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Bruce Roistacher

Bruce Roistacher

Bruce Roistacher has tried in excess of 100 jury trials in federal and state courts. He is a former NYC prosecutor and has previously represented insurance companies, which can be a great advantage to his automotive clients.


Bruce can be reached at Bruce@AutobodyAttorney.com or by phone at 866-Law-MANN.

Monday, 20 August 2018 17:18

Ask the Auto Body Attorney: September 2018

Written by Bruce L. Roistacher, Esq. NY, FL and DC Bar

Index

I want to thank all of the shop owners around the country who have favorably responded to my initial column from last month.

 

If you have a question or concern about any legal issue that may arise in your business, don’t hesitate to contact me at 1-855-Law-Mann or contact Autobody News.

 

Although I can’t give legal advice, I can give a general opinion about your issue and point you in the right direction.

 

In this edition, I want to explain some very basic definitions of terms that you may see me discuss in future columns. You may experience some of the following in your day-to-day business:

 

1. OEM – This is simply Original Equipment Manufacturer parts and equipment that may be marketed by a manufacturer. However, these parts are assembled and installed during the construction of a new vehicle. They are in contrast to after-market parts, which are subsequently installed, e.g.., Champion sparkplugs, Kinsler fuel injectors, BMP engine blocks.

 

You have to be careful because many auto parts are sold through multiple brands, causing some vehicles to have non-OEM parts.

 

This area contributes to much of the litigation that is currently taking place, i.e., the State Farm case that I discussed in my prior column.

 

Another topic that unfortunately occurs is the situation where insurance companies short shops on payments regarding OEM vs. after-market parts.

 

Shops should fight back! There have been successful verdicts and settlements around the country on this issue and many others.

 

2. CAPPING – Watch out for companies capping labor rates and paint materials itemized, such as PaintEx. They may have no legal basis in capping or even outright rejecting your hard-earned payments – they add up!

 

Gamesmanship by the insurance industry is alive and well, i.e., their latest word game is called a calculator. Why, you might ask? It’s simple and means nothing. PaintEx is a presentation that falls under the gaap rule (generally accepted accounting principles). These are the same rules that every insurance company uses every day.

 

PaintEx is only one example of many that insurance companies attempt to reject because it saves them money and at the same time takes money out of your pocket.


 

3. UNFAIR PRACTICES – Insurance companies will deny, delay and try to defend and use methods such as steering, totaling and negotiating unfairly. The insurance companies will keep getting aggressive unless shop owners push back.

 

4. ASSIGNMENTS – Assignments from your customer, the insured, are crucial to obtain and must be legally sufficient. They legally put you, the shop owner, in the legal position of your customer for negotiating and subsequent litigation with insurance companies, if required. Each state may have their own requirements, which must be followed precisely.

 

5. SHOP SAFETY – Lately, the entire topic of environmental rules and regulations has become extremely important in your day-to-day business. This is particularly common regarding respiratory protection and hazard communication. My suggestion is to issue written warnings to your employees to create what we call informed consent. This can later be used as evidence to prove that legal and sufficient notice of any potential danger has been given to your employees.

 

Remember, employee safety is a must and proper safety equipment and environmentally acceptable chemicals have to be used, as both Federal and State agencies may visit your shops for inspection. They have the power to commence legal action against your shop, which could lead to fines and even put your permits or license in jeopardy.

 

6. TOTALING – In their never-ending effort to “tighten the belt,” the practice of totaling, i.e., when insurance companies declare an automobile too damaged for repair when you know that it is repairable. This process obviously saves the companies the expense of parts and labor. The result? You lose business.

 

Insurance companies have long used the method of favoring certain shops, perhaps in your area, to obtain favorable rates.

 

Although it is perfectly understandable that any business has an absolute right to make profits, cut expenses and costs and deal with certain companies, they can’t do it by illegall and/or unfair means. That applies to small businesses as well as to the largest companies in the world that have faced scandal or criminal conviction, such as Archer Daniels Midland, Bankers Trust, BP, British Airways, GE, International Paper, Samsung, Sears Roebuck and Company, Tyson Foods, VW, Waste Management and many more.


 

Let me be clear: It is my opinion that the time has come that shop owners who have suffered serious financial loss due to any unfair practice by an insurance company begin to take legal action in an attempt to recover their hard-earned gains.

 

7. TORTIOUS INTERFERENCE WITH BUSINESS – If not criminal, almost every state recognizes the principle of tortious interference with business relations. This concept can be known by different names such as “intentional interference with contractual relations” or a “tort of negligent interference,” depending on the state that your business is in.

 

It happens when one entity intentionally damages someone else’s contractual or business relationship with a third party, causing economic harm.

 

It can also occur if it happens without intent but in a negligent manner.

 

Courts have held that tortious interference of business relations can occur when false claims against the business are made, which can affect reputation that drives business away.

 

Each state requires proof of certain factors, including proof of damages or the harm caused.

 

If proven, there might even be punitive or a punishing award that may increase any judgment rendered. Examples are when insurance companies or appraisers intentionally or negligently comment or publish untrue statements that downgrade a particular shop for another to a potential customer.

 

The aforementioned scenario has been the subject of litigation around the country, and there have been some large verdicts that have been returned against insurance companies.

 

8. DEFAMATION – Very close and part of the above concept is the area of defamation.

 

Reputation is a valuable asset in any business. A damaged reputation can result in significant financial hardship. As previously stated, statements made to a third party about a particular shop---if untrue and actual damages can be proven that are directly related to those false statements---can be used to prove a claim of defamation.

 

States obviously vary. However, the usual requirements are the following: (1) your reputation must be harmed and you must be able to prove it; (2) the statement must be false and you must be able to prove it; (3) you must identify the entity or person who made the statement; (4) you must have suffered provable damages directly relating to the above.


 

The above are only an introduction to some of the most common legal issues that have wound up in our courts, and many have involved insurance companies and/or their appraisers.

 

If you feel that you have been the victim of any of the aforementioned actions by an insurance company and have suffered damages directly related to their actions, you should consult an experienced attorney for legal advice.

 

See you next month!

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