GEICO Settles Lawsuit with Gunder's Auto Center - BodyShop Business

GEICO Settles Lawsuit with Gunder’s Auto Center

Insurer avoids deposition of claim reps by paying Gunder's full billing and legal fees of $3,593.09.

Gunder’s Auto Center announced that GEICO has elected to settle a lawsuit Gunder’s filed on behalf of their customer rather than concede to deposition of their claims representatives.

Upon deeming the customer’s vehicle a total loss and disputing Gunder’s billing for incurred charges (including a parts return fee), GEICO elected to post what is referred to as a “bond” through the county courts in the amount of Gunder’s billing ($972), which allowed GEICO to then take possession of the customer’s vehicle. As required, GEICO provided full payment of the disputed amount to the Clerk of Courts and was issued a “bond,” which legally required Gunder’s Auto Center to relinquish the vehicle along with their possessory lien on that vehicle.

Gunder’s, according to stipulations in the bond statutes, was then confronted with having to file a lawsuit against the vehicle owner as the only means to exercise their right of recovery. If Gunder’s failed to file a lawsuit within 60 days, they would have then forfeited their right of collection, and the monies would have been refunded to GEICO, with Gunder’s receiving nothing.

Ray Gunder, owner of Gunder’s, proceeded to file the lawsuit against his customer, who he says understood the issues and did not dispute any portion of their billing. Gunder also claims that the customer was not aware of the bonding of his vehicle, claiming he would testify that he had not even been aware of GEICO taking possession of his vehicle until it had been removed.

In the process of arranging the depositions of GEICO’s claims manager and the field claims rep who bonded the vehicle, GEICO elected to avoid the depositions by paying Gunder’s their full billing as well as all legal fees and costs of $2,621.09 for a total amount of $3,593.09.

“I surely hope this sets precedence that handling returned parts, with all the administrative efforts, costs and assumed liabilities involved, is not merely a ‘cost of doing business,’” said Gunder. "As I have learned from my good friend and business consultant Barrett Smith of Auto Damage Experts, performing such activities for free could very well be ‘the cost of going out of business.’ After setting this legal precedence, I hope to resume a respectful relationship with GEICO for the benefit of our mutual customers and our respective companies.”

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