In its memorandum on the appeal, the court stated, “The district court erred, because the contract does not expressly state how the parties must determine the loss to the vehicle. Hansen has sufficiently pled that the industry standards and practices—here, the manufacturer’s recommendation that diagnostic scans be run every time the particular truck model at issue is involved in a collision—effectuated a potentially reasonable contractual expectation that GEICO would cover the cost of diagnostic scans in these circumstances. Nor do the exclusions on liability make it unreasonable to expect that the cost of a diagnostic scan, when necessary for repair, would be included in the cost of a repair. In fact, GEICO conceded that in some cases, it will reimburse for the cost of performing diagnostic tests.”
During the appeal Dan Goldfine, GEICO attorney, argued that the policy does not include coverage for pre- and post-repair scans, stating “The scan is not the damage to the vehicle.”
At the pressing of Hansen’s attorney Robert Koch, Goldfine confirmed that GEICO sometimes pays for scans. He said, “We would pay for a scan, assuming that the repair shop presented a legitimate reason for doing the scan … There are occasions when there is damage to the vehicle that relates and ties to the scan.”
Although it was not included in the court record, Koch confirmed during his rebuttal on May 13 that Hansen did pay for his own scan and found damage to the vehicle. This information will be added to the court record now that the Ninth Circuit Court has reversed and remanded the case.