Why was this lawsuit necessary?
State Farm rejected Ms. Roberts’ pre-suit demand for settlement of her claim. State Farm had refused to pay over $4,000 in repair costs due, paying only about 60% of the repair costs.
Did the Hernandez Collision Center case affect your understanding of consumer rights?
The issue of consumer rights is a matter of Georgia law, so that was learned from Georgia law and insurance regulations. Hernandez Collision Center has educated me on the responsibilities of the repair shops to return a damaged car back to its pre-accident condition and on the process of repairing a car. Learning the particularities of vehicle repair has been a challenge.
What role did Hernandez Collision Center play in Japonica Roberts’ case against State Farm?
Hernandez Collision Center was the repair shop that repaired Ms. Robert’s vandalized car. As the repair shop, Hernandez Collision Center personnel provided testimony on the scope of the necessary repairs and testified on industry standards, both in estimating and repair procedures. Also, Hernandez did a wonderful job documenting the file. They took close to a hundred photographs, and some were very helpful. You just never know which photo is going to be the most important, but every repair shop that is hoping to help their customers should take lots of photos, particularly of any cost items or repairs that the shop knows the carrier will object to or may question.
What did you learn from that case?
These cases have a long learning curve, and I am glad to have begun to understand some of the many legal, evidentiary and procedural issues that these cases present.
Do you think more consumers would get involved in short pay lawsuits if they were better educated about their rights?
I don’t know. Some may, and others may think it is too much trouble. It is a time-consuming process.
Do you feel it’s important for shops and/or consumers to pursue short pay litigation?
That decision is up to the policy holder and/or the third party damaged party. It’s great that some car owners are willing to test the insurance company’s decision on what it will and won’t pay. Without this ‘push back,’ insurance companies have little or no incentive to be reasonable. State Farm, in particular, appears to have a take-it-or-sue-me attitude, and so I am glad to assist consumers with the backbone to file suit.
What measures should be taken to prevent the necessity/prevalence of short pay cases in the future?
The repair shops need to be willing to assist the customer by appearing to testify without requiring any sort of witness fee, and policyholders need to be familiar with their policy language. I expect that the best way to blunt the insurance industry’s incentive to short pay is for jurors to require full payment in trial verdicts. At least in Georgia, that is the only realistic avenue for making a difference. The Insurance Commissioner isn’t going to get involved. In helping the consumer, the shop should be aware that the consumer will have the burden of proof. So, the shop should document, document, document. Take lots of photos. Save invoices. Get as much in writing as possible. Memories fade, and the carrier’s estimator will often have a different recollection of events than the shop estimator. This ‘he said/she said’ dilemma can often be resolved favorably for the consumer with sufficient documentation and photos.
What advice would you give shops/ consumers interested in pursuing short pay litigation?
Be ready for protracted litigation. And as stated above, the shop has to document. The consumer should stay involved and make the calls to the carrier. Keep notes. Keep records. Then there is the issue of cost. Fortunately, in Georgia, attorney fees are recoverable by a policy holder; however, Georgia’s laws should be updated to allow for recovery of litigation expenses. Without this provision, the litigation playing field is tilted in favor of the insurance company because of the cost of depositions and discovery. Some carriers, such as State Farm, do not have appraisal clauses in their policies and so the policy holder has no choice but to sue in Court. The damaged wreck car owner has no choice but to sue the at-fault driver. The third party claims are difficult because the trial is a two-step process and the verdict must first be obtained against the at-fault driver. Then, there is the discovery process and the depositions. The insurance company doesn’t mind spending the money on the depositions, but this is an expensive litigation burden for the party bringing the lawsuit. The insurance company does not willingly turn over its documents and so motions are required. The insurance companies know this, and they have lobbied the legislature for years to have statutes written that favor their position in these bad faith cases. It would be helpful if the shops got involved in lobbying and leveled some of these playing fields, but that takes organization and the shops don’t appear organized at this point.
Tell me about the second case you recently filed. Is it the same issue(s)? Are you optimistic about another victory?
I am representing about a dozen policy holders against State Farm. The first two cases we tried, one a first party claim and the other being a third party claim, were both lost and are presently either on appeal or being prepared for appeal. The policy holders won the second two cases, again, both a first party claim and a third party claim. We are set to try another first party claim and are optimistic that this case will turn out well for the policy holder. There are many variables, including juror attitudes, which cannot be predicted with great accuracy, so we’ll just have to wait and see. Hopefully, we can establish a string of verdicts for policy holders that will give these claims greater credibility.
As always, we welcome responses from opposing counsel or defendants and will report on them if received.