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Monday, 09 October 2017 22:00

PA Auto Body Shops’ Owner Files Lawsuit Against Insurance Companies

Written by Phil Ray, Atloona Mirror

The owner of two Altoona-area auto body shops has filed another lawsuit against many of the nation’s largest insurance companies, claiming they refuse to pay the full costs of making necessary repairs to damaged vehicles.

Ron Perretta, who owns Professionals Auto Body, with repair shops on East Pleasant Valley Boulevard, Altoona, and Plank Road, Duncansville, in his second lawsuit is asking for more than $8 million in damages that include insurance company underpayments, interest on those alleged outstanding debts and his “administrative costs.”

 

The Altoona businessman is also seeking punitive damages against the 32 insurance companies named as defendants in the lawsuit filed August 28 in the Blair County Court of Common Pleas.


Attorneys for three of the insurance companies sought to move the lawsuit to the U.S. District Court in Johnstown and notified U.S. District Judge Kim R. Gibson that if he approves the transfer, they will “promptly” ask that the case be transferred to the Middle District of Florida as an addition to lawsuits against the same insurance companies, including Perretta’s original lawsuit, filed by auto body shops across the nation.


All those lawsuits have been consolidated into one legal action being heard by U.S. District Judge Gregory A. Presnell in Orlando.


The auto body shops contend that the insurance companies have violated federal antitrust laws by agreeing to set prices for labor, materials and other expenses of repairing damaged vehicles. The shops claim they are forced to use “inferior parts” and reduced labor when making repairs.


The insurance companies, the auto body companies say, subtly enforce their price structures by having Direct Repair Program agreements with local garages, guaranteeing them business in return for adopting the insurance companies’ cost structures.


Perretta said he refuses to sign DRP agreements, but states in his lawsuit that his company has been “put in the untenable position of having to provide all necessary repair services in order to bring each damaged vehicle back to its pre-loss condition without ever receiving full reimbursement for the labor and costs involved in making those necessary repairs, which has resulted in (Professionals) regularly making repairs without compensation and to its own financial detriment.”


He cited one example in which a customer brought in a 2012 Nissan Armada last February.


The customer decided to make repairs to the vehicle rather than have it declared a total loss.


A licensed appraiser prepared an estimate to repair the vehicle, but the insurance company refused to pay $2,105.


Professionals is pursuing the amount not paid by the insurance company after obtaining the customer’s authorization.


In 2015, Presnell dismissed the multiple lawsuits, contending the auto body shops did not provide enough facts to support a violation of antitrust laws, but a three-judge panel of the 11th Circuit Court of Appeals in Atlanta reinstated the lawsuit, saying, “We determine that the shops have pleaded enough facts to plausibly support their federal antitrust and state court claims.”


Attorneys for Allstate Insurance Co., Encompass Home and Auto Insurance Co. and Esurance Insurance Co. have asked that the latest lawsuit filed by Professionals be moved to the federal court. The other defendants have joined that request.


In the removal request submitted by attorney Jack Hall of Carnegie, it was pointed out that Professionals is seeking $403,822 from the three companies.


The insurance companies “deny that (Professionals) is entitled to any relief, based on the allegations of the complaint” but state that since the amount of money being asked exceeds $75,000, the lawsuit qualifies for removal to the federal court system.


The removal request also contends Professionals “has pleaded no facts that would establish a conspiracy or other connection among defendants that might support a finding of joint and several liability.”


It addressed the example used in the Professionals lawsuit of the customer who brought in the Nissan for repairs, stating that claim should be against the customer’s insurance company only and no other insurer because, it stated, “there are no allegations establishing a basis for joint and several liability.”


The Professionals lawsuit was filed by attorney Traci L. Naugle of Altoona.


We thank the Atloonta Mirror for reprint permission. 

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