Opinion ID: 219024
Heading Depth: 2
Heading Rank: 2

Heading: Dismissal of Claim Alleging Violation of Anti-Incentive Statute

Text: Farmers contends that the district court erroneously dismissed its counterclaim alleging that Alpine violated Minnesota's anti-incentive statute, Minnesota Statutes § 325F.783. The counterclaim alleged that as an inducement for the insured's assignment of the proceeds of the insurance policy, Alpine promised that it would release the Insured from any obligation to pay the difference between the amounts [Farmers] agreed to pay pursuant to the terms and conditions of the Policies and all applicable law and the excessive prices charged by [Alpine]. According to Farmers, the practice constituted an unlawful credit or rebate to induce the insureds to do business with Alpine, in violation of the anti-incentive statute. We review de novo the district court's interpretation of the Minnesota statute. Marvin Lumber & Cedar Co. v. PPG Indus., Inc., 401 F.3d 901, 917 (8th Cir.2005). Under Minnesota law, [t]he object of all interpretation and construction of laws is to ascertain and effectuate the intention of the legislature. Minn.Stat. § 645.16. The statutory question here is whether the Minnesota legislature intended to forbid Alpine's practice. We determine legislative intent `primarily from the language of the statute itself.' Brayton v. Pawlenty, 781 N.W.2d 357, 363 (Minn. 2010) (quoting Gleason v. Geary, 214 Minn. 499, 8 N.W.2d 808, 816 (1943)). If the language is clear and unambiguous, statutory construction is neither necessary nor permitted and [we] apply the statute's plain meaning. Id. (quoting Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn.2001)). But if the statute is ambiguousthat is, if it is susceptible to more than one reasonable interpretationwe apply canons of construction to discern the legislature's intent. Id. (citing § 645.16); Amaral v. St. Cloud Hosp., 598 N.W.2d 379, 384 (Minn.1999). Minnesota's anti-incentive statute provides: (a) No person who provides retail auto glass products or services paid for in whole or in part, directly or indirectly, by an insurer regarding an insurance claim may: . . . (2) as an inducement to the sale of goods or services to an insured, advertise or give any rebate, gift, prize, bonus, coupon, credit, referral fee, trade-in or trade-in payment, advertising or other fee or payment, or any other tangible thing or item of monetary value, directly or indirectly, to an insured or any other person not in the employ of the seller. Minn.Stat. § 325F.783. The plain language of the statute indicates that the legislature intended to prohibit auto-glass vendors from offering incentives to induce insureds to choose their shops. See Ill. Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792, 796 (Minn.2004) (stating that the statute forbids auto-glass companies from soliciting insureds as customers by offering gifts to those customers who choose to use their services). The list of prohibited items reveals that the incentive must be something in addition to the auto-glass work the insured's vehicle requires, and the list's final phrasebeginning with the words or any otherindicates that the items preceding it constitute tangible thing[s] or item[s] of monetary value. Moreover, the terms rebate and credit are not ambiguous. A rebate is commonly understood to be [a] deduction from an amount to be paid or a return of an amount given in payment. Am. Heritage Dictionary of English Language 1457 (4th ed. 2000). The term credit has several definitions, but when used to describe an incentive, it means [t]he positive balance or amount remaining in a person's account. Id. at 428. Given the plain language of the statute and the ordinary meaning of the terms rebate and credit, we conclude that Alpine's practice does not violate the anti-incentive statute. Alpine does not offer any payment deduction, partial return of payment, or sum of money to be used as payment for future goods or services. It thus has not offered a rebate, credit, or anything that could be fairly described as a tangible thing or item of monetary value. Instead, it completes the required auto-glass work and accepts as payment the assignment of the insurance policy proceeds. The insured does not receive any tangible thing or item, in addition to the auto-glass work, that might set Alpine apart from other vendors or otherwise induce the insured to choose Alpine. Moreover, Farmers pays only for the required auto-glass work, not additional incentives. [3] We agree with the district court's characterization of Alpine's practice as charging a contingent price: In effect, when Alpine quotes a price of $300 to a customer, it is saying: `To repair your windshield, we will charge you the lesser of $300 or the amount that your insurance company will pay us.' This type of pricing cannot readily be described as involving a `rebate' or `credit.' The typical Alpine customer is unlikely to drive her repaired car home and tell her spouse about the `rebate' or `credit' that she received from Alpine. Indeed, a typical customer is unlikely to know or care how much Alpine receives for her new windshield. D. Ct. Order of Dec. 4, 2006, at 10. Alpine thus takes on the obligation of negotiating the amount that is due under the policy and assumes the risk that the policy covers less than the amount quoted in Alpine's invoice. We fail to see this practice as an as an inducement to the sale of goods or services to an insured, Minn.Stat. § 325F.783, particularly in light of Minnesota's statutory scheme, which essentially removes the auto glass customer from the payment process, Glass Serv. Co., 683 N.W.2d at 796.