Thursday, 25 August 2016 16:41

Judge Dismisses UT Shops’ Claims Except “Steering”

The majority of claims filed by nine Utah body shops against a group of 20 insurance companies have been dismissed. In the U.S. District Court for the Middle District of Florida, Judge Gregory Presnell ruled in July that only one of the “steering” claims can be refiled.

The Utah body shops filed the original claim in the United States District Court of Utah on April 10, 2014. In Alpine Straightening Systems Inc. et al v. State Farm Mutual Automobile Insurance Co. et al, they alleged that:

“…defendants have engaged in an ongoing, concerted and combined intentional course of action and conduct to improperly and illegally control and depress automotive damage repair costs to the detriment of the plaintiffs and the substantial profit of the defendants.”

They further stated in court documents that these actions by the defendants “have eradicated competition within the body shop industry.”

In August 2014, the lawsuit was consolidated with several others by the United States Judicial Panel on Multidistrict Litigation. It was decided that all cases would be heard in the U.S. District Court for the Middle District of Florida.

In the plantiffs’ second amended complaint, filed in May 2015, they alleged:

“The defendants have successfully created a ‘market’ system that rewards the body shops that will cut comers so they can increase profits and punishes body shops who are unwilling to compromise the quality or safety of the American consumers’ repair. The whole intent of anti-trust actions was and is to increase competition for the sole benefit of the American consumer. Defendants' actions have violated the letter and the spirit of the law. Instead of providing the best quality repairs for the lowest cost, they have fixed the costs to their utmost benefit and forced the market into a race to the bottom in terms of quality to the customer.”

They further stated in court documents that according to the Department of Utah Insurance’s 2013 Company Market Share Report, State Farm had captured about 15.06 percent of the private passenger automobile insurance business in Utah as of December 31, 2013. The report also said that overall, the defendants controlled about 71 percent of the 2013 private passenger automobile insurance market in Utah.

Earlier this year, Magistrate Judge Thomas Smith prepared a Report and Recommendation in regards to the claims at the request of Judge Presnell. Judge Smith considered the motions, the plaintiffs’ response and the replies that were filed by the defendants. He then recommended that all but one of the plaintiff’s remaining state law claims be dismissed with prejudice, which means that cannot be refiled.

Following his recommendation, the plaintiffs and two of the defendants filed an objection to the Report and Recommendation.

According to court documents, Judge Smith struck the plaintiffs objection earlier this year in May on the grounds that it exceeded the permitted page count and was filed after the deadline.

In regards to the plaintiffs’ tortious interference claim, Judge Smith recommended it be dismissed with prejudice along with the other claims, except for one instance of alleged interference.

Judge Presnell affirmed his recommendation and dismissed the body shop’s claims of quantum meruit, tortious interference with economic relations and conversions.

The claim that can be refiled involved one of the plaintiffs, Perk’s Auto; one of the defendants, Farmers Insurance Exchange; and Jayme Montgomery, one of Farmer’s customers.

Montgomery took her vehicle to Perk’s Auto following an accident and allegedly Farmers told Montgomery to take the vehicle to another shop.

“Judge Smith found that the plaintiffs had failed to state a claim because they had failed to plead facts showing that Farmers’ alleged interference had caused injury to Perk’s Auto,” according to court documents. “However, Judge Smith could not rule out the possibility that Perk’s Auto could re-plead so as to state a tortious interference claim.”

 

All of the antitrust cases are represented by John Arthur Eaves Jr. and Allison Fry of Eaves Law Firm in Jackson, Mississippi.

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