Insurers Seek Dismissal of Class Action Collision Repair Suit

Several insurers have filed motions to dismiss a class action suit filed by a Downington, Pa.-based collision repair shop. Crawford’s Auto Center filed the suit in April under the Racketeer Influenced and Corrupt Organizations Act (the RICO Act) and names several insurers, including State Farm, Allstate, Geico, Progressive, Farmers, Liberty Mutual and Nationwide. The suit charges the insurers with market control, price-setting, steering, information-sharing and more.

State Farm, Geico, Progressive and several others have filed motions for dismissal for a variety of reasons.

“ … Plaintiff must allege facts showing that its alleged injuries were caused by one or more of the alleged wire fraud violations forming the purported pattern of RICO activity,” writes State Farm in its memo in support of the motion to dismiss.

Additionally, State Farm alleges that CAC “gives no specific details of the alleged transactions” (particularly in regard to payment issues).

“Plaintiff merely alleges that State Farm’s payment amount differs from the amount charged by plaintiff and conclusorily asserts that its number is correct and State Farm’s number is incorrect and fraudulent,” writes State Farm. “Plaintiff does not give any specifics as to what components of State Farm’s estimates and supplements it claims are incorrect or why they are incorrect.”

The motion continues, “Furthermore, although plaintiff apparently is alleging that State Farm’s misrepresentations consist in asserting that plaintiff’s charges are not consistent with prevailing rates, plaintiff does not allege what the prevailing rates would or should have been or even that plaintiff’s charges were consistent with the prevailing rates.”

State Farm also alleges that “the purported fraud boils down to no more than plaintiff’s frustration with competitive market forces and its agreements with State Farm’s and the other defendants’ methods of determining prevailing rates.”

Geico also addresses the prevailing rate allegations in its motion to dismiss—but in a different way.

“If the amount Geico pays is, in some way, too low, then the result would be that Geico’s customer allegedly would not be receiving the benefit of the bargain (i.e., auto insurance coverage in exchange for premiums), and would have to pay more to plaintiff for body work for a quality repair, and thus would have a claim against Geico,” writes the company.

Similarly, the insurance company claims that CAC “has failed to allege that [it] acted in a manner that harms [the] plaintiff.”

Other insurers, including Progressive, Farmers, 21st Century, Allstate and Liberty Mutual also have filed a joint motion to dismiss.

Crawford’s is seeking certification of the class; judgments against each of the defendants; actual and compensatory damages; restitution; punitive damages; court costs; and prejudgment and post-judgment interest.

At press time, the court had not yet ruled on the motions. In response to the motions, Crawford’s had amended its complaint and added another named plaintiff, K&M Collision LLC, based in Hickory, N.C. Stay tuned to™ for more information as it becomes available.

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