$42 million verdict in crash case is 'clarion call' to body shops and insurers, lawyer says

$42 million verdict in crash case is 'clarion call' to body shops and insurers, lawyer says

- in Automotive
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A Texas jury concluded that substandard roof repairs to this used 2010 Honda Fit aggravated the effects of a collision in December 2013. Red arrows show where the roof detached during the crash.

To Dallas lawyer Todd Tracy, a $42 million jury verdict for substandard repair work on a 2010 Honda Fit should sound a clarion call to dealerships, insurers and automakers.

“That’s going to cause alarms to go off and red flags to go off,” says Tracy, whose firm represents plaintiffs in vehicle safety and crashworthiness cases, including the owners of the Fit.

John Eagle Collision Center, a body shop associated with John Eagle Auto Group in Dallas, used glue instead of welds to fix hailstorm damage to the Fit’s roof, although Honda’s repair manual calls for 108 roof welds.

The shop took the cheaper (by $3,000) but unsafe route under pressure from State Farm Insurance Co., the vehicle’s insurer, Tracy told Fixed Ops Journal. John Eagle’s publicist declined to answer questions about the case.

If the allegation can be proved in court, State Farm could be found liable, says Tom Baker, a tort and insurance law expert at the University of Pennsylvania Law School.

“The elements of a tort action are having a duty of care and then breaching it by action that’s unreasonable,” Baker said. “From a tort law perspective, if you got an automobile insurer that’s pressuring dealers to cut corners in doing repairs in ways that make the cars unsafe, I’d take that case.”

Insurer sued

Tracy’s clients, Marcia and Matthew Seebachan, were injured in December 2013, when a Toyota Tundra struck their Fit head-on, trapping them inside the burning wreckage when the roof collapsed. They had bought the used car four months earlier, and the roof repair wasn’t included in the vehicle history report, according to legal documents.

The Seebachans filed a federal lawsuit in October that accuses State Farm of negligence, deceptive trade practices and breach of warranty for allegedly demanding that the shop not follow more expensive manufacturer repair standards.

The suit cites Honda’s 2008-13 Fit Body Repair Manual, which says: “Any person who intends to use a replacement part, a repair procedure or a tool that is not recommended by Honda must determine the risks to their personal safety and the safe operation of the vehicle.”

State Farm hasn’t filed an answer in the case. A company spokesman said in a statement: “The comments made about State Farm cited in the lawsuit (against the repair facility) are not supported by the facts. Additionally, they are not in line with State Farm’s mission to serve the needs of our customers and our long, proud history of advancing vehicle safety.”

In October, a Dallas County jury decided the Seebachans’ injuries were worth about $42 million and held John Eagle Collision Center 75 percent liable. The jury attributed the remaining liability to the Tundra’s driver.

After the verdict, the body shop and the Seebachans reached a confidential settlement for “a lot of money” says Tracy, who made a presentation about the case at the Specialty Equipment Market Association trade show last month in Las Vegas.

Repair shops ‘bullied’

Insurer pressure on repair shops is widespread, affecting “millions of vehicles,” Tracy says. “It happens in every shop across the country numerous times a day.”

His firm is handling six similar cases in Texas, three of them wrongful-death suits and three involving “unbelievably bad catastrophic injury cases,” he says.

“I’m trying to get them to trial as quickly as possible,” Tracy says. “Juries don’t like repair facilities getting bullied by the insurance companies.”

Repair facilities that don’t follow automakers’ specifications under pressure from cost-conscious insurers and claims adjusters put themselves at risk of liability, Tracy says, but adds that shops are vulnerable to such demands if they want to do work covered by insurance.

In a joint statement, John Eagle and Tracy said the dealership is “making a commitment to encourage the collision repair industry across the nation to follow OEM bulletins instead of insurance companies’ mandates when they repair vehicles.”

The statement also said the dealership wanted to settle the case before trial, but State Farm “elected to proceed with the trial.”

Tracy argues that automakers should make their repair specs available online without charge to every shop that wants them.

“They are the true experts in design and engineering, and they know best how to comply with all the regulations and be crashworthy,” he says.

But insurers remain “the big elephant in the room,” Tracy says.

“They’re holding a gun to the repair shops’ heads: ‘If you don’t kowtow, we’re not going to send you any business.’

“That’s extortion.”

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