New England Automotive Report December 2017

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Massachusetts Schools Win Big at Collision Repair Education Foundation Awards pg. 24

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New England Automotive Report

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2018 MEMBERSHIP APPLICATION MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

As a member of the Alliance of Automotive Service Providers of Massachusetts (AASP/MA), I will abide by the association’s bylaws and code of ethics. I understand that membership in AASP of Massachusetts is non-transferable, and I must remain current with my dues in order to be a member in good standing. I understand that if I discontinue my membership that I must immediately cease using any association promotions, logos or materials. Additionally, I understand that as part of my AASP of Massachusetts membership, I will receive New England Automotive Report, the official publication of AASP of Massachusetts, faxes, emails and other mailings.

*** PLEASE TYPE OR PRINT LEGIBLY *** Primary Contact Name: ________________________________________________________________________________________________ Business Name: ______________________________________________________________________________________________________ Street Address ________________________________________________________________________________________________________ City

Street

State

Zip

Mailing Address ______________________________________________________________________________________________________ Street

Phone Number ( E-mail Address

City

)____________________________________ Fax Number (

State

Zip

) __________________________________________

________________________________________ Web Site Address ____________________________________________

MEMBERSHIP TYPE (check one) Collision Repair Shop

ACCOUNTS PAYABLE CONTACT: Name: __________________________________________________

Mechanical Repair Shop

Phone Number: __________________________________________

Both, Collision & Mechanical Repair Shops Vendor

Email:____________________________________________________

RS Number (if applicable) ________________________________ ANNUAL MEMBERSHIP DUES

AASP/MA CHAPTER (check one) MidState Southeastern Northeastern Western

(The AASP membership year is from January 1 to December 31, 2018)

$40/month

$115/quarter

$425/year - BEST VALUE!

Monthly & Quarterly Dues are Automatic Credit Card Transactions ONLY*

NEW! Political Action Committee (PAC) Donation ...............$_____ Personal Contributions Only

ADDITIONAL CONTACT FOR NEWSLETTERS AND LEGISLATIVE UPDATES Name: ____________________________________________________ Email: ____________________________________________________ Name: ____________________________________________________ Email: ____________________________________________________ Name: ____________________________________________________ Email: ____________________________________________________

Check or Cash

Credit Card:

Visa

MasterCard

Amex

Card Number: __________________________________________ CID Number: ____________ (3#s on back for Visa, 4 on front for AMEX) Expiration Date: ________________________________________ Name on Card: __________________________________________ Billing Address of Credit Card: ____________________________ ________________________________________________________

Name: ____________________________________________________

________________________________________________________

Email: ____________________________________________________

Signature: ______________________________________________

Name: ____________________________________________________

Date: __________________________________________________

Email: ____________________________________________________

PLEASE COMPLETE THIS MEMBERSHIP APPLICATION AND RETURN IT WITH PAYMENT TO AASP-MA OFFICE. 12 Post Office Square, 6th Floor • Boston, MA 02109 Phone: (617) 574-0741 | Fax: (617) 695-0173|jzywien@aaspma.org As required by the U.S. Tax Code, AASP of Massachusetts, Inc. informs its members that 75% of the dues paid to the association are tax deductible. The remaining 25% is allocated to legislative activities and is not tax deductible.

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December 2017 • Volume 15, No. 12

CONTENTS

DEPARTMENTS PRESIDENT’S MESSAGE by Molly Brodeur 8 | Looking Forward: AASP/MA’s Big Plans for 2018 LOCAL NEWS 16 | AASP/MA “No-Clam Clambake” Fills the Room NATIONAL NEWS 20 | SEMA 2017: Staying Active and Educated in the Industry by Kristen Dalli 21 | AASP/MA Active in Dialogue at AASP National Meeting by Joel Gausten

26

24 | John Eagle Case Takes Center Stage at SEMA

by Joel Gausten

24 | Massachusetts Schools Win Big at Collision Repair Education Foundation Awards by Kristen Dalli LEGAL PERSPECTIVE by James Castleman, Esq. 47 | Why Make Repairs the Way Your Customer Wants Them? Because That’s What the Law Requires

FEATURES COVER STORY by Joel Gausten 26 | The Shockwave Hits Home: AASP/MA Explores $31.5M Improper Repair Verdict

NATIONAL FEATURE by Joel Gausten 30 | State of the Industry Address: An Executive Director/Administrator Roundtable

TECHNICAL FEATURE by Larry Montanez III, CDA 40 | When You Are Proven Wrong in Court (and It’s Too Little, Too Late): Part 2 of 2

40 ALSO THIS ISSUE 5 | AASP/MA MEMBERSHIP APPLICATION 10 | A MESSAGE FROM THE EXECUTIVE DIRECTOR Calling All Auto Body Shops!

13 | TRAINING OPPORTUNITIES: I-CAR CALENDAR OF EVENTS 13 | AASP/MA SPONSOR INFO 54 | INDEX OF ADVERTISERS New England Automotive Report

December 2017

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PRESIDENT’S MESSAGE

Looking Forward: AASP/MA’s Big Plans for 2018 MOLLY BRODEUR

communicate with each other on a regular basis and see the ways being part of this association can positively contribute to your everyday business. (Make sure you have your member login information to access these new features!)

AASP/MA is also working to reengage our member benefit package. While we offered one in the past, we’re working now to create a more comprehensive, cohesive benefits package, and we’re attacking this project from a new angle. These new benefits will be released mid-2018, so be sure to keep up with the latest AASP/MA updates.

Lastly, be sure to follow us on social media! One of our goals in the coming year is to have a more robust presence on social media, so like us on Facebook and follow us on Twitter. We will be generating a great deal more content in 2018, and we look forward to connecting with all of you on these platforms.

With 2017 winding down, now is the time to look ahead to the potential opportunity that comes with a new year. Whether these last 12 months were your greatest yet or you’re counting the days until the calendar flips to 2018, the end of the year calls for both reflection and excitement.

At AASP/MA, we couldn’t be more eager for the start of 2018, as the new year will bring about a number of changes that we hope will better your businesses and reignite your excitement about being a part of this association.

For starters, in 2018 we’ll be revamping our website to make it more user-friendly and interactive for our members. We’re working on enhancing the Members Only portal to create a space that members can use in their shops on a day-to-day basis that will ultimately better their bottom lines. Currently, we have a ton of information in the portal, and we’re diligently working to make it easier and more intuitive for our members.

Additionally, we’ll be creating a Member Forum on our website as a way for AASP/MA members to communicate in real time. You’ll be able to post questions and have them answered by fellow shop owners, while also facilitating helpful, engaging conversation about issues we all face in the collision repair industry. We hope this Forum will become a great way for our members to

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Facebook: facebook.com/AASP-Massachusetts251472571580905 Twitter: https://twitter.com/AASP_MA

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

AASP/MA PRESIDENT MOLLY BRODEUR is the Chief Operating Officer of Al Brodeur's Auto Body in Marlborough, MA. She can be reached at (508) 485-1082 or molly@albrodeur.com.

G

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AUT M TIVE STAFF

AASP/MA EXECUTIVE COMMITTEE

PUBLISHER

CREATIVE DIRECTOR

Thomas Greco - thomas@grecopublishing.com

Lea Velocci - lea@grecopublishing.com

SALES DIRECTOR

EDITORIAL/CREATIVE COORDINATOR

Alicia Figurelli - alicia@grecopublishing.com

Kristen Dalli - kristen@grecopublishing.com

EDITORIAL DIRECTOR

PRODUCTION

Joel Gausten - joel@grecopublishing.com

Donna Greco - donna@grecopublishing.com

PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963

PRESIDENT

TREASURER

Molly Brodeur

Kevin Gallerani

VICE PRESIDENT

LEGISLATIVE CHAIR

Adam Ioakim

Peter Langone

SECRETARY

IMMEDIATE PAST PRESIDENT

Gary Cloutier

Paul Hendricks

AASP/MA STATEWIDE DIRECTORS COLLISION DIRECTOR Rob DelGallo

AASP/MA DIRECTORS www.grecopublishing.com 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 © 2017 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com

Darlene Andrade

Kevin Kyes

Matthew Ciaschini

Frank Patterson

Alex Falzone

Mike Penacho

Joshua Fuller MASSACHUSETTS

WWW.AASPMA.ORG

BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

8 December 2017

New England Automotive Report

AASP/MA EXECUTIVE DIRECTOR Jillian M. Bukhenik 12 Post Office Square, 6th Floor Boston, MA 02109 Phone: (617) 574-0741 Fax: (617) 695-0173 Email: jzywien@aaspma.org

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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: 617-826-5005 FAX Number: 617-489-0733

COLONIAL FORD 147 Samoset Street 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: 800-548-8887 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

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COLONIAL BUICK - GMC 66 Galen Street Watertown, MA. 02472 Phone Number: 888-560-5337 FAX Number: 617-489-6875

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

COLONIAL CADILLAC 201 Cambridge Road Woburn, MA. 01801 Phone Number: 781-935-7009 FAX Number: 781-933-7728

Place any order online with our parts order form at www.buycolonial.com

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A MESSAGE FROM THE EXECUTIVE DIRECTOR

Calling All Auto Body Shops!

JILLIAN BUKHENIK

It’s time to renew your dues to AASP/MA! If you’re not a member, now is the perfect time to join the only association representing the interests of collision repair shops in the Commonwealth.

One of the most important services AASP/MA offers is representing the industry before the Legislature and various regulatory offices including the Auto Damage Appraisers Licensing Board (ADALB) and the Attorney General’s Office. AASP/MA has an aggressive legislative agenda this year, with five filed matters including our priority Labor Rate Bill. Last session, that bill was passed by the Senate for the first time in its history!

AASP/MA attends every ADALB meeting and posts a recording of each one to the Members Only section of our website, which can be viewed at any time. These meetings are extremely important to the industry. AASP/MA also regularly meets with the Attorney General’s Office on consumer issues affecting body shops.

As an AASP/MA member, you receive

our Damage Report electronic newsletter, which includes exclusive information like DEG estimating tips, free webinars and status reports on our legislative and regulatory efforts. In addition, members receive notice about upcoming training and educational events hosted by the association as well as events hosted by industry partners like I-CAR. Members may add any of their shop members to our newsletter list.

AASP/MA hosts a variety of educational and social events throughout the year. This year alone, we have hosted Rich Altieri, a national expert on shop management solutions, and Jake Rodenroth from asTech, who presented on pre- and post-repair scanning and provided members in attendance with a discount code to purchase asTech products.

We also hosted our annual Golf Outing, which raised over $600 for our Political Action Committee (PAC).

Members also received a variety of discount programs and services, such as a 15 percent discount on any Mitchell RepairCenter TechAdvisor package through Mitchell International, 50 percent off website marketing success packages

with Autoshop Solutions and a 1 percent discount on Sarat Ford purchases. For more information about these and other AASP/MA benefit programs, call us today!

AASP/MA membership provides exclusive opportunities for your business.

If you are a current member, thank you for your continued support. We know you find value in being part of this association, and I appreciate your participation. If you are not a current member, please consider joining today. Not only can we save your business money, but we are also working every day to provide solutions to your daily challenges. Join us today and receive free membership through the end of 2017.

Sincerely,

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

Jillian M. Bukhenik, Executive Director AASP/MA EXECUTIVE DIRECTOR JILLIAN BUKHENIK (formerly Jillian

Zywien) has been a senior account executive at Lynch Associates for over eight years. She can be reached at (617) 574-0741 or via email at jzywien@aaspma.org.

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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

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

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

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

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

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AASP/MA ASKS YOU TO PLEASE SUPPORT

in Massachusetts

December 4, 2017 Corrosion Protection Enterprise Rent-A-Car (Burlington, MA) December 5, 2017 Vehicle Technology Trends & Diagnostics Overview Enterprise Rent-A-Car (Burlington, MA) December 9, 2017 Best Practices for High-Strength Steel Repairs VFW Post 2125 (Bridgewater, MA) Vehicle Technology Trends & Diagnostics Overview VFW Post 2125 (Bridgewater, MA) December 11, 2017 Hazardous Materials, Personal Safety & Refinish Safety Enterprise Rent-A-Car (Burlington, MA)

Contact AASP/MA at (617) 574-0741 / jzywien@aaspma.org for information on additional AASP/MA sponsorship opportunities!

December 19, 2017 Understanding the Cycle Time Process Fuller Auto Body (Auburn, MA) December 27, 2017 Steering & Suspension Damage Analysis Fuller Auto Body (Auburn, MA)

For more information, visit i-car.com

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[LOCAL] NEWS

AASP/MA “No-Clam Clambake” Fills the Room the many industry companies and individuals who offered their invaluable participation and support. Gold Sponsors included ABSAP, Grand Prize winner Chad Farnham of Sarat Ford-Lincoln Amherst Oakham Auto walked away with a framed “game face” photograph of Recycling, AkzoNobel, Tom Brady donated by Lynch Associates.

Axalta, Central Chevrolet, Auto Body Technologies, a wireless Hoffman Auto Group, Linder’s Inc., VOIP headset donated by Lynch LKQ/Keystone Automotive, Lombard Associates and multiple prizes donated Equipment, Long Automotive Group,

by Evercoat Products.

Lynch Associates, Mercedes-Benz of The “No-Clam Clambake” featured Springfield, Sarat Ford-Lincoln, Transtar a slew of additional raffle prizes Autobody Technologies Inc. and West graciously donated by 3M, A&R Glass, Springfield Auto Paint & Body. The AkzoNobel, Amherst Oakham Auto event was also helped along by Bronze Sponsors 3M, CCC Information Services Recycling, ABSAP, Axalta, CCC Information Services Inc., Central Inc., New England Auto & Truck Chevrolet, Cloot’s Auto Body, Evercoat Recyclers, Pleasant Street Autobody & Products, Hoffmann Auto Group, Repair and Westover Auto Salvage.

Linder’s Inc., LKQ/Keystone A special “shop owners only” raffle Automotive-Springfield, Lombard offered a $50 restaurant gift card Equipment, Long Automotive Group, donated by West Springfield Auto Parts, an HVLP spray gun donated by Transtar Lynch Associates, Mercedes-Benz of Springfield, New England Auto & Truck Recyclers, Pleasant Street Auto Body, Rubber Seal (Larry Skorupski), Sarat Ford-Lincoln, Transtar Auto Body Technologies Inc., U-POL Products, West Springfield Auto Parts and Westover Auto Salvage.

AASP/MA would like to thank the following members who volunteered their time and energy to making the night such an unforgettable time: Gary Cloutier (Cloot’s Auto Body), Peter Langone (Langonet Auto Body & Frame), Rick Casey and Rico Caputo (LKQ/Keystone Automotive – Springfield), Mike Boucher (Custom Auto Body), Matt Ciaschini (Full Tilt Auto Body), Paul Zollner (West Springfield Auto Parts) and Andre Marcoux (Western Mass Collision).

For information on upcoming Super Grand Prize winner Andre Marcoux (left) with Rick Casey of LKQ. Marcoux took AASP/MA events, visit aaspma.org.

On October 27, the Polish American Club in Feeding Hills hosted hundreds of AASP/MA community members for the association’s 2017 “No-Clam Clambake.” Continuing a tradition that began with last year’s event, AASP/MA made the Friday night gathering a “clambake” in name only and offered steak and clam chowder. The festivities provided AASP/MA members and vendors an amazing opportunity to sit back and relax after five days of hard work in the industry.

The “No-Clam Clambake” featured an annual raffle that made a Super Grand Prize winner out of Andre Marcoux of Western Mass Collision, who went home with a 65-inch TV donated by LKQ/Keystone Automotive and AkzoNobel. The Grand Prize, a framed “game face” photograph of Tom Brady donated by Lynch Associates, went to Chad Farnham of Sarat FordLincoln.

This year’s “No-Clam Clambake” would not have been possible without

home a 65-inch TV donated by LKQ/Keystone Automotive and AkzoNobel.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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Gold Sponsors included

ABSAP, Amherst Oakham Auto Recycling, AkzoNobel, Axalta, Central Chevrolet, Hoffman Auto Group, Linder’s Inc., LKQ/Keystone Automotive, Lombard Equipment, Long Automotive Group, Lynch Associates, Mercedes-Benz of Springfield, Sarat Ford-Lincoln, Transtar Autobody Technologies Inc. and West Springfield Auto Paint & Body.

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[NATIONAL] NEWS

by Kristen Dalli

SEMA 2017: Staying Active and Educated in the Industry The 2017 SEMA Show brought nearly 200,000 automotive enthusiasts from around the globe to the Las Vegas Convention Center from October 30-November 3. Though SEMA draws attendees from every corner of the world, many New England natives made the trip to Vegas for the Show.

“Whatever you’re doing in your business, that company is at SEMA. Software, paint, tools, parts – everything is there. It allows you to focus in and look at new stuff,” shared AASP/MA Treasurer Kevin Gallerani.

“We looked at a ton of equipment and management software – whatever we think is going to help make business more efficient.

“Everybody should go there once to see what it’s like,” Gallerani continued. “It’s important to make time for stuff like that. I got to meet with other shops and see what problems they have and how they deal with them, and just bounce ideas off peers. I met a bunch of new people I never would’ve had the opportunity to otherwise. It’s all about building the

business and making the business better.”

AASP/MA Collision Director Rob DelGallo echoed Gallerani’s sentiments, saying, “If you’ve never been to SEMA, you owe it to yourself to check it out. If you go once, you’ll most likely never miss it again.”

“SEMA is such a large national show that has such a unique energy,” shared Dave Berube of SprayBooth Services & Equipment. “I know it’s tough in New England – it’s tough all over – but a lot of people get stuck in the four walls of their shops and don’t realize what’s going on out there. If you’re not going to some sort of trade show at least biyearly, you’re missing out on a huge opportunity for what’s changing in the industry.”

1. American Honda Motor Co. returned to SEMA for what it calls “an amazing show.”

2. Accudraft made a huge impression at SEMA 2017.

3. AASP/MA Treasurer Kevin Gallerani (right) and his father, Dave, at SCRS’ RDE After-party at SEMA. 4. Polyvance saw heavy attendee traffic throughout the week.

1 2

4

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“SEMA is an amazing show,” remarked American Honda Motor Co. Assistant National Manager Rossana Alvarez. “It’s a great place to not only be seen, but to see people in the industry. There’s an amazing number of meetings that get done on the sidelines. It’s absolutely worth coming here year after year.”

Accudraft’s JB Haydell shared similar thoughts, saying, “The SEMA Show has a lot of foot traffic, and it’s really nice to get out there. A lot of our distributors are happy that we’re here and happy with the way the Show went.”

High-level Repairer Driven Education (RDE) sponsor PPG, who’s been exhibiting at SEMA for the last 15 years, also recognized the importance of being out in Vegas each year.

“It’s the biggest event where we can really position our brand and all of the innovative things that we’re doing. The show continues to grow and get bigger, and we’re very satisfied,” said Marketing Director Ben Shaw.

“SEMA is now the biggest and best-supported show, and that’s why we continue to go,” shared Polyvance President Kurt Lammon.

“We make sales there, and the leads make it profitable for us.”

SEMA 2017 was also the place for moments of great emotion.

During the Collision Industry Conference (CIC), administrator Jeff Hendler paid tribute to industry legend and past SCRS Chairman Gene Hamilton, who passed away in late October.

“We stand on the shoulders of those who came before us to reach for the dreams we’ve made for ourselves. Gene was one of those guys.”

SEMA also provided an opportunity for the national automotive community to honor the great March Taylor, a beloved

member of SCRS who passed away in 2007. At the inaugural Collision Repair Red Carpet Awards Breakfast, SCRS representatives presented the first-ever March Taylor Kina’ole Award to past Chairman Gary Wano, Jr., who was unable to attend. Industry mainstay Jeff Hendler paid tribute to Taylor, who lived and worked in Hawaii, by dressing in his image.

During the Recycled Rides Luncheon hosted by the National Auto Body Council (NABC), a full ballroom watched as five vehicles were gifted to drivers in need.

Participants in making this moment possible included Hertz, Service King, LKQ, State Farm, Maaco, Sherwin-Williams, Allstate, AkzoNobel, Enterprise Rent-A-Car, Gerber Collision & Glass, GEICO and Caliber Collision, among many others. The event served as the final NABC outing overseen by Executive Director Chuck Sulkala, a 50-year industry veteran who is retiring at the end of this year.

Speaking with us from the SEMA floor on the last day of the Show, SCRS Executive Director Aaron Schulenburg was excited by the exceptional attendance rate at the Show and also hopeful for what SCRS and the SEMA organization can contribute back to the industry in future years.

“SCRS has been a fixture in the last eight SEMA Shows, and this one has felt the most alive,” Schulenburg stated. “It’s huge – the aisles were swelled with people, and our sponsors’ booths are just full of people doing business and engaging in solutions. I hope that we can continue to be nimble and produce relevant programs that speak to the industry’s need for information.”

MASSACHUSETTS

AASP/MA Active in Dialogue at AASP National Meeting Representatives from various AASP state affiliate associations recently gathered at the Renaissance Hotel in Las Vegas during the 2017 SEMA Show for their biannual National Board meeting.

Designed to discuss some of the industry’s most pertinent issues, the meeting also provides state affiliates with the opportunity to share reports on their associations’ individual efforts and gain insight into what their peers are doing to improve the industry.

In her affiliate report, AASP/MA Executive Director Jillian Bukhenik shared the association’s tireless legislative efforts, saying, “We have five legislative issues that we’ve filed, which is a pretty aggressive agenda, and we’ve been getting a lot of traction at the Legislature.”

Also present at the meeting was new Database Enhancement Gateway (DEG) Administrator Danny Gredinberg, who gave a brief overview of his work in the position thus far.

“It’s been exciting being a part of this and being able to bring my past knowledge in a shop environment to the table. I’ve used the DEG in the past and had positive results, and thought this would be a great opportunity,” Gredinberg shared. “The DEG participated in a presentation [at the SEMA show] with 3M, Honda and ALLDATA on getting the awareness out there and teaching how to better utilize all of the estimating resources out there. We want to make the DEG more visible to everyone, and we’re teaching firsthand how to use inquiries.

The feedback I’m getting is that there’s more communication than there has been in the past, which is really encouraging.”

At the time of the meeting, the DEG had received more than 11,100 Database Inquiries. More information on the DEG is available at degweb.org; more information on AASP National is available at autoserviceproviders.com.

BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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[NATIONAL] NEWS

John Eagle Case Takes Center Stage at SEMA

by Joel Gausten As reported in last month’s New England Automotive Report, an October 2 verdict in Texas found John Eagle Collision Center in Dallas guilty of negligence in the improper repair of a 2010 Honda Fit that led to permanent injuries for the driver in a subsequent collision. The driver, Matthew Seebachan, and his wife, Marcia, were awarded 75 percent of a $42 million verdict (or $31.5 million) for their ordeal. (The other driver in the accident, Jack Jordan, Texas attorney was found responsible for 25 percent of the Todd Tracy $42 million, but he was not involved in the case and is not legally obligated to pay this amount.)

To gain insight into the crucial case, the Society of Collision Repair Specialists (SCRS) welcomed the plaintiff’s attorney, Todd Tracy of Tracy Law Firm, to address industry members during the 2017 SEMA Show in Las Vegas. During the panel discussion “The Hidden Dangers of Vehicle Technology, Improper Repair Methodology and Your Liabilities” at SCRS’ 2017 OEM Collision Repair Technology Summit, Tracy made it clear that the days of auto body shops allowing insurers to dictate repair procedures are coming to a swift and litigious end. He noted that John Eagle Collision in Dallas was once a “well-respected billion-dollar company” before they earned headlines by performing an improper repair that nearly cost two people their lives.

“That company chose to get bullied by an insurer and glue a roof on rather than put the 108 welds that the OEM repair specifications said to do,” he said. “The jury came back and said, ‘If you’re going to make a business decision to let the insurance companies dictate safety to you, we’re going to make a business decision for you and award [the plaintiffs] $42 million.’”

Earlier in the week, Tracy gave his own seminar, “The Anatomy of a Lawsuit: The Crucial Details of the $42 Million Dollar Verdict,” which presented an overview of the accident and the factors that ultimately led to the jury decision. In an effort to help other collision businesses avoid similar legal calamities, he presented the following 11 tips: Always follow OEM repair specifications.

Always follow I-CAR. Never forget who your customer is.

If there are no OEM repair specifications, research how to make the repairs, keep records and keep the customer informed.

Never over-promise what you can deliver.

If your shop makes repairs, report the repairs and keep records.

NEVER put profits over your customers’ safety.

NEVER admit you’re letting insurance companies dictate how you repair vehicles.

Tell your customer in writing what the insurance company is doing, that you recommend against it because the vehicle will not be as safe in the event of an accident and that their family or 24 December 2017

New England Automotive Report

a future owner of the vehicle can be seriously injured or killed.

Then, have your customer sign off on your shop performing the insurance company’s repair so that you can CYA (cover your a**).

Be a HERO and STAND UP to the insurance companies and tell them and your customer in writing that the insurance company’s approved repairs violate OEM repair specifications and will cause serious injury or death to your customer or any future owner of this vehicle if an accident occurs in the future, and that you WILL NOT repair the vehicle knowing you are placing someone’s life at risk.

Be a HERO and STAND UP to the insurance companies and tell them and your customer in writing that the insurance company’s approved repairs violate OEM repair specifications and will cause serious injury or death to your customer or any future owner of this vehicle if an accident occurs in the future, and that you WILL perform the work required by the OEM, take what the insurance company pays and then sue the insurance company for the difference.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

Massachusetts Schools Win Big at Collision Repair Education Foundation Awards

by Kristen Dalli The Collision Repair Education Foundation (CREF) recently hosted its annual reception honoring countless vocational schools across the country. Held at the Renaissance Hotel in Las Vegas as part of the 2017 SEMA Show, the Foundation announced over $600,000 in school grants.

Massachusetts schools won big at the awards ceremony, with a number of schools bringing home prizes for their collision repair programs. Company-Sponsored Grant winners include Montachusett Regional Vocational Technical High School in Littleton with a $1,250 TechForce Foundation Grant and Essex Technical High School in Hathorne with a ProSpot Pulse MIG Grant. The following Massachusetts schools were recipients of $1,000 Ultimate Collision Education Makeover Grants: Assabet Valley Regional Technical High School (Marlboro), Bay Path (Charlton), Diman Regional Vocational Technical High School (Fall River), Greater Lawrence Technical High School (Andover), Greater Lowell Technical High School (Tyngsborough), Pathfinder Regional Vocational Technical High School (Palmer) and Southeastern Regional Vocational Tech High School (South Easton).

Founded in 1991, the Collision Repair Education Foundation is a non-profit organization dedicated to supporting collision repair education programs, schools and students. They aim to help create qualified, entry-level employees and provide them with a wide variety of career opportunities. For more information on CREF, visit CollisionEducationFoundation.org.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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December 2017

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[COVER] STORY

As easily the most significant legal decision to ever hit the American auto body industry, the recent $31.5 million verdict against John Eagle Collision has sent shockwaves across the country.

In an effort to outline the most important factors in the case and explore how it could affect shops in Massachusetts, AASP/MA welcomed Attorney Attorney James Castleman James Castleman for a special urged shops to follow presentation during its manufacturer repair November 15 Statewide recommendations.

Meeting in Framingham.

Four years ago, Matthew and Marcia Seebachan were driving their used Honda Fit four days before Christmas when they were struck head-on by a hydroplaning pickup truck. Within moments, the couple’s vehicle was engulfed in flames with them trapped inside. Although they were pulled from the car in the nick of time, Matthew suffered fourth-degree burns and Marcia experienced trauma that survives to this day. Following the crash, the Seebachans learned that the car’s previous owner had the roof replaced at John Eagle. The couple later sued the collision center, arguing that when the roof separated, one of the walls curved enough to puncture the gas 26 December 2017

New England Automotive Report

tank under the driver’s seat.

The Seebachens were awarded $42 million for their ordeal, with John Eagle responsible for 75 percent of the judgement (or $31.5 million).

Castleman explained to attendees that instead of following OEM recommended procedures, the non-referral shop made repairs in a different manner, allegedly at State AASP/MA’s Peter Farm’s request. While the OEM D’Agostino discussed procedure required spot welding plans to revise state auto for the roof of the car, the facility repair regulations. used adhesive to bond the roof to the car.

“According to the plaintiff’s expert, the repairs altered the structural and fuel protection system of the vehicle, preventing [it] from collapsing as intended and designed, ultimately causing damage to the vehicle’s gas tank so that the [Fit] caught on fire and trapped the plaintiffs in the vehicle.”

Because the shop did not follow known OEM repair specifications and should have known better – and because they did not openly disclose that they had used alternate repair procedures – the jury awarded actual damages as well as punitive “exemplary” damages, finding that the shop acted with “gross

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negligence, malice, intent or actual fraud.”

As detailed in Castleman’s presentation, John Eagle reportedly gave State Farm a significant discount on the repair, even though the shop was not a referral shop for the insurer. Even though there had been extensive repairs made to the vehicle before the Seebachens purchased it, the prior accident and damage did not show up on a Carfax report; in fact, the report came back completely clean. Neither the plaintiffs nor the dealership that sold the car to them (not the dealership associated with the repair shop) knew about the prior damage or that the roof had been panel-bonded.

Of course, this discussion led to an intriguing question: Could something like this case happen to a shop in Massachusetts? According to a handout Castleman distributed to attendees: Absolutely. In the Commonwealth, all repair shops are required to warranty their work, and that warranty (for the most part) cannot be waived in consumer transactions. Mandated warranties include that a product is “fit for the particular purpose” for which it is to be used, and also that it is “merchantable.” If a faulty repair makes the car unfit to perform properly in a crash, then it is likely not fit for its particular purpose and is possibly not merchantable either. Massachusetts does not generally recognize punitive “exemplary” damages; however, the state does have punitive damages under M.G.L., Chapter 93A for businesses that engage in unfair or deceptive trade practices, which can result in an award of three times the actual damage plus the plaintiffs’ attorney fees. It could likely be found in a case similar to the Seebachans’ suit that the facility engaged in unfair and deceptive practices.

Not surprisingly, Castleman warned that a scenario similar to what happened to John Eagle could absolutely occur here as “more lawyers get to hear about this case and find another source of income.” As a way for shops to better protect themselves from lawsuits, he offered the following advice:

Follow OEM and I-CAR specifications and procedures.

Let your customer know how you are going to be making repairs.

If their insurer won’t pay for OEM or I-CAR-specified repairs, disclose this to your customer and ask them to pay the additional amount that their insurer won’t pay or to sign a waiver of liability if you are going to make repairs according to the insurance appraisal.

(Castleman added that while a waiver of liability form might protect you, some Massachusetts courts may not find it enforceable and could even find that you have engaged in unfair and deceptive practices by asking your customer to sign such a form.)

Even if the insurer or your customer won’t pay for OEM-specified repairs, consider doing them the correct way anyway, even if no one is going to pay you to do it.

Consider turning down some repair jobs.

Make sure that you are doing business as a corporation or an LLC. (Castleman cautioned that while limited liability entities can protect you from individual liability, they may not if you are the individual that made the decision that caused the damages. The business can be sued – and so can the person who did the faulty work or decided to do work that is not to OEM or ICAR specifications.)

Buy “a boatload” of insurance.

Get out of the collision repair business. (Although this statement was drastic and brought a bit of levity to the discussion, Castleman noted that the risk of serious injury or death caused by faulty repairs can be significant.)

AASP/MA Treasurer Kevin Gallerani with Amy Blair and Tom Amichetti of Statewide Meeting Gold Sponsor Enterprise Rent-A-Car

Earlier in the evening, AASP/MA President Molly Brodeur commented on John Eagle’s actions on the shop floor.

“The reason why it’s such a huge issue is that obviously [John Eagle] didn’t follow the manufacturer-recommended repair procedures for the roof. Even more alarming, they were a huge dealership body shop, and they were a Honda ProFirst collision center. That begs a whole different question: If you’ve gone through the exercise of getting your certification, why aren’t you following the procedures? Everybody should be doing it, but if you have spent the time, energy and money [and made the] training and equipment investment to get yourself certified and then you’re still not doing what the manufacturer tells you needs to be done… That’s a major problem.”

In one respect, the John Eagle verdict could not have happened at a better time, as AASP/MA has been working tirelessly for several months to call for changes to state regulations to better ensure the use of OEM procedures. At press time, the proposed regulations were still pending official state review. In the meantime, AASP/MA past president and Auto Damage Appraiser Licensing Board (ADALB) member Rick Starbard proposed an ADALB Advisory Ruling (currently under review by the Board) that would change the word “may” to “shall” in the following regulation: Manufacturer repair procedures, I-CAR, Tec Cor and paint manufacturer procedures shall also apply. However, the selection of parts shall comply with 211 CMR 133.00 and 212 CMR 2.00.

“This [John Eagle] case really brought this issue to the forefront,” offered AASP/MA Executive Team Member Peter D’Agostino. “I think this debate is over; the courts have spoken.

There is now case law that says, ‘This is a negligent act when you don’t follow the repair procedures’… It’s not a debate anymore, and we need to fix the regulation.”

AASP/MA wishes to thank Gold Sponsor Enterprise Rent-ACar and Silver Sponsors Long Automotive and Designer Systems for making the Statewide Meeting possible. For information on upcoming AASP/MA events, visit aaspma.org.

More information on the John Eagle case is on page 24.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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28 December 2017

New England Automotive Report

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December 2017

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[NATIONAL] FEATURE

STATE OF THE INDUSTRY ADDRESS:

An Executive Director/ Administrator Roundtable The collision repair industry is a complex and ever-changing place, and few know this reality more than the six people included in the conversation you’re about to read.

For this special Roundtable feature, we welcome industry representatives for an in-depth discussion of some of the industry’s most pressing issues and how each participant’s group is working to change things for the better: New England Automotive Report: What would you say have been the biggest changes to impact the industry in the time you’ve served in your current position?

Jillian Bukhenik: Technology is always changing, and with that comes significant challenges to the industry.

As our vehicles become more sophisticated, so do our repair processes. Shops must make considerable investments in new equipment to keep up with manufacturer’s repair procedures.

Jordan Hendler: I’ve seen a lot of changes in the area of OEM repairs, including repair procedures and the certification programs. To me, they have revolutionized the industry and created an enormous chasm between those who follow and those who don’t.

Aaron Schulenburg: The evolution of vehicle technology – both structural and functional – is something that our industry has always been challenged with. However, I think if you look at the last decade, I think there has been evolution by leaps and bounds as you look at lightweighting, unique materials and the introduction of fundamentals of autonomy. Those are some of the things that are creating the biggest shakeup.

Judell Anderson: Technology, technology and technology. New, advanced vehicle technologies are being introduced at an increasingly rapid pace.

Although shifts in vehicle technology have always taken place and the collision industry has always adapted, electronic systems in today’s vehicles create new processes and bring a different skill set into play for shops than in years past. Technology, in general, has dramatically affected all aspects of the business, from the repair to business management/administration to developing and managing customer relationships. A second big change has been the rise and proliferation of the consolidators, which has led all shops to rethink their business models and processes to stay relevant and competitive in the marketplace.

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Charles Bryant: We are presently experiencing the biggest changes to impact the collision industry since I’ve been involved. The changes in the design and complexity of modern vehicles, combined with the refusal of the insurance industry to acknowledge the changes and the costs associated with repairing these automobiles, has and will continue to cause havoc.

Because of the suppressed Labor Rates being controlled by the insurance industry, shops simply cannot afford to buy the new and necessary equipment and pay a rate to repair technicians that would entice them to stay in the industry or attract new technicians to join the field.

Sue Peterson: Advances and changes in technology and computers has had the greatest impact. When I started, estimates were handwritten; now, some insurers are writing them based on photos of the damage.

NEAR: The growth in automakers promoting the use of pre-and post-repair scans is just one example of the call for greater adherence to OEM repair procedures in this industry. Why is it important for repairers to follow manufacturer-recommended procedures at all times?

JB: As I have just mentioned, cars are becoming more and more technologically advanced; because of that, it is vitally important for repairers to follow manufacturers’ procedures for the safety and security of their customers.

SP: Liability. The thought of a lawsuit should be enough for every repairer to adhere to manufacturerrecommended procedures.

JH: The root of following the procedures would be to relieve yourself of liability and have an environment that promotes safe and proper repairs. When not following repair procedures that OEMs have specified, you are opening yourself up to the possibility of a lawsuit – or, worse, a death.

AS: Liability and safety – plain and simple. Those are the reasons. What I love about this industry is that it’s comprised of businesses that give back to their communities and help people who are in times of need.

People need to know that a shop is going to repair their vehicles safely; when they put their kids in the backseat and their spouses in the front with them, that vehicle needs to function just as safely as it would have prior to that accident. That’s why we have to perform these things. My previous answer talked about how cars have evolved in functionality; they have evolved to such a

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Aaron Schulenburg (Society of Collision Repair Specialists – SCRS Executive Director)

Jillian Bukhenik (AASP of Massachusetts Executive Director)

Judell Anderson (Alliance of Automotive Service Providers [AASP] of Minnesota Executive Director and AASP National Administrator)

Charles Bryant (AASP of New Jersey Executive Director)

Jordan Hendler (WMABA Executive Director)

Sue Peterson (Wisconsin Auto Collision Technicians Assn. LTD – WACTAL Administrator)

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[NATIONAL] FEATURE point where if we simply connect to it and ask it, it will tell us what’s wrong with it. It’s not as simple as that, but it is.

We are literally in an industry arguing over whether we should perform a preor post-repair scan that, in most cases, is being identified as required. It’s necessary to restore those vehicles. We’re having this debate because some parties don’t think that this information over why it is required is specific enough, without looking at the related advantages of simply performing that task every time. If the car can tell us that something is not functioning or calibrated, we should be listening to it. The debate over this is stepping over dollars to pick up pennies. If we can create a more efficient process by identifying what’s wrong with the vehicle up front, we should be doing it. If a manufacturer says something is necessary, we have to do it; otherwise, there is unnecessary liability placed on the shoulders of a repairer who chooses to disregard that – or is told to disregard that.

JA: To understand how important this issue is, you need look no further than the lawsuit in Texas, where a repair facility was sued for negligence for not adhering to OEM repair procedures. In my mind, it’s pretty obvious that the OEM that engineers, tests and manufactures a vehicle has the knowledge and expertise necessary – and is in the best position to determine how to safely and properly restore it back to pre-accident condition.

CB: In the past, when an insurer would refuse to pay for items like blending, repairing damage on pinch welds from attaching the frame machine to the vehicle or wet sand and buff, certain shops took the position that they were not going to do the work because the insurer refused to pay for it. Not repairing these items or performing these procedures would not result in an unsafe vehicle. However, based on reports directly from the collision industry, certain – if not most – insurers these days are reportedly denying payment for many repair procedures that are based on OEM repair guidelines or position statements. Now, we have a completely different set of circumstances to deal with. If a collision shop thinks that they can avoid liability for not following OEM repair procedures when the failure to do 32 December 2017

so results in the passengers in the vehicle being injured in a future accident, I would warn them to think again – or consult an attorney.

NEAR: What are some industry-related issues that appear to be exclusive to your region [or the ones you represent] at the moment that could have a major impact on the greater industry moving forward?

JB: There has been a trend throughout the industry of insurers encouraging their customers to use their applications and website to process claims. It is important that we continue to advocate that customers must receive a personal inspection. There have been far too many instances where a consumer will send in a photo that may appear to have minimal damage, but little do they know there are significant operational safety and/or emissions risks that have resulted from the accident.

JH: We have very high density of collision repairers in our markets. I believe that exacerbates issues with reimbursement, prices or competitiveness that can also lead to poor decisionmaking on the part of repairers – including keeping a repair job that you are not qualified to have. When you feel like competition is too strong, I believe that can cause some people to justify cutting corners. Along with that, when you have so many repairers squished into a geographic area, you can also get a bigger group of supporters that rise to the top. We have a lot of certified repairers and independent repairers who believe in the right things. WMABA is lucky that way.

JA: A hot topic right now for Minneapolis and St. Paul shops are local ordinances raising the minimum wage and mandating pay for sick and safe time.

This is a trend that appears to be gaining traction in other areas of the country, as well. It’s one more example of shops experiencing increased costs of doing business but being unable to recoup those additional costs due to insurer suppression of Labor Rates.

CB: We are constantly hearing about insurers refusing to acknowledge repair procedures mandated by vehicle manufacturers. When a repair facility

New England Automotive Report

fights back, the steering starts and certain insurers are relentless in their attempt to control the cost of repairs to an amount they want to pay or make sure the shops that push back have their work steered away.

SP: For the most part, concerns of repairers in Wisconsin mirror those across the country. There was one issue that appeared to be unique to Wisconsin – the legality of removing and replacing vehicle information labels that contain a VIN, which was resolved this summer legislatively.

NEAR: Some associations maintain a very active presence in the legislative arena, while others pursue legal methods to effect change in the industry.

Generally, what does your association see as the best course of action in addressing issues with the laws and regulations in the region(s) you represent?

JB: Our philosophy is death by a thousand cuts. The more avenues of change we pursue, the better our chances for success. In addition to our Labor Rate Bill, we have filed four legislative initiatives to combat issues like steering, aftermarket parts and challenges with the configuration of the Auto Damage Appraiser Licensing Board [ADALB] in Massachusetts. Since May of last year, we have worked with the ADALB on changes to their regulations. Many of the changes sought by the association have been included in their recommendation to the Governor. The Automobile Insurers Bureau [AIB] filed a new Massachusetts Automobile Insurance Policy, which was approved by the Division of Insurance.

Due to overwhelming pressure from AASP/MA, the AIB withdrew their standard auto policy. A new policy was filed on October 1, 2016 that incorporated key changes sought by the association.

We continue to monitor policy changes submitted to the Division of Insurance.

AASP/MA continues its work before the DOI to advocate for enforcement of their regulations. Specifically, AASP/MA is currently advocating for the enforcement of steering regulations through plan enforcement. We continue our work with body shops in representation of their customers before the Attorney General’s Office in an effort to advocate for consumer protections. We provide our

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members with educational materials for delivery to their customers.

JH: Our association has proposed some legislation, but generally, we have an attitude of ‘watch and promote’ or ‘identify and destroy.’ We monitor legislative sessions for activity relating to our industry. If a bill doesn’t help, we offer changes or kill tactics; if it helps, we support it and participate in the hearings.

We know that repairers pursue legal options in our market, but that hasn’t been something we’ve dealt with yet at WMABA. If it came to a situation our Board felt was necessary, I’d bet they would consider that route as an option.

JA: Since its inception in the 1950s, AASPMN has retained a lobbyist and been active in the legislative arena. The association initiates, monitors and responds to legislative and regulatory activity at the state and local level to ensure positive outcomes for its members. We have helped our members’ bottom line by changing taxation on paint and materials as well as passing numerous pieces of legislation that strengthen the collision repairer when it comes to insurer claims-handling practices. For example, we’ve passed legislation that prohibits insurers from requiring aftermarket parts, unilaterally and arbitrarily disregarding a repair operation or cost identified by an estimating system, adjusting a repair shop estimate without conducting a physical inspection of the vehicle and requiring that shops use a particular vendor for parts procurement. That being said, we’ve had our fair share of frustrations as well! We recognize that, depending on the issue, legislative action may not always be the only or best course of action. We evaluate each issue on a case-by-case basis and develop a strategy we think has the best chance of bringing about the desired outcome.

AS: For us, because most legislation is handled at a state level and we’re a national group, I think our role becomes a little different. We have a very wide affiliate network of over 40 state associations from across the country. The role we have in this arena is in connecting groups together and facilitating communication and understanding what’s going on out there. For example, when there is an attempt to remove

consumer consent laws in Arkansas, the other affiliates become aware of effective arguments against those efforts to help legislators and consumers understand what that means to them. The different state associations are on the same page, and they’re following each other’s progress and challenges.

SP: WACTAL has been working to effect change legislatively and by working with various state agencies. Consumer choice legislation passed in November 2015 gives consumers the legal right to have their vehicle repaired at the shop of their choice. This summer saw the passage of the Vehicle Information Label Bill. In Wisconsin, it’s now legal to remove and replace a vehicle information label that contains a VIN when necessary as part of the repair.

option if you have a growing business.

WMABA recently decided to pursue grants for our Education Fund, and we are also simultaneously looking at applying for a 501(c)3 status with the IRS, which would make us a charitable foundation. The purpose would be to gather and gain resources to assist in the education of either students or other people wanting to apprentice into the collision industry. If repairers had options to have the training period subsidized, I think they would be far more likely to participate and hire.

JB: AASP/MA has always had a strong relationship with our vocational technical schools. Accordingly, we offer free membership to collision repair educators.

Over the last two years, we have hosted our industry meetings at schools to encourage participation from educators and students. Getting students involved in the industry is imperative. I know many of our members participate on Advisory Boards, which provides the schools with a unique perspective. I would encourage shops to reach out to area schools and offer to participate in their job fairs or other events that give students an idea of what types of careers the collision industry offers.

AS: We’ve been fortunate that we’ve had a great amount of growth in SCRS and our membership. One of my favorite parts of this job is reaching out to every new member and doing an intake interview. One of my questions is always, ‘What is the biggest issue facing your shop?’ Ninety-five percent of the time, the answer is that there aren’t enough skilled technical representatives in this industry to fill the need. It’s obviously an area where we know there needs to be work done, and I think it’s a challenge that’s facing all technical fields – not just the collision repair industry. From a resource standpoint, we’ve worked with other groups – like the Auto Care Association, SEMA and others – to build the SCRS Career Center, which ties into a greater automotive job board so that we can appeal to people. Maybe there are people who have an interest in automotive or went to school for something automotive-related, but never considered the collision repair industry as a place they would seek out for a job.

We’re working on finding ways to appeal to people who may not be in the industry yet but have great potential to do so.

We’re also working on a grant research project with a researcher who has helped us identify workforce development funds across all 50 states. We’re pulling that information together to help our affiliates understand what they can go after, either governmental- or foundational-level funds that can help workforce development in their state and help them work with other states to do it in a collaborative process. Additionally, these state affiliates can use the information to educate their members on how they can individually go after those funds.

JH: Putting out an ad for an ‘A’ tech with 10 years’ experience is no longer a viable

JA: In 2016, AASP-MN took a leadership role to found and fund MNCARS

CB: AASP/NJ has gone down the legislative path in an effort to assist our members with the many problems that plague the industry. Unfortunately, the strong influence the insurance industry has over the legislative process makes it almost impossible to succeed in this arena. At the present time, it appears that the only way change is going to come is when change is mandated by the legal system.

NEAR: There is a clear and concerning shortage of new technicians entering this field. What is your association doing to address this issue? What can members do more of to ensure a strong workforce moving forward?

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[NATIONAL] FEATURE [Minnesota Careers in Auto Repair and Service], a non-profit organization whose sole purpose is to promote careers in the automotive industry, recruit young people into the state’s college-level automotive service and collision repair programs and, ultimately, into our industry workplaces. We started from scratch, building a content-rich website [carcareers.org], social media presence, marketing materials, counselors’ kits and other collateral to educate our target audiences [‘tinkerers,’ school counselors and parents] about industry careers. Our industry speakers’ bureau and college student ambassadors have been in front of over 8,400 students at high school and middle school career fairs and presentations since January. We’ve connected with over 1,000 school counselors, and our social media campaign has reached tens of thousands of Facebook, Instagram and Snapchat users with the MNCARS message: ‘The automotive industry has a lot to offer – rewarding and varied career paths with high earnings potential in a high-tech, high-demand industry.’ AASP-MN believes this is the most critical issue facing the industry; with industry support, we have invested over $200,000 to make a positive impact for Minnesota’s auto service and collision repair businesses.

Members are going to have to engage locally to promote industry careers and support and advocate for automotive programs at the high school and college level. This means getting involved on school Advisory Boards, participating in job fairs, career days and job shadowing opportunities in their community and volunteering their time and financial support to ensure that the auto programs that still exist remain viable.

CB: AASP/NJ has a Labor Pool to locate and then place qualified repair technicians in shops that are members of the association as well as locate shops in AASP/NJ that are looking for qualified repair technicians and then bring the repair technicians to those members. The Labor Pool has existed for well over 20 years, and it is a free service.

SP: Members need to engage and take advantage of the opportunities to promote our industry and encourage individuals to pursue a career in collision repair. A registered [adult] apprenticeship program is in the final stages of 34 December 2017

development in Wisconsin. Development of this program was a concerted effort by the industry, Wisconsin Workforce Development and the Wisconsin Technical College System. Wisconsin also has an Auto Collision Youth Apprentice program that integrates school-based and work-based learning.

NEAR: OEM certification programs are growing in size and scope. How will this ultimately affect how shops will conduct business, market their services to customers and grow their economic footprint in the future?

JB: Certifications can be valuable to shops. While there is a significant investment to become certified, they can be very beneficial to bringing in and retaining customers.

JH: In my opinion, OEM certification programs are going to be - if not already the difference between Shop A and Shop B, until the autonomous car is so prevalent that we become something else.

When it comes to certification programs, they require the use of proper equipment, proper procedures and compliance to the manufacturer program requirements.

This makes the OEM an important relationship for the shop, so they can maintain their ability to acquire new customers under that umbrella. It helps them define their marketplace outside of a DRP relationship. This gives independents another – maybe an even more – viable option.

AS: I think it will affect it, and I think it provides advantages and challenges. It is not necessarily inexpensive to create a culture where you make the decision that you are going to continually invest in the tools, equipment, facility, training and skill set that are necessary to comply with those certification programs. There is duplication across some of them, but it can be costly. On the flipside, it can also produce a return for the shop that’s committed and has built a culture within their business that they’re going to follow the OEM procedures, meet the certification requirements and set themselves apart for the consumer. I think consumers want to know that the collision center they’re dealing with has a connection with – and validation from – the party that built their car. I think there is a lot of value in it, but one of the

New England Automotive Report

challenges our industry has faced in maintaining pace with the technology is that you do have to continually invest to be able to stay up with it.

JA: These programs are going to be a game-changer for the industry. It’ll be like DRPs on steroids. A key difference? In the DRP scenario, steering happened solely on the basis of shops’ willingness to offer an insurer a concession of some kind, be it price or otherwise. But it’s pretty hard to argue that steering shouldn’t happen on the basis of a shop’s ability to properly and safely repair a vehicle, as would be the case with OEM certification.

Questions remain, like who’s going to police the programs to make sure repairs are, in fact, being done properly? And will all shops who meet the certification requirements be allowed to participate, or are some going to be shut out? Will we end up trading one master [insurers] for another [OEMs]?

These programs definitely create higher barriers to entry for new shops just starting out. And for existing shops, they require an investment in training and equipment that may or may not be feasible for everyone. Shops are going to have to be selective about which of the certification programs work for them and then gear their marketing and operations around the specific ones that will bring the highest economic benefit. And while I think these programs will have a profound impact in larger metropolitan markets, it remains to be seen how they will play out in more sparsely populated, rural areas.

CB: Like it or not, in my opinion, soon shops will need to pick the type or types of vehicles they like to repair the best and then get certified for those types of vehicles. Because of the sudden advancements taking place in the design of vehicles, all vehicle manufacturers will soon likely demand that shops be certified in order to purchase parts and repair their type of vehicles.

NEAR: What are the most important things that your individual members can do at their shops to help strengthen the overall industry?

JB: We are only as strong as our members.

Without you, we don’t have a voice. We need the industry, not just our members, to get involved and support us. We are

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[NATIONAL] FEATURE the only association in Massachusetts advocating on their behalf. We cannot build the success of the auto repair industry without the industry behind us.

There are a number of ways to get involved: Attend meetings and events, donate to our Political Action Committee, call your legislators and encourage your fellow shop owners to join.

CB: Join and support AASP. JH: Keeping up with proper OEM repair procedures – especially the required ones

– will help alleviate those shops that are doing repairs poorly from adversely affecting the entire industry. When a shop doesn’t even know a proper repair procedure and doesn’t charge for it because they don’t know, they are enabling carriers to say that other shops ‘don’t charge for that’ when in fact it’s not that they don’t charge for that – it’s that they don’t know they should be performing the operation regardless. A lot of insurers are amenable when documentation is provided. If you don’t know how to find documentation for a

procedure or repair method, then you need to ask us or another knowledgeable repairer you can trust. More importantly, you need to find it so you can do it right for your customer. This all helps everyone!

JA: Operate their business in a professional, responsible and ethical manner. Invest in the employee education/training and facility improvements necessary to safely and properly repair today’s vehicles. Be a good employer. Engage and be good citizens in their community. Take advantage of resources like the Database Enhancement Gateway [DEG] that will not only benefit their own shop, but the entire industry. Of course I’m biased here, but I feel strongly that each and every shop owner should seek out, support and participate in an industry organization that works proactively for the betterment of the industry.

AS: I don’t know that there’s a collision repair business out there that hasn’t heard about the guy or gal down the street. There are so many shops that are trying to do the right thing but are influenced because there is supposedly someone down the street who’s willing to do it for less or do it the wrong way. I think the best thing that individual members can do for their business that also strengthens the overall industry is to not be the one down the street that’s being used as the example against everyone else. Understand the safety and liability implications that the work you produce has on your business and your customers, and create unwavering and uncompromising cultures that protect against them. I think if everybody committed to do that for their business, the industry as a whole would be significantly stronger.

SP: The answer to this question appears to be simple and applies to non-members as well: Stay involved and stay informed.

Remember that the vehicle owner is the customer. Most importantly, if you’re not a member of your state or regional association, join today.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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[TECHNICAL] FEATURE

By Larry Montanez III, CDA

Last month, I provided an example of an incorrectly repaired vehicle involved in a court case. Here are some other cases I worked on through my company, P&L Consultants: 2009 FOrd MUSTAnG The vehicle was involved in a frontal collision event and sustained structural damage. The vehicle was repaired at a DRP facility under a first-party claim. Approximately six months later, the vehicle owner was having drivability issues and took the car back to the DRP facility four times, but that shop was unable to determine and resolve the issues. The vehicle owner then took the vehicle to a shop they had previously frequented. The shop performed a PRI and discovered the front structure was displaced on the right upper and lower uni-rails. Additionally, the right strut tower was displaced. They also noted that the replaced upper uni-rail was MAG plug welded on incorrectly. According to the final invoice, the replacement uni-rail was procured from a totaled-out vehicle. I was called in to examine the vehicle and discovered the same issues as the facility technician. We also uncovered evidence during borescope examination to indicate the rear 40 December 2017

New England Automotive Report

A legal tsunami is headed towards the collision repair industry...

Larry Montanez tells you what to keep in mind.

suspension was displaced, 25 MAG plug welds were unacceptable and no corrosion protection was applied.

After my deposition, the DRP’s insurance company decided to purchase the vehicle from the insured and settle costs out of court.

2008 LAnd rOvEr Lr3 The vehicle sustained frontal damage to the uni-body, front frame assembly and front suspension mountings. The vehicle was repaired at a dealership DRP shop as a firstparty claim, but the third-party was at fault. After the repairs, the insured had the vehicle inspected for DV. During the inspection, multiple issues were discovered.

The vehicle was taken to a Certified Collision Repair Facility (CCRF) for a PRI. The facility discovered multiple fractures that were welded and displaced with indications of corrosion to the front bumper mounting and front suspension mountings. Three-dimensional electronic measuring of the vehicle revealed the vehicle frame assembly was significantly displaced. Excessive tire wear was also observed. I was hired to review the facility findings, documents, testing results and the OEM repair protocols and write an affidavit of their analysis. The

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[TECHNICAL] FEATURE dealership elected to go to court. This state allowed all inspection costs, attorney’s fees, loss of use and punitive damages to be attached. The verdict was significant; the jury awarded the plaintiff $438,000, which also included unfair and deceptive trade practices along with treble damages (consumer fraud).

1967 Ford Mustang Wide-body Custom The vehicle was taken to a custom restoration auto body shop for fabrication of metal wheel flares, widened rear wheel wells, custom handmade front and rear molded in metal spoilers and a custom paint job. The shop determined the work to the vehicle would cost approximately $55,000. During the custom work, the vehicle owner added some things, raising the cost to $75,000. Now this case is unique, as the vehicle was completed and the owner was very pleased. There were no issues with the custom work, but the vehicle owner never received any paperwork (officially notified in writing of the additional costs), and the shop was sued for consumer fraud laws for triple damages. I was retained to go over the repair and charges. The hours were clocked on a technician worksheet that was very accurate. The charges were reasonable based on the amount of clocked hours, photographic documentation and video evidence provided.

Although the shop documented all the custom work, they neglected to put the additional costs in writing and have the consumer sign the authorization for the extra hours and craftsmanship. The case was settled out of court, with the customer only having to pay approximately $10,000 for the work. The shop faced losing upwards of $225,000 if they lost the case in court. The attorney for the defendant (the shop) advised the shop owner to cut their losses, learn their lesson and settle.

As you can see, a legal tsunami is headed towards the collision repair industry. Please keep the following in mind: Keep accurate paperwork, photographs and even video evidence of the repair.

Always follow the OEM recommended repair procedures (which is a requirement), protocols and positions.

The insurance company has no control over what replacement components you use, where you procure or purchase them from, what is repairable or is replaced and any other operations you are charging for. Only the vehicle owner can authorize or approve of the repairs you are charging for, regardless if you are a DRP, non-DRP or a custom repair facility.

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The insurance company is almost never held liable for the repairs you attempt.

If the insurance company refuses to pay for a procedure, operation, an OEM component or a sublet repair, it is not your problem. It is the vehicle owner’s problem, but you can assist them. Ultimately, the vehicle owner owes you for the work performed.

The insurance company never pays you monies unless it is your own vehicle.

Learn your state insurance laws, rules and regulations, unfair claims settlement practices, consumer protection laws and the rules and regulations from the state agency that governs your repair facility. It is not your state’s Department of Insurance (DOI).

Check with your attorney that all your consumer paperwork is correct, and make sure protection is provided for you.

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Hold Harmless Agreements will generally not hold up in court to protect your liability.

I hope this article has raised some questions for you to find the answers to some myths or misinformation. I also hope that I have convinced you to do some research and contact your attorney for a consultation. As always, please feel free to contact me if you have questions.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

Larry Montanez, CDA is co-owner of P&L Consultants with Peter Pratti Jr. P&L Consultants works with collision repair shops on estimating, production and proper repair procedures. P&L conducts repair workshops on MIG & Resistance Welding, Measuring for Estimating and Advanced Estimating Skills.

P&L also conducts investigations for insurers and repair shops for improper repairs, collision reparability and estimating issues. Larry is ISO 9606-2 Certified for Audi and Mercedes-Benz and is a certified technician for multiple OEM collision repair programs. P&L can be reached by contacting Larry at (718) 891-4018 (office), (917) 860-3588 (cell) or info@PnLEstimology.com.

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[LEGAL] PERSPECTIVE

by James A. Castleman, Esq.

WHY MAKE REPAIRS THE WAY YOUR CUSTOMER WANTS THEM? Because That’s What the Law Requires for the loss of or damage to the insured motor vehicle... prior to receipt by the insurer of a claim form from the insured stating that the repair work described in an appraisal made pursuant to regulations promulgated by the auto damage appraisers licensing board has been completed.”

In other words, if an insurer has a Direct Payment Plan, then the insurer must pay the full appraised cost of repairing the car before any repairs are made – regardless of whether or not the repairs are made. Further, the Commissioner of Insurance requires essentially all Massachusetts insurers to have a Direct Payment Plan.

Some insurers still don’t get it.

They think that collision repair shops are required to fix cars the way that the insurer’s appraiser writes them, or that it is insurance fraud for a shop to negotiate for certain repairs and then not perform them. Or that it is illegal for a shop to keep a claim payment check from an insurer if the shop doesn’t do all the work the insurer is paying for.

None of this is true. What is true, however, is that repair shops are required to fix cars the way their customers want them fixed, no matter what the insurers want to pay for.

How do I know this? Because that’s what the law says.

THE rELEvAnT STATUTES Massachusetts General Laws, Chapter 90, Section 34 O is the law that governs both third-party property damage liability claims and first-party collision and limited collision claims. Chapter 175, Section 113 O governs first-party comprehensive claims. Regarding first-party claims, both statutes initially say that an insurer cannot pay the full cost of repairs unless it receives a Completed Work Claim Form, which would require certification that all work written by an insurer’s appraiser be completed before payment can be made. Thirty years ago, it was true that a repair shop would have to fix a car the way that the insurer wrote it.

However, in 1988, the Direct Payment law was enacted, which changed everything. As part of that law, both governing statutes were amended to add, “Notwithstanding the previous paragraph or any other law, an insurer may file a plan for approval by the Commissioner [of insurance] providing for direct payment by the insurer to the insured

THE dirECT PAyMEnT rEGULATiOnS Under the statute, the Commissioner of Insurance is also directed to issue regulations for the operation of Direct Payment Plans. Those regulations provide details of how collision, limited collision and comprehensive claim payments are to be made and cover how supplement payments are to be handled.

One part of the regulation, 211 CMR 123.05(1) says, “The insurer shall offer to pay every claimant for the loss of or damage to the insured motor vehicle under collision coverage, limited collision coverage or comprehensive coverage the full amount, less any applicable deductible, of the cost of repair of the damage as described in an appraisal made by a licensed automobile damage appraiser employed or designated by the insurer, subject to the terms and conditions of the applicable insurance policy. In the case of property damage liability claims, the insurer may make such offer to the person to whom such liability payments are owed…Unless such direct payment is refused by the claimant, the insurer shall make such payment at the time of, or within five business days after, the preparation of said appraisal.” (Emphasis added.) Again, the regulation requires that the full cost of repairs has to be made to the claimant before any repairs are made (and whether or not any repairs are made).

Another section of the regulation, 211 CMR 123.05(4), addresses the situation where not all damage is specified in the initial insurance appraisal, i.e., when a supplement is needed. If supplemental damage is discovered, the regulation says, “The claimant may direct the insurer to make any supplemental payment to the repair shop, provided the repair shop is registered under M.G.L. c. 100A. New England Automotive Report

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[LEGAL] PERSPECTIVE Otherwise, any supplemental payment must be made directly to the claimant.” The regulation requires that full payment be made for any supplemental appraisal, either to the claimant or the repair shop, but does not require that the repairs be made.

Notably, if repairs are made at a referral shop, then the referral shop cannot charge more than the insurance appraisal plus the deductible. But even at a referral shop, the claimant is still not required to make the repairs as appraised, and the referral shop is required to make the repairs that the claimant directs – not the repairs written by the insurer. This is the case despite the fact that the shop’s referral contract may penalize the shop for not doing the work. (Such a penalty clause might be illegal, but that is a topic for a whole other article.)

It is also true that still another section of the regulation, 211 CMR 123.05(2), requires subsequent submission of a “repair certification form” by the claimant when repairs are finished, stating that repairs have been made. But the regulation recognizes that the only penalty for failing to have repairs made or returning the form is to reduce the insured actual cash value (“ACV”) of the vehicle by the amount of the claim payment.

What is important from a shop’s perspective is that they have obtained the correct authorization from the customer and that their final bill accurately reflects the work they actually performed.

Although (on its face) the regulation says that the insured ACV is to be reduced by “the amount of the claim payment plus any applicable deductible,” since 1989 (when the Direct Payment law actually became effective) the Commissioner of Insurance and Massachusetts insurers have consistently interpreted this to mean that the insured ACV is to be reduced only by the amount attributable to the work not done - i.e., not the full amount of the payment.

Additionally, there is a legitimate argument to be made that if different work is done that increases the value of the car, then this also has to be factored into the actual insured ACV of that vehicle. The bottom line is that there is additional recognition in the regulation emphasizing again that a claimant does not have to make the repairs written by the insurer.

THE ATTOrnEy GEnErAL’S rEGULATiOnS While the Direct Payment statutes and regulations make it clear that a claimant does not have to make the repairs written by their insurer, it is the Massachusetts Attorney

General’s regulations, at 940 CMR 5.05, that make it clear that a repair shop is engaging in unfair and deceptive practices if it charges a customer for anything other than the “specific repairs” authorized by that customer, whether the authorization is in writing or oral.

The only exception (other than for emergency repairs outside of normal business hours and offsite repairs) is if the shop obtains a separate written waiver from the customer limiting the total amount that the repairs will cost but allowing the shop to use its discretion as to what repairs will be made. The waiver must have special language, as set out in the regulation, and be separately signed by the customer.

Even with the waiver, the customer is authorizing the repairs to be made by the shop, and what the insurer wrote is irrelevant.

SOME AddiTiOnAL POinTS One major issue is the assertion by insurers that repair shops have no right to keep claim payments made directly to them by an insurer under a “direction to pay” if the shop has not done the work written by the insurer. However, if the shop has received their customer’s authorization for what work will be done, the shop can charge whatever has been agreed on with their customer.

If the customer wants less work done than their insurer is paying for but is willing to compensate the shop for whatever total amount their insurer is paying, then the shop has the right – and obligation – to collect the full insurer payment and do only the work authorized by the customer.

If the customer wants different work done for that price, that is okay as well. If the shop charges a higher Labor Rate than the insurer is willing to pay, and the customer is willing to have the work done at that higher rate but without all work being completed as written by the insurer, that is still okay.

Alternatively, if the customer wants less work done and there will be an excess amount paid to the shop from the insurer, then the shop can still collect the full amount of the payment. In this instance, however, the excess belongs to the customer and the shop is obligated to pay that to their customer – not the insurer.

Do understand that the insured claimant is still going to have to send in a certification as to what work was done, and that it may be fraudulent for them to certify that work was done if it was not. But that is between the shop’s customer and their insurer, not between the shop and the insurer. So long as they understand what the penalty is for not doing the work written by their insurer (reduction of the insured ACV of the vehicle), there is no reason for the customer to be untruthful as to what they certify on the form. What is important from a shop’s perspective is that they have obtained the correct authorization from the customer and that their final bill accurately reflects the work they actually performed. continued on page 54 New England Automotive Report

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[LEGAL] PERSPECTIVE N

continued from page 49 COnCLUSiOn It boggles my mind that so many insurance personnel still think that auto damage claims payments are controlled by laws that have not been in effect since the 1980s. It is about time that insurers understand what the law requires.

If you work for a collision repair shop, keep copies of this article on hand, and feel free to give it to the next appraiser or claims adjustor who tries to tell you that you are required to make all repairs as written by the insurer.

Feel free to ask them to show it to their in-house legal counsel so that their attorneys can be educated on the governing laws as well.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

54 December 2017

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Imperial Ford ................................................35

AUT M TIVE

Ira Toyota of Danvers....................................12

ADVERTISER’S INDEX

Kia Group ......................................................51

Ira Subaru ......................................................13 Kelly Automotive Group ..........................IBC Linder’s, Inc. ................................................54

Accudraft Paint Booths ............................OBC

Long Automotive Group ..............................45

American Honda Motor Co. ..........................4

Mazda Group ................................................22

Audi Group ....................................................52

McGovern Chrysler Jeep Dodge Ram ........42

Audi Shrewsbury ..........................................28

Mercedes-Benz of Shrewsbury ....................28

Axalta Coating Systems..................................6

Mopar Group ................................................23

Balise Wholesale Parts Express ..................18

Nissan Group ................................................39

Best Chevrolet/Best CDJR ........................IFC

PPG ....................................................................3

BMW Group ......................................................14-15

Robertsons GMC Truck ................................38

BMW/Mini of Warwick................................19

Sarat Ford Lincoln ........................................48

Colonial Auto Group ......................................9

Sentry Group..................................................37

Empire Auto Parts ........................................43

Subaru Group ................................................29

Enterprise........................................................38

Tasca Group....................................................46

First Chrysler-Dodge-Jeep-Ram ..................10

Toyota Group ................................................25

First Ford ........................................................10

Volvo Group ..................................................44

First Hyundai ................................................10

VW Group ......................................................53

Ford Group ....................................................35

Wagner BMW of Shrewsbury ......................28

FutureCure ....................................................36

Wagner Kia of Shrewsbury ..........................28

Honda Group ................................................11

Wellesley Toyota/Scion ................................48

Hyundai Group ............................................50

Wheel Collision Center ................................43

New England Automotive Report

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