AASP/MA Body Shop Wins in Court Against Travelers Insurance

An auto body shop owner’s win against a major insurance company on an appeal could possibly mean big things for the industry’s future.

A December 13 court decision ruled in favor of an AASP/ MA member shop, Mike’s Auto Body (Fall River), and partnering business, All Day & Night Towing, against Travelers Insurance.

The appeal dismissed a small claims court magistrate ruling that favored Travelers Insurance’s claim, which alleged that Mike’s Auto Body and All Day & Night Towing were engaging in unfair business practices, challenging their rates and other charges.

Mike Penacho, owner of the body shop, wants everyone in the industry to know what he had to face when Travelers Insurance came after them. The initial magistrate ruling in the insurance company’s favor would have cost Penacho roughly $16,000 – three times the amount of damages sought. The insurer was willing to drop it to $15,000 if they didn’t appeal, but Penacho pushed forward, he said.

“I know some guys out there would likely have caved and just paid, but we had to appeal,” lamented Penacho. “It cost me roughly $12,000 to fight, but sometimes you have to decide when it’s right to go to court or not. As my pastor has told me, ‘If you don’t go to battle, you don’t have a shot at victory.’

“I thank my Lord and Savior for helping me out,” he professed, regarding this recent issue and others he’s faced in the past.

“The judge found in our favor, which essentially means that the prior judgments awarded against the body shop and tow company have been vacated, and they do not owe Travelers any money,” reported Jordan J. Rodrigues, the attorney for the two automotive businesses.

In the end, this judge found the shops’ rates to be justified, explained Rodrigues.

“We were vindicated as the judge found our rates to be fair and not unjustified.”

The shops did their work and are entitled to be paid for the services rendered.

“It’s kind of like a David versus Goliath mentality – a billiondollar insurance company putting all this pressure on the small business,” he continued. “A lot of times, these businesses get letters in the mail from insurers requesting refunds or threatening to sue for triple damages and attorney fees. Nine times out of 10, these small shops probably cave and give in. I’d like to think that maybe this win will put the brakes on that practice.”

“This court ruling in favor of Mike’s Auto Body is a positive thing for the collision industry,” said AASP/MA Executive Director Lucky Papageorg, who testified on behalf of Mike’s Auto Body. “It may not set a precedent, but it’s surely something to be optimistic about. Body shops can fight and win.”

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