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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
ALPINE GLASS, INC.,
STATE FARM FIRE AND CASUALTY
COMPANY and STATE FARM
Civil No. 12-2867 (JRT/LIB)
AND ORDER DENYING MOTION
Brian F. Murn and Rachael J. Abrahamson, LIVGARD & LLOYD PLLP,
2520 University Southeast, Suite 202, Minneapolis, MN 55414, for
Kathleen M. Ghreichi, MEAGHER & GEER, PLLP, 33 South Sixth
Street, Suite 4400, Minneapolis, MN 55402, for defendants.
Plaintiff, Alpine Glass, Inc. (“Alpine Glass”), an auto glass repairer, brought this
declaratory judgment action in Minnesota state court against defendants, State Farm Fire
& Casualty Company and State Farm Mutual Automobile Insurance Company
(collectively, “State Farm”). Alpine Glass sought an order consolidating 1401 claims
1 Alpine Glass initially sought consolidation of 148 claims. The parties have since
stipulated that eight claims be removed from the current action. (See Stipulation, Apr. 4, 2013,
Docket No. 21.) United States Magistrate Judge Leo Brisbois adopted the stipulation and
dismissed the claims. (Order, Apr. 24, 2013, Docket No. 22.) Accordingly, this Order addresses
only the remaining 140 claims. Because the Stipulation is not a model of clarity, the Court
briefly addresses its interpretation of the Stipulation’s scope. The Stipulation states that it seeks
(Footnote continued on next page.)
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against State Farm for purposes of mandatory arbitration under Minnesota’s No-Fault
Act. State Farm removed the action to federal court, based on diversity jurisdiction under
28 U.S.C. § 1332, relying on the total value of the 140 claims – over $103,000 – to
satisfy the jurisdictional amount in controversy requirement.
Alpine Glass now brings a motion for remand, arguing that the Court lacks
jurisdiction because the complaint does not allege $75,000 in controversy. Because the
value of the 140 claims can be aggregated to satisfy the jurisdictional amount in
controversy requirement, the Court will deny the motion for remand.
dismissal of a claim for policy holder “Suiter, Dale” in the amount of $183.89. A “Suiter,
Pat/Bunny” is listed in the original complaint for a claim in the amount of $183.89. (Compl.,
Ex. A at 11.) The Court will assume that the “Suiter, Pat/Bunny” claim is the one the parties
intended to dismiss pursuant to the stipulation. The Stipulation also seeks dismissal of a claim
for policy holder “Olson, Amy” in the amount of $409.91. The original complaint lists a claim
for an “Olson” in the amount of $459.91. (Id., Ex. A at 9.) Although the value of the claims
does not match, as no other Olson appears in the original complaint, the Court will assume the
“Olson” claim in the complaint is the “Olson, Amy” claim intended to be dismissed pursuant to
the Stipulation. Finally, the Stipulation seeks dismissal of a claim for “Pautz, Gerald” in the
amount of $1,764.95. The original complaint lists a claim for “Pautz” in the amount of $524.73.
(Id.) Again, although the values of the claims do not correspond, the Court will assume that the
Stipulation intended to dismiss the “Pautz” claim listed in the original complaint. The precise
value of the claims dismissed pursuant to the stipulation and the Magistrate Judge’s order does
not affect the Court’s analysis.
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UNDERLYING INSURANCE CLAIMS
Alpine Glass is an auto glass repairer. (Compl., Nov. 13, 2012, Docket No. 1 at
Attachment 1.) State Farm provides automobile insurance to the Alpine Glass customers
involved in this matter (“the insureds”), including coverage for broken or damaged auto
glass. (Id. ¶¶ 3, 14.)
During the time period in question, Alpine Glass performed auto glass repairs for
the insureds. The insureds then allegedly assigned their individual claims to Alpine
Glass. (Id. ¶ 5.)2 Alpine Glass, as the assignee of the insureds, billed State Farm for
those repairs based upon a formula/percentage of the National Automobile Glass
Specifications (“NAGS”) List Price. (Id. ¶¶ 5-6.) The NAGS is a publication used by
auto glass providers and insurance companies “as a starting point when pricing repairs.”
Alpine Glass, Inc. v. Country Mut. Ins. Co., Civ. No. 09-3492, 2010 WL 4386896, at *1
n.1 (D. Minn. Oct. 28, 2010). “NAGS provides part numbers, list prices, and standard
labor rates for the installation of more than 10,000 pieces of auto glass.” Id.
2 This practice is typical in the auto glass repair industry. The customer assigns to glass
repairer any claim to collect payment for repairs from the customer’s insurer. The auto glass
repairer agrees to release the customer from any liability for any amounts not recovered from the
insurance company. Disputes often arise when the insurance company’s formula calculates a
reimbursement amount that is less than the auto glass provider’s calculation – termed a
“shortpay” in the industry. See Alpine Glass, Inc. v. Country Mut. Ins. Co., Civ. No. 09-3492,
2010 WL 4386896, at *1 (D. Minn. Oct. 28, 2010).
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Alpine Glass alleges that, during the time period in question, State Farm paid
Alpine Glass’s auto glass claims based on its own formula for the NAGS List Price, and
consequently underpaid Alpine Glass’s claims. (Compl. ¶¶ 7, 9.) For example, in
September 2009, Alpine Glass submitted an invoice to State Farm in the amount of
$680.71. (Id., Ex. A.) State Farm allegedly paid only $294 on that invoice, and Alpine
now claims that $386.58 is due. (Id.)
Alpine Glass’s complaint involves 140 of these allegedly underpaid claims. (Id.;
see Stipulation at 1.) The total value of the underpayment alleged by Alpine Glass is
approximately $103,000.3 (Compl. ¶ 11; see Stipulation at 1.) The unpaid amounts of
the individual claims range from $127.75 to $2,632.47. (Id., Ex. A.)
Alpine Glass filed a complaint in Hennepin County District Court on October 24,
2012, seeking consolidation of the 140 individual glass claims into a single arbitration
proceeding, pursuant to Minn. Stat. § 65B.525, subd. 1. (Compl. ¶¶ 14-15.)4 On
November 13, 2012, State Farm removed the case to federal court pursuant to diversity
jurisdiction under 28 U.S.C. § 1332(a)(1). (Notice of Removal at 2, Nov. 13, 2012,
3 The complaint alleges that, based upon inclusion of the original 148 claims,
$108,678.41 was the amount in controversy.
4 Minnesota Statutes, § 65B.525, subd. 1, provides for “the mandatory submission to
binding arbitration of” all no-fault automobile insurance claims “where the claim at the
commencement of arbitration is in an amount of $10,000 or less against any insured’s reparation
obligor or no-fault benefits or comprehensive or collision damage coverage.”
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Docket No. 1.) State Farm alleged that the amount in controversy is in excess of
STANDARD OF REVIEW
This motion for remand challenges the Court’s subject matter jurisdiction and
requires the Court to examine whether it has the authority to decide the claim. See Uland
v. City of Winsted, 570 F. Supp. 2d 1114, 1117 (D. Minn. 2008). A defendant may
remove a civil action to federal court only if the action could have been filed originally in
federal court. See 28 U.S.C. § 1441(b); Gore v. Trans World Airlines, 210 F.3d 944, 948
(8th Cir. 2000). The party seeking removal bears the burden of establishing federal
subject matter jurisdiction by a preponderance of the evidence, see V S Ltd. P’ship v.
Dep’t of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir. 2000), and “all doubts about
federal jurisdiction must be resolved in favor of remand,” Cent. Iowa Power Coop. v.
Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 911 (8th Cir. 2009).
AMOUNT IN CONTROVERSY
Under 28 U.S.C. § 1332(a), the Court may exercise jurisdiction over completely
diverse parties5 “where the matter in controversy exceeds the sum or value of $75,000.”
“[A] complaint that alleges the jurisdictional amount in good faith will suffice to confer
5 The parties do not dispute that the requirements for diversity of citizenship are satisfied
in this case.
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jurisdiction, but the complaint will be dismissed if it appears to a legal certainty that the
claim is really for less than the jurisdictional amount.” Kopp v. Kopp, 280 F.3d 883, 884
(8th Cir. 2002) (internal quotation marks and alteration omitted). The Court generally
determines whether the amount in controversy has been satisfied based on the record at
the time of removal. St. Jude Med., Inc. v. Lifecare Int’l, Inc., 250 F.3d 587, 593-94
(8th Cir. 2001).
Aggregation of a Single Plaintiff’s Claims
“It is [a] well settled rule that once diversity jurisdiction is properly invoked, a
single plaintiff may properly aggregate all of the claims which he has against the
defendants to satisfy the jurisdictional amount.” Lynch v. Porter, 446 F.2d 225, 228
(8th Cir. 1971); see Snyder v. Harris, 394 U.S. 332, 335 (1969). Claims that may be
aggregated to satisfy the jurisdictional amount in controversy include claims which have
been assigned to the plaintiff. Tam v. Lo, 968 F. Supp. 1326, 1328 (N.D. Ill. 1997).6
Additionally, although “plaintiffs generally cannot aggregate separate and independent
claims against multiple defendants to achieve the amount in controversy for diversity
jurisdiction where two defendants are jointly liable, the same damages can satisfy the
6 See also Long & Foster Real Estate, Inc. v. NRT Mid-Atlantic, Inc., 357 F. Supp. 2d
911, 920 (E.D. Va. 2005) (allowing a plaintiff to aggregate amounts from 58 separate claims that
had been assigned to it, “each of which [wa]s below the jurisdictional amount in controversy” to
satisfy the amount in controversy requirement); Nat’l Recovery Sys. v. Ornstein, 541 F. Supp.
1131, 1133 (E.D. Pa. 1982) (“Aggregation is permissible even where some or all of the claims
have come to plaintiff by way of assignment, unless the purpose of the assignment was to invoke
the jurisdiction of the federal court.”).
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amount-in-controversy requirement as to both defendants.” Spine Imaging MRI, L.L.C. v.
Country Cas. Ins. Co. (Spine Imaging II), Civ. No. 10-480, 2011 WL 379100, at *3
(D. Minn. Feb. 1, 2011) (internal quotation marks omitted); see Siegerist v. Blaw-Knox
Co., 414 F.2d 375, 381 (8th Cir. 1969).
Alpine Glass is a single plaintiff, and all of its claims asserted against both State
Farm defendants may be aggregated to reach the amount in controversy. Although the
140 claims asserted by Alpine Glass were assigned to it by the insureds, the claims are
still properly aggregated for purposes of determining the amount in controversy. See
Spine Imaging MRI, L.L.C. v. Liberty Mut. Ins. Co. (Spine Imaging I), 743 F. Supp. 2d
1034, 1044 (D. Minn. 2010) (exercising diversity jurisdiction where the aggregate of
insurance claims assigned to plaintiff exceeded $75,000).7 Additionally, the Court may
aggregate Alpine Glass’s claims sought against both State Farm defendants, because
Alpine Glass seeks to hold the defendants jointly liable, and “does not distinguish
between defendants at all; to the contrary, it characterizes all allegations as collectively
taken.” See Spine Imaging II, 2011 WL 379100, at *3.8
7 See also Deajess Med. Imaging, P.C. v. Allstate Ins. Co., 344 F. Supp. 2d 907, 909-10
(S.D.N.Y. 2004) (allowing a plaintiff medical provider to aggregate, for purposes of reaching the
amount in controversy, fifty-five claims that were assigned to the plaintiff by patients to collect
benefits under no-fault insurance policies, none of which claims exceeds $3,700).
8 Additionally, this district has consistently exercised subject matter jurisdiction over
claims identical to the one brought by Alpine Glass – involving multiple shortpay claims which
individually do not meet the amount in controversy, but in the aggregate exceed $75,000. See,
e.g., Alpine Glass, Inc. v. Am. Family Ins. Co., Civ. No. 06-4213, 2010 WL 5088188 (D. Minn.
(Footnote continued on next page.)
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Furthermore, Alpine Glass ultimately seeks declaratory relief in its complaint. “In
actions seeking declaratory or injunctive relief, it is well established that the amount in
controversy is measured by the value of the object of the litigation.” Hunt v. Wash. State
Apple Adver. Comm’n, 432 U.S. 333, 347 (1977). Here, the value of the litigation is at
least $103,000. Furthermore, Alpine Glass specifically alleged that “[d]ue to the nature
of the auto glass business, the number of short paid invoices is likely to continue to
increase as additional claims are submitted to defendants.” (Compl. ¶ 12.) The fact that
Alpine Glass seeks declaratory relief with respect to future invoices provides additional
support for the conclusion that the amount in controversy in this matter is greater than
$75,000. See Spine Imaging I, 743 F. Supp. 2d at 1042 (finding a complaint for
declaratory relief properly alleged the amount in controversy where “[a] reasonable fact
finder could conclude that defendants’ continued refusal to pay for its insureds’ claims
will cause [the plaintiff] damage in excess of $75,000”). Therefore, the Court concludes
that Alpine Glass’s complaint properly alleges the jurisdictional amount in controversy.
Aggregation of Claims Under Minnesota’s No-Fault Act
In support of remand, Alpine Glass argues only that the Court may not aggregate
its 140 claims for purposes of satisfying the amount in controversy because Minnesota
state courts do not aggregate these types of underpaid auto glass insurance claims for
Dec. 7, 2010); Alpine Glass, Inc., 2010 WL 4386896; BuyRite Auto Glass, Inc. v. Ill. Farmers
Ins. Co., Civ. No. 06-4462, 2010 WL 145277 (D. Minn. Jan. 8, 2010).
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purposes of determining whether binding arbitration is required under Minnesota’s No-
The Minnesota No-Fault Act provides that arbitration is mandatory to resolve “all
cases at issue where the claim at the commencement of arbitration is in an amount of
$10,000 or less.” Minn. Stat. § 65B.525. In Illinois Farmers Insurance Co. v. Glass
Service Co., the Minnesota Supreme Court held that Glass Service, an auto glass repairer,
could not aggregate separate underpayment claims for purposes of avoiding mandatory
arbitration under the No-Fault Act. 683 N.W.2d 792, 803-04 (Minn. 2004). The court
determined that each underpaid invoice was a separate claim, and concluded that “[t]he
form, volume, and amount of the assignments does not . . . transform Glass Service’s
status as an assignee of 5,700 plus individual claims [of less than $10,000] into a
claimant with a single claim of over $1 million.” Id. at 804. Therefore “each” of Glass
Service’s individual claims was “subject to mandatory arbitration under the No-Fault
Alpine Glass’s reliance on Illinois Farmers is misplaced. Whether claims may be
aggregated for purposes of avoiding mandatory arbitration is an entirely separate question
from whether claims may be aggregated for purposes of achieving an amount in
controversy sufficient to establish federal jurisdiction. “The determination of the value of
‘the matter in controversy’ under 28 U.S.C. § 1332(a), ‘is a federal question to be decided
under federal standards.’” Hedberg v. State Farm Mut. Auto. Ins. Co., 350 F.2d 924
(8th Cir. 1965) (quoting Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 352-53 (1961)).
Federal law clearly allows a single plaintiff to aggregate all of its claims, even those
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which have been assigned to the plaintiff, to achieve the amount in controversy.
Therefore, the Court finds that Alpine Glass’s complaint satisfies the requirements for the
amount in controversy under Section 1332.
JURISDICTION OVER CLAIMS SUBJECT TO ARBITRATION
Because the Court has concluded that federal jurisdiction in this matter is proper
under 28 U.S.C. § 1332, it must go on to determine whether the Court may exercise
subject matter jurisdiction over any aspect of Alpine Glass’s claims which are subject to
mandatory arbitration under Minnesota law. See Guzhagin v. State Farm Mut. Auto. Ins.
Co., 566 F. Supp. 2d 962, 967 (D. Minn. 2008) (finding that the court lacked subject
matter jurisdiction over claims that were subject to mandatory arbitration under
Minnesota’s No-Fault Act).
Courts, both state and federal, lack subject matter jurisdiction over claims that are
subject to mandatory arbitration under Minnesota’s No-Fault Act. See Ill. Farmers Ins.
Co., 638 N.W.2d at 805; see also LIFE Rehab Servs., Inc. v. Allied Props. & Cas. Ins.
Co., 2006 WL 91334 (D. Minn. Jan. 6, 2006) (“The [No-Fault Act] thereby deprives
district courts of subject matter jurisdiction over insurance disputes involving claims for
comprehensive benefits of $10,000 or less.”).
But Courts are deprived of subject matter jurisdiction only over questions of fact
arising directly from the arbitrable claim. “[N]o-fault arbitrators are limited to deciding
questions of fact, leaving the interpretation of law to the courts.” Weaver v. State Farm
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Ins. Cos., 609 N.W.2d 878, 882 (Minn. 2000).9 Because no-fault arbitrators are limited
to determining questions of fact, courts have jurisdiction to determine legal issues. For
example, courts can exercise jurisdiction to order consolidation of claims for purposes of
arbitration under the No-Fault Act. See BuyRite Auto Glass, Inc. v. Ill. Farmers Ins. Co.,
Civ. No. 06-4462, 2010 WL 145277, at *1 (D. Minn. Jan. 8, 2010). Courts can also
decide the validity of assignments, the interpretation of an insurance policy, the
construction of the No-Fault Act, and other legal issues not directed at the merits of
shortpay claims.10 In addition to questions of law, courts are ultimately responsible for
deciding certain factual issues, such as preconditions to coverage. See Costello v. Aetna
Cas. & Sur. Co., 472 N.W.2d 324, 326 (Minn. 1991).
The parties do not dispute that the 140 claims raised in Alpine Glass’s complaint
are subject to mandatory arbitration under Minnesota’s No-Fault Act because each claim
is for less than $10,000. See Minn. Stat. § 65B.525, subd. 1. That Alpine Glass’s claims
are subject to mandatory arbitration does not, however, deprive this Court of jurisdiction
9 Although arbitrators are not prevented from deciding issues of law, their decisions are
subject to de novo review by the courts. See Weaver, 609 N.W.2d at 882; Gilder v. Auto-Owners
Ins. Co., 659 N.W.2d 804, 807 (Minn. Ct. App. 2003) (explaining that “when called upon to
grant relief, an arbitrator need not refrain from deciding a question simply because it is a legal
question,” but that decision will be subject to de novo review).
10 See Alpine Glass, Inc. v. Am. Family Ins. Co., Civ. No. 06-4213, 2007 WL 1152931, at
*2 (D. Minn. Apr. 18, 2007) (determining validity of assignments); Alpine Glass, Inc. v. Ill.
Farmers Ins. Co., Civ. No. 06-1148, 2006 WL 3486996, at *2-3 (D. Minn. Dec. 4, 2006)
(dismissing a counterclaim challenging the validity of assignments); AMCO Ins. Co. v. Ashwood-
Ames, 534 N.W.2d 740, 741 (Minn. Ct. App. 1995) (concluding that a determination of
insurance coverage was beyond the scope of the arbitrator’s fact-finding authority under the No-
Fault Act, and was a question of law for the court).
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to decide preliminary legal questions. In its complaint, Alpine Glass requests
consolidation of arbitration proceedings. Whether the 140 claims may be consolidated is
a question appropriate for the Court. See BuyRite Auto Glass, Inc., 2010 WL 145277, at
*1. Additionally, State Farm has suggested in its answer that the validity of the
assignments and issues of coverage are also involved in this case. (See Answer ¶¶ 20-21,
Nov. 13, 2012, Docket No. 2.) Therefore, the Court finds that it likely has subject matter
jurisdiction to determine several of the issues raised by the parties, and remand for
arbitration at this time is not appropriate.11
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Plaintiff’s Motion to Remand to State Court [Docket No. 5]
DATED: June 4, 2013
at Minneapolis, Minnesota.
JOHN R. TUNHEIM
United States District Judge
11 “[T]here is no per se requirement under Minnesota’s No-Fault Act that courts resolve
any legal issues before ordering arbitration.” Alpine Glass, Inc. v. Ill. Farmers Ins. Co., 531 F.3d
679, 683 n.4 (8th Cir. 2008). However, “where the Court is presented with an issue that it will
ultimately be required to decide, and which necessarily impacts whether arbitration is
appropriate at all – such as a coverage issue – the Court should resolve the issue before
arbitration proceeds.” Boulay Auto Glass, Inc. v. Ill. Farmers Ins. Co., Civ. No. 10-798, 2010
WL 3033732, at *4 (D. Minn. June 28, 2010), report and recommendation adopted by, 2010 WL
3033735 (D. Minn. July 26, 2010); see Costello v. Aetna Cas. & Surety Co., 472 N.W.2d 324,
326 (Minn. 1991) (“Where the coverage dispute arises on a motion to compel arbitration or to
enjoin arbitration, the court ought to decide the issue in the first instance.”).
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