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Monday, 19 March 2018 17:17

$713,000 Lawsuit Against Progressive Filed by PA Shop Owner

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On December 4, 2017, the body shop filed an amended complaint and brought four counts against Progressive: breach of contract; bad faith; intentional interference with business relations; and quantum meruit.

 

Progressive attempted to dismiss the amended complaint. According to court documents in February (2018), the court denied Progressive’s motion to dismiss Professionals’ claims of breach of contract, bad faith and unjust enrichment claims. However, the court granted the insurance company’s motion to dismiss the bad faith claim in regard to third-party claimants and the causes of action that accrued before August 23, 2015 due to the statute of limitations. The court also granted Progressive’s motion to dismiss Professionals’ tortious interference with business relations claim.

 

“This all really just comes down to one thing---the insurance company has a contract with their customer to bring their vehicle back to its pre-loss condition and they are breaching that contract,” said Perretta. “Because of that, that’s where this judge [Judge Kim R. Gibson] looked at this and said ‘Yes, these counts are true. They are accurate.’ We’ve proven that.”

 

He said the other pertinent issue is that insurers want to pay one rate in the market.

 

“It has been proven over and over again that a rate is not one number. The rate is a range of numbers,” said Perretta. “In a market, the range could go from $50 an hour to $120 an hour.”

 

He said that shops that aren’t trained and don’t have the proper equipment or facilities to repair cars are paid the same rate by the insurance company as the shops that have the proper facilities, training and equipment.

 

“That makes no sense,” said Perretta. “Any judge who looks at this whole situation is going to apply the law based on the contract and… as this judge mentioned in his opinion.”

 

Breach of Contract


According to the court documents, Progressive argued that Professionals did not state a plausible breach of contract claim because it didn’t plead the existence of a contract, the terms of the contract and damages. The insurance company also stated that the body shop did not have standing “…to pursue a breach of contract claim on behalf of third-party claimants who, by definition, are not parties to any agreement with Progressive.”


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