AUTO GLASS EXPRESS, INC. v. HANOVER INSURANCE COMPANY, SC 18118

Judicial District of Hartford

 

      Insurance; Contracts; Whether Pricing Letters Sent by Defendant and Repair Work Subsequently Performed by Plaintiffs Created Unilateral Contracts. The plaintiffs, Auto Glass Express, Inc., and Ed Steben Glass, Inc., replaced damaged automobile glass for several of the defendant's policy holders, who assigned to the plaintiffs their rights of reimbursement from the defendant.  Under the policies issued by the defendant, the limit of liability for property damage was the "amount necessary to repair or replace the property with other property of like kind and quality."  Approximately twice a year, the defendant, through its third party claims administrator, sent the plaintiffs letters specifying the prices it would pay for repair work and notifying them of any adjustments to its pricing structure.  The plaintiffs submitted invoices for the repair work, billing at prices that were higher than the prices contained in the pricing letters.  The claims administrator then paid the plaintiffs in accordance with the pricing letters and the plaintiffs cashed the payment checks.  Subsequently, the plaintiffs brought these actions, alleging breach of contract for failure to pay under the terms of the policies.  The defendant asserted three special defenses, including accord and satisfaction and implied contract.  The cases were consolidated, and, in 2004, the trial court rendered judgments for the defendant on its special defense of accord and satisfaction.  Subsequently, the Appellate Court (98 Conn. App. 784) reversed the judgments and remanded the cases for further proceedings on the breach of contract claims.  Upon remand, concluding that the plaintiffs failed to prove that there was a breach of contract, the trial court rendered judgment for the defendant.  It agreed with the defendant that unilateral contracts were created as a result of the pricing letters sent by the defendant and the repair work subsequently performed by the plaintiffs.  The court found that the pricing letters were offers and that the plaintiffs manifested their acceptance by performing the repair work, noting that there was little evidence that the plaintiffs contested the amounts received.  It further found that the policy language relied upon by the plaintiffs was a liability limiting mechanism only.  On appeal, the plaintiffs contend that the purported unilateral contracts lacked the essential elements of valid offer, acceptance and consideration.