Lee Gamboa of Gamboa Body & Frame, a large multiple-shop operator in Sacramento, describes the events that precipitated the battle against Allstate:
Daniel Watts of Roseville, California, while driving his 2005 Nissan Titan LE pickup in September 2005, was hit by a DUI driver, damaging the frame which is made of High Strength Steel (HSS) - a material that the manufacturer, Nissan, says is not designed to be repaired with conventional methods.
Watts brought his truck to Gamboa for repair. Gamboa was able to pull the frame to the proper dimensions, but there remained an unacceptable buckle in the collision management area of the frame.
Watts himself emphasized that he could have been killed were it not for the size and strength of the Nissan Titan's frame: "I truly believe that the frame on my truck did exactly what it was supposed to do and that was to bend in the area so it could take the impact of the hit. Now it is weak in the [collision management] area and no amount of repair will ever bring it back to how it originally was."
Watt's source for this last statement was a bulletin published by Tech-Cor, an Allstate subsidiary in Illinois that provides insurers with research on collision repair methods.
Watts explained that in spite of information from Tech-Cor and Nissan, Allstate continued to suggest repair procedures instead of replacement, including welding a tab on the frame and pulling the kink out. Said Watts of his experience, "Allstate has successfully made my life a living hell."
High Strength Steel
The strength of the frame is an important safety feature and one of the reasons Watts says he purchased the vehicle. The HSS frame is lighter than conventional "mild" steel, designed to meet both fuel economy mandates and crashworthiness standards.
Although Nissan reiterated that repairs should not be made to the collision management area of the frame and recommended that the frame be replaced, Allstate dug in its heels and refused to replace the frame, instead spending the next eleven months trying to pull the car from the Gamboa shop. "They used everything from the usual word tracks to claiming that we were incompetent," said Lee Gamboa. "Allstate offered to come to the shop to mentor and teach my technicians how to repair frames."
Discussing the Nissan frame, Gamboa said, "No amount of repair can bring the mechanical properties back. In the production stage, frames go through specific chemical and thermal processing and controlled cooling cycles. HSS is very sensitive. At least fifty people - from engineers, the manufacturer and industry resources, have all said the frame must be replaced."
Allstate, through its adjusters and consultants, repeatedly denied this was true, according to a report written by Mark Guess from the California Bureau of Automotive Repair's Sacramento office.
BAR report says "replace it"
Like a soap opera, this story has a lot of twists and turns. Unable to get satisfaction from Allstate, Gamboa suggested to Watts that he file a complaint against Allstate with the Department of Insurance (DOI) and against the Gamboa shop with the Bureau of Automotive Repair (BAR) in order to get the BAR to initiate an investigation.
The BAR investigation actually began as a fraud investigation against Gamboa for a faulty repair. In the end, the BAR wrote a 15-page, highly detailed report detailing Allstate's attempts to avoid replacing the frame and stating that the frame should be replaced: "The argument to replace the frame is compelling."
Complaint to the Dept. Of Insurance
With the assistance of Gamboa, Watts wrote a complaint to the Department of Insurance regarding Allstate's handling of the claim. He alleged that beginning "in November 2005, Allstate, through their agents Russ Coleman, Jack Larson, Alan Helwig and Scott Parker, have violated numerous statutes while refusing to return the victim's vehicle to its pre-accident condition, and have failed to address the claim in good faith by refusing to replace the vehicle's frame that was damaged as a result of the accident."
The complaint further alleged that [the above agents] verbally and in writing falsely stated that "the permanent deformation in the subject frame is cosmetic in nature and that Allstate's suggested repair methodology will not decrease the integrity of the vehicle in the least."
The complaint also alleged that Allstate had violated anti-steering laws by trying repeatedly to direct the vehicle owner to an Allstate PRO shop and had attempted to lowball the settlement of the claim.
The DOI opened an investigation, closed it and then reopened it. The results of that investigation were not disclosed by the DOI.
A convincing appraiser's report
Concurrent with the state investigations, Watts exercised his right under the Allstate policy to have an independent appraisal of the damage using three appraisers, one chosen by each party plus a neutral agreed to by both parties.
Each party selected their own appraiser, but they could not agree on the third neutral appraiser. Gamboa said that Allstate refused to agree to any neutral other than one affiliated with Allstate, even refusing to accept a retired judge. Watts' appraiser, Jim Drulias of Material Damage Appraisers in Sacramento, wrote a lengthy report, at a cost of $1,500, detailing why the frame had to be replaced.
"It seems like the weight of his report together with the BAR report finally convinced Allstate to settle," said Gamboa, who noted that Allstate brought three attorneys to the mediation conference while Watts was represented by Alan M. Laskin of Sacramento. "I think they were concerned at this point over a bad faith suit for punitive damages being filed against them," opined Gamboa.
At mediation, Allstate agreed to pay $7,800 to replace the frame and a $5,000 "consultation fee" to Gamboa. In addition, Watts received about $60,000 for his trouble and car rental for eleven months.