Supreme Court Sides with Auto Glass Shop in Lawsuit

The four-year legal battle between a Vermont auto repair shop and Nationwide Mutual Insurance Company (Nationwide) has come to an end. The Supreme Court ruled in favor of Parker’s Classic Auto Works, Ltd. (PCAW).

A Superior Court judge previously ruled to throw out the jury’s verdict that was in favor of PCAW. Now however, the auto body shop will gain $41,737.89 from Nationwide due to the Supreme Court’s ruling in late June. The Vermont Supreme Court, provided a 14-page unanimous decision that was authored by Justice Karen Carroll, which ruled in favor of PCAW.

“The jury awarded plaintiff damages.  After the trial the superior court concluded that, as a matter of law, plaintiff could not show that his assignors were damaged by a breach of contract by defendant.  We reverse this determination, vacate the judgment that was entered in favor of defendant, and remand with direction to the superior court to reinstate the jury’s verdict and its award of damages,” said Carroll.

According to court documents, PCAW claimed Nationwide “failed to pay enough to cover needed repairs to vehicles that had been in collisions.” The allegations were also referred to as “short-pay” throughout PCAW’s complaint.

PCAW combined more than 70 claims with matching policies for the lawsuit. The auto body shop stated it fixed each vehicle to “pre-accident condition” as well as receiving assignments of benefits (AOB) from policyholders before sending each claim to Nationwide.

“In each instance, defendant paid less than what plaintiff had billed to complete the repair,” said Carroll in court documents.

According to court documents, Nationwide at first denied owing PCAW any money in regard to its submitted short-pay allegations as well as stating it was not responsible for any associated damages.

“With no definition of ‘damage’ in the policy, we construe this term consistently with general principles of the law of remedies, interpretations of the standard collision-insurance policy as a whole, particularly the limitation-of-liability clause,” the decision stated.

In previous court documents, Nationwide claimed it was not required to pay both “repair and labor costs” since its policy provided payment for labor costs under its towing clause but not the “collision-coverage insuring” clause.

Justice Carroll denied that argument in her decision.

“Labor is an indispensable component of the cost to make a repair. Moreover, defendant’s opening statement and the only witness that defendant offered at trial effectively admitted that the policy covers, to some degree, labor costs for making a repair,” said Carroll.

The Supreme Court found Nationwide at fault for not fully paying for each claim PCAW submitted between 2009 and 2014. Now Nationwide must pay the auto body shop just over $40,000, according to court documents.

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3 Responses to Supreme Court Sides with Auto Glass Shop in Lawsuit

  1. Kerry Soat says:

    The beauty of this is it establishes a precedent. So the next case may not need to go all the way to the Supreme Court.

  2. C. Colo says:

    The majority of insurance companies have had the regulators in their back pocket for years, while the insurance companies regularly under-pay claims. Those who fight back are punished by being black-balled. The hacks who are dishonest and don’t repair the the vehicle properly, like by omitting needed parts, flourish while some of the insurers even give parts to body shops which they don’t need, for favors.

  3. Pingback: 4 year court battle between Nationwide and a VT. auto glass shop ends - IAS Auto Glass Solutions

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