From the Desk of Mike Anderson: Industry Misses 2 Important Aspects of John Eagle Collision Case

From the Desk of Mike Anderson: Industry Misses 2 Important Aspects of John Eagle Collision Case

In the 18 months since a Texas couple was awarded $42 million by a jury who found a dealership body shop had improperly repaired the vehicle in which the couple was injured in a subsequent accident, I’ve probably been asked about the case at least 20 times a week.

Even now, I continue to get phone calls, emails and questions about it from those in my classes.

Based on those exchanges, I think there are two important things related to what happened that a lot of people seem to miss.

The first is a fundamental difference between a warranty and a liability. We all understand a warranty, defined as the “written guarantee issued to a purchaser.” Let’s say you repair Suzy Smith’s car, and she later sells that car to Joe Brown. Joe later notices the paint is starting to flake off the bumper, and he brings the car back to your shop. Under the terms of the warranties I see most shops providing to their customers, you can kick Joe to the curb. Most shop warranties say the work is guaranteed only to the customer who had the work done at the shop. It doesn’t transfer to any subsequent owners of that vehicle.

But liability, defined as “the state of being responsible for something,” is different. I will preface this by saying I’m not an attorney, but from my understanding, if you repaired Suzy Smith’s car and didn’t do something related to the safety of that vehicle, you could be held liable even if it’s Joe Brown, as a subsequent owner of that car, who is injured in the vehicle based in whole or in part on the repairs you did.

That’s essentially what happened in the Texas lawsuit. Matthew and Marcia Seebachan purchased a used Honda Fit that had previously been repaired by the John Eagle Collision Center. If the Seebachans had decided the paint didn’t match and took it back to the dealership, John Eagle wouldn’t have to warranty the work, presuming the shop’s warranty extends only to the owner who had the work done to the car.

But the shop was still found liable for the couple’s injuries in the subsequent accident. The jury ruled the repairs made to the vehicle before the Seebachans owned it weren’t performed correctly. The replacement roof the dealership had put on the vehicle was bonded rather than welded to the vehicle as called for by Honda---and the roof’s separation in the Seebachan’s collision, the jury found, led to the degree of their injuries.

To my way of thinking, that means you’re still potentially liable for the repairs you made to a vehicle eight years ago, even if that vehicle has been resold two, three or 10 times since. I see too many shops confusing “warranty” and “liability.”

I haven’t studied all the documents and transcripts from the case, but the second key point I think a lot of people miss is this: If you tout your shop as being certified by certain automakers, yet you fail to follow the repair procedures called for by those automakers, that could be construed as negligence, which is defined as “failure to take proper care in doing something.”

Again, I’m not an attorney. But the legal argument that could be made goes something like this: As a car owner, I saw on your website, in your advertisement and on your signage at your shop that you’re certified by ABC Automaker. That tells me you are going to do everything ABC Automaker says to do in repairing one of their vehicles. If you deviate from that, that’s negligence on your part because you portrayed yourself as being certified and knowledgeable in repairing ABC Automaker’s vehicles.

I think that could conceivably extend beyond just automaker certifications. Think about other ways you portray yourself as a qualified expert, whether it be the I-CAR Gold Class designation, or training or certifications from other organizations.

Warranty, liability and negligence are three terms this industry really needs to understand.

Mike Anderson

Mike Anderson is a columnist for Autobody News and president of Collision Advice, a consulting company for the auto body/collision repair industry.

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