STATE OF MINNESOTA
JAN 21 2015
IN COURT OF APPEALS
; CLERK OF APPELLATE COURT
Safelite Group, Inc. and ) WRIT OF CERTIORARI
Safelite Solutions LLC, )
)
Relators, ) Court of Appeals No.
v. )
)
Minnesota Department of Commerce, )
) Date of Order: January 8, 2015
Respondent. _)
TO: Minnesota Department of Commerce:
You are hereby ordered to return to the Court of Appeals and serve on all parties in
accordance with Rule 115.04, subdivision 3, within 30 days after service of the petition or
14 days after delivery of a transcript, whichever is later, an itemized statement of the record,
exhibits and proceedings in the above-entitled matter so that this court may review the decision
of the agency issued on the date noted above.
You are further directed to retain the actual record, exhibits, and transcript of proceedings
(if any) until requested by the clerk of the appellate courts to deliver them in accordance with
Rule 115.04, subdivision 5.
Copies of this writ and accompanying petition shall be served forthwith either personally
or by mail upon the respondent agency and upon its attorney at:
Minnesota Department of Commerce
Mike Rothman, Commissioner -
Suite 500
85 Seventh Place East
St. Paul, MN 55101
Michael J. Tostengard
Assistant Attorney General
Office of the Attorney General
Suite 1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
Proof of service of the writ and of the itemized list shall be filed with the clerk of the
appellate courts.
Dated: January 21, 2015 Clerk of the Appellate Courts
Xf Menten Seba [/aifis
Assistant Clerk
52362014 _1.D0C
STATE OF MINNESOTA
IN COURT OF APPEALS
)
Safelite Group, Inc. and ) PETITION FOR WRIT
Safelite Solutions LLC, ) OF CERTIORARI
)
Relators, ) Court of Appeals No.
v. )
)
Minnesota Department of Commerce, )
) Date of Order: January 8, 2015
Respondent. _)
TO: The Court of Appeals of the State of Minnesota:
Relators Safelite Group, Inc. and Safelite Solutions LLC hereby petition the Court of
Appeals for a Writ of Certiorari to review the attached order of the Minnesota Department of
Commerce dated January 8, 2015, and which was received by Relators on January 14, 2015. The
grounds for review are that the decision and the actions taken by Respondent Minnesota
Department of Commerce are arbitrary and capricious and not in conformity with law. A copy
of the decision and two copies of the statement of the case are attached and made part of this
petition.
Dated: January 21, 2015
Richard D. Snyder (#191294)
FREDRIKSON & BYRON, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402-1425
Telephone: (612) 492-7145
Facsimile: (612) 492-7077
ATTORNEYS FOR RELATORS
$2361691_I1.DOC
Master File No. 30260/TLB
Master File No. 31329/TIP
STATE OF MINNESOTA
COMMISSIONER OF COMMERCE
In the Matter of the Certificate of Authority CONSENT ORDER
of The Auto Club Group
a Michigan corporation licensed
to do business in the State of Minnesota
NAIC Nos. 11983, 21202
To: The Auto Club Group
1 Auto Club Drive
Dearborn, MI 48126
1. Commissioner of Commerce Mike Rothman (“Commissioner”) has advised The
Auto Club Group, Auto Club Group Property-Casualty Insurance Company, and their affiliated
entities (collectively, “Respondents”) that he is prepared to commence formal action pursuant to
Minn. Stat. § 45.027 (2014) and other applicable law against Respondents’ Certificate of
Authority to engage in the business of insurance in Minnesota, based on the following
allegations resulting from the Minnesota Department of Commerce’s (the “Department”) review
of 125 automobile glass and automobile accident claim files:
A. Respondents’ glass administrator and its affiliated entities (collectively,
“Safelite”), while administering automobile glass claims, failed to provide
the required advisory to insureds before recommending the use of
Respondents’ network of preferred glass vendors;
B. Respondents’ glass administrator Safelite, while administering automobile
glass claims, advised insureds that they may not receive a warranty from
Respondents for work performed by non-preferred glass vendors;
Cc, Respondents’ glass administrator Safelite, while administering automobile
glass claims, advised that insureds may be balance billed by non-preferred
glass vendors;
D. Non-preferred glass vendors, which had valid assignments of benefits
from Respondents’ insureds, instituted proceedings in arbitration to
recover disputed amounts and, in some cases, prevailed; and
FE. Respondents failed to reasonably investigate all available facts and
information in making assignments of comparative negligence percentages
in numerous claims when ascertaining automobile accident liability.
The Commissioner alleges that the above-listed conduct violates Minn, Stat. §§ 724.20, subd.
12(6), (7) and 724.201, subd. 6(9), (14), (16) (2014), With respect to these allegations, there has
been no hearing, findings of fact, or conclusions of law. Moreover, this Consent Order
constitutes a settlement of the parties’ disputes regarding these allegations.
2. Respondents acknowledge that they have been advised of their right to a hearing
in this matter, to present argument to the Commissioner, and to appeal from any adverse
determination after a hearing. Respondents hereby expressly waive that right. Respondents
further acknowledge that they have been represented by legal counsel throughout these
proceedings.
3. Respondents have agreed to informal disposition of this matter without a hearing
as provided under Minn, Stat. § 14.59 (2014) and Minn. R. 1400.5900 (2013),
4, The following Order is in the public interest.
3
NOW, THEREFORE, ji IS HEREBY ORDERED, pursuant to Minn. Stat. § 45.027,
subd. 6 (2014), that Respondents shall pay to the state of Minnesota a civil penalty in the amount
of $150,000.00.
IT IS FURTHER ORDERED, pursuant to Minn. Stat. § 45.027, subd. 5(a) (2014), that
Respondents shall cease and desist from using Safelite Solutions, or any other subsidiary of
Safelite Group, Inc., as their administrator of automobile glass claims in Minnesota on or before
February 1, 2015. Nothing herein prohibits: (1) any claimant or insured from using the glass
repait or replacement services of Safelite Group, Inc.; (2) Respondents from including Safelite
Group, Inc, as a glass vendor in their preferred provider program; or (3) Respondents from
utilizing Safelite Solutions as a supplemental call center for home and automobile claims due to
storm-related events resulting in unexpected volume.
IT IS FURTHER ORDERED, pursuant to Minn. Stat. § 45.027, subd. 5(a) (2014), that
Respondents shall cease and desist from informing insureds about any alleged benefits of using
Respondents’ preferred glass vendors prior to stating the required advisory pursuant to Minn.
Stat. § 724.201, subd. 6(14) (2014).
IT IS FURTHER ORDERED, pursuant to Minn. Stat. § 45.027, subd. 5(a) (2014), that
Respondents shall cease and desist from informing insureds they may not receive a proper
warranty from and/or may be balance-billed by non-preferred glass vendors, unless Respondents
have specific information proving the assertion(s) to be true for a certain vendor.
IT IS FURTHER ORDERED, that Respondents shall within thirty (30) days of the
effective date of this Order develop practices and procedures to ensure that each and every
independent adjuster, as defined by Minn. Stat. § 72B.02, subd. 4 (2014), engaged by
Respondents to adjust Minnesota claims is properly licensed in Minnesota.
IT IS FURTHER ORDERED, that Respondents shall, in each and every ae file for
automobile bodily injury and/or property damage, document any and all relevant reasons which
Respondents rely upon in determining that someone other than the insured bears some
percentage of fault as a result of a comparative negligence determination or assessment.
IT IS FURTHER ORDERED, that Respondents shall:
A.
Identify each and every Minnesota automobile accident claim reported to
Respondents between January 1, 2014 and June 30, 2014 where a
comparative negligence percentage was assigned, excluding those claims
in which a claimant was represented by counsel, subrogation claims,
claims decided through arbitration, and claims in which both parties’
insurance companies reached agreement as to liability,
Within thirty (0) days of the completion of A. above, Respondents shall
appoint, conttact, or designate an independent party (the “Reviewer’) to
review each claim identified in A. above to determine whether
Respondents’ investigation of the claim and assessment of comparative
negligence was compliant with Minnesota statutes and rules, including,
without limitation, Minn, Stat. §§ 724.20, subd. 12(4) and 72A.201, subd.
6(9) (2014). The Reviewer shall be recommended by Respondent and
approved by the Commissioner.
The Reviewer shall notify Respondents of each claim from A, above that
the Reviewer determines requires supplemental investigation.
Dd. Respondent shall, within thirty (0) days of the Reviewer's notification
from C. above, take all necessary steps to complete any supplemental
investigation and provide an accounting of the same to the Reviewer.
E. Upon completion of D. above, the Reviewer shall determine whether
Respondents’ investigation, as supplemented, complies with Minnesota
statutes and rules, including, without limitation, Minn. Stat. § 72A.20,
subd. 12(4) (2014).
FE, Respondents shall thereafter make appropriate adjustments in the fault
determination percentages for the claims identified in D. above so that
percentages are based on the totality of the facts available to Respondents,
including facts derived from any supplemental investigation, and comply
with Minnesota statutes and rules, including, without limitation, Minn.
Stat. § 72A.201, subd. 6(9) (2014). This will be completed within one
hundred twenty (120) days of the completion of E. above.
G. Respondents shall thereafter pay any additional amounts owed to each
claimant within thirty (30) days of the completion of F, above.
H. Respondents shall provide the Department with a detailed report of their
findings and a list of any additional payments made to claimants within
thirty (30) days of the completion of G. above.
[THE BOTTOM OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
This Order shall be effective upon signature on behalf of the Commissionen
Dated:
/- ¥ - 20f 5
By:
MIKE ROTHMAN
Commissioner
MARTIN FLEISCHHACKER
Assistant Commissioner of Enforcement
85 Seventh Place East, Suite 500
St. Paul, MN 55101
(651) 539-1538
CONSENT TO ENTRY OF ORDER
4
The undersigned, acting on behalf of The Auto Club Group and Auto Club Group
Property-Casualty Insurance Company (collectively, “Respondents”), states that s/he has read the
foregoing Consent Order; that s/he knows and fully understands its contents and effect; that s/he
has been advised of Respondents’ right to a hearing in this matter and expressly waives that
right; that Respondents have been represented by legal counsel in these matters, or have been
advised of their right to be represented by legal counsel and expressly waive that right; and that
s/he consents to entry of this Order by the Commissioner. It is further understood that this
Consent Order constitutes the entire settlement agreement between the parties, there being no
other promises or agreements, either express or implied.
The Auto Club Group
By: HAg-TeS
Tts: Vorcg Oprohire of foe
STATE OF Fh Ki dl a
COUNTY OF /t Uf She rou sh
Signed or attested before me ona, h pec ar gy t oe. Kate)
(stamp) (Signature of fofary officer)
' . Title (and Rank)
' My Commission qxpiges;, DEBRA JEAN PERKINS
if “¢ | Notary Publi, Stato of Florida
Commiselond FF 124643
My comm. expires May 16, 2018
Auto Club Group Property-Casualty
Insurance Company
m _AOATAL,
Its: Y Pes Ae t
STATE OF Fheida
county or Ai/shurdu gh
Signed or attested before me on, Hey ) “ar o 6, oe Xaate)
te Yan ML
stamp) (Signature of notary officer)
p,
Title (and Rank)
My Commissi ires: DEBRA JEAN PHRKING
yt, y Commission expires: | 3 4 4 age
nt Commisslon# FF 124843
My comm, expires May 15, 2018
STATE OF MINNESOTA
IN COURT OF APPEALS
STATEMENT OF THE CASE
OF RELATORS
Safelite Group, Inc. and
Safelite Solutions LLC,
Vv.
Minnesota Department of Commerce,
)
)
)
)
)
Relators, ) Court of Appeals No.
)
)
)
) Date of Order: January 8, 2015
)
Respondent.
1. Court or agency of case origination and name of judge or hearing officer:
Minnesota Department of Commerce, Mike Rothman, Commissioner.
2. Jurisdictional statement:
(A) Certiorari appeal.
Statute, rule or other authority authorizing certiorari appeal:
Relators seek review of the Minnesota Department of Commerce’s Consent Order dated
January 8, 2015 by certiorari pursuant to Minn. Stat. §§ 14.63, 480A.06, subd. 3, 606.06 and
Minn. R. Civ. App. P. 115. See EPA Audio Visual, Inc. v. State, 427 N.W.2d 271 (Minn. Ct.
App. 1988) (holding that the jurisdiction of the Court of Appeals by writ of certiorari “extends to
final decisions of all agencies, regardless of whether a contested case was held”).
Authority fixing time limit for obtaining certiorari review (cite statutory section and
date of event triggering appeal time, e.g., mailing of decision, receipt of decision or
receipt of other notice):
Relators first received a copy of the January 8, 2015 Order on January 14, 2015. Minn.
Stat. § 14.63 requires a writ of certiorari to be served and filed “not more than 30 days after the
party receives the final decision and order of the agency.” Minn. Stat. § 606.01 states “No writ
of certiorari shall be issued, to correct any proceeding, unless such writ shall be issued within 60
days after the party applying for such writ shall have received due notice of the procceding
sought to be reviewed thereby.”
(B) Finality of order or judgment.
Does the judgment or order to be reviewed dispose of all claims by and against all
parties, including attorney fees? Yes (X ) No ()
3. State type of litigation and designate any statutes at issue:
Certiorari review of Minnesota Department of Commerce’s January 8, 2015 Consent
Order. Statutes at issue include: Minn. Stat. §§ 14.001 ef seg., 45.027, 72A.20; 72A.21,
72A.201,
4, Brief description of claims, defenses, issues litigated and result below:
Relator Safelite Group, Inc. is a multi-faceted vehicle glass and claims management
organization based in Columbus, Ohio. Relator Safelite Solutions LLC (“Safelite”), a subsidiary
of Safelite Group, Inc., has contracts with insurance companies operating in Minnesota under
which Safelite agrees to administer the insurers’ auto glass claims by Minnesota policyholders.
Pursuant to such contracts, Safelite operates call centers for auto glass claims, provides
information to insureds making claims, and administratively processes the claims. Safelite is not
an insurance company and is not an insurance adjustor. It is not licensed by the Minnesota
Department of Commerce.
On January 8, 2015, the Respondent Minnesota Department of Commerce issued a
“Consent Order” (“Order”) to Auto Club Group Property-Casualty Insurance Company and Auto
Club Group (“Auto Club”). Auto Club is a licensee of the Department of Commerce and is one
of the insurance company clients of Safelite in Minnesota. The Order, among other things,
orders that Auto Club “shall cease and desist from using Safelite Solutions, or any other
subsidiary of Safelite Group, Inc. as their administrator of automobile glass claims in
Minnesota[.]” Relators are not parties to the Order, and were provided with no notice of or
=9>
opportunity to be heard on the matter. The Department of Commerce issued the order even
though the Department failed or refused to hold a hearing or to make findings of fact or
conclusions of law. Order at 2.
5. List of specific issues proposed to be raised on appeal:
A.
Where a valid, enforceable and legal contract exists between Safelite and one of
its insurance company clients, and the contract contains no provisions that violate
any requirements of Minnesota law, does the Department of Commerce exceed its
authority by ordering the insurance company client to terminate the contract in
perpetuity and effectively blacklist Safelite as to that insurer?
Is the Department of Commerce’s January 8, 2015 Order arbitrary and capricious,
unsupported by substantial evidence in the record, contrary to law, or affected by
procedural irregularities?
Did the Department of Commerce exceed its authority and err by issuing its
January 8, 2015 Order as to Safelite without notice to or consent of Safelite,
without conducting a hearing and without making findings of fact and conclusions
of law?
6. Related appeals. None.
7. Contents of record. Is a transcript required? No.
8. Is oral argument requested? Yes.
If so, is argument requested at a location other than that provided in Rule 134.09,
subd. 2? Yes( ) No(X)
9. Identify the type of brief to be filed. Formal briefs under Rule 128.02.
10. Names, addresses, zip codes and telephone numbers of attorney for relator and
respondent.
Richard D, Snyder (#191292)
Fredrikson & Byron, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402-1425
Telephone: (612) 492-7145
rsnyder@fredlaw.com
eunger@fredlaw.com
ATTORNEYS FOR RELATORS SAFELITE GROUP, INC. AND
SAFELITE SOLUTIONS LLC
235
Michael J. Tostengard
Assistant Attorney General
Office of the Attorney General
Suite 1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
Telephone: (651) 296-3353
ATTORNEYS FOR RESPONDENT
MINNESOTA DEPARTMENT OF COMMERCE
Dated: January 21, 2015
Richard D. Snyder (#191292)
FREDRIKSON & BYRON, P.
200 South Sixth Strect, Suite 4000
Minneapolis, MN 55402-1425
Telephone: (612) 492-7145
Facsimile: (612) 492-7077
ATTORNEYS FOR RELATORS
52381301_1.DOC
