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Friday, 27 April 2012 23:19

Mike Orso Launches $3 Million Suit Against Three Insurers, Citing Capping and Shorting

Leif’s Auto Collision Centers, Oregon

A long-established New York auto body shop owner who has successfully won over $1 million from insurance companies announced recently lawsuits seeking nearly $3 million from the trio of State Farm, Allstate and Adirondack Insurance.

Mike Orso, the president of Nick Orso’s Body Shop of Syracuse, New York, is suing the insurers for a variety of reasons, including shorting the shop on payments and the continued battle of OEM (original equipment manufacturer) vs. aftermarket parts.


“In a few words I can sum of these suits,” Mike said in a press release. “Capping and short payments,” before adding “the longer version, by and large, they consist of ‘shorting’ or ‘capping’ of labor rate, paint materials per itemized PaintEx, ‘Data base P-page’ denials, omissions, and a host of arbitrary caps. Some of the caps are related to clear coat labor and materials or refusal of necessary body shop materials. Some itemized deficiencies are for parts cost, OEM vs aftermarket and used parts that we refuse for relevant reasons.”

The tactics Mike is suing over, unfortunately, aren’t dissimilar from what Leif’s Auto Collision Centers sees in its Oregon shops. Both Orso and Leif Hansen see the same “deny, delay, defend” protocol from a myriad of insurance companies.

Like Orso, Leif sees a problem with some insurers refusing to pay certain labor rates, which is why he recently had an independent survey conducted to verify his prices were well within the market. Indeed they are.

Orso is fed up with seeing these same tactics over and over again and isn’t afraid to head to court seeking remedy.  “We keep seeing the same nonsensical issues over and over it’s ridiculous,” he said. “I think this going on more and more because the shops don’t push back or… appraisers keep dictating the same nonsense over and over in shops everyday everywhere. After a while it becomes the normal practice. Some shops have never known it differently. We’re told it’s ‘market price’ that sets rates and fees. We think it’s the allocated and dictated rates and fees that set the market price. I’m sorry to let the cat out of the bag but not all shops are the same.”

As dealing with insurers is often times cumbersome, Orso has an in-house attorney to deal with lawsuits. In a 2010 appeals suit vs. Adirondack— a lower court ruled Orso didn’t have standing to sue for recover due to policy restrictions on assignments— Onondaga County Supreme Court Judge William D. Walsh reversed the lower court’s ruling, affirming that by law, assignments of claim proceeds on post-lost assignments are indeed allowed under NYS law regardless of policy language. Orso’s in-house attorney, Joseph Talarico Jr. said lots of money was spent on the court process.

“Mike spent big bucks to file that appeal,” Talarico said. “There is a lot involved in preparing an appeal but he knew a lot was at stake. It was clear the insurance side knew the potential also based on the effort expended trying to defeat us. By winning Mike cleared the way for himself and others to use the assignment process.”

The assignment process is important because, as Orso points out, it allows a person with knowledge to negotiate a car’s repair settlement.

“We are willing to negotiate if authorized,” Orso said. “If Orso’s handles the loss and negotiates, it’s because most consumers don’t have the time or expertise to pursue collection on their own.”

While lawsuits with insurance companies who continue these practices isn’t ideal for Orso, he notes the alternative simply isn’t sustainable.

“No one likes to go this route, it’s expensive and time consuming but the cost of doing nothing as you can see by the numbers is unsustainable.”

“I didn’t wake up one day and say ‘I think I’ll fire off a few lawsuits,’” Orso continued. But, he mentioned the importance of pleasing the customer, making sure they have upto- date equipment to handle repairs and keeping up-to-date with environmentally friendly products.

“Right now we’re looking into installing two new energy efficient spray booths,” he said.

As Orso explains, he’s in the business to make money, and what he’s seeking from insurance companies is that they adhere to the law and stop with the endless deny, delay, defend tactics.

“Interesting, we’re finding insurance attorneys and deposed claims personnel are stating that appraisers in the field DO HAVE authority to settle claims and negotiate,” Orso said. “We all know that’s not what shops hear or experience every day. We notify every company of deficiencies in writing. Some requests are disregarded or responded to late by the same repeat offenders. You know who they are.”

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