The California Senate Committee on Insurance has passed Senate Bill 551, a bill that would prohibit an insurer from recommending a motor vehicle be repaired at a specific shop unless the insured requests such a referral. It allows an insured or other claimant or repair dealer to recover damages, if harmed by a violation of this provision.
The Beverly Hills attorneys who filed over 2,000 lawsuits against auto repair shops and other small businesses in California, making headlines throughout the state and leading to calls for action against them by state legislators and an investigation by The State Attorney General, were placed on involuntary inactive status by the State Bar Court in late May. In other words, their licenses to practice law have been suspended as disciplinary proceedings toward possible disbarment continue. In its ruling, the State Bar Court agreed with its prosecutors that the lawyers had filed thousands of frivolous lawsuits with the intent of forcing quick settlements.
Bill Heard Enterprises, the world’s largest Chevrolet dealership group, employing approximately 2,700 people, announced on Sept 24 that it would cease operations at its 13 stores, almost all of which operated body shops. The 13 locations are in Alabama, Florida, Georgia, Nevada, Tennessee and Texas.
On Sept 29, Heard filed for Chapter 11 bankruptcy protection blaming a ‘perfect storm’ that included fuel price increases and the Chevrolet product mix of trucks and SUVs. It also said 10 Heard stores had used floorplan loans from GMAC Financial Services, which GMAC pulled Aug. 21.
Bill Heard Enterprises’ dealership in Sugar Land, Texas, is also apparently closed.
None of the Heard dealerships is operating, attorney Robert Rubin said at the bankruptcy hearing Monday, Sept. 29. Rubin is a lawyer representing Bill Heard Enterprises.
The Texas Senate on May 27 passed House Resolution 1131, the insurer-owned repair shop legislation, by a unanimous vote of 31 to 0. On April 8, the Texas House of Representatives passed the bill by a voice vote.
Body shops and consumers in Texas have reason to celebrate! Republican Texas Governor Rick Perry signed into law on June 20 Texas House Bill 1131, the Insurer-Owned Repair Facility Legislation. Earlier, the Texas Senate passed the legislation by a unanimous vote of 31 to 0.
Late breaking news
The State Bureau of Automotive Repair (BAR) announced on July 2 that it has filed accusations against five more Caliber Collision Center locations, including El Cajon (N. Johnson Avenue), Riverside (Indiana Avenue), Costa Mesa, Chino and Murietta.
The California Autobody Association (CAA), which had been "patiently waiting this year," according to Executive Director David McClune, to see if Texas would be successful in passing legislation prohibiting insurers from owning collision repair shops, now says it may be ready to try again.
Aftermarket parts manufacturers and CAPA are likely vexed by the newly-released Crash Parts Certification Study, published in July by the California Bureau of Automotive Repair (BAR). The report blasts the parts certification process, concluding that "certification has no value to the customer . . . if there are problems with the certified product the certifying entity does not stand behind their own certification process."
California's anti-steering legislation, SB 551, took a major step forward on July 9 when an amended version passed the Assembly Insurance Committee by unanimous vote and then moved to the assembly floor. Bill sponsor Sen. Jackie Speier (D-San Francisco) plans to move forward after she and supporters of the bill - the California Autobody Association (CAA) and the State Department of Insurance - can work out clarifying language. The bill passed the State Senate in early June.