West Virginia Attorney General Darrell McGraw announced April 12 that Liberty Mutual and Greg Chandler’s Frame & Body in St. Albans will halt their use of "junkyard parts" in repairs of new vehicles.
The terms of the Preliminary Injunction Order with Liberty Mutual and the body shop provide that the defendants will immediately cease repairing vehicles that are three years old or less with salvaged parts until all issues raised in Attorney General McGraw's complaint are fully resolved. Liberty Mutual also agreed that it would provide the State with a list of all West Virginia consumers whose vehicles were repaired illegally within the last three years using salvaged parts.
"It's important to notify West Virginians who have been victimized by Liberty Mutual’s unlawful policy," Attorney General McGraw said. "Consumers likely have no idea their vehicles were repaired with junkyard parts."
In one case, a consumer filed a complaint with the Attorney General’s office in December 2011 after experiencing problems with her 2009 Chevrolet Aveo, which was repaired by the body shop in the fall of 2011. When the vehicle was returned to her after repairs, the customer noticed "the rear hatch did not line up and there was a gap between the driver’s side hatch and the quarter panel big enough to put my fingers in."
She then reviewed her invoice which showed that "like-kind and quality" parts were used to replace the driver’s side quarter panel. It wasn’t until she saw news coverage about Attorney General McGraw’s lawsuit against Liberty Mutual that she realized her car had been repaired with "junkyard parts."
"State law requires insurance companies and body shops to secure a consumer’s written authorization before repairing a new vehicle with salvaged parts," Attorney General McGraw said. "Liberty Mutual intentionally withheld this material information. Consumers had no notice that their vehicles had not been repaired with new parts."
Darrell McGraw filed the lawsuit against Liberty Mutual and body shop owner Greg Chandler late last year, alleging that the body shop followed an illegal insurance policy to install used or aftermarket crash parts on vehicles manufactured within three years of the date of the crash. "Crash parts" in this case generally refers to exterior or interior fiberglass or metal materials that make up the body of the vehicle, like fenders, bumpers, door panels and wheel wells. The suit listed repeated violations of the West Virginia Consumer Credit and Protection Act by Liberty Mutual and Greg’s Body Shop. McGraw’s office alleged that Liberty Mutual required body shops to repair vehicles with reconditioned, re-manufactured, and used parts in violation of West Virginia law. In addition, he said Liberty Mutual failed to provide the proper notices and written statements to consumers.
"The safety and economic well-being of Liberty Mutual's customers are always our primary considerations," company spokesman Glenn Greenberg said in a statement. "Any decision we make concerning the use of a specific part for a damaged vehicle is made without compromising neither our customer's safety, or the manufacturer warranty."
But according to McGraw, the policy violates a state law that prohibits body shop owners from installing used crash parts on newer vehicles without the owner's consent.
The Attorney General's Office became aware of the practice when a former body shop manager for Joe Holland Automotive came forward with a complaint.
The manager said that a Liberty Mutual agent tried to implement the policy. When Joe Holland refused, the insurance company revoked its status as a "preferred" body shop, which is a contractual agreement between the two companies that allowed Joe Holland to save time and money by writing estimates and repairing damaged vehicles without the prior approval of an insurance agent.
The case has also provoked objections from recyclers to the use of the term "junkyard parts."