Steve Piispanen, owner of a bodyshop, did not hire a lawyer because he believed they were “unskilled” in insurance law.
He represented himself when he appealed against a local judge’s decision to dismiss a $1,093.37 claim against State Farm Mutual Automobile Insurance Co. to reject. He wrote his own letter and appeared to plead personally before the New Hampshire Supreme Court.
Piispanen has no legal training. “Heck no,” he said. “I just winged it.”
Does not matter. Piispanen convinced the state Supreme Court that a Circuit Court judge in Keene had erred in dismissing his claim. In a 3-2 decision Tuesday, the Supreme Court ruled that an “anti-assignment clause” in auto insurance applies only to pre-loss assignments, clearing the way for Piispanen to file a lawsuit against the insurer.
The majority of the court rejected State Farm’s argument that allowing post-loss assignments would expose insurers to greater risk.
“While assignees may be more sophisticated or better funded than insureds, we do not view the increased possibility of an insurer having to pay money it is already contractually obligated to pay as an increase in risk; otherwise we would ‘reward the insurer who refuses to fulfill its contractual obligations,’” the majority says, citing a 1975 decision by the Arizona Court of Appeals.
Caleb Meagher took his vehicle to Piispanen’s shop, Keene Auto Body, for repair. He transferred his right to file a claim against State Farm after the insurer refused to pay the full amount Piispanen said was necessary to repair the vehicle.
Piispanen filed a small claims complaint. State Farm argued that the policy issued to Meagher clearly states that any award of benefits is void unless State Farm approves the award. Circuit Court Judge James Gleason dismissed the claim without explaining the reason.
That did not end the battle. Piispanen is the third generation owner of a bodyshop founded in 1928 by a Finnish immigrant. He said he consulted regularly with other “like-minded” bodyshops and was aware that courts in other states did not favor insurance contracts that preclude claims from awarding after-loss benefits.
He said State Farm had refused to pay for parts that clearly needed replacing. For example, the insurer insisted that he install a halogen headlight instead of the LED headlight supplied by the original equipment manufacturer, which cost $300 more. The insurer also refused to pay for the calibration of the vehicle’s safety systems.
Piispanen said Gleason rejected Meagher’s claim, along with many other small claims totaling $30,000. But he said he also has a strong track record of beating insurers in court.
“If I were a major league player, I would be in the Hall of Fame,” he said.
After the New Hampshire Supreme Court upheld the review of Meagher’s claim, the New Hampshire Automobile Dealers Association joined the fray by filing an amicus brief. The association said courts “from Maine to California” have ruled that anti-assignment clauses in post-loss insurance contracts are unenforceable.
“As the Iowa Supreme Court put it,”[t]The great weight of authority supports the rule that an anti-assignment clause does not apply to the assignment of claims arising after the loss,” the association’s amicus brief said.
The New Hampshire court majority followed its own reasoning in deciding the case. It said the State Farm policy in the Meagher case was ambiguous because the language did not specifically state that it applies to post-loss claims.
“We are expressing no opinion on whether an unequivocal clause prohibiting the transfer of claims after a loss would be enforceable,” the court said.
Chief Justice Gordon J. MacDonald and Justice Anna Barbara Hantz Marconi disagreed. They said the majority had adopted “new interpretative principles” without any “encouraging or developed legal arguments” from Keene Auto Body.
“The plain and ordinary meaning of the clause is clear and, as usual, it is our duty to enforce it,” says the minority opinion.
Top photo: The Keene Auto Body store in Keene, NH Photo courtesy of Keene Auto Body.
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