Northeastern News

1HomePageMap small ne 0816Local news stories affecting the auto body industry in New York, New Jersey, Pennsylvania, Delaware, Connecticut, Maryland, Rhode Island, Massachusetts, New Hampshire, Vermont and Maine

When I first met Greg Coccaro, the owner of North State Custom in Bedford Hills, New York, I was immediately struck by his passion for his business, his customers and his industry. But it was his frustration with the inequities inherent in his chosen field that truly captured my attention. I listened as Greg explained to me what a DRP was, how his labor rate was determined by someone other than himself and what the practice of “steering” had done to his and other businesses like his. Having spent nearly 20 years litigating for and against insurance companies, I was aware of the power an insurance company can exert. However as Greg explained to me the realities of the collision repair industry, I was admittedly shocked by what I heard.

The Case of North State v. Progressive Insurance
In 2007, as attorney for North State Custom, I commenced a lawsuit against Progressive Insurance alleging that Progressive engaged in deceptive business practices and interference with North State’s business and customers. The case has survived two motions to dismiss, two appeals and a separate action brought by Progressive against North State resulting in two separate jury trials. (For a summary of the Progressive v. North State saga see autobodynews.com, Cocarro Case Takes a Wide Turn...). While the case against Progressive has not yet been resolved and in fact we expect a jury trial to be held sometime next year, a recent court ruling in the matter has significant impact for the industry as a whole.

A Syracuse (NY) City Court judge has denied a motion by Nationwide Insurance seeking dismissal of an “assignment of proceeds” case brought against the insurer by Nick Orso’s Body Shop. The shop sued on behalf of two customers for repair costs not paid for by Nationwide, which argued that the customers’ policies prohibited them from assigning claimed losses to another party without the insurer’s prior permission.

Judge Rory McMahon, citing a decision in a similar case last fall also involving Nick Orso’s Body Shop, ruled that anti-assignment clauses are valid for assignments prior to a loss and claim (when that could impact the insurer’s exposure) but not after. Orso’s attorney argued successfully that Nationwide has no interest in preventing a post-loss assignment of proceeds “other than an insurer’s desire to make it as cumbersome as possible for the insured to obtain what is owed under the insurance contract.”

The judge, however, did not find that Nationwide’s motion for dismissal of the case was brought in bad faith, and he therefore denied the shop’s request to have its court and attorney costs paid for by the insurer.

Wednesday, 24 August 2011 19:58

State Farm Moving 500 N.J. Jobs

State Farm will drastically reduce the size of its operations center in Parsippany over the next two years, moving about 500 New Jersey jobs to New York and Pennsylvania to cut costs and improve efficiency, the company said July 26 according to NorthJersey.com.

Most of the Parsippany office’s functions will be consolidated into its two other Northeast operations centers, in upstate Ballston Spa, NY and Concordville, PA. Some of the Parsippany employees will be offered jobs in those locations, the company said

The Christie administration was “proactive” in trying to persuade State Farm to keep the jobs in New Jersey, but the insurer’s decision was final, company spokesman Doug Nadeau said. Employees were notified July 24, he said. A bodily injury claims office and a sales training office will remain in Parsippany, but it is unclear how many will be employed there. The Parsippany center currently employs about 700.

“State Farm hopes to retain the largest amount of employees possible,” Nadeau said. Employees who do not want to relocate will be offered severance packages, he said.

A satellite office in Farmingdale, NJ, that employs a dozen people also is slated for closing and a claims office in Melville, NY will be consolidated into one in Lakeville, NY. The changes, expected to be completed by September 2013, are to “better serve customers and achieve business goals through increased efficiency, reduced expenses and establishment of more consistent operations,” Nadeau said.

The New York Insurance Association has noted that the 2000 Honda Civic is again the most frequently stolen vehicle in New York State, according to Insurance Journal.

The Hot Wheels 2011 study released by the National Insurance Crime Bureau (NICB) examines data reported to the National Crime Information Center (NCIC) and determines the vehicle make, model, and model year most reported stolen in 2010.

The study found that the 2000 Honda Civic topped the list of the most frequently stolen vehicles in New York State for the fourth year in a row.

In 2010, the most stolen vehicles in New York State were:
1. 2000 Honda Civic
2. 1994 Honda Accord
3. 1991Toyota Camry
4. 1996 Nissan Maxima
5. 2000 Dodge Caravan
6. 2005 Nissan Altima
7. 2009 Toyota Corolla
8. 2009 Ford Econoline E350
9. 2002 Ford Explorer
10. 1999 Jeep Grand Cherokee

“Auto theft continues to decline in New York State,” Ellen Melchionni, president of NYIA stated. “But drivers still need to take prudent steps to prevent their vehicle from being stolen.”

“Crash taxes,” or accident response fees, are sweeping the nation. Cities in 27 states have adopted them in one form or another, including Dallas, Texas; Buffalo, New York; Toledo, Ohio; and New Haven, Connecticut.

But not every state has been eager to bill those involved in motor vehicle accidents for the services of responding firefighters and police officers. According to Property Casualty Insurers Association of America, 13 states, including neighboring Pennsylvania, have outlawed accident fees, preventing their municipalities from billing those injured in motor vehicle accidents for fire and police department services. New York may be the 14th state to ban crash taxes.

A Crash Tax for New York City?

Earlier this year, New York City Mayor Michael Bloomberg proposed that drivers be assessed an accident response fee when the New York Fire Department (NYFD) responds to an accident or car fire. The proposal basically meant that if the NYFD responded to: – A vehicle fire or car accident with injuries, then drivers would receive a bill for $490.
- A fire without injuries, those involved would receive a bill for $415.
- An accident without injuries, motorists would be assessed a crash tax of $365.

New Jersey made massive change to the regulations for the personal injury element of auto insurance this month, with the intention of keeping rate increases under control, according to Live Insurance News.

The primary changes have to do with the ways in which a doctor will be permitted to bill for the treatments provided, and will recreate the way in which a claim that has been denied can be appealed.

While New Jersey has maintained its status among the more costly states in which to buy car insurance, its residents are paying lower premiums following former Governor James McGreevey’s changes, which were enacted in 2003 in order to encourage competition. However, more recently, rates have been climbing upward once more and officials are blaming personal injury expenses.

According to the Department of Banking and Insurance in New Jersey, in 2010, 97% of all rate increases were a direct result in an alarming increase in the personal injury claims being paid out. It also stated that $1.23 was being spent by insurers for benefits for every dollar that they made for personal injury premiums.

In response to more than 50,000 letters from consumers who support the Right to Repair legislation, the Right to Repair coalition announced August 3 it has submitted language to the Massachusetts Attorney General’s office for approval as a 2012 ballot question. The coalition is still aggressively pursuing passage of its original legislation but the deadline this week for ballot submissions comes at the same time as the continued legislative push.

“As the original sponsor of the Right to Repair legislation, I intend to push as hard as I can to show my fellow elected officials that the current legislation is the best way during these challenging economic times to provide cost savings and convenience for financially-strapped car repair consumers,” said State Rep. Garrett Bradley (D-Hingham). “But, with the deadline coming this week to submit ballot questions for 2012, the coalition is doing the right thing for motoring consumers by keeping that option open,” Bradley said.

Consumers across the state visiting local mechanics or neighborhood parts stores have been filling out support letters and sending them in to their state legislators. While the possible 2012 ballot question would achieve the same goal of allowing consumers to have their cars completely serviced wherever they choose without being forced to go to one of the carmaker dealerships, one option filed with the Attorney General includes language different from the current legislation. The ballot language would require new car dealerships to provide all the necessary non-proprietary repair information directly to consumers at the time of purchase of a new vehicle. This would put choice and convenience directly into consumers’ hands.

The Coordinating Committee for Automotive Repair (CCAR) recognized a Philadelphia, PA, collision repair shop with its “GreenLink Shop” status on June 29.

The shop that received the recognition was Auto Show Collision Center.

The “GreenLink Shop” status promotes consumer confidence in local automotive repair facilities’ environmental and safety awareness and implementation, according to CCAR.

Repair facilities pursuing “GreenLink Shop” recognition must maintain high standards of excellence in environmental, health and safety practices in four categories.

The CCAR initiative recognizes auto service facilities and collision repair shops with separate criteria established for each type of business.

For more information visit ccar-greenlink.org.

Additional need for Ecotec four-cylinder engines used in Chevrolet’s fuel-efficient cars and crossovers, including the all-new 2013 Malibu, is driving $65 million in new investment at plants in New York and Tennessee that will create or retain 163 jobs.

“GM is committed to investing in manufacturing and jobs in the U.S.,” said Cathy Clegg, vice president Labor Relations. “These investments in powertrain manufacturing technology will help us meet the growing needs of our customers for high quality, fuel efficient vehicles - both today and in the future.”

In Tonawanda, N.Y., additional capacity is being added for engines used in the Chevrolet Equinox and GMC Terrain crossovers that achieve 32 mpg on the highway and can travel up to 600 miles between fill-ups. GM is investing $33 million that will create or retain 100 jobs.

In Spring Hill, Tenn., the engine plant is adding capacity for direct-injection four-cylinder engines to support the acceleration of the 2013 Chevrolet Malibu. GM Is investing $32 million that will create or retain 63 positions.

The re-energized Lehigh Valley Collision Repair Association is serving eastern Pennsylvania, including cities such as Allentown, Easton and Bethlehem. The one-year-old group comprises 18 auto body repair facilities, jobbers, parts suppliers, information providers and rental car companies, says its president, Matt Dewalt, AAM.

“Our mission is to promote the professional image of our industry through safe, quality and ethical repairs,” explains Dewalt, vice president of Scott’s Collision Centers, which is celebrating its 40th year serving the Lehigh Valley.

“We want to educate and lead our members to better themselves by allowing the free exchange of ideas and assist with ongoing training,” he adds. “It is truly an organization made up of members who want to better our industry.”

His father, Scott, a past and current member of LVCRA, started their business in 1971, and today the two locations, in Easton and Stroudsburg, comprise 34,000 square feet and generate about $5 million in annual sales.

The original LVCRA has roots at least 50 years deep and was very active in the late ‘80s and early ‘90s, sponsoring golf tournaments, hosting monthly meetings and holding I-CAR and other classes, Dewalt says. At the time, Scott participated with his early shop, but membership dwindled and meetings stopped about 10 years ago.