State Farm Insurance, the nation’s largest private automotive insurer, recently elected to settle a lawsuit with Ray Gunder, who had sued the company on behalf of his customer, for underpayments of labor rates and paint and materials.
Attorney Brent Geohagan, legal counsel for Ray Gunder and Gunder’s Auto Center, recently received a letter from State Farm’s legal counsel stating that while they were not admitting to any wrongdoing or liability, they elected to provide full payment for the disputed amount of $553.77 to settle a lawsuit that Gunder had filed on behalf of his customer. State Farm agreed to pay the disputed amount and Gunder’s legal fees.
An elated Ray Gunder said, “This is huge! This is the first of what we anticipate will be many such decisions from State Farm in the numerous other lawsuits we have filed against them for their repeated underpayments of our increased labor rates and PMC Logic paint and material invoices. This check, while made out to Gunder’s and Brent Geohagan, has the name of every quality repairer in the country and should send a strong, loud and very clear message, that when push comes to shove, that the little guy can take on the bullies and win! Like us, every shop can make a difference!”
A year ago, Gunder’s raised its body labor rate from $42 to $48 per hour and began demanding full payment of PMC Logic’s paint and material invoices. Since then, 37 insurers have provided the full labor and materials without much opposition. Those who have been resistant include State Farm, Allstate, USAA, Travelers and GEICO; all of which are defendants in approximately more than 40 current lawsuits levied by Ray Gunder on behalf of Gunder’s Auto Center’s customers, with about half against State Farm alone on similar issues.
“Today’s announcement may bring other insurers to reconsider their positions,” Gunder said. “Generally speaking, other insurers often follow State Farm’s lead on such issues. It will be interesting to see what happens in the weeks and months ahead. I would like nothing more than to have positive and respectful working relationships with State Farm and every other insurer we deal with on behalf of our customers. This would be beneficial to our respective companies and allow us to do what we’re here to do—properly serve the consumer.”