Source: Automotive Body Repair News
Stroud’s Auto Rebuild, a Tacoma, Wash., collision repair facility prevailed in an arbitration proceeding against Safeco Insurance Co. on a claim that it tortiously interfered with a repair contract Stroud’s had with a consumer. In the case of Stroud’s Auto Rebuild, Inc. v. Safeco Insurance Company, Stroud’s convinced the arbitrator that it had a valid business expectancy in performing the work, but lost the job and the profit it would have generated after Safeco actively pressured the vehicle owner to remove his vehicle from Stroud’s and have it repaired at one of their “preferred” collision repair shops.
Although the arbitrator awarded Stroud’s the entire lost profit requested— $9,462.23—on Dec. 6, 2010, Safeco elected to appeal the arbitration award. Not long after the appeal was filed, however, Stroud’s and Safeco were able to settle the matter in the amount of the entire arbitration award as well as Stroud’s attorney’s fees.
Mike Harber, the owner of Stroud’s Auto Rebuild said that he is delighted about the outcome. “I am so pleased that the arbitrator understood the real issues in this matter. I am a small business person trying to perform quality services and take care of my customers in the process. To have an insurance company put my business and my customers at risk because it wants to save money and increase its own profits is reprehensible.”
Allen Shabino, the attorney for Stroud’s is equally pleased. “Prevailing in a tortious interference case can be very difficult because the legal standard is vague and difficult to meet, particularly the requirement that the defendant either be shown to have had an improper objective of affirmatively harming the plaintiff, or that the defendant employed ‘improper means’ to accomplish the interference. By rendering the award that she did, the arbitrator agreed that Safeco either was actuated by an improper motive or had used inappropriate means to induce the consumer to move his vehicle to their preferred shop.”
Harber and Shabino both hope that this outcome will discourage Safeco and other insurers from interfering with consumers’ choices of collision repairers. “People need to feel comfortable with the facility that will repair their damaged vehicles,” said Harber. “The safety of anyone who rides in that vehicle is in the hands of the repairer. Consumers need to know they can have their vehicles repaired at the shops of their choice and not feel forced by insurers to have someone they don’t know or trust fix their damaged vehicles.”
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