A Florida judge ruled recently that although State Farm may have made defamatory statements about Gunder’s Auto Center of Lakeland, Fla., the shop failed to prove that the insurer’s primary motive in making such statements was to harm the shop rather than further its own cause.
In a decision filed in U.S. District Court on March 26, Judge Steven Merryday dismissed Gunder’s Auto Center’s lawsuit against State Farm. In the suit, Gunder’s alleged that State Farm “intentionally and unjustifiably interfered with [Gunder’s] relationships with its customers” by falsely stating to insureds that the shop overcharged for repairs and completed repairs in an untimely, inefficient and substandard manner.
The judge noted that Gunder’s Auto Center and State Farm have a contentious history the shop was terminated from State Farm’s DRP program in 2004, and case records also showed that Gunder’s objected to State Farm’s method of compensating repair shops for paint and materials.
In the case, State Farm argued that its communications with insureds about Gunder’s were privileged because the insurer was communicating with its claimants “about an issue in which they have a common interest the prompt and full repayment of repairs,” the court decision states.
Although Merryday agreed that the communications between State Farm and claimants were privileged, he noted that they could still be considered slanderous if Gunder’s could prove State Farm acted with “express malice,” meaning, “ill will, hostility or evil intention to defame and injure.”
The shop submitted affidavits from several claimants who said they would have used Gunder’s for repairs had it not been for statements about the shop made by State Farm. Regarding State Farm’s claims that Gunder’s overcharges for repairs, the shop submitted proof that State Farm routinely paid for repairs at other shops that charged rates similar to or higher than Gunder’s.
In the end, Merryday ruled that the evidence provided by Gunder’s was insufficient and failed to show “express malice” on the part of State Farm: “The plaintiff fails to present evidence showing that State Farm’s ‘primary motive’ was to harm the plaintiff rather than to further State Farm and the insured’s mutual interest in securing timely, quality repairs to the insured’s automobile,” the decision stated.
Download a copy of the court decision