Serving the New England Collision and Mechanical Repair Industry
"Your Massachusetts Auto Body Association"
JUNE 2020 U.S.A. $5.95
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
An COVID-19 and Industry Leader COLLISION REPAIR: Roundtable
AASP/MA Members Give Back Avoiding “Disinfecting” Disasters Prepping for the New Normal
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COLONIAL NISSAN 104 Mystic Avenue Medford, MA. 02155 Phone Number: 781-395-3025 FAX Number: 781-475-5063
COLONIAL HONDA OF DARTMOUTH 225 State Road (Rte. 6) Dartmouth, MA. 02747 Parts Direct: 508-997-2919 FAX Number: 508-730-6578
CITY SIDE SUBARU 790 Pleasant Street Belmont, MA. 02478 Phone Number: 617-826-5013 FAX Number: 617-489-0733
COLONIAL FORD OF PLYMOUTH 11 Pilgrim Hill Road Plymouth, MA. 02360 Phone Number: 800-233-8109 FAX Number: 508-830-1658
NORTH END SUBARU 757 Chase Road (Rte. 13) Lunenburg, MA. 01462 Phone Number: 877-289-0053 FAX Number: 978-582-9843
COLONIAL CHRYSLER JEEP DODGE-RAM 24 Coolidge Street (Rte. 62) Hudson, MA. 01749 Phone Number: 978-568-8000 FAX Number: 978-562-1213
COLONIAL FORD OF MARLBOROUGH 428 Maple Street Marlborough, MA. 01752 Phone Number: 888-460-1125 FAX Number: 508-460-3464
COLONIAL SOUTH CHRYSLER JEEP DODGE-RAM 42 State Road (Rte. 6) Dartmouth, MA. 02747 Phone Number: 508-984-1900 FAX Number: 508-996-5801
COLONIAL CADILLAC 201 Cambridge Road Woburn, MA. 01801 Phone Number: 781-935-7009 FAX Number: 781-933-7728
NORTH END MAZDA 757 Chase Road Lunenburg, MA. 01462 Phone Number: 800-322-1241 FAX Number: 978-582-9841
COLONIAL VOLKSWAGEN COLONIAL SOUTH CHEVROLET 89 Turnpike Road (Rte. 9) 361 State Road (Rte. 6) Westborough, MA. 01581 Dartmouth, MA. 02747 Phone Number: 888-322-6570 Phone Number: 508-996-6266 FAX Number: 508-616-0445 FAX Number: 508-979-1219 COLONIAL VOLKSWAGEN OF MEDFORD 162 Mystic Avenue Medford, MA. 02155 Phone Number: 781-475-5200 FAX Number: 781-391-3506
WELLESLEY VOLKSWAGEN 231 Linden Street Wellesley, MA. 02482 Phone Number: 800-228-8344 FAX Number: 781-237-6024 Contact: Dan Bettencourt / Wholesale Parts Manager
COLONIAL CHEVROLET 171 Great Road Acton, MA. 01720 Phone Number: 800-787-2787 FAX Number: 978-263-8587
COLONIAL WEST CHEVROLET 314 John Fitch Highway Fitchburg, MA. 01420 Phone Number: 978-345-5532 FAX Number: 978-345-1152
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New England Automotive Report June 2020 3
Superior service starts with superior parts. Rely on what Mazda drivers already know-Genuine Mazda parts extend a car's life. Designed specifically for Mazda vehicles Get the right part the first time We're an accurate, trusted resource as close as your phone Give us the opportunity to serve you
Contact these Mazda dealers for all your parts needs: Mastria Mazda 1545 New State Highway Route 44 Raynham, MA 02767 Phone: 877-272-8876 Fax: 508-802-4074 wholesale@mastria.com
4 June 2020
New England Automotive Report
Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475 Balise Mazda 635 Riverdale St. West Springfield, MA 01089 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com One Call, One Truck for Eleven Brands!
CONTENTS
June 2020 • Volume 18, No. 6
DEPARTMENTS
FEATURES
VICE PRESIDENT’S MESSAGE by Kevin Gallerani 8 | We Are Your Resource
EXECUTIVE DIRECTOR’S MESSAGE by Evangelos “Lucky” Papageorg
12 | I Dare You!
LOCAL NEWS
15 | AASP/MA Urges Insurance Commissioner to Address COVID-19-Related Abuses 20 | Care during COVID-19 Pandemic: AASP/MA Shops Give Back by Alana Bonillo
NATIONAL NEWS
22 | SCRS Webinar Explores Risks with “Disinfecting” Vehicles 24 | Collision Industry Preps for the New Normal
ALSO THIS ISSUE 11 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS 18 | FOR SALE 35 | AASP/MA MEMBERSHIP APPLICATION
ADVERTISERS’ INDEX Accudraft Paint Booths ................................OBC Audi Group....................................................10 Balise Wholesale ..............................................9 Best Chevrolet................................................14 BMW Group............................................................6 BMW/Mini of Warwick ..................................16 Boch Chevrolet ................................................31 Boch Hyundai ................................................31 Collision Supplies ..........................................36 Colonial Auto Group ....................................IFC Empire Auto Parts ..........................................37
26 | COVER STORY By Joel Gausten
COVID-19 and Collision Repair: An Industry Leader Roundtable
38 | LEGAL PERSPECTIVE By James Castleman, Esq.
Are Claims for Inherent Diminished Value Dead in Massachusetts? Ford Group ....................................................41
Nissan Group ................................................23
Genesis of Norwood ........................................31
PPG................................................................3
Honda Group ................................................19
Quirk Wholesale Parts ....................................15
Hyundai Group ..............................................18
Reliable Automotive Equipment ........................7
Ira Subaru ....................................................33
Sarat Ford Lincoln ..........................................29
Ira Toyota of Danvers ......................................32
Sherwin Williams ..........................................34
Kelly Automotive Group ................................IBC
Subaru Group ................................................42
Kia Group ....................................................30
Toyota Group ................................................28
Linder’s, Inc. ..................................................9
Volvo Group ..................................................30
Long Automotive Group..................................25
VW Group......................................................17
Mazda Group ..................................................4
Wellesley Toyota/Scion ..................................37
McGovern Chrysler Jeep Dodge Ram ................29
Wheel Collision Center....................................37
Mopar Group ................................................21
New England Automotive Report June 2020 5
THEY’RE CALLED “ORIGINAL BMW PARTS” FOR GOOD REASON. FOR UNCOMPROMISING PRECISION AND INCOMPARABLE QUALITY, YOUR BMW CENTER IS YOUR ONE-STOP SHOP FOR EVERYTHING BMW. For Original BMW Parts, contact one of these authorized BMW centers: BMW of West Springfield 1712 Riverdale St. West Springfield, MA 01089 PH: 413-746-1722 FAX: 413-304-9009 bmwwestspringfield.com
BMW of Stratham 71 Portsmouth Avenue Stratham, NH 03885 PH: 603-772-0000 FAX: 603-772-9436 bmwofstratham.com
Tulley BMW of Nashua 147 Daniel Webster Hwy Nashua NH 03060 PH: 603-888-5050 FAX: 603-888-8427 tulleybmw.com
New Country BMW 1 Weston Park Ave. Hartford, CT 06120 PH: 860-240-7881 FAX: 860-240-7873 newcountrybmw.com
BMW of Warwick 1515 Bald Hill Rd. Warwick, RI 02886 PH: 401-821-1510 FAX: 401-823-0530 bmwofwarwick.com
BMW of Sudbury Wholesale Parts 68 Old County Road Sudbury, MA 01776 PH: 800-338-3198 FAX: 508-881-7578 bmwofsudbury.com
©2020 BMW of North America, LLC. The BMW name, model names and logo are registered trademarks. 6 June 2020
New England Automotive Report
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VICE PRESIDENT’S MESSAGE
We Are Your Resource
KEVIN GALLERANI
feature a special roundtable discussion with various industry representatives from around the country – including AASP/MA Executive Director Lucky Papageorg – to get a sense of how different associations are handling things. This kind of outreach and exchange of information is one of many things we provide our members as a state association with national ties. When you’re a member of AASP/MA, you’re more than just part of a group representing our state; you’re part of a vast network of repairers working to address the very same issues you’re grappling with on a daily basis. Now is the time for us all to work together to keep our industry strong and prosperous. “Strength in numbers” is not just a catchy phrase; it’s the philosophy that will get us through this and anything else we face down the road. As always, please reach out to Lucky or any member of our Board if we can help in any way. The next few months will be challenging for us all, but there is no reason for any of us to feel we have to combat these obstacles alone.
I hope the entire AASP/MA membership and everyone in the Massachusetts automotive industry is staying strong and doing well during this very unpredictable time. None of us could have prepared for something like this, but it has been great to see so many shops step up to help their communities and keep their customers and employees safe. As I write this message, many things are still up in the air. It’s hard to plan for whatever “normal” will be once we’re able to resume our business and personal lives without fear of COVID-19. One thing I’m sure of is that AASP/MA will continue to be here to serve and inform our members as we move towards the future in front of us. I encourage everyone to carefully read this month’s issue, which has tons of critical information to help keep your facilities virus-free and productive despite the craziness around us. This month, we
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PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA VICE PRESIDENT KEVIN GALLERANI is vice president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com
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AUT M TIVE AASP/MA EXECUTIVE COMMITTEE
STAFF PUBLISHER
GRAPHIC DESIGNER
Thomas Greco - thomas@grecopublishing.com
Lisa M. Cuthbert - lisa@grecopublishing.com
SALES DIRECTOR
EDITORIAL/CREATIVE COORDINATOR
Alicia Figurelli - alicia@grecopublishing.com
Alana Bonillo - alana@grecopublishing.com
EDITORIAL DIRECTOR
PRODUCTION
Joel Gausten - joel@grecopublishing.com
Donna Greco - donna@grecopublishing.com
TREASURER Matthew Ciaschini
PRESIDENT Molly Brodeur VICE PRESIDENT Kevin Gallerani SECRETARY Gary Cloutier
IMMEDIATE PAST PRESIDENT Paul Hendricks
AASP/MA STATEWIDE DIRECTORS PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 www.grecopublishing.com
COLLISION DIRECTOR Rob DelGallo
AT-LARGE DIRECTOR Adam Ioakim
AASP/MA DIRECTORS Ray Belsito
Joshua Fuller
Alex Falzone
Kevin Kyes
Rick Fleming
Frank Patterson
Mike Penacho Andrew PotterDana Snowdale
Bill Spellane Brian Stone
AASP/MA ADMINISTRATIVE OFFICE -New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2020 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
WWW.AASPMA.ORG 8 June 2020
New England Automotive Report
Evangelos “Lucky” Papageorg: AASP/MA Executive Director
Alana Bonillo: AASP/MA Administrative Assistant P.O. Box 212 Marlborough, MA 01752 617-574-0741
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New England Automotive Report June 2020 9
Audi dealers strive to make you an Audi Genuine Parts fan •
Audi Parts professionals are your subject matter experts on collision parts, replacement components and mechanical items.
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Many Audi dealers offer technical service support hotline access that can reduce your repair times and help you meet an on-time promised delivery.
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Installing Audi Genuine Parts contributes toward improved cycle time that helps make both your customer and their insurance company happier.
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Regardless of the age of your customer’s Audi, Audi dealers have access to over 200,000 part numbers. No other supplier comes close.
Helping you do business is our business. Order Audi Genuine Parts from these select dealers. Audi Natick 549 Worcester Street Natick, MA 01760 www.bernardiaudi.com 800.247.3033 Fax: 508.651.6841
Hoffman Audi 700 Connecticut Blvd East Hartford, CT 06108 860.282.0191 Fax: 860.290.6355 www.hoffmanauto.com
10 June 2020
New England Automotive Report
Audi Peabody 252 Andover Street Peabody, MA 01960 800.774.8411 Parts Direct: 978.605.2182 email: pwalke@iramotorgroup.com www.audipeabody.com
Mattie Audi 80 William S. Canning Blvd. Fall River, MA 02721 800.678.0914 Fax: 508.730.1283 www.mattieaudi.com
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Thanks to our VAP members for their continued support during this pandemic crisis.
New England Automotive Report June 2020 11
EXECUTIVE DIRECTOR’S MESSAGE
I Dare You! EVANGELOS “LUCKY” PAPAGEORG
Recently, a dear friend and colleague shared a link to a daily email journal by Jason Leister, self-named “The INCOMPARABLE EXPERT.” I have found his musings to be uplifting, thought-provoking and a nice way to start the day. They only take a couple of minutes to read and are well worth the time. The following is a recent sample of one of the emails that truly hits home with the issues we face in our industry: May 1, 2020 Mountains of Arizona Sunny - 87 Degrees 3:24pm When I was in college, I don’t believe I ever considered the option of walking into the bursar’s office and sitting down for a good old-fashioned negotiation about the tuition. Instead, I just saw the number and thought I had to pay it. We don’t haggle about this. That’s how we’ve been trained. But college IS a business. They have revenue, they have expenses, they have a product to sell, they have customers. Which means if they can do it, you can do it, too. What would that look like for you? What would happen if (in your mind at first) you took the option of “negotiating” with prospective clients OFF the table? I’m not saying you should do it. I’m saying you should think about it. Think about what type of an internal shift would have to happen to just HAVE YOUR FEE and to really not be interested in discussions about that. If you feel nervous about such a pursuit, just think about the average fast food restaurant to get some confidence. They aren’t interested in negotiating the price of the burger. If you don’t want to pay, that’s fine; they just won’t give you the burger. They don’t have an attitude about it. They’re never called “difficult” for choosing this path. It’s just accepted because they don’t entertain another option. The point here is this: Just ask for what you want. Did anyone ever tell you that in school? Nope.
12 June 2020
New England Automotive Report
But that’s the way it works. Be OK with asking for what you want. Why would “what you want” NOT be valid? Onward, Jason Leister The final sentence says it all!!! As an independent professional businessperson, why does your desire to do the best and safest repair possible for your customer mean so little in the repair process? Why can’t the collision industry take the same position as those fast food chains? “If you don’t want to pay, that’s fine; they just won’t give you the burger.” It’s not as if the burger joint’s potential customers do not have a choice of competitors. Your customers can choose who will insure their vehicle and who will ultimately repair it when necessary. Just like the student in the story, our industry has been “trained” to avoid questioning not getting paid for our expertise, equipment and years of specialized training. We do so to avoid getting stuck with the label of “difficult.” Why do we care about such a label if the burger joint does not? I know that I am beating the same drum, and we have all heard this before. I also know that there are more and more success stories of shops that have had this type of shift in business mindset that must happen across the board. They have taken an important position: “THIS IS MY FEE.” They have no desire nor need to have any discussions about it, as mentioned in Mr. Leister’s journal entry. These shops have taken the needed time and energy to ensure their customers are informed and educated. Their customers are made aware of proper repair procedures as well as the propaganda (lies) many insurers use to avoid living up to their responsibilities under the indemnification policy they have sold to the vehicle owner. The complete disregard of the insurer’s obligation has never been so blatant as it has under the current “state of emergency” brought on by the COVID-19 pandemic. As 212 CMR 2.04 states, in part, “The appraiser shall itemize the cost of all parts, labor, materials and necessary procedures required to restore the vehicle to pre-accident condition and
shall total such items.” Many insurers have either outright refused to pay or reimbursed only a minimal amount for the application of disinfecting materials to collision-damaged vehicles. This required process in today’s world is NOT one that will go away with the lifting of the “state of emergency;” it is one that will be with us for a very long time. THE PROCESS IS NOT PART OF THE COST OF DOING BUSINESS as insurers have tried to convince you. Just like the cost of materials, parts and labor are attributed to the cost of repair, so should the application of disinfecting materials. Only you can be sure to make the distinction and not be beaten into submission. For the protection of your customers, business and your employees, you must perform the process in a very thorough manner. It is the only way you can accept the liability for doing so. This should include the additional administrative costs associated with every estimate and supplement you have written and forced to upload because insurers are REFUSING to put their staff at risk. Please DO NOT allow yourself to be taken advantage of by the twisting of these words in 212 CMR 2.0: “The registered repair shop must prepare an appraisal for the purpose of negotiation,” or, “The registered repair shop shall complete a supplemental appraisal prior to making the request.”
SAVE THE DATE!
AASP/MA Statewide Membership Meeting – Held Online via Zoom Wednesday, June 10 (Tentative Date) Time TBA
Details to come. Be on the lookout for emails from AASP/MA for more information. In neither case does the CMR state that you have to do so for free. This process is NOT included in the cost of doing business. If the vehicle was not damaged, there would be no need to write an estimate or supplement. The same holds true, once again, for the application of disinfecting materials. The insurance industry looks at the whole process as a game. As “children,” we used to play “I dare you” or even “double dare you” to do something out of the ordinary or a bit dangerous. Insurers play that very same game every day with no conscience or moral ethics – with or without the COVID-19 pandemic
continued on page 30
New England Automotive Report June 2020 13
[LOCAL] NEWS
AASP/MA Urges Insurance Commissioner to Address COVID-19-Related Abuses In response to various collision industry concerns that have surfaced as a result of the lockdown, AASP/MA has sent correspondence to Massachusetts Commissioner of Insurance Gary Anderson (and copied to Governor Charlie Baker, Lt. Governor Karyn Polito and Attorney General Maura Healey) requesting “immediate steps to stop exploitive practices being employed by insurance providers” as shops work to provide a safe and professional environment for customers and employees alike. “As the ‘first responders’ meeting the needs of the motoring public, the collision repair industry and the customers we serve are subjected to the potentially lifethreatening exposure of the pandemic virus,” comments AASP/MA Executive Director Evangelos “Lucky” Papageorg in the letters. “New procedures and protocols are now required to protect both the customer and our entire workforce. This requires that insurers must acknowledge and pay for the procedures and the associated costs that will help protect the vehicle owners and the dedicated professionals who repair collisiondamaged vehicles.”
AASP/MA has identified the following items that require “immediate attention through a directive to the insurance industry to ensure the health and safety of vehicle owners requiring collision repair services and collision repair technicians during the COVID-19 pandemic:” v Proper time allowance for the application of disinfecting materials v Proper reimbursement for the additional PPE items required, which includes covering of interiors of the vehicle and high-contact components, such as steering wheels, shifters and door handles v Proper reimbursement for additional administrative costs, such as picking up and delivering of vehicles from and to the vehicle owner, the preparation of all documentation required and uploading of the required documentation to the insurer
continued on page 30
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New England Automotive Report
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New England Automotive Report June 2020 15
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· Fax or emailing your order will speed processing and delivery to your location. © 2020 BMW of North America, LLC. The BMW name, model names and logo are registered trademarks.
16 June 2020
New England Automotive Report
Genuine Volkswagen Collision Parts Are a Call or a Click Away. The best repairs start with the best shop-supplier relationship. Contact the following Authorized Volkswagen dealers by phone, fax or email to get the parts you need, when you need them. Mattie Volkswagen 80 William S. Canning Blvd. Fall River, MA 02771 800-678-0914 fax: 508-730-1283
Lia Volkswagen 140 Elm Street Enfield, CT 06083 860-698-6890 fax: 860-265-7840 www.liavw.com
Quirk Auto Dealers 115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475
Volkswagen of Hartford 133 Leibert Road Hartford, CT 06120 Direct Parts: 860-543-6012 fax: 860-728-4408 email: ebautista@vwofhartford.com
Mastria Volkwagen 1619 New State Highway Raynham, MA 02767 Toll Free: 888-581-1146 Direct Parts: 508-802-9955 fax: 508-802-9966 email: vwparts@mastria.com www.mastriavw.com
Balise Volkswagen 525 Quaker Ln. West Warwick, RI 02893 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com
One Call, One Truck for Eleven Brands!
“Volkswagen“ and the Volkswagen logo are registered trademarks of Volkswagen AG. ©2020 Volkswagen of America, Inc.
New England Automotive Report June 2020 17
HYUNDAI IS PROUD OF ITS REPUTATION FOR QUALITY AND SERVICE. SO ARE THE DEALERS AND BODY SHOPS WHO RELY ON GENUINE HYUNDAI PARTS. TO MAKE CERTAIN THAT YOU GET THE RIGHT HYUNDAI PART, ASK FOR A HYUNDAI WHOLESALE PARTS SPECIALIST.
For Genuine Hyundai parts, contact an Authorized Hyundai Dealer. HERB CHAMBERS HYUNDAI 735 Southbridge Street Auburn, MA 01501 TOLL FREE: 800-767-1898 FAX: 508-832-6026 EMAIL: pobrien@herbchambers.com www.herbchambershyundaiofauburn.com
BOCH HYUNDAI 391 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062 PARTS LINE: 781-762-9210 TOLL FREE: 800-559-9210 bchwholesale@boch.com
BALISE HYUNDAI 683 E. Columbus Ave. Springfield, MA 01105 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com
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Contact: Al/Guy’s Auto Body (978) 667- 3750 guysautobody@hotmail.com 18 June 2020
New England Automotive Report
It Takes Genuine Honda Collision Repair Parts To Achieve a Genuine Honda Fit. Honda collision repair parts are engineered and manufactured to Honda standards. In the collision-repair business, time is money, and you can’t waste time on parts that almost fit properly. Use Genuine Honda replacement parts. Your reputation depends on it. For Genuine Honda parts, contact these Authorized Honda dealers. Bernardi Honda 960 Worcester Road Natick, MA 01760 Parts Direct: 800-247-3033 FAX: 508-651-1220 www.bernardihonda.com
Kelly Honda 540 Lynnway Rt. 1A Lynn, MA 01905 Parts Direct: 800-779-7466 FAX: 781-595-2898 e-mail: mpsomosjr@kellyauto.com
Honda of Enfield 20 Palomba Drive Enfield, CT 06082 Toll Free: 800-222-6632 FAX: 860-253-5419 www.liahondaofenfield.com
Honda North 382 Newbury Street Danvers, MA 01923 Toll Free: 800-882-9797 FAX: 978-774-9483 e-mail: eadams@iclautos.com www.hondanorth.com
Schaller Honda 1 Veterans Drive New Britain, CT 06051 Toll Free: 800-382-4525 Direct: 860-826-2080 FAX: 860-826-2083 e-mail: jkiniry@schallerauto.com www.schallerauto.com
Lundgren Honda of Auburn 525 Washington Street Auburn, MA 01501 Toll Free: 800-777-2044 FAX: 508-721-0872 e-mail:pmccarthy@lhonda.com www.lhonda.com
Balise Honda 400 Riverdale St. West Springfield, MA 01089 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com One Call, One Truck for Eleven Brands!
Balise Honda of West Warwick 509 Quaker Lane West Warwick, RI 02893 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com One Call, One Truck for Eleven Brands!
Lia Honda of Northampton 293 King Street Northampton, MA 01060 Toll Free: 800-369-7889 Direct: 1-413-586-6043 FAX: 1-413-585-0502 www.liahondanorthampton.com
New England Automotive Report June 2020 19
[LOCAL] NEWS By Alana Bonillo
Care during
COVID-19: AASP/MA Shops Give Back
As previously reported in New England Automotive Report, AASP/MA members have been doing all they can to help their communities by way of donating unused gloves and N95 masks to local hospitals, first responders and others in need. Shops are now going a step further to lend a helping hand or offer a token of gratitude to those who have been on the front lines. At Marshall’s Auto Body Experts in Billerica, owners Jim and Dawn Marshall wanted to find a unique way to give back. So, the shop set up a special raffle to give away 10 detail/recons (valued at $300 and to be performed between June 15 and August 15) to nurses and first responders as a thank you. Due to the tremendous response Marshall’s received throughout April and May, Jim decided to grant anyone who entered but did not win the grand prize raffle a $100 gift certificate to be used toward their next collision repair. “I see everyone out there doing good things, and I didn’t want to piggyback on someone else’s idea and take away from their identity. We work heavily with the local Rotary Club, the food pantry and things of that nature. I didn’t know what else I could do that could be directed to the first responders.” Then, it occurred to him how much people love to have their vehicles cleaned, which the shop decided to offer by way of the raffle. As members of many community organizations, Marshall’s is always looking for ways to help its neighbors. The shop is currently working on a project to restore a vehicle to be gifted to a local woman and her husband, who recently adopted their grandchildren after the children’s parents lost custody. Jim received the vehicle from Plymouth Rock Assurance. Although he would like to receive some donations from others who may be willing to help, this has been a bit of a challenge due to COVID-19. Marshall’s is grateful that it has been able to keep its doors open and its crew on deck thanks to receiving the PPP loan. The facility is currently keep busy pursuing various educational opportunities and training. 20 June 2020
New England Automotive Report
AASP/MA’s Rick Starbard (far left) is one of many members volunteering to help the community.
“We’re a larger body shop in town with 42 years at this location, so I don’t fear we will disappear. But with no one driving and no mishaps to create accidents, it will be some time before the work starts to come back in.” Closely involved with the local food pantry, Marshall’s also played a role in helping get a food drive together at a time when the number of needy families who normally frequent it has nearly tripled due to the pandemic. Through the local Rotary Club, Jim helped put together a food drive where residents of Billerica can purchase items at their local market and place them in the donation carts out front. “In just two days, they got 50 carts filled to the brim. We went around in box trucks to the different market locations to pick up the donations. It was an emotional afternoon. My thanks to all who are helping our fellow neighbors.” Rick Starbard (Rick’s Auto Collision, Inc.; Revere) has been working tirelessly in Lynn, where he serves as a city councilman. Currently, he is devoting time to delivering food donations to senior citizens in the area. “The city took on the project to make sure that the thousands of seniors who live in the community get food without having to go out for it. So, we started a partnership with the Salvation Army, which normally does this for families. We fundraised, got some volunteers and have been able to provide 300-400 grocery boxes per day to senior living complexes.” Starbard has been spending about a half a day, if not longer, on a daily basis working with volunteers to help load up his truck to deliver food donations. “It’s great to see everybody really rise to the occasion. Every age, every background. When I go in at night and see the volunteers who are working to pack these things up, I see high school kids through retirees all working to volunteer their time.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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New England Automotive Report June 2020 21 1:30 PM
[NATIONAL] NEWS
SCRS Webinar
Explores Risks with “Disinfecting” Vehicles
As the COVID-19 dilemma carries on, so do the potential health and legal risks associated with performing collision repairs at this time. Everything from the types of cleaning/disinfecting solutions utilized on the shop floor to how these chemicals are explained and marketed to customers introduces the possibility for physical danger or lawsuits down the road. As a way to caution and better inform shops of these risks, the Society of Collision Repair Specialists (SCRS) hosted “Ask the Experts: How Professional Restorers Deal with ‘Disinfecting’ Vehicles,” a two-hour Zoom meeting in late April that offered insights from both the collision repair and property restoration industries on how body shops could provide a safer and more legally sound environment during the current pandemic. Panelist Jordan Hendler, executive director for the Washington Metropolitan Auto Body Association (WMABA) and the administrator of the Property Insurance and Restoration Conference (PIRC), developed the presentation with SCRS after seeing several commonalities between the two fields in their professional response to COVID-19. Other panelists included shop owner and Past SCRS Chairman Kye Yeung (European Motor Car Works; Costa Mesa, CA), restoration industry expert Kris Rzesnoski (vice president of business development for Encircle) and Restoration Industry Association (RIA) instructor Norris Gearhart. SCRS Executive Director Aaron Schulenburg moderated the discussion. Like many facility owners, Yeung is taking extra precautions at his business, including conducting as much business with customers online as possible. He has also added pick-ups and drop-offs to his services so there is no more than a single customer in his shop at one time. 22 June 2020
New England Automotive Report
Of course, most repair establishments are also adding “disinfecting” to their processes and billing. However, a considerable portion of the webinar cautioned repairers that how they present this operation to vehicle owners and insurers could open the door to litigation if not handled properly. In Rzesnoski’s mind, shops need to be able to clearly define and explain the standards they use to clean vehicles throughout a repair. “Not all cleaners are built the same. When you’re using a disinfectant, is it on the EPA list? Does it meet those requirements? Then, you have to follow the instructions on the product…The customer has to have a choice in that, because you’re putting products inside that vehicle that may affect them differently.” “Shops are using the terms ‘disinfecting’ and ‘sanitizing,’ and that was a concern for us,” added Hendler. “They should be saying, ‘I applied disinfectant; I used this chemical.’ But after that, no guarantees.” In addition recommending that shops have their legal representative review any documentation they wish to share with customers and insurers in regard to their cleaning processes, Gearhart advised webinar attendees to be careful with how they advertise and sell these services. “If you say you’re going to ‘disinfect’ or ‘sanitize’ the car, how are you validating that you did that? All that you can really say is, ‘We have applied the disinfectant per the EPA-registered guidelines.’” Readers are strongly urged to view the complete webinar available online at scrs.com/covid19resources for additional information and discussions beyond those included in this story. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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New England Automotive Report June 2020 23
Collision Industry Preps for the
[NATIONAL] NEWS
NEW NORMAL
Note: The following update is based on information available as of our May 13 press deadline. We urge you to follow your state’s specific orders and guidelines for the re-opening process in your area. As various parts of the country begin the slow process of reopening nonessential businesses, collision shops and other operations deemed essential from the beginning will soon face new demands in serving the largest potential customer base they’ve seen in several months. In an effort to provide a sense of direction for this transition, the White House has issued a proposed three-phase state/regional process for officials to follow for the safety of employers and individuals. According to the proposal, the “phased comeback” should only be implemented once a state/region can demonstrate a “downward trajectory of documented [COVID-19] cases within a 14-day period” or a “downward trajectory of positive tests as a percent of total tests within a 14-day period [flat or increasing volume of tests].” Throughout all phases, employers should “develop and implement appropriate policies in accordance with federal, state and local regulations, and guidance and informed by industry best practices,” regarding social distancing and protective equipment; temperature checks; sanitation; use and disinfection of common and high-traffic areas; and business travel. Employers are urged to monitor their workforce for COVID-19 symptoms and not permit symptomatic individuals to return to work until they are cleared by a medical provider. Additionally, the proposal calls for employers to “develop and implement policies and procedures for workforce contact tracing” following an employee’s coronavirus test. The first phase asks employers to continue to encourage telework whenever possible, return 24 June 2020
New England Automotive Report
employees to work in phases (if possible), keep common areas closed or enforce “strict social distancing guidelines” and minimize non-essential travel. Additionally, these businesses are encouraged to strongly consider special accommodations for employees who are elderly or who have underlying health conditions, including (among others) high blood pressure, chronic lung disease, diabetes, obesity and asthma. During the second phrase, employers should adhere to “moderate” social distancing protocols, continue to keep common areas closed, encourage telework and consider special accommodations for at-risk personnel with the previously noted health conditions. The final phase in the process calls for employers to resume “unrestricted staffing” at worksites. The complete proposed guidelines are available at whitehouse.gov/openingamerica/#criteria. Although the reopening process will be challenging for many industries, the public’s return to more regular activities could provide new opportunities for the collision repair field. “When we get through COVID-19, people are going to be so pent up and stir crazy that I believe we’re going to see people hit the roads in unprecedented numbers; that’s going to lead to more claims,” observes industry consultant and former shop owner Mike Anderson (Collision Advice). “Financially, a lot of people are going to have to play catch-up when they get out of this. They may need to take on a second job just to build their nest eggs, which will also mean more miles traveled.” For frequently updated, industry-generated COVID19 news and information, bookmark and visit the Society of Collision Repair Specialists’ (SCRS) resource page at scrs.com/covid19-resources. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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[COVER] STORY By Joel Gausten
An Industry Leader Roundtable
COVID-19 and Collision Repair: Lucky Papageorg AASP/MA
Charles Bryant AASP/NJ
Judell Anderson AASP-MN
The COVID-19 pandemic has had an immediate and powerful impact on the national collision repair and mechanical service industries. This month, we connect with AASP/MA Executive Director Evangelos “Lucky” Papageorg , AASP/New Jersey (AASP/NJ) Executive Director Charles Bryant, AASP-Minnesota (AASP-MN) Executive Director Judell Anderson, Washington Metropolitan Auto Body Association (WMABA) Executive Director Jordan Hendler, Auto Body Association of Texas (ABAT) Executive Director Jill Tuggle, Society of Collision Repair Specialists (SCRS) Executive Director Aaron Schulenburg and Wisconsin Auto Collision Technicians Association Ltd. (WACTAL) President Larry Terrien to gain insight into how their associations and their members are working to address the crisis while serving customers and the industry as a whole. New England Automotive Report: What are your immediate thoughts on this pandemic and the effect it has had on your state’s industry and/or your membership at-large?
Jordan Hendler WMABA
Jill Tuggle ABAT
Larry Terrien WACTAL
Aaron Schulenburg SCRS
Lucky Papageorg: The events are life- and industry-changing – not only in the short term, but for the long-term future as well. When we do return to ‘normalcy,’ it will not be business as usual for those shops that make it through the current state of emergency. SOPs, which we have been forced to change, may not look the same in the future. Our members and the industry as a whole have had to make very challenging decisions, and many more will have to be made. Shops need to use this time to their advantage to learn new skills as well as how to work smarter. Charles Bryant: For the most part, the industry is in panic mode because this came on so quickly and no one was prepared for it. Some are in denial that it is as bad as it is being reported; others are angry with those who just don’t seem to get it. Many shops that fought to stay open in the beginning are now basically being forced to close because they have finished the work they had in the shop when things first started and no other – or little – work is coming in or their employees are refusing to come in. Either way, members of the industry, large or small, seem to be living in fear because of the uncertainty of what will come next or when it will be over.
Judell Anderson: On a human level, it’s tragic. My heart goes out to those who have lost loved ones to the disease or whose economic wellbeing is at risk due to job loss. The business impact on the industry will certainly not be insignificant, and I’m concerned about the financial strain on members. But like any other challenge, those who have positioned their business strategically for the long term will survive, although probably with a few battle scars. Jordan Hendler: This is so prolific; the effect is not even fully known. Everyone in the country is affected in multiple ways from this pandemic, and our regional industry and membership are no different. Obviously, the lack of people driving directly affects accidents and claims. I think the lack of available information to deal with such a crisis has been exposed for all. We don’t know as an industry how to clean for disease control, and suddenly here we are. Jill Tuggle: I think we can all agree that the biggest issue we face as an industry is the fear of the unknown. We are navigating uncharted waters. I have seen many shops working on the proactive side. Furloughs, pay cuts and split shifts have been difficult decisions to make, but they just may be what preserves businesses when done proactively, as we’ve seen here. Larry Terrien: The collision industry has been listed as an essential business, and for good reason. Grocery and health-care workers, truck drivers, police and other emergency personnel and all of the other critical workers need to get to work, and they need their vehicles. We have seen the majority of our member shops stepping up and often doing more with less. Aaron Schulenburg: Obviously, this is impacting everybody whether they’re in this industry or not. Our businesses are essential, and I think many of them are fortunate in that the way we schedule work often provides for a backlog. When the switch got flipped and there was a stay-at-home order, there was still work in the pipeline for many of these businesses. But I think we’re really coming to a point where a lot of that has started to be worked through. At the time of this conversation, I think we’re just coming up on some of the
most challenging days ahead. Repair businesses have stopped seeing the same capacity of tow-ins and have seen a drastic decrease in the amount of new people walking through their doors. For SCRS, our days have been filled with helping small businesses through the relief mechanisms that are available to them in terms of how to support their employees and the businesses they’ve built and how to help the industry figure out what’s new and relevant to using disinfectants in the vehicles and the resources available to them. We’ve all been drinking from a firehose of information, and I think part of our job is to take out relevant pieces and provide them to their businesses so they can consume what they need to and continue to function. NEAR: How has your association been dealing with the pandemic since the state of emergency was issued? LP: As an association, we have concentrated on providing the most up-to-date information to our members regarding the measures they should be taking to protect themselves, their customers and their employees. We have been providing them with the links to the resources established to provide assistance through this challenging time. We have also been in contact with the Governor, drawing attention to the exploitative actions of insurers and requesting that he intercede on our behalf with the Commissioner of Insurance. We have provided templates of letters to our members requesting they also contact the Governor and their legislators. CB: AASP/NJ has been assisting members with the many issues that the pandemic has brought about on a daily basis. Unlike many other associations, we have a unique service that few others have. AASP/NJ has a Hot Line that members can call all day, every day for answers to questions related to anything that is going on in the industry. These include, but are not limited to, insurance claim issues; environmental issues; compliance with laws, rules and regulations or
licensing issues; and, in this case, issues related to the COVID-19 pandemic. Since the outbreak, the AASP/NJ Hot Line has been ringing non-stop, and members are so grateful to know that they have a place to turn for answers to their questions in this difficult time. JA: We’ve been busier than ever. Fortunately, the staff was already set up to work remotely, so that transition has been seamless. But we did have to make the difficult decision to cancel our annual Leadership Conference scheduled for April 23. Since the impact of the crisis hit in mid-March, we’ve scoured all of the various legislation and other measures taken by the government, distilled that information to what’s relevant to members and then communicated it through weekly updates. We sponsored a free ‘crisis marketing’ webinar and have scheduled Zoom roundtable sessions for members to share and discuss the impact on employees, shop practices, marketing, finances and the like. They are really wanting to talk to each other right now and learn from what others are doing. We’re also fielding lots of member calls and connecting them with resources and support where needed. JH: Our priority is to help the industry get information, so working with SCRS has been crucial. One concern addressed early on was how to communicate and perform any disinfecting services. We cautioned members against language using ‘disinfecting or sanitizing’ and they could instead say ‘applying/applied disinfectant,’ because there is no testing possible for confirming. Unfortunately, it is a liability our industry should not take on in this time but a service we want for our own employee protection as much as the customer. We want our membership to have resources; right now, that is what we can do for them. We check on them and see how they’re doing. If we identify needs we can assist with, then that’s what we address.
JT: During the first week, I was in shock and felt helpless – like watching an accident you can’t stop. I had so many questions: How would this affect our upcoming events, our dues or our Texas Auto Body Trade Show? I figured that members wouldn’t be focused on these things in a time like this; they would just be trying to survive. Then, I woke up the next morning and thought, ‘THIS is why ABAT exists: To be there in the hard times. These shops need us to be a resource and a steady light. We have to be there for them any way we can right now.’ So, our focus shifted to any creative ways we can be a source of information and resources for them. Our lobbyist spent hours analyzing the stimulus package and putting it into a readable document that we sent out. We ordered face masks to send to shops. Who knows what the next steps will be, but we are energized, listening and acting. LT: We have been very busy keeping up with all of the latest news and information and relaying it to our members by emailed newsletters. AS: There have been a lot of different ways of communicating with members. As we were doing regular emails and updates, people were contacting us and saying, ‘I know I saw an email, but I wasn’t sure what it was.’ I think we were all experiencing that; there’s just been so much communication on this. We developed scrs.com/covid19resources as a page that’s focused on workplace preparation and health, financial-related relief and other resources that may be out there as well – including other associations that have compiled useful information and SCRS Corporate Members that have developed standalone pages devoted to coronavirus information. We’ve been updating the page regularly; it changes on a near-daily basis. Our hope is that it becomes a dedicated place for people to go to find information, whether they’re a member or not. continued on page 31 New England Automotive Report June 2020 27
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[LOCAL] NEWS
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“The insurance industry has been saving millions during this current state of emergency,” adds Papageorg in the correspondence. “Some insurers have provided minimal discounts of premiums [the average is about 15 percent] due to a dramatic reduction in driving that has reduced claims by as much as 70 percent. They do so while exploiting those of us in the ‘essential’ business of collision repair. The actions of the insurance industry are unfair to consumers and repairers alike, and it only magnifies the insurers’ commitment to subordinating ‘consumer safety’ to ‘corporate profit.’” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
EXECUTIVE DIRECTOR’S MESSAGE
Continued from page 13
threat. They are daring and double daring you to either work for free by absorbing the costs of repair or charging the customer. We must expose this practice. AASP/MA has been working to bring this issue and many others to the attention of the Governor, Lt. Governor, Attorney General and the Commissioner of Insurance. You no doubt have countless examples of these practices. Please bring your examples forward, as they are not isolated instances and we must safeguard against them from becoming FORCED SOPs. WE can and will make an issue of insurers taking advantage of the current unprecedented situation by burdening consumers with additional costs at this perilous time. As I write this message, I am looking at four return receipts of letters I sent to the Commissioner of Insurance, Governor, Lt. Governor and Attorney General, who have been getting plenty of airtime talking about their concern for the public. Our industry, just like first responders, should be getting our share of their concern. I have no doubt we will get our time in front of them to plead our case. We must be prepared. It is imperative that as an “essential” business, our voices are heard and responded to. Let’s take on the “dare” challenge and then “double dare” the powers that be to ignore us! ASK yourself, “Why would ‘what you want’ NOT be valid?” For more information on Jason Leister and to read his work, visit incomparableexpert.org. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org 30 June 2020
New England Automotive Report
[COVER] STORY
Continued from page 27
NEAR: What are some ways you’ve seen your members stay positive during this current situation? LP: Many shops have adapted to the new way of ‘connecting’ with their customers during intake and upon completion of repairs. Many shops I have spoken to have taken advantage of the slowdown in the volume of work to address issues that were not addressed previously due to lack of time. Some have been reviewing their past repair orders to catch parts issues, such as price increases that may have slipped by. They are also reviewing procedural items that may have been performed but not reimbursed for by the insurer. The slowdown has given them the opportunity to visit OEM websites and other online resources to gather the documentation necessary to be paid on the previous jobs as well as those in the future.
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CB: To be honest, I have seen so many ways the members of AASP/NJ have responded positively to COVID-19, and it makes me proud to be a part of the industry. Many of our members have voluntarily donated masks, Tyvek suits, protective eye wear, gloves and basic PPE items to hospitals, police departments and other organizations that are in need of such items. One member of the AASP/NJ Board voluntarily agreed to pick up the items and deliver them to the places that needed them. One member who had been speaking with another member who was really afraid that he would not be financially able to survive comforted him by assuring him that he would lend him as much money as he needed to get through this. Another member informed me that a dealer parts department that was forced to close gave the shop the keys to the parts facility and said, ‘Just keep track of whatever you need, and we will see you when we return.’ I have heard of many acts of kindness one member of the industry has offered to another,
and it warms my heart to hear the stories. Many seem to think of the members of the auto repair business as ‘tough guys,’ but it amazes me to see just how kind they can be in times like this. JA: We had a roundtable discussion with mechanical members on April 8, and I came away with so much pride and inspiration after that session. Many members were using this opportunity to connect even deeper with their communities through outreach and contributions to charitable causes. It was also noted that with new car sales lower and recent job losses, people would be more apt to hold on to older vehicles and invest in repairs to keep them on the road – a positive for future business. Another positive mentioned was that this was an opportunity to build employee loyalty by keeping people on the payroll, demonstrating concern about their wellbeing and showing support in other ways. continued on page 33
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New England Automotive Report June 2020 31
32 June 2020
New England Automotive Report
[COVER] STORY
Continued from page 31
JH: Our industry is resilient, but I’ve yet to talk to someone who is wholly positive. I think that is due to the uncertainty of this crisis. It’s not war, where we can see the face of our enemy; it’s a far-off movie concept come to life. So, in our resiliency, we see where we can help. I know of shops donating PPE and other items to the hospitals and medical facilities that need them. I see that they want to work on the vehicles they can, and that gives them pride in being the essential industry they are. JT: The email chains have slowed, but they have not stopped. Members are calling each other and ABAT to check on one another’s wellbeing. They really care about their circle. LT: Shops are reassuring their staff by having regular status update meetings and being flexible with staff members’ needs. They are reassuring their customers that they are there for them, and that they will do
whatever it takes to help them out. This often includes: • extra hours by appointment; • free pick-up and delivery; • non-contact drop-off and pick-up; • sanitizing every vehicle before beginning work and before delivery; and • dealing with parts shortages.
their local hospitals. We’ve seen that civic duty come out in light of all of this. We serve an essential role not just in the fact that we’re able to stay open, but also in that we also serve an essential role in the community. We’re seeing a lot of small business owners really living up to that. It really shone a light on what a great industry this is.
AS: There have been some bright lights in this situation. We’re seeing a lot of ingenuity and that entrepreneurial spirit come through in these tough times from a lot of our member businesses. If there’s a silver lining, that’s one of them. We’ve watched folks like John Mosley from the Mississippi Collision Repair Association take a portion of the materials he had in his coatings business, and instead of producing the coatings he normally would, he turned them into disinfectants that his business is giving out to their local hospitals. We’ve spoken with collision repair facilities that are transitioning over some of the PPE they’ve used and donating the remaining stock to
NEAR: What are your thoughts on how the industry as a whole is addressing this? LP: The majority of shops have stayed positive. Shops are positioning themselves to come back stronger after the state of emergency is lifted. Due to the paperwork and documentation review required to apply for the different stimulus packages, many have been reevaluating their Labor Rates and procedures in the repair process. Quite a few have been submitting updated information regarding their Labor Rates to National AutoBody Research [NABR], while others are
continued on page 36
New England Automotive Report June 2020 33
A SYSTEM
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YES Please list my business as an AASP/MA member in good standing on the AASP/MA website for consumers to consider using for the collision repairs and assistance with the claims process. I understand this is a member benefit (_________ initials Date ___/____/2020) !
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! New England Automotive Report June 2020 35
[COVER] STORY
Continued from page 33
taking NABR’s Labor Rate Survey for the first time. Those who had previously subscribed to NABR’s BillableGenie service have used the time to research the information archived there as well as upload additional documentation of rates and procedures insurers have paid. CB: There is no doubt that this is a scary time, because no one knows exactly where things will go from day to day. With that considered, the industry is handling this very well, in my opinion. Shop owners are setting up methods of dealing with their customers remotely. I have heard of shops installing glass doors inside the office where the shop owner or worker has a shield between themselves and the customers who come in. I had to laugh when I was told about a shop owner who brought a wooden paddle that is normally used to turn pizzas over in an oven into his office and is now using it to have his customers put their keys on instead of handing the keys directly to
36 June 2020
New England Automotive Report
him. Members are attending webinars to learn about workplace safety, and we notify our members of webinars that provide information on the different types of loans that the government is making available. As time goes on, members of the industry are figuring out how to deal with whatever issues they face as the result of the COVID-19 situation. JA: I’m impressed with the generosity, resourcefulness, business acumen and commitment that our members have demonstrated. It’s going to be rough for a while, and the industry will emerge changed but stronger than ever. JH: Collision repairers are happiest when they’re working. The fact that our industry is deemed essential gives us purpose. We can keep working on the vehicles we do have and give the best service possible. JT: Again, these are uncharted waters. Unfortunately, there’s not much new information in circulation, but everyone is trying their best to be a helpful resource. SCRS moved up its
Affiliate Association conference call, which offered a great deal of ideas and information shared among association leadership nationally. LT: We are seeing some shops shutting down completely, but the vast majority are continuing to serve their customers. The ones that are running are experiencing a drastic change in business practices. These often include dealing with parts shortages and having to pick up parts that are no longer being delivered. This often involves having an employee drive long distances to get parts that cannot be obtained locally. Drop-off and pick-up of vehicles is now done differently, and many shops are modifying estimating procedures and office hours, among other things. AS: I’m really proud of the way our industry has responded to and handled all of this. I believe that at the end of this, the independent market is really going to shine in a number of different ways.
NEAR: What are the best ways members can use your association to keep them moving forward until this is finally over? LP: Members should continue seeking information from the association and let us know what else we can do to better assist them as we go forward. I suggest they become familiar with the information on our website available through the Members Only portal. There is a wealth of information that can be used to assist in the repair and negotiating processes in our state. Members should also take the time to view the Auto Damage Appraiser Licensing Board [ADALB] videos through that same Members Only portal so they can see and hear firsthand what goes on. In particular, the recording from November 26, 2019 regarding the issued aftermarket Advisory Ruling and how to interpret it is worth their time. This will help to dispel any propaganda spread by insurers and their appraisers when they come to their shop feigning ignorance of the Advisory Ruling or attempt to avoid their obligations. Also, they should listen to the ‘video of the emergency teleconference held on March 26 of this year, where the insurance industry attempted to exploit the current situation by trying to order to get ‘temporary’ regulatory language changed, which they have sought for a very long time. If the language had passed, it would have had the potential to forever change how motor vehicle damage estimates were written, reviewed and negotiated. CB: From the time this first started, AASP/NJ has been providing notices to our members on how to deal with the issues as they arise or change from day to day, including webinars on how to deal with the issues and contacts for organizations that can assist with any issue that results from the pandemic. We continue to research and provide links to important information. We have provided members with dealer license information that allows the dealer to sell, title and register vehicles online. AASP/NJ is continued on page 40
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[LEGAL] PERSPECTIVE By James A. Castleman, Esq.
Are Claims for Inherent Diminished Value Dead in Massachusetts? In the age of CARFAX and similar vehicle history reporting services, used car buyers know whether the car they are buying has been damaged and repaired. The reality is that a car that has been through the repair process has a stigma attached to it, and it is generally worth less than a car that never has been damaged. In fact, most people in the business of selling cars would say that repaired cars have a value that is inherently less than previously undamaged cars, with diminished value generally reflected in the price that dealers are able to get for a repaired used car. Recognizing that previously damaged cars are worth less, recent years have seen claimants seeking reimbursement from insurers covering their auto damage having second thoughts about accepting only the cost of repairing damage. They have been wondering why they should not also be able to collect the inherent diminished value of their car on top of the cost of repair. After all, if the insurance payment is supposed to make them whole, why isn’t the insurer on the hook for the diminished value of the car as well? First-Party Claims For first-party collision claims, the Massachusetts Supreme Judicial Court put the issue to rest in 2003. In Given v. Commerce Ins. Co., the Court ruled that under the standard Massachusetts auto insurance policy, claimants are not entitled to collect inherent diminished value damages on top of the cost of repairs. The rationale of the Court in that case, however, was based solely on the insurance policy language applicable to first-party coverage. The policy, which is the enforceable contract between an insurer and their insured, says that the insurer is only responsible for the cost of repairs in collision claims – with no provision for also paying for diminished value. The Court strictly interpreted the standard Massachusetts insurance policy and found that it could not allow a first-party claimant to collect more than their policy provides. Third-Party Claims While the issue was settled for first-party claims back in 2003, the Given decision does not control what happens in third-party property damage claims. If a person’s car is damaged because of someone else’s negligent driving, then they can make a claim against the negligent driver. In that case, what the claimant can collect is not limited by the contract language of their own policy. Rather, they can collect (and, if necessary, sue for) “tort” damages from the negligent operator. Generally, that includes all reasonably foreseeable damages incurred by the claimant, with no contractual limitation to just the cost of repairs. 38 June 2020
New England Automotive Report
Assuming that the negligent driver has an auto insurance policy, then that person’s insurer is responsible under their policy to pay any amount that a third party would be “legally entitled to collect [from the insured] for property damage through a court judgment or settlement.” This is a much broader liability than the limited contract damages that an insurer is obligated to pay on a first-party collision claim. While insurers certainly have balked at paying for the cost of repair plus diminished value in third-party claims, when push has come to shove, most insurers over the past several years have agreed to pay some amount for diminished value on top of cost of repair. Of course, the claimant has had to know that the issue exists in the first place and not have agreed to accept just the cost of repairs. Also, the claimant generally has needed to push the issue with the negligent operator’s insurer. But at least in my experience, insurers generally were agreeing to pay something for diminished value. But Maybe Not Anymore In the past year, there have been two significant court cases in which the courts have refused to allow claimants to collect inherent diminished value on top of cost of repairs in third-party property damage claims. In both cases, there was no dispute as to the facts, and both cases were submitted to the respective judge on crossmotions for summary judgment, with all claimants and insurers asking the judge to decide the case on his application of the law to those agreed facts. One case was decided by a Massachusetts Federal District Court judge last August. The other was decided by a judge sitting in the Suffolk County Superior Court Business Litigation Session in March of this year. Neither of these cases is fully controlling of the issue. They are both trial court decisions, not decisions of either the Massachusetts Supreme Judicial Court or Appeals Court, which would be controlling. However, they are both well thought out and well-written decisions, and they are likely to make it much more difficult to be able to collect diminished value damages from insurers. Insurers will know about these cases, and it is quite possible that none will now willingly pay diminished value damages unless and until they are ordered to make those payments by an appellate court. The basis for both decisions is somewhat complex and technical. Essentially, both judges looked at prior appellate cases involving damage to real estate. Those cases have held that, for real estate, the measure of damages is the lesser of the cost of repair of the damage to the land or the decrease in value to the land as a result of the damage. Both judges determined that the issue as it relates to auto damage had never been decided in
Massachusetts, but they chose to apply the real estate principles to auto damage claims. The judges also looked at insurance policy language, the statute governing auto property damage insurance, various insurance regulations, prior guidance to insurers given by the Massachusetts Division of Insurance and decisions from other states on the issue. The judge in the recent state Superior Court case had read the prior federal court case and directly cited some of the first judge’s reasoning. What Is the Fallout from These Cases? Both decisions are relatively lengthy and cover a number of issues, but some takeaways from the cases are as follows: The cases will surely embolden insurers to deny payment of diminished value damages in third-party claims from now on. As noted earlier, in my experience, most insurers did pay some amount for diminished value if they were pushed on the issue. Insurers probably made these payments partly out of fear that if they were sued under the Massachusetts Unfair Claims Settlement Act and lost, then they potentially could be saddled with payment of significant diminished value damages as well as multiple punitive damages and payment of attorneys’ fees. Further, it could open them up to class action lawsuits that could be ruinous. Now having two significant cases in which it was determined that diminished value could not be collected, insurers are likely to see no reason to make those payments, since these decisions would make it quite difficult for a claimant to be able to make an effective unfair claims settlement argument in the face of two different courts having found that diminished value cannot be collected. It now is going to be difficult to win a court case brought for collection of diminished value damages unless these decisions are overturned by appellate courts. While some judges may be willing to go out on a limb and decide differently, it is more likely that many hearing these types of cases are going to adopt the reasoning of the other two. After all, these two judges have already done the research and written lengthy and reasoned decisions. Why should another judge decide differently, unless an appellate court tells them that these two decisions were wrong? Despite all of this, these two decisions actually are not controlling of any future case that does not involve the exact same parties. Again, these are trial court cases, not appellate cases. Trial court decisions do not bind anyone who was not a party to them. Any other claimant can still try to make a claim against any other insurer – or even against these insurers – for diminished value damages. However, claimants do need to be aware that these two cases are going to make such claims difficult to win. The insurers in these cases clearly believed that the courts might find that diminished value would be a legitimate element of damages. The earlier federal case was brought against Vermont Mutual Insurance. The more recent state case involved three different claims,
two against Safety and one against Commerce. The decisions make reference to the fact that both Vermont Mutual and Safety had made offers of payment for diminished value during the claim process, but they just weren’t enough to satisfy the claimants. Is inherent diminished value actually “inherent?” In the two cases, the various insurers took different positions as to whether diminished value applies in all cases. Commerce took a strict stance that it never applies, and that cost of repair is the only applicable measure of damages. Vermont Mutual and Safety were not as strict in their positions. They did take the position, however, that diminished value did not apply to all claims. As an example, what if an older car with wear and tear were damaged in a collision, and then the repairs actually improved the value of the car? If the repaired car now had a new transmission, other new parts and a new paint job, might it be worth more than the car was worth prior to repairs? If so, perhaps diminished value is not always “inherent.” This factor was important to the insurers: If diminished value always applies, then it makes it easier for a class action to be brought against an insurer that refuses to pay it. If it is not inherent, then a class action may fail on its face. Diminished value is quantifiable. Even if diminished value may not be applicable to all losses, all of the insurers seemed to agree (with somewhat less agreement by Commerce) that a dollar value for it could be determined by experts. This factor would be important to future claimants who may succeed in suing insurers for diminished value, because it would eliminate one potential argument that an insurer could make. Conclusion Based on the cases discussed in this article, it could be that both first- and third-party claims for diminished value could be dead in Massachusetts, at least for now. Yet, I personally think that the reasoning of the past year’s third-party diminished value cases is flawed. I believe that there are clear and significant distinctions between the real estate damage cases relied on by these two judges and what happens when a motor vehicle is damaged and repaired, and I think that the judges misinterpreted the Massachusetts insurance policy and governing law. I have learned that the decision in the recent state Superior Court case has been appealed, and I am hopeful that the appeal will be successful. Other states have allowed for the collection of diminished value in addition to cost of repairs, and I see no reason why Massachusetts appellate courts should not adopt the reasoning of the courts in those states. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 4723424 or at jcastleman@prclawoffice.com. New England Automotive Report June 2020 39
[COVER] STORY
Continued from page 37
constantly watching what is going on and seeking answers to problems that are being reported to the AASP/NJ Hot Line. The association is here and ready to assist any member with any issues that arise. If we don’t have the answers, we will go and get them, report back to those members and share this information with others. JA: The benefits of association membership haven’t changed, and they have become even more important during this crisis. We can help them move forward by providing access to ‘need-to-know’ information and education, connecting them with their peers to share experiences and lessons learned and reducing their costs with our member benefit programs. We are here to help and will continue to be their champion and their ally. JH: We can connect needs as best we can, and that can be educational or even a product or service. When so much ‘information’ is being floated out everywhere, it’s our job to find and source what actually helps our members to survive this crisis. JT: Take the time to read emails and reach out. Help us help you. Most of our day-to-day operations are put on hold right now, and we are waiting to be a resource to you. Associations have the heart of any charitable cause – we do it because we genuinely care for you and our industry. If we can do one thing to help you or your shop during this time, then we have done our job.
LT: Members rely on us to keep them informed of the very latest information. We are also a platform where they can network with other shops for ideas of what works and what doesn’t and just bounce ideas off of each other. AS: We’re continually releasing educational materials, as we always do, through our YouTube channel and website. There are a lot of people who are focused right now on developing content through this period, and there are a lot of opportunities for members to get in training and learning and spend time sharpening their minds and looking at their businesses. And if they find material they like, I’d ask that they share it. NEAR: What is the message you have for members so they remain hopeful for the future? LP: We are an essential, a resilient and – most importantly – a proud industry. We will survive the current state of affairs we find ourselves in, and we will come out on the other side that much stronger. We need to be vigilant to ensure that our customers and our businesses are not exploited and put in harm’s way by insurers feigning concern for their policyholders. We must rely on one another and AASP/MA for the strength needed to survive and prosper in the aftermath of COVID-19. CB: AASP/NJ wants every member to know that they are not alone. The association has constantly spread the message that unity is the answer. That message could never be more
important than right now. This is a time for each member to look out for one another, put their differences aside and help each other. Over the years, the industry has dealt with whatever difficulties it has had, and this is no different. The difference now is that the members of AASP/NJ have an association that stands ready to assist in whatever manner necessary to get through this and anything else that comes our way. I would urge the members of AASP/NJ to utilize the benefits that we provide, like the Hot Line, Labor Pool and Equipment Exchange. Also, they should utilize our Benefit Provider Programs that provide discounts on workers’ compensation and garage insurance, credit card processing and so much more. Our final message to all AASP/NJ members is to stay strong and safe and know that you are not alone. The future will shine bright again soon. JA: There’s a reason that auto and collision repair were deemed ‘essential’ businesses, and that’s because you are! The fundamental need for consumers to have their vehicles maintained and repaired has not changed and will continue after this crisis has passed – perhaps at even greater levels than ever before. This industry has always been resilient, whether adapting to changing vehicle technologies or a shifting regulatory environment. If you stay informed, take advantage of the resources available to you and adjust accordingly, you will weather the storm and come out wiser and stronger on the other side.
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New England Automotive Report
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JH: This industry goes to work as soon as the doors open, and this crisis is no different. When cars go back on the road, work will be coming back in the doors. We cannot focus on the things we cannot help. Rather, we need to do the best with what we have now and look to the future. Does the shop need to be cleaned out, reorganized and freshened up? Would you change anything about your layout? This is the time, when it’s slow, that you can make all these positive changes to come back better and stronger than ever! JT: This industry has many, many great minds at work. Because of the groundwork we have laid as an association, our members have the network of trainers, researchers and other successful shop operators at their fingertips. That, coupled with what they have been learning and implementing at their businesses over the past few years, is the biggest advantage they could have given themselves to face something as
unexpected as this. ABAT members have given themselves many advantages, and faith in God will carry us through. LT: We tell shops to be creative and flexible and keep an open mind. What worked best for them just a couple of weeks ago might not work at all now. For example, we are seeing new vendor opportunities opening up. We are seeing stronger bonds with local small businesses that are also getting creative in their marketing efforts. We are also seeing closer relationships with our insurance partners that hopefully will continue long after this is over. AS: We are an industry made up of people who fix tragically broke things, and we can do the same here. This is not the first time we have weathered really challenging economic adjustments. September 11 and the recession in 2008 are examples of instances where the challenge felt insurmountable, but we – as an
industry, as a country and as individuals – found our way through it. This will be no different. It’s going to be tough, but I think many businesses will learn how they can be better prepared in the future while hoping they never have to be prepared for something like this again. The reality is that we can come together and potentially be a stronger industry as a result of this. For so long as an industry, one of our challenges has been attracting new individuals to fill the gaping holes in technical roles that we have. The reality is that we may have more opportunity to fill those empty spaces than we did previously. We may appeal to individuals who wouldn’t have considered us before but who now might say, ‘Wow, this is an industry that continues going to work, continues supporting its employees and continues to provide a paycheck when so many people are stuck at home.’ There are things in this situation that make our industry shine. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
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115 E. Howard St. Quincy, MA 02169 Toll Free: 877-707-8475
561 Quaker Ln. Warwick, RI 02893 TOLL FREE: 800-992-6220 FAX: 800-254-3544 wparts@baliseauto.com www.BaliseWholesaleParts.com
One Call, One Truck for Eleven Brands!
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New England Automotive Report
247 Boston Turnpike Shrewsbury, MA 01545 508-756-8364 Fax: 508-752-3691 www.patricksubaru.com jlavalley@patrickmotors.com
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