fbpx

‘Biggest part’ of US-lawsuit to go forward

A Florida judge has ruled that at least some parts of a recent suit filed by repairers against insurers may go forward.

By Jeff Sanford

Orlando, Florida — February 25, 2016 — Owners of several independent collision repair centres in the United States are celebrating a legal victory today as a Florida magistrate has allowed the “biggest part” of a major case against a number of insurance companies to go ahead.

In essence, the repairers brought suit against a group of some of America’s largest auto insurers claiming that steering practices are unlawfully impacting their businesses. The judge has now recommended that at least some of the many claims included in the suit can go ahead.

The defendants, various insurance companies, were seeking to have the case, Capitol Body Shop et al v. State Farm et al, thrown out of court. But US Magistrate Judge Thomas Smith ruled that the allegations by three shops from Mississippi alleging “tortious interference”–a claim for damages when a defendant wrongfully interferes with a plaintiff’s business relationships—had enough evidence to survive the motion to dismiss the case.

The attorney representing the shops, John Eaves Jr., described the ruling as a big victory, according to a report in Repairer Driven News: “The steering has always been the big hammer,” said Eaves. “The biggest part of the case is going forward.”

In favour of the defense, the judge did rule that another 23 claims of steering be thrown out. Eaves, however, was also quoted as saying that the plaintiffs could provide more evidence on those cases and would seek to keep the other 23 shops in the case.

“We think that will be corrected,” Eaves said. “… In our response, we’ll clear that up with the court.”

Below are examples of the parts of the suit that the judge has said may proceed.

A shop called AutoWorks Collision lost a customer because the insurer is alleged to have steered the car to another shop, which then botched the repair. According to the suit, the client was told that AutoWorks Collision would charge her more for repairs, and that if she didn’t go to a preferred shop, she would be liable for storage fees. The customer took her vehicle to the insurer’s preferred shop, where storage fees were incurred. AutoWorks Collision later found unrepaired damage to the vehicle and “shoddy work” that ultimately left the vehicle less safe.

In another claim, a customer wanted to use a shop known as Walkers Collision. The suit alleges that the insurer promised her a lifetime guarantee if she chose one of three facilities, all over an hour away. The client wanted to use the local shop but, “based upon Progressive’s statements that she had to use one of the three shops they named,” she felt she had no choice. The judge felt the shops backed up these claims by arguing that, according to a report, “since the insurers knew they wouldn’t pay more than a fixed amount anyway and had made false claims, the steering was malicious.”

Counsel for the insurers named in the suit argue there is nothing illegal in requiring an estimate be done at a particular location, nor anything illegal about direct repair programs. The current lawsuit was recently amended and refiled this past January after an earlier form of the case had been dismissed. The new version of the lawsuit offers more “specific examples of allegedly improper behavior and how it relates to each (or all) of the insurers.”

Interestingly, one of the plaintiffs in the case ran against the Mississippi insurance commissioner in a recent election, reportedly out of frustration over enforcement of insurance claims. The campaign was unsuccessful however.

One of the more absurd examples in this case includes an incident in which an adjustor is alleged to have written to Porsche-certified K&M Collision that “he couldn’t pay an additional $3,108 worth of work on a Porsche — work described in AudaExplore and Porsche manufacturer guidelines — because he couldn’t change [presets] in the system,” according to the report in Repairer Driven News.

SHARE VIA:
Facebook
LinkedIn
Twitter
Email

Sign-up for the Collision Repair daily e-zine and never miss a story –  SUBSCRIBE NOW FOR FREE!

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Arslan Accuvision
PlayPlay
Arslan Accuvision
PlayPlay
previous arrow
next arrow

Recent Products

Recent Posts

Stay on top of the latest INDUSTRY news and trends by subscribing to our daily e-zine!

Our other sites

Our other sites

Days
Hours
Minutes
Seconds