass and Mirror a nominal fee for merely 'patching' Plaintiff's windshield. The amount paid for this so-called 'repair' was substantially less than the amount owed to Plaintiff under the terms of Plaintiff's policy to fully replace the windshield, even without the application of a deductible."

The plaintiff describes the repair process as one in which "chemical compounds [create] … an area of the windshield that does not and cannot possess the qualities of a single piece of glass that comprised the windshield prior to the accident."
In the initial complain, Cullen refers to repairs as "patching" several times, describes it as "temporary" and states that the company that performed the job, Twinsburg Glass and Mirror "or a similar company or firm, could have easily restored the vehicle to its pre-loss condition in accordance with the insuring agreement by replacing the windshield."

Nowhere in the initial complaint is the damage to Cullen's windshield that was repaired described.

The initial complaint was filed in Cuyahoga County, Ohio on February 18, 2005. In May 2005, State Farm announced that it was eliminating the deductible waiver for windshield repair.

The plaintiff, represented by W. Craig Bashein and Paul W. Flowers, both in Cleveland, is seeking class-action status for the case going back to February 1990.

While the news took the repair industry by surprise, at least one person isn't too worried about the suit having a negative effect on the trade.

"The problem doesn't have anything to do with windshield repair," said Dee Berge-Morse of Dee's Windshield Repair in Westminister, Calif. "It sounds like it might be a problem with State Farm's language more than anything to do with repair."