ORLANDO – A lawsuit alleging that insurance companies, including State Farm, are pressuring auto body and repair shops to use substandard parts hit the skids in the 11th Circuit Court.
In Parker Auto Body et al v. State Farm et al, the plaintiff is suing State Farm Insurance and more than 50 other automotive-insurance providers, alleging that the defendants have joined together to leverage their collective market power and exert control over a wide range of the collision-repair industry.
This includes, but is not limited to, fixing the cost of labor rates, controlling the cost of replacement parts, forcing auto body and repair shops to use substandard or even dangerous replacement parts, compulsory use of a parts-procurement program that directly financially benefits State Farm and indirectly benefits the remaining defendants.
In addition, the claim alleges the defendants are guilty of boycotting shops that are unwilling to comply with either their decision to control prices or their demands to use substandard and improper parts, and interfering with the plaintiff’s current and prospective business relations by intentionally misrepresenting and making knowingly false statements regarding the quality, efficiency and ethical reputation of his business.
The claim goes on to contend the defendants exerted economic duress and coercion upon both the plaintiff to and upon consumers to bow to their demands.
This includes making direct threats to consumers to refuse to cover portions of their repairs if they continue to patronize the plaintiff’s business to the point where the defendants' behavior has done serious harm to the competitive environment in the body-shop industry.
“It's an unfair practice and we think vehicles should be repaired the way the manufacture says they should be,” Matt Parker, owner of Parker Auto Body, told the Louisiana Record. “Every time you want to represent the consumer, the insurance company wants you to do things the cheapest way possible and the end result is not safe.”
He alleges that State Farm Insurance and the other defendants have unfairly pressured him to use substandard and after-market parts, to reduce costs, under the threat of losing favored status.
Parker said insurance companies have been applying pressure to auto body and repair shops to fix vehicles at the lowest cost possible for the last 20 years.
“We have to deal with this kind of pressure all of time and the response is typically to try to make the body shops look like the bad guys,” he said. “But the person really getting hurt is the consumer.”
Parker contends that these policies have been driving up insurance rates across Louisiana for decades.
“The insurance companies use these delay, deny and defend tactics to make consumers choose between accepting their policies or fighting it out in court,” he said. “It's become a real nightmare.”
Right now, Parker's lawsuit remains in stasis. His legal team missed a deadline to file an appendix with the court and the 11th District Court dismissed the case on Oct. 4, according to an article on www.repairdrivenews.com.
Parker said there still is a plan to continue pursuing the claim.
“But it is progressing at a snail's pace,” he said.