Upon receipt of a Complaint and Civil Remedy Notice, State Farm has elected to pay the full demands to settle a lawsuit levied against them by Ray Gunder on behalf of Gunder’s Auto Center’s customer.
Upon State Farm’s Oct. 10, 2011 written denial to pay for select items on the estimate, Gunder instructed his lawyer, Brent Geohagan, to file a lawsuit against the insurer at the request and authorization of his customer.
State Farm, in a letter to its insured, explained why they were only paying $7,919.65 for the repair, a shortfall of $1,090.70 requested in a supplement by Gunder’s. They explained which items they weren’t paying for and why:
• R& I body weather strips were not necessary to repair the vehicle.
• 2-wheel thrust angle alignment $79.95, which is more than a competitive rate; the market rate is $59.95.
• Lift tape glass shop bid .6 hours in refinish, commonly bid in the market as a dollar amount in sheet metal and we have approved $18 on the estimate.
• Reset electronic presets in the clock. This item is not commonly charged in the marketplace.
• Second color setup is not commonly charged in the marketplace.
• Disconnect/reconnect battery for welding. This is included in Audatex’s labor time for R&R rear body panel.
• Repair pinch welds at .8 hours each. The more competitive rate in the marketplace is .5 hours each.
• Mask hinges. This is included in Audatex’s refinish labor.
• Car cover interior. This is a duplicate line item not necessary for the repair.
• Color, sand and buff is not needed.
• Feather, prime and block is not commonly charged as a separate line item in the marketplace.
• Mask for prime. This is a duplicate line item not necessary for the repair.
• Overhaul bumper. Not necessary to repair the vehicle. R&I included in the R&R of the rear body panel.
• Paint & materials. The amount of the invoice is not competitive in the marketplace.
The letter also implored the vehicle owner to pick up the vehicle as soon as possible because Gunder’s was going to start charging storage fees of $42.80 per day, and State Farm said it would not be responsible for reimbursing for these fees.
The lawsuit was prepared and filed on October 25, 2011, along with a Civil Remedy Notice which was accepted by the courts on December 16, 2011.
The settlement occurred on Jan. 20, 2012, with State Farm paying the full $1,090.70 shortfall. A letter from State Farm’s legal counsel to Gunder’s attorney read:
“State Farm has decided to exercise its rights under Florida law to avoid unnecessary litigation. Accordingly, enclosed is a check made payable to you and Raymond Gunder in the amount of $1090.70 – which is the amount demanded in the CRN, plus statutory interest. This amount is paid to ensure that any alleged violations are cured in accordance with the statute of Florida law and to preclude unnecessary litigation. Again, State Farm’s payment should not be construed as an admission of any wrongdoing or liability on the part of State Farm who denies any liability, as well as the standing of Mr. Gunder to pursue any claims, but exercise of its right under Florida law to avoid protracted, vexatious litigation.”
The letter also stated, “…at all times, State Farm acted in good faith and fairly and honestly toward its insured, with due regard for its insured’s interest.”
“I’m elated that State Farm has chosen to step up and pay what was due our customer, and that they elected to settle rather than proceed with a long drawn-out and costly litigation,” said Gunder. “The word ‘vexation’ means harassing and/or annoying, as if the settlement was settled merely as a nuisance claim. I’ve never found where an insurer has ever over-paid a claim, and they didn’t in this matter either. They knew what they owed and why and that they would lose if it went in front of a jury. They also knew they would surely incur additional and significant legal costs and interest just as they have in the past. I don’t care what they say their motivation was, as long as they pay us so we can pay our team members for every drop of sweat they drop in the repair of our customer’s vehicles.”
Another Suit Settled
On Jan. 23, State Farm settled another suit with Gunder’s similar to the one settled on Jan. 20 when the insurer’s appraiser refused to pay for what Gunder’s deemed recommended and necessary repair procedures.
At the pre-trial hearing, State Farm’s attorneys came to court with a pre-written settlement check for full payment prior to going before the judge.
The lawsuit was filed on December 9, 2011 when, according to Gunder’s, a substitute State Farm appraiser was allegedly instructed by his manager to not pay Gunder’s “anything.” Gunder then contacted his customer and explained what was needed and the cost to provide the labor and materials necessary to perform a proper and thorough repair. The customer then authorized Gunder by Power of Attorney to file a lawsuit against State Farm on his behalf.
“I don’t understand why we have to keep going through this, but I guess State Farm just wants to see me ‘pound that rock,’" said Gunder. “The check they tendered was already typed out just as any supplemental draft is. Why didn’t they just agree to pay it before the hearing?
“As I see it, they’re not only paying what I recommend as needed for a proper repair but are losing long-term customers in the process. It just doesn’t make sense to me. In this case, the total amount in question was a mere $265.45, which is far below the approximated attorney fees of $1,500 they seemingly agreed was a fair amount. This isn’t including what they paid for their legal counsel.”
Gunder’s has two more active lawsuits filed against State Farm on behalf of their customers, plus an additional 25 more behind those based around the same failure-to-pay issues.
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