A federal court has denied most of Progressive’s motion to dismiss a lawsuit filed by Professionals Auto Body of Altoona and Duncansville, Pa.
Judge Kim Gibson of the U.S. District Court for the Western District of Pennsylvania denied Progressive’s motion to dismiss the case for three of the lawsuit’s four claims, which means Professionals Auto Body can pursue its case against Progressive for alleged breach of contract, bad faith and unjust enrichment.
Gibson granted Progressive’s motion to dismiss the lawsuit’s claim of tortious interference against the insurer.
In August 2017, Professionals Auto Body owner Ron Perretta filed a lawsuit against more than two dozen insurers – including Progressive – in the Blair County (Pa.) Court of Common Pleas. The lawsuit contends that the insurance companies don’t pay enough to cover the costs of making proper repairs, and notes that Professionals Auto Body entered into assignment-of-proceeds agreements with consumers to recover any unpaid balances for the shop’s repairs.
In September, the county court granted Progressive’s request to break off from the larger case. The case then moved to the U.S. District Court for the Western District of Pennsylvania, where Progressive filed a motion to dismiss the case.
Gibson ruled that Professionals Auto Body has stated “plausible” claims for alleged breach of contract, bad faith and unjust enrichment. To win the case, Professionals will have to present evidence to substantiate those claims.
“Professionals alleges that Progressive failed to reimburse it for the full amount of the reasonable and necessary repairs without a valid justification,” Gibson wrote in her analysis of Professionals’ bad faith claim. “Furthermore, Progressive knew of or recklessly disregarded this lack of a reasonable basis because it failed to fully reimburse Professionals despite Professionals informing Progressive on several occasions that it had failed to pay the full cost of all reasonable and necessary repairs on each of the vehicles that Professionals serviced. Professionals began sending ‘supplements’ to Progressive notifying them about the unpaid repairs as early as the fall of 2013. The fact that Progressive has a long history of failing to fully reimburse Professionals supports Professionals’ argument that Progressive acted in bad faith.”
