Monday, 28 September 2015 18:51

Body Shops Await News About Multi-District Litigation After Florida Case Dismissed

After the lead case in the Multi-District Litigation was dismissed by a Florida judge on September 24, body shops across the country are watching closely to see what happens next.

Autobody News spoke to John Eaves, the head attorney for the consolidated lawsuit, A&E et al v. 21st Century, to find out how this will affect the other cases. “Our best guess is that he (Judge Gregory Presnell) will try to do that in the other states as well,” he said.

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In what Eaves referred to as a “delay of games,” he said from an organizational standpoint Judge Presnell is probably going to send the remaining cases to the appellate court and let them sort out what the law actually is.

However, he said it’s possible that the judge may “cherry pick” and make a different decision in each of the different states involved.

Eaves said that he was surprised and disappointed with the news but Eaves Law Firm, based in Jackson, Mississippi, plans to file an appeal and shops should not lose hope.

“There is a lot of activity still going on and our commitment is still solid when it comes to customers getting a quality repair,” said Eaves. “This is not the end of our efforts. We’re interpreting this as a delay in the process.”

The Florida lawsuit, including 20 auto repair shops and 39 insurance companies, was filed February 24, 2014. It was the first action filed in the Multi-District Lawsuit, which grew to include two dozen lawsuits and were consolidated for pretrial purposes.

In the case, the Plaintiffs allege that the Defendants, “engaged in an ongoing, concerted and combined intentional course of action and conduct to improperly and illegally control and depress automobile damage repair costs to the detriment of the Plaintiffs and the substantial profit of the Defendants.”

The Plaintiffs also assert that the Defendants engaged in price fixing, compulsory use of substandard parts and boycotting shops that refuse to comply.

Eaves Law Firm filed a Second Amended Complaint Feb. 11, 2015, alleging price fixing in violation of the Sherman Act, boycott in violation of the Sherman Act, tortious interference with business relations, and quantum meruit.

This is the third time the claims were dismissed; however, this time they were dismissed “with prejuidice,” meaning they cannot be refiled as they were before.

“Based upon a review of the pleadings in this and the other 20-odd cases... the Court finds that giving the Plaintiffs another opportunity to state a claim would be an exercise in futility,” Judge Presnell wrote in the most recent court document.

Eaves said the silver lining is that they will get more clarification from the appellate judge on the other issues of law.

The first step is to file a motion to reconsider, which Eaves said will be done in 10 days. Then the law firm will have 30 days to file a notice that they will appeal, which will most likely take a year.

In the meantime, Eaves Law Firm has submitted amended complaints for the first six lawsuits that were filed, including Florida, Indiana, Louisiana, Mississippi, Tennessee and Utah. (Autobody News will share details about the amended complaints in a follow-up article)

“We think the judge is mistaken, especially about tortious interference, so we are appealing that ruling,” said Eaves.

Tortious interference occurs when a person intentionally damages the plaintiff’s contractual or other business relationship.

According to court documents, “Tortious interference may be justified where the interfering defendant is not a stranger to the business relationship with which it is interfering... The defendants in this case were not strangers to any business relationships between their insureds and auto repair shops, as the defendants would be paying for the repairs to be performed.

In court documents, Judge Presnell wrote that the plaintiffs relied on the same incidents as demonstrating that the defendants were engaging in a boycott. “However, those incidents are not sufficient to state a claim for tortious interference with a business relationship,” he said.

Another claim involved quantum meruit. Quantum meruit refers to a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract.

Judge Presnell dismissed the claim for quantum meruit, saying “One person should not benefit from the work efforts of another under circumstances where the person doing the work has the reasonable expectation of being paid by the person benefitted, and the person benefitted has a reasonable expectation of paying for the work.”
He added that, “With foreknowledge of the amounts the Defendants were willing to pay, the Plaintiffs could not have had a reasonable expectation of receiving more.”

Eaves said, “We think that shops have the right to get paid for work and have a reasonable expectation to get paid for work that they do.”

The law firm encourages all shops, whether or not they are involved in the lawsuit, to send evidence for the case. “This industry didn’t get in this shape overnight and it won’t get out of it overnight,” said Eaves.

 

Read article released by Barrett Smith of Auto Damage Experts

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