The amount of reimbursement owed to auto glass repair companies by the insurer was the issue presented in Auto Glass Express, Inc. v. Hanover Ins. Co., 975 A.2d 1266 (Conn. Aug. 25, 2009).
The insureds' policies provided reimbursement of the "amount necessary to repair or replace broken glass of like kind and quality." Hanover periodically issued pricing letters to the plaintiff repair companies, informing them of the insurer's "pricing standards" for glass repair services rendered to its insureds. Plaintiffs agreed to repair glass for policyholders, who then assigned their policy rights of reimbursement from Hanover. Plaintiffs submitted invoices for glass repair work to Hanover's third party administrator, Safelite Glass Corporation. Safelite reimbursed Plaintiffs by checks written in amounts that were set forth in the pricing letters, but were less than what was stated in the invoices.
Plaintiffs sued Hanover. The trial court ruled that Plaintiffs acceptance of Safelite's payments was an accord and satisfaction, and entered judgment for Hanover.
On appeal, the Connecticut Supreme Court reversed. The court agreed with Plaintiffs that merely performing the glass repairs did not constitute acceptance of the terms of the pricing letters. The Supreme Court, however, remanded the issue of whether Hanover had breached the policies assigned to Plaintiffs by refusing to pay the amounts stated in the invoices. The meaning of the term "amount necessary" for reimbursement was disputed. Plaintiffs argued the phrase meant an amount that was reasonable in the marketplace. Hanover countered by arguing "amount necessary" was the amount absolutely required to have the service performed. The Court found the term ambiguous. On remand the trial court was to consider whether Plaintiffs' invoices were reasonable in the marketplace and whether Hanover breached the terms of the policies by failing to pay the full amount of the invoices.
