Connecticut Attorney General Richard Blumenthal wants to intervene in a class action lawsuit against The Hartford Insurance Co. to help “prevent unfair and biased automobile body damage appraisals.”
The Auto Body Association of Connecticut (ABAC) said Blumenthal has asked the Stamford Superior Court for permission to appear amicus curiae and file a brief in support of the ABAC motion for a permanent injunction.
In Nov. 2009, a jury awarded $15 million to Connecticut auto body repair firms, saying The Hartford Insurance Co. engaged in unfair business practices.
“Atty. Gen. Blumenthal has been a champion of small business and has been with us every step of the way,” says attorney David Slossberg of Hurwitz, Sagarin, Slossberg and Knuff, of Milford, co-counsel for ABAC. “The AG’s intervention in this action sends a strong message – The Hartford’s unfair trade practices must stop, it must follow the law, and the hundreds of auto body shops in our state must be able to run their businesses on an even playing field, absent The Hartford’s influence and control. We are delighted with this development.
“We trust that the results of this action will help the court conclude what has been a significant injustice,” says Bob Skrip, president of ABAC and owner of Skrip’s Auto Body Inc., Prospect. “Blumenthal is a longtime advocate on our behalf against insurance companies that try to take advantage of our businesses and we are grateful for this latest support.”
The lawsuit filed by ABAC and three of its members alleged that the insurance company artificially suppressed body shop labor rates by eliminating the use of independent appraisers and relying exclusively on its own automobile service representatives to perform appraisals so the company could control their content, including labor rates. The result: consumers do not get fair, independent appraisals of the damage to their automobiles.
The jury agreed.
Following the verdict, ABAC filed a motion for a permanent injunction to prevent the unfair business practices and asked the court for punitive damages in addition to the $15 million. Those motions are pending.
Blumenthal’s petition said “the State seeks to prevent unfair and biased automobile body damage appraisals and unfair suppression of labor rates – conduct which not only violates (State law), but which also has a direct and adverse effect on Connecticut’s general economy.”
Further, it said the “State has an interest in preventing the unfair suppression of labor rates that significantly harms the State’s economy and results in extreme economic hardship for independent automobile body repair shops.”
In its ruling in November, the jury agreed with lawsuit claims that The Hartford improperly forced auto body shops to charge lower labor rates than general market conditions otherwise allow, in effect strangling the industry by exerting undue influence on its appraisers.
The lawsuit said when customers need auto body repairs following an accident, employees of The Hartford, “customer care team specialists,” were instructed to direct the customers to a preferred shop in The Hartford’s “customer care repair service program.” Consumers were often pressured to abandon their choice in favor of The Hartford’s preferred shop, allowing The Hartford’s appraisers to exert greater control over the repair.
“Automobiles have become increasingly sophisticated over the years. Ongoing training is necessary. Expensive, sophisticated equipment is continually required to keep up with ever-more complex vehicles. Those who work in our profession today are extremely talented craftsmen and professionals. It’s time for compensation to catch up to our expenses,” Skrip says.
“The Hartford handles only about 7 percent of the auto insurance business in Connecticut,” Skrip says. “We anticipate pursing legal action against other insurance companies that insist on engaging in similar illegal actions in Connecticut.”
“Enough is enough,” Skrip adds. “We can no longer allow huge insurance companies to force their will on businesses and consumers. It’s your car. It’s your choice where to have it repaired.”
The ABAC is a statewide consumer advocacy association dedicated to the advancement of the collision repair industry. Additional information is available at its Web site, www.abaconn.com.
