A District Court judge has thrown out Allstate’s request for a summary judgment on claims of tortious interference and violation of unfair business practices law by Mid Island Collision of Rockville Centre, New York, allowing the case to move forward in Federal Court.
In 2007, Mid Island brought Allstate to court, alleging that the insurer pressured it to accept lower labor rates and refused to negotiate labor rates in good faith. When Allstate policyholders began to complain that the insurer would not approve Mid Island’s labor rates, Mid Island began to testify in assignment of proceeds lawsuits involving policyholders who pursued the difference between Allstate and Mid Island’s labor rates. Allstate paid Mid Island $38 per hour, but Mid Island’s labor rate was ordinarily $55 to $65 per hour.
Subsquently, Allstate told Mid Island it would not negotiate a labor rate with the shop under any circumstance. Further, Allstate allegedly told several policyholders that they should not use Mid Island because the shop overcharged and did not provide quality services.
The Court is permitting Mid Island to file an amended complaint to add defamation, but has requested that the shop submit specific evidence. Mid Island General Manager Brian McGauvran said the shop will be submitting around 200 examples of defamation to support its case.
“We have written affidavits from customers, recordings and more,” McGauvran said. “One of these customers is a judge.”
Mid Island has over 50 employees and is a multi-million-dollar shop. One of the shop’s allegations is that Allstate was sending customers “fraudulent” and “doctored” Notice of Rights. According to McGauvran, the Notice of Rights were supposed to say, “At your request, we can send you the names of shops that will do the repair work at our cost,” but he says Allstate was leaving out “at your request.”
McGauvran said the shop was left with no choice but to pursue legal action against Allstate.
“They were totaling cars to punish us and steering,” McGauvran said. “If we don’t do this, we’ll be out of business.”
The Federal Court trial is slated to begin sometime in October.
