State Farm has elected to settle three pending lawsuits
filed by Gunder’s Auto Center for under-paid paint and materials, low labor
allowances and refusal to consider R & I procedures related to car-cover,
color sand and buff and others.
"After further consideration, and to discontinue the
need for further litigation, State Farm has decided to tender amounts at issue
in each of the above-referenced matters, with interest," a letter read
from State Farm’s legal counsel. "In summary, with this letter, State Farm
has paid the amount asserted by the insured to be in dispute for the above
referenced claim, thereby curing any circumstance relating to any alleged
improper estimate of damage or payment under the applicable policy, and any
claim or coverage denial, claim handling or trade practice as the result of
The amounts State Farm will pay are:
$163.31, $124.48 and $1,461.01.
By settling, State Farm avoided having to comply with the
court’s demand for its business records.
State Farm first sought a global settlement to avoid
further litigation by inviting Gunder’s to mediate the more than 30 pending
lawsuits the shop filed against them for tortious interference, breach of
contract and bad faith. Owner Ray Gunder agreed to this, and thus the contempt
of court hearing scheduled for Sept. 22, 2011 was postponed and mediation
scheduled for Oct. 6.
On Sept. 27, Gunder received notice that State Farm would
provide full payment for the amounts outstanding on the three pending lawsuits that were the basis for the contempt of court hearing.
"While I’m disappointed that we couldn’t come to an
agreement, as I would very much like to put the issues behind us and be
compensated fairly to restore people’s vehicles and their peace of mind, we’re
encouraged to continue on with discovery and having our day in court,"
said Gunder. "We have no fewer than 30 similar cases in the process of
being filed on behalf of our customers, all with the same or similar issues.
State Farm is paying approximately $120,000 in legal fees and costs for these
three cases which they have now elected to settle, and will no doubt be paying
substantially more in the coming months and years should things continue as
they have in the past.
"We’ve been sharing our legal journey with the
collision repair industry, and we’ll continue to do so in the hopes that our
successes will encourage others to consider their legal options. Meanwhile,
we’ll continue to ‘pound the rock!’"