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 Auto Glass Legal News 

May 20, 1999

 

Court Papers re: Michigan Glass Shops  Suit
Against AAA Michigan and Harmon Glass

Text of Lawsuit Filed in Wayne County Michigan against AAA Michigan Insurance, and Harmon Glass charging unfair trade practices, violation of uniform trade secrets, and civil conspiracy, among others.


STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF WAYNE

 

PK PARTNERS, INC. d/b/a AUTO AMERISTAR OF CANTON; AUTO AMERICA, INC. d/b/a AUTO AMERISTAR OF LINCOLN PARK; MAT-DAN ENTERPRISES, INC. d/b/a AUTO AMERISTAR OF MOUNT CLEMENS; BEN-JAS ENTERPRISES, INC. d/b/a AUTO AMERISTAR OF REDFORD; J & M. GREUMANN, INC. d/b/a AUTO AMERISTAR OF SOUTHGATE; AREA AUTO SERVICE, INC. d/b/a AUTO AMERISTAR OF TAYLOR; AUTO AFTERMARKET ACCESSORIES, INC. d/b/a AUTO AMERISTAR OF TROY; BLACKMER-DIERINGER MGT., INC. d/b/a AUTO AMERISTAR OF WALLED LAKE; AUTO GLASS TINT. & ACCESSORIES, INC. d/b/a AUTO AMERISTAR OF WARREN; PK PARTNERS, INC. d/b/a AUTO AMERISTAR OF WESTLAND; NEW WAVE AUTO FASHIONS, INC. d/b/a AUTO AMERISTAR OF WOODHAVEN; AUTO GLASS PLUS, INC. d/b/a GLASS DOCTOR OF KALAMAZOO; L.S.C. ENTERPRISES, INC. d/b/a AUTO ONE OF BERKLEY; AUTO ONE ACCESSORIES CENTER, INC. d/b/a AUTO ONE OF BIRM/TROY; ZOLDOWSKI, INC. d/b/a AUTO ONE OF BRIGHTON; R.D.L. ENTERPRISES d/b/a AUTO ONE OF DEARBORN HEIGHTS; D.M.K. AUTOMOTIVE, INC. d/b/a AUTO ONE OF EAST POINTE; ZOLDOWSKI, INC. d/b/a AUTO ONE OF FENTON; AUTO CARE, INC. d/b/a AUTO ONE OF GARDEN CITY; L &W MANAGEMENT, LLC d/b/a AUTO ONE OF JACKSON; L &W MANAGEMENT, LLC d/b/a AUTO ONE OF KALAMAZOO; MCTHAL, INC. d/b/a AUTO ONE OF LAKE ORION; CLAUDE LEBLANC d/b/a AUTO ONE OF LANSING; S & H GLASS, INC. d/b/a AUTO ONE OF LINCOLN PARK; L& W MANAGEMENT, LLC d/b/a AUTO ONE OF LIVONIA; MFM, INC. d/b/a AUTO ONE OF ROCHESTER; L & W MANAGEMENT, LLC d/b/a AUTO ONE OF SOUTHFIELD; TAYLOR, L.W. INC., d/b/a AUTO ONE OF TAYLOR; K.P.S. ENTERPRISES, INC. d/b/a AUTO ONE OF UTICA; NU STAR LLC d/b/a AUTO AMERISTAR OF WATERFORD; VISIONS GLASS, INC. d/b/a VISIONS AUTO GLASS - JENISON; VISIONS AUTO GLASS OF

 

Case No. 99- -CK

Hon.

KALAMAZOO, INC. d/b/a VISIONS AUTO GLASS - KALAMAZOO; VISIONS AUTO GLASS OF LANSING, INC. d/b/a VISIONS AUTO GLASS - LANSING; VISIONS AUTO GLASS - MUSKEGON; VISIONS AUTO GLASS - SAGINAW; VISIONS AUTO GLASS - HOLLAND; VISIONS AUTO GLASS - ROCHESTER HILLS; VISIONS AUTO GLASS - KENTWOOD; IXL GLASS, INC.; J.M.F. INC., d/b/a BRAD'S MOBILE GLASS; and EARL W. BERRY;

 

 

Plaintiffs,

-v-

 

AUTO CLUB OF MICHIGAN a/k/a AAA

MICHIGAN, HARMON AUTOGLASS,

HARMON GLASS COMPANY, and

HARMON SOLUTIONS GROUP,

Defendants.

_________________________________________/

SCHWARTZ LAW FIRM, P.C.

By: Jay A. Schwartz (P45268)

Julie Schwartz Silberg (48701)

Attorney for Plaintiffs

Suite A, 37887 West Twelve Mile Road

Farmington Hills, Michigan 48331

(248) 553-9400

_________________________________________/

 

THERE IS NO OTHER CIVIL ACTION BETWEEN THESE PARTIES ARISING OUT OF THE SAME TRANSACTION OR OCCURRENCE AS ALLEGED IN THIS COMPLAINT PENDING IN THIS COURT, NOR HAS ANY SUCH ACTION BEEN PREVIOUSLY FILED AND DISMISSED OR TRANSFERRED TO AFTER HAVING BEEN ASSIGNED TO A JUDGE. I DO NOT KNOW OF ANY OTHER CIVIL ACTION, NOT BETWEEN THESE PARTIES, ARISING OUT OF THE SAME TRANSACTION OR OCCURRENCE AS ALLEGED IN THIS COMPLAINT THAT IS EITHER PENDING OR WAS PREVIOUSLY FILED AND DISMISSED, TRANSFERRED, OR OTHERWISE DISPOSED OF AFTER HAVING BEEN ASSIGNED TO A JUDGE IN THIS COURT.

 

 

COMPLAINT

and

DEMAND FOR TRIAL BY JURY

 

NOW COME Plaintiffs, PK PARTNERS, INC. d/b/a AUTO AMERISTAR OF CANTON; AUTO AMERICA, INC. d/b/a AUTO AMERISTAR OF LINCOLN PARK; MAT-DAN ENTERPRISES, INC. d/b/a AUTO AMERISTAR OF MOUNT CLEMENS; BEN-JAS ENTERPRISES, INC. d/b/a AUTO AMERISTAR OF REDFORD; J & M. GREUMANN, INC. d/b/a AUTO AMERISTAR OF SOUTHGATE; AREA AUTO SERVICE, INC. d/b/a AUTO AMERISTAR OF TAYLOR; AUTO AFTERMARKET ACCESSORIES, INC. d/b/a AUTO AMERISTAR OF TROY; BLACKMER-DIERINGER MGT., INC. d/b/a AUTO AMERISTAR OF WALLED LAKE; AUTO GLASS TINT. & ACCESSORIES, INC. d/b/a AUTO AMERISTAR OF WARREN; PK PARTNERS, INC. d/b/a AUTO AMERISTAR OF WESTLAND; NEW WAVE AUTO FASHIONS, INC. d/b/a AUTO AMERISTAR OF WOODHAVEN; AUTO GLASS PLUS, INC. d/b/a GLASS DOCTOR OF KALAMAZOO; L.S.C. ENTERPRISES, INC. d/b/a AUTO ONE OF BERKLEY; AUTO ONE ACCESSORIES CENTER, INC. d/b/a AUTO ONE OF BIRM/TROY; ZOLDOWSKI, INC. d/b/a AUTO ONE OF BRIGHTON; R.D.L. ENTERPRISES d/b/a AUTO ONE OF DEARBORN HEIGHTS; D.M.K. AUTOMOTIVE, INC. d/b/a AUTO ONE OF EAST POINTE; ZOLDOWSKI, INC. d/b/a AUTO ONE OF FENTON; AUTO CARE, INC. d/b/a AUTO ONE OF GARDEN CITY; L &W MANAGEMENT, LLC d/b/a AUTO ONE OF JACKSON; L &W MANAGEMENT, LLC d/b/a AUTO ONE OF KALAMAZOO; MCTHAL, INC. d/b/a AUTO ONE OF LAKE ORION; CLAUDE LEBLANC d/b/a AUTO ONE OF LANSING; S & H GLASS, INC. d/b/a AUTO ONE OF LINCOLN PARK; L& W MANAGEMENT, LLC d/b/a AUTO ONE OF LIVONIA; MFM, INC. d/b/a AUTO ONE OF ROCHESTER; L & W MANAGEMENT, LLC d/b/a AUTO ONE OF SOUTHFIELD; TAYLOR, L.W. INC., d/b/a AUTO ONE OF TAYLOR; K.P.S. ENTERPRISES, INC. d/b/a AUTO ONE OF UTICA; NU STAR LLC d/b/a AUTO AMERISTAR OF WATERFORD; VISIONS GLASS, INC. d/b/a VISIONS AUTO GLASS - JENISON; VISIONS AUTO GLASS OF KALAMAZOO, INC. d/b/a VISIONS AUTO GLASS - KALAMAZOO; VISIONS AUTO GLASS OF LANSING, INC. d/b/a VISIONS AUTO GLASS - LANSING; VISIONS AUTO GLASS - MUSKEGON; VISIONS AUTO GLASS - SAGINAW; VISIONS AUTO GLASS - HOLLAND; VISIONS AUTO GLASS - ROCHESTER HILLS; VISIONS AUTO GLASS - KENTWOOD; IXL GLASS, INC.; J.M.F. INC., d/b/a BRAD'S MOBILE GLASS; (collectively as "the Independents")and EARL W. BERRY by and through their attorneys, SCHWARTZ LAW FIRM, and for their Complaint against Defendants, state as follows:

    1. Plaintiff, PK Partners, Inc. d/b/a Auto Ameristar of Canton, is a Michigan corporation doing business in the City of Canton, State of Michigan.
    2. Plaintiff, Auto America, Inc. d/b/a Auto Ameristar of Lincoln Park, is a Michigan corporation doing business in the City of Lincoln Park, State of Michigan.
    3. Plaintiff, Mat-Dan Enterprises, Inc. d/b/a Auto Ameristar of Mount Clemens, is a Michigan corporation doing business in the City of Mount Clemens, State of Michigan.
    4. Plaintiff, Ben-Jas Enterprises, Inc. d/b/a Auto Ameristar of Redford, is a Michigan corporation doing business in the City of Redford, State of Michigan.
    5. Plaintiff, J & M. Greumann, Inc. d/ b/ a Auto Ameristar of Southgate, is a Michigan corporation doing business in the City of Southgate, State of Michigan.
    6. Plaintiff, Area Auto Service, Inc. d/b/a Auto Ameristar of Taylor, is a Michigan corporation doing business in the City of Taylor, State of Michigan.
    7. Plaintiff, Auto Aftermarket Accessiories, Inc. d/b/a Auto Ameristar of Troy, is a Michigan corporation doing business in the City of Troy, State of Michigan.
    8. Plaintiff, Blackmer-Dieringer Mgt., Inc. d/b/a Auto Ameristar of Walled Lake, is a Michigan corporation doing business in the City of Walled Lake, State of Michigan.
    9. Plaintiff, Auto Glass Tint. & Accessories, Inc. d/b/a Auto Ameristar of Warren, is a Michigan corporation doing business in the City of Warren, State of Michigan.
  1. Plaintiff, PK Partners, Inc. d/b/a Auto Ameristar of Westland, is a Michigan corporation doing business in the City of Westland, State of Michigan.
  2. Plaintiff, New Wave Auto Fashions, Inc. d/b/a Auto Ameristar of Woodhaven, is a Michigan corporation doing business in the City of Woodhaven, State of Michigan.
  3. Plaintiff, Auto Glass Plus, Inc. d/b/a Glass Doctor of Kalamazoo, is a Michigan corporation doing business in the City of Kalamazoo, State of Michigan.
  4. Plaintiff, L.S.C. Enterprises, Inc. d/b/a Auto One of Berkley, is a Michigan corporation doing business in the City of Berkley, State of Michigan.
  5. Plaintiff, Auto One Accessories Center, Inc. d/b/a Auto One of Birm/Troy, is a Michigan corporation doing business in the City of Troy, State of Michigan.
  6. Plaintiff, Zoldowski, Inc. d/b/a Auto One of Brighton, is a Michigan corporation doing business in the City of Brighton, State of Michigan.
  7. Plaintiff, R.D.L. Enterprises d/b/a Auto One of Dearborn Heights, is a Michigan corporation doing business in the City of Dearborn, State of Michigan.
  8. Plaintiff, D.M.K. Automotive, Inc. d/b/a Auto One of East Pointe, is a Michigan corporation doing business in the City of East Pointe, State of Michigan.
  9. Plaintiff, Zoldowski, Inc. d/b/a Auto One of Fenton, is a Michigan corporation doing business in the City of Fenton, State of Michigan.
  10. Plaintiff, Auto Care, Inc. d/b/a Auto One of Garden City, is a Michigan corporation doing business in the City of Garden City, State of Michigan.
  11. Plaintiff, L &W Management, LLC d/b/a Auto One of Jackson, is a Michigan corporation doing business in the City of Jackson, State of Michigan.
  12. Plaintiff, L &W Management, LLC d/b/a Auto One of Kalamazoo, is a Michigan corporation doing business in the City of Kalamazoo, State of Michigan.
  13. Plaintiff, MCTHAL, Inc. d/b/a Auto One of Lake Orion, is a Michigan corporation doing business in the City of Lake Orion, State of Michigan.
  14. Plaintiff, Claude Leblanc d/b/a Auto One of Lansing, is a Michigan corporation doing business in the City of Lansing, State of Michigan.
  15. Plaintiff, S & H Glass, Inc. d/b/a Auto One of Lincoln Park, is a Michigan corporation doing business in the City of Lincoln Park, State of Michigan.
  16. Plaintiff, L& W Management, LLC d/b/a Auto One of Livonia, is a Michigan corporation doing business in the City of Livonia, State of Michigan.
  17. Plaintiff, MFM, Inc. d/b/a Auto One of Rochester, is a Michigan corporation doing business in the City of Rochester, State of Michigan.
  18. Plaintiff, L & W Management, LLC d/b/a Auto One of Southfield, is a Michigan corporation doing business in the City of Southfield, State of Michigan.
  19. Plaintiff, Taylor, L.W. Inc., d/b/a Auto One of Taylor, is a Michigan corporation doing business in the City of Taylor, State of Michigan.
  20. Plaintiff, K.P.S. Enterprises, Inc. d/b/a Auto One of Utica, is a Michigan corporation doing business in the City of Shelby Township, State of Michigan.
  21. Plaintiff, Nu Star LLC d/b/a Auto Ameristar of Waterford, is a Michigan corporation doing business in the City of Waterford, State of Michigan.
  22. Plaintiff, Visions Glass, Inc. d/b/a Visions Auto Glass - Jenison, is a Michigan corporation doing business in the City of Jenison, State of Michigan.
  23. Plaintiff, Visions Auto Glass of Kalamazoo, Inc. d/b/a Visions Auto Glass - Kalamazoo, is a Michigan corporation doing business in the City of Portage, State of Michigan.
  24. Plaintiff, Visions Auto Glass of Lansing, Inc. d/b/a Visions Auto Glass - Lansing, is a Michigan corporation doing business in the City of Lansing, State of Michigan.
  25. Plaintiff, Visions Auto Glass - Muskegon, is a Michigan corporation doing business in the City of Mustegon, State of Michigan.
  26. Plaintiff, Visions Auto Glass - Saginaw, is a Michigan corporation doing business in the City of Saginaw, State of Michigan.
  27. Plaintiff, Visions Auto Glass - Holland, is a Michigan corporation doing business in the City of Holland, State of Michigan.
  28. Plaintiff, Visions Auto Glass - Rochester Hills, is a Michigan corporation doing business in the City of Rochester Hills, State of Michigan.
  29. Plaintiff, Visions Auto Glass - Kentwood, is a Michigan corporation doing business in the City of Kentwood, State of Michigan.
  30. Plaintiff, IXL Glass, Inc., is a Michigan corporation doing business in the City of Gross Pointe Woods, State of Michigan.
  31. Plaintiff, J.M.F. Inc., d/b/a Brad's Mobile Glass, is a Michigan corporation doing business in the City of Ann Arbor, State of Michigan.
  32. Plaintiff, Earl W. Berry, is a resident of the City of Dearborn Heights, County of Wayne, State of Michigan.
  33. Defendant Auto Club of Michigan a/k/a AAA Michigan is a Michigan Insurance Corporation doing business in the County of Wayne, State of Michigan.
  34. Harmon AutoGlass is a corporation authorized under the laws of the State of Minnesota and conducting business throughout the State of Michigan including Wayne County.
  35. Defendant Harmon Glass Company is a corporation authorized under the laws of the State of Minnesota and conducting business throughout the State of Michigan including Wayne County.
  36. Defendant Harmon Solutions Group is a corporation authorized under the laws of the State of Minnesota and conducting business throughout the State of Michigan including Wayne County (Defendants Harmon Solutions Group, Harmon Autoglass and Harmon Glass Company collectively as "Harmon").
  37. The amount in controversy in this civil action is in excess of Twenty Five Thousand ($25,000.00) Dollars and is otherwise within the jurisdiction of this Honorable Court pursuant to MCLA ßß600.504, 600.601, 600.605, 600.701, 600.711 and 600.715.
  38. Venue is proper in this judicial circuit pursuant to MCLA ßß600.1605, 600.1621 and 600.1627.

    GENERAL ALLEGATIONS

  39. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 47 as though each allegation was stated verbatim.
  40. The Independents are independent dealers engaged in the business of auto glass repair.
  41. AAA Michigan is the largest provider of automotive insurance to drivers in the State of Michigan.
  42. Harmon manufactures, distributes, installs and manages 15% of the United Statesí auto glass needs.
  43. Insurance claims through AAA Michigan comprise approximately 26% of the auto glass business in the State of Michigan.
  44. Currently, there are no state mandated licensing requirements for auto glass repair facilities.
  45. Therefore, absent restrictions in individual insurance policies, (which upon information and belief, are rare), customers are free to select their choice of auto glass repair facility.
  46. The Independents have been performing auto glass repair work for AAA Michigan, for customers throughout the State of Michigan, for approximately fifty (50) years.
  47. Upon information and belief, AAA Michigan has attempted to control the cost of claims through an "Offer and Acceptance" Program. This is a voluntary program where auto glass repair facilities accept AAA Michiganís offer to pay set prices for particular repairs. Thus, a AAA customer had the freedom to go to any auto glass repair facility and AAA would pay the the claim in accordance with its set prices.
  48. Until the later part of 1998, AAA Michigan acted as its own claims administrator whereby it processed its insuredís auto glass claims. Claims were handled one of two ways:
      1. When an insured sustained damage to their motor vehicle requiring glass repair, the insured contacted AAA Michigan (either directly, or through their insurance agent) to report the claim. Upon confirmation of coverage, AAA Michigan would authorize the claim, and provide the insured a list of repair facilities in their geographical location. Upon completion of the repairs, the chosen repair facility would submit an invoice directly to AAA Michigan. The repair facility would obtain payment directly from AAA Michigan.
      2. Alternatively, a claimant would independently chose a repair facility (a "walk in") The facility would obtain verification of coverage and authorization from AAA Michigan prior to performing repairs services. Upon completion to the repairs, the chosen repair facility would submit an invoice directly to AAA Michigan. The repair facility would obtain payment directly from AAA Michigan.
  49. Under both scenarios, customers were free to select the auto glass repair facility of their choice.
  50. Under both scenarios, the only parties who had access to information about the specific customer and their claim were the insured themselves, AAA Michigan (as insurer) and the auto glass repair facility.
  51. The Independents have developed extensive customer data bases through years of advertising, supporting and servicing AAA Michiganís customers.
  52. In1998, Harmon approached AAA Michigan and proposed an arrangement whereby Harmon would act as what is known in the insurance industry as a Third-Party Administrator ("TPA") of AAA Michigan insuredís auto glass claims. As TPA, Harmon would handle all aspects of AAA Michiganís claims processing, including receipt of the claim, confirmation of coverage, determination of deductibles, authorization of the claim, suggestion of repair facility, receipt of billing information from the repair facility, and payment of invoices.
  53. Given Harmonís prior course of deceptive and predatory conduct as a TPA in other states, that the above arrangement would give Harmon unilateral control over all AAA Michigan auto glass claims, that Harmon is a direct competitor of the Independents and that a serious potential for fraud, abuse and deceit would exist for consumers throughout the State of Michigan and the Independents, the Independents vehemently objected to the above arrangement.
  54. The Independents objected to Harmonís position as TPA for AAA Michiganís auto glass claims as:
      1. Harmon would have unilateral control over all AAA Michigan auto glass claims;
      2. In many instances, Harmon would receive the first notice of the claim, thereby having the ability to establish a business relationship with the claimant;
      3. Harmon would have unfettered control over suggesting auto glass repair facilities;
      4. Harmon would have unfettered control over providing authorization for repair services;
      5. Harmon would have the ability to mislead AAA Michigan customers as to their freedom of choice of auto glass repair facilities;
      6. Harmon would have the ability to steer claims to Harmon facilities;

g. Harmon would have the ability to assign work to their own low cost providers, who they controlled, and profit on the difference;

h. Harmon would have complete access to the Independentsí billing information, which contains highly confidential and proprietary information; (including, but not limited to, customer names, addresses, telephone numbers, vehicle identification, vehicle repairs, repair history, and cost).

i. Harmon would have complete access to the Independentsí sales information, which contains highly confidential and proprietary information; (sales data, market intelligence, customer demographics, shop insurance volume, costs, and profit margins).

j. Harmon would have unfettered control over payment of claims, including when payments would be issued to the Independents (its competitors), how payments would be issued to the Independents (its competitors), and what types of bureaucratic barriers it wished to place on the Independents (its competitors);

k. Harmon would surreptitiously use its position as TPA to accumulate and utilize the Independentsí confidential and proprietary information to its competitive advantage in an effort to infringe upon consumer choice, drive the Independents out of business, and capture a greater share of the auto glass repair market.

l. Harmon would cause irreparable harm to Plaintiffs.

64. The Independentsí objections were also based on Harmonís prior conduct as a TPA for auto glass claims in other states and for other insurance carriers in the State of Michigan. Harmon has previously used its position as TPA to engage in deceptive, manipulative and fraudulent practices in an effort to capture increased auto glass market share.

65. Commencing in December 1998, the Independents engaged in negotiations with AAA Michigan to voice their objections to the proposed AAA Michigan/Harmon alliance and warn of the potential harm to consumers in the State of Michigan. The Independents also provided AAA Michigan with viable alternatives to process auto glass claims in an objective, cost effective manner which would not affect consumers freedom to choose.

66. Nonetheless, despite the Independentsí protestations, and its knowledge of Harmonís prior conduct as a TPA, AAA Michigan entered into the alliance with Harmon.

67. By correspondence dated April 9, 1999, AAA Michigan stated it "is pleased to announce the selection of Harmon AutoGlass to be its glass claim administrator."

68. Although the AAA Michigan/Harmon alliance wasnít official until April 14, 1999, Harmon had begun administering certain AAA Michigan auto glass claims in or around November 1998.

69. Harmon has established customer call centers in Eau Claire, Wisconsin and Orlando, Florida to handle its TPA duties. When an auto glass claimant contacts AAA Michigan, they are automatically transferred to the call center to speak with a Harmon representative. Theoretically, the Harmon representative is to confirm coverage and authorize claims. Theoretically, if the customer expresses a preference of repair facility, the customerís choice is to be respected. Theoretically, if the customer has no preference, the representative is to provide the customer with a list of auto glass repair facilities within the customerís geographical locale.

70. Contrary to the above theory, the Independentsí fears have come to fruition. Immediately upon commencement of its role as TPA for AAA Michigan, Harmon has through fraudulent, deceptive and manipulative means deceived Michigan consumers and used its position in an effort to divert business from the Independents to Harmon.

71. For example, when the Harmon call center employees receive the initial phone call, they represent themselves as "AAA Michigan". They do not identify themselves as Harmon, nor do they inform the customer as to their relationship to AAA Michigan. This practice results in customers believing they are dealing directly with AAA Michigan.

72. Customers who specifically request one of the Independentsí facilities are then steered toward Harmon shops. The Harmon representatives have told customers that the Independents are "not on the list" or that the Independentsí "prices are too high." These statements are false and misleading.

73. Customers who do not specifically request one of the Independentsí facilities are automatically directed to a Harmon shop.

74. With respect to those persistent customers who insist upon working being performed at one of the Independentsí facilities, Harmon has refused to timely provide claim authorizations to the Independents. This causes customers (many of whom require immediate glass repair service) great delays in obtaining service, and has severely impacted the Independentsí ability to service their customers.

75. Upon information and belief and because of the Independentsí complaints to AAA Michigan, Harmon has blackballed and/or threatened to blackball, specific independent auto glass shops.

76. Although the AAA/Harmon alliance is only a few months old, the Independents have already received voluminous customer complaints about Harmonís deceptive, coercive and manipulative tactics. Some examples include:

a. A customer contacted AAA Michigan to report a glass claim and request service from one of the Independentsí facilities. Harmon told the customer that the shop was "not on the list."

b. A customer reported a claim to Harmonís call center and requested one of the Independentsí facilities. The customer was told they was not on "the list." After the customerís insistence on her right to choose, Harmon acquiesced and provided the customer with the requisite claim number.

c. One of the Independentís existing customers called AAA Michigan to report a claim. Harmon referred the customer to a Harmon shop.

d. One of the Independentís walk-in customers called AAA Michigan to obtain a claim authorization. Harmon told the customer that their "computers were down," that "this shop was not on the list" and that the customer should wait until the next day for authorization.

e. A walk-in customer requested auto glass repair service from one of the Independentsí facilities. After the customer called AAA Michigan to report claim, the shop contacted Harmon for authorization. Harmon required the customer to contact its call center again. Rather than granting the customerís choice of repair facility, the Harmon representative attempted to persuade the customer to use a Harmon facility. When the customer insisted on his right to choose, and despite numerous telephone calls from this Independentís facilities, Harmon refused to provide timely authorization (the customer had indicated his request to receive immediate service).

f. A customer contacted Harmonís call center and requested one of the Independentsí facilities to replace her windshield. The Harmon representative stated he had to verify that this shop was on "the list" and would have to call the customer back later. But the Harmon representative immediately suggested another Harmon facility as an option.

      1. A customer reported a claim to Harmonís call center. The center recommended a Harmon facility. When the customer chose one of the Independentsí facilities, Harmon refused to provide timely authorization.
      2. One of the Independents called to verify coverage and obtain authorization for a repair. The Harmon representative misidentified herself as a AAA Michigan representative. Harmon refused to provide authorization. After waiting three hours, the shop called AAA Michigan directly, explained what happened and was immediately provided a claim number.
      3. A customer requested one of Independentsí facilities repair his auto glass. The customer had already obtained a claim authorization from AAA Michigan. Harmon then called the customer, identified themselves as AAA Michigan and tried to give the customer a Harmon referral number. The customer was upset and confused.
      4. One of the Independents contacted Harmon to confirm insurance information on a customer. The Harmon representative refused to provide the information indicating that it only provided such information to Harmon shops.
      5. One of the Independentsí customers contacted AAA Michigan to obtain authorization for the work. She was immediately transferred to Harmon and referred to a Harmon shop.
      6. One of the Independentsí customers contacted AAA Michigan for a claim authorization. The customer reported that Harmon subsequently contacted him 4 times attempting to take over the claim or find where he was taking the vehicle for repairs.
      7. A customer of one of the Independents contacted AAA Michigan for a claim authorization. Harmon referred the customer to a Harmon shop. When the customer insisted on choosing one of Independentsí facilities, Harmon concurred and indicated it would contact that facility. Harmon never contacted the facility. Moreover, Harmon provide the customer with the wrong telephone number for the Independentís facility.
      8. A customer walked in to one of the Independentís shops. The customer called AAA for a claim authorization. Harmon did not provide the requisite work order for 11 days.
      9. One of Independentsí customers walked in for a repair. The customer called AAA Michigan for a claim authorization. Harmon then told customer that the Independent was "not on the list." Harmon then failed to provide a timely claim authorization.
      10. With Independent's customer present, Harmon contacted Independent to provide a work order. When Independent asked Harmon's representative if she was Harmon, she hesitated and said she was with AAA.
      11. Independent's customer call AAA to file a claim, she was told AAA would contact Independent with a claim number, Harmon never called Independent. Independent was forced to call Harmon three (3) times before it could obtain a work order. Each time Independent was told that Harmon's agents were too busy.

77. Moreover, as TPA, Harmon requires the Independents to submit all billing information to Harmon. Contained within this billing information is highly confidential and proprietary information, including, but not limited to customer names, addresses, telephone numbers, vehicle identification, vehicle repairs, repair history, and cost. Based on Harmonís prior conduct as TPA, and upon information and belief, Harmon has improperly utilized this information to its competitive advantage, ie. solicitation of the Independentsí customers.

78. Harmon has failed to timely issue claims authorization to the Independents, process the Independentsí claims and compensate the Independents for services rendered.

79. Harmon has also stated that in order for the Independents to become "Provider Shops" within the Harmon network, the Independents are required to complete an application where they must divulge their sales information, including, but not limited to, market information, customer demographics, shop insurance volume, costs, and profit margin. Based upon Harmonís prior conduct as TPA, and upon information and belief, Harmon will improperly utilize this information to its competitive advantage, ie. choosing locations for new Harmon shops.

COUNT I

UNFAIR TRADE PRACTICES UNDER MICHIGAN CONSUMER PROTECTION ACT AGAINST AAA MICHIGAN AND HARMON

80. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 79 as though each allegation was stated verbatim.

81. The Michigan Consumer Protection Act ("MCPA") prohibits unfair, unconscionable, or deceptive methods, acts or practices in the conduct of trade or commerce. See MCLA ß 445.903.

82. The statute defines "trade or commerce" as "the conduct of a business providing goods, property, or service primarily for personal, family, or household purposes."

83. AAA Michigan and Harmon are engaged in trade or commerce within the meaning of the MCPA.

84. Through their actions described above, AAA Michigan and Harmon have engaged in the following unfair, unconscionable, or deceptive methods, acts or practices in conduct of trade or commerce:

      1. Causing a probability of confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services. MCLA ß 445.903 (1)(a)
      2. Using deceptive representations or deceptive designations of geographic origin in connection with goods or services. id ß 445.903 (1)(b);
      3. Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has sponsorship, approval, status, affiliation, or connection that he or she does not have. id ß 445.903 (1)(c);
      4. Disparaging the goods, services, business, or reputation of another by false or misleading representation of fact. id ß 445.903 (1)(f);
      5. Causing a probability of confusion or of misunderstanding as to the legal rights, obligations, or remedies of a party to a transaction. id ß 445.903 (1)(n);
      6. Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer. id ß 445.903 (1)(s);
      7. Making a representation of fact or statement of fact material to the transaction such that a person reasonably believes the represented or suggested state of affairs to be other than it actually is. id ß 445.903 (1)(bb).
      8. Failing to reveal facts that are material to the transaction in light of representations of fact made in a positive manner id ß 445.903 (1)(cc).

85. As a direct and proximate result of AAA Michigan and Harmonís unfair, unconscionable, or deceptive methods, acts, or practices, Plaintiffs have incurred and will continue to incur substantial damages.

WHEREFORE, Plaintiffs respectfully request that this Honorable Court issue a judgment in their favor and against Defendants in an amount in excess of Twenty-Five Thousand ($25,000.00) Dollars, plus interest, costs and attorney fees so wrongfully sustained and such further relief as this Court deems just and equitable.

COUNT II

VIOLATION OF MICHIGAN UNIFORM TRADE SECRETS ACT BY HARMON

86. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 85 as though each allegation was stated verbatim.

87. MCLA ß 445.1904 provides: "Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation."

88. Misappropriation is defined as either:

(i) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means.

(ii) Disclosure or use of a trade secret of another without express or implied consent by a person who did 1 or more of the following:

(A) Used improper means to acquire knowledge of the trade secret.

(B) At the time of the disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was derived from or through a person who had utilized improper means to acquire it, acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or derived from or through a person who owed a duty to the person to maintain its secrecy or limit its use.

(C) Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

MCLA ß 445.1902.

89. Trade secret is defined as "information, including a formula, pattern, compilation, program, device, method, technique, or process, that is both of the following:

      1. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.
      2. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. MCLA ß 445.1902.

90. The Independentsí customer and sales records are compiled information which derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

91. The Independents take reasonable efforts to maintain the secrecy of their customer and sales records.

92. The Independentsí customer and sales records constitute trade secrets as defined by ß 445.1902.

93. Harmon misappropriated the Independentsí trade secrets by using the information to gain a competitive edge over the Independents when it knew or had reason to know that the trade secrets were acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or derived from or through a person who owed a duty to the Independents to maintain its secrecy or limit its use.

94. Harmonís acts of misappropriation include, but are not limited to:

      1. Requiring the Independents to divulge their trade secrets as a precondition for inclusion on Harmonís " list" for assignment of claims;
      2. Using the Independentsí trade secrets to solicit the Independentsí customers;
      3. Using the Independentsí trade secrets to decide where to open new Harmon shops;
      4. Using the Independentsí trade secrets to gain a competitive edge over Plaintiffs;
      5. Using the Independentsí trade secrets to increase Harmonís market share to the detriment of Independents.

95. As a direct and proximate result of Harmonís misappropriation, the Independents have incurred substantial damages.

96. Harmon has been unjustly enriched by its misappropriation.

WHEREFORE, Plaintiffs respectfully request that this Honorable Court issue a judgment in their favor and against Defendants in an amount in excess of Twenty-Five Thousand ($25,000.00) Dollars plus interest, costs and attorney fees so wrongfully sustained and such further relief as this Court deems just and equitable.

COUNT III

UNFAIR COMPETITION AGAINST AAA MICHIGAN AND HARMON

97. Plaintiffs repeat and reallege the allegations in paragraphs 1 through 96 as though each allegation was stated verbatim.

98. Harmonís use of the Independentsí confidential and proprietary information is a calculated effort to benefit from the goodwill the Independents have established in the auto glass repair industry to the advantage of Harmon and to the detriment of the Independents. In addition, Harmonís failure to properly identify itself to AAA Michigan auto glass claimants who contact the call center, and Harmonís misrepresentation of itself as AAA Michigan, coupled with Harmonís use of fraudulent, misleading and deceptive tactics to steer customers from the Independentsí facilities to Harmon facilities is likely to cause confusion or mistake or to deceive as to the source or origin of Harmonís services and constitutes unfair competition under the laws of the State of Michigan.

99. AAA Michiganís alliance with Harmon, coupled with its knowledge, acquiescence and direct participation in the above activities constitutes unfair competition under the laws of the State of Michigan.

100. As a direct and proximate result of AAA Michigan and Harmonís unfair competition, Plaintiffs have suffered damages.

WHEREFORE, Plaintiffs respectfully request this Court enters a judgment in their favor and against Defendants in an amount in excess of Twenty-Five Thousand ($25,000.00) Dollars, plus interest, costs and attorney fees so wrongfully sustained and such further relief as this Court deems just and equitable.

 

COUNT IV

TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS

AGAINST AAA MICHIGAN AND HARMON

 

101. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 100 as though each was stated verbatim.

102. The Independents have contractual relations/prospective business advantages with their customers.

103. AAA Michigan and Harmon know of the Independentsí contractual relations/prospective business advantages.

104. By engaging in the above-described conduct, AAA Michigan and Harmon intentionally and improperly interfered with the Independentsí contractual relations/prospective business advantages.

105. As a direct and proximate result of AAA Michigan and Harmonís tortious interference with the Independentsí contractual relations/prospective business advantage, the Independents have incurred substantial damages.

WHEREFORE, Plaintiffs respectfully request this Court enters a judgment in their favor and against Defendants in an amount in excess of Twenty-Five Thousand ($25,000.00) Dollars, plus interest, costs and attorney fees so wrongfully sustained and such further relief as this Court deems just and equitable.

COUNT V

CIVIL CONSPIRACY AGAINST AAA MICHIGAN AND HARMON

106. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 105 as though each allegation was stated verbatim.

107. AAA Michigan and Harmon acted in concert to accomplish an unlawful purpose, ie. engaging in unfair, unconscionable, or deceptive methods, acts, or practices, engaging in unfair competition, and tortiously interfering with the Independentsí contractual relations/prospective business advantages.

108. As a proximate and direct result of the concerted action of AAA Michigan and Harmon, the Independents have sustained damages.

WHEREFORE, Plaintiffs respectfully request this Court enters a judgment in their favor and against Defendants in an amount in excess of Twenty-Five Thousand ($25,000.00) Dollars, plus interest, costs and attorney fees so wrongfully sustained and such further relief as this Court deems just and equitable.

COUNT VI

INJUNCTIVE RELIEF AGAINST AAA MICHIGAN AND HARMON

109. Plaintiffs repeat and reallege the allegations in Paragraphs 1 through 108 as though each allegation was stated verbatim.

 

110. The MCPA authorizes an action to "[e]njoin in accordance with the principles of equity a person who is engaging or is about to engage in a method, act, or practice which is unlawful under [the MCPA]."

111. The Uniform Trade Secrets Act, MCLA ß445.1903 provides that:

[a]ctual or threatened misappropriation may be enjoined. Upon application to the Court of competent jurisdiction, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.

 

 

112. Moreover, balancing of the equities warrants a grant of temporary and permanent injunctive relief:

      1. The is no harm to the public interest. In fact, the public will benefit by having their freedom to choose an auto glass repair facility free of manipulation, coercion and deception restored.
      2. Any harm to AAA Michigan and Harmon is greatly outweighed by the continuing and irreparable harm to Plaintiffs.
      3. Plaintiffs are likely to prevail on the merits of their claims.
      4. Plaintiffs have suffered and continue to suffer irreparable harm to their businesses for which no adequate remedy at law exists absent an injunction.

 

WHEREFORE, Plaintiffs respectfully request this Court temporarily and permanently enjoins AAA Michigan and Harmon from:

      1. Misappropriating the Independentsí trade secrets;
      2. Continuing to engaging in unfair, unconscionable, or deceptive methods, acts or practices in conduct of trade or commerce;
      3. Making false and disparaging remarks about the Independents;
      4. Wrongfully misrepresenting themselves as AAA Michigan representatives to customers contacting the call center;
      5. Using fraudulent, deceptive and manipulative means to steer customers to Harmon shops.
      6. Requiring the Independents to release their confidential and proprietary customer and sales information.
      7. Generally illegal means to divert the Independentsí business to Harmon in order for Harmon to gain increased market share.

I DECLARE THAT THE STATEMENTS ABOVE ARE TRUE TO THE BEST OF MY OWN KNOWLEDGE AND BELIEF.

PK Partners, Inc. d/b/a Auto Ameristar of Canton

 

By: ________________________________

John Losen

Its: President

Mat-Dan Enterprises, Inc. d/b/a Auto Ameristar of Mount Clemens

 

By: ________________________________

Bob Blackmer

Its: President

Ben-Jas Enterprises, Inc. d/b/a Auto Ameristar of Redford

 

By: ________________________________

Bob Blackmer

Its: Vice - President

Area Auto Service, Inc. d/b/a Auto Ameristar of Taylor

 

By: ________________________________

Bob Blackmer

Its: President

Blackmer-Dieringer Mgt., Inc. d/b/a Auto Ameristar of Walled Lake

 

By: ________________________________

Bob Blackmer

Its: Vice - President

PK Partners, Inc. d/b/a Auto Ameristar of Westland

 

By: ________________________________

John Losen

Its: President

 

 

New Wave Auto Fashions, Inc. d/b/a Auto Ameristar of Woodhaven

 

By: ________________________________

Bob Blackmer

Its: Vice - President

Zoldowski, Inc. d/b/a Auto One of Brighton

 

 

By: ________________________________

Dave Zoldowski

Its: President

Zoldowski, Inc. d/b/a Auto One of Fenton

 

 

By: ________________________________

Dave Zoldowski

Its: President

L &W Management, LLC d/b/a Auto One of Jackson

 

By: ________________________________

Henry W. Weber

Its: President

L &W Management, LLC d/b/a Auto One of Kalamazoo

 

By: ________________________________

Henry W. Weber

Its: President

L& W Management, LLC d/b/a Auto One of Livonia

 

By: ________________________________

Henry W. Weber

Its: President

L & W Management, LLC d/b/a Auto One of Southfield

 

By: ________________________________

Henry W. Weber

Its: President

Visions Glass, Inc. d/b/a Visions Auto Glass - Jenison

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

Visions Auto Glass of Kalamazoo, Inc. d/b/a Visions Auto Glass - Kalamazoo

 

By: ________________________________

Daniel Eerdmans

Its: President

 

Visions Auto Glass of Lansing, Inc. d/b/a Visions Auto Glass - Lansing

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

Visions Auto Glass - Muskegon

 

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

 

 

Visions Auto Glass - Saginaw

 

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

Visions Auto Glass - Holland

 

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

Visions Auto Glass - Rochester Hills

 

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

 

Visions Auto Glass - Kentwood

 

 

By: ________________________________

Daniel Eerdmans

Its: Vice President

Respectfully submitted,

SCHWARTZ LAW FIRM

 

 

By:________________________________

Jay A. Schwartz (P45268)

Julie Schwartz Silberg (P48701)

Attorney for Plaintiffs

Suite A, 37887 West Twelve Mile

Farmington Hills, MI 48331

 

DEMAND FOR TRIAL BY JURY

NOW COME Plaintiffs, by and through their attorney, SCHWARTZ LAW FIRM, and hereby demand a trial by jury of the within cause.

Respectfully submitted,

SCHWARTZ LAW FIRM

 

 

 

By:________________________________

Jay A. Schwartz (P45268)

Julie Schwartz Silberg (P48701)

Attorney for Plaintiffs

Suite A, 37887 West Twelve Mile

Farmington Hills, MI 48331

Dated: May 20, 1999
 (248) 553-9400


source: Schwartz Law Firm / Wayne County Court