New Jersey Automotive January 2016

THE OFFICIAL PUBLICATION OF THE ALLIANCE OF AUTOMOTIVE SERVICE PROVIDERS/NEW JERSEY (www.AASPNJ.org) AND THE AUTOMOTIVE RECYCLERS ASSOCIATION OF NEW JERSEY (www.ARANJ.org)

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“Refining” the Market: Inside State Farm’s Labor Rate Increase www.grecopublishing.com

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P.O. Box 734 Neptune, NJ 07753 EXECUTIVE DIRECTOR Charles Bryant 732-922-8909 / setlit4u@msn.com 2015 - 2017 OFFICERS

PRESIDENT Jeff McDowell, Leslie’s Auto Body 732-738-1948 / chacki@aol.com

COLLISION CHAIRMAN Jerry McNee, Ultimate Collision Repair, Inc. 732-494-1900 / ultimatecollision@att.net MECHANICAL CHAIRMAN Keith Krehel, Krehel Automotive Repair, Inc. 973-546-2828 / krehelauto@aol.com TREASURER Tom Elder, Compact Kars, Inc. 609-259-6373 / compactkars@aol.com SECRETARY Thomas Greco, Thomas Greco Publishing, Inc. 973-667-6922 / thomas@grecopublishing.com BOARD Dave Laganella, Peters Body and Fender 201-337-1200 / petersbandf@gmail.com

Sam Mikhail, Prestige Auto Body 908-789-2020 / mikhail@goldcar.com

Ted Rainer, Ocean Bay Auto Body 732-899-7900 / trainer@verizon.net

CONTENTS

VOLUME 46, NUMBER 1 | January 2016

10 OUT OF BODY (AND MECHANICAL) EXPERIENCES 12 PRESIDENT’S MESSAGE

16 EXECUTIVE DIRECTOR’S MESSAGE 22 I-CAR CALENDAR 62 NJA ADVERTISERS’ INDEX

NORTHEAST® SPOTLIGHT by Jacquelyn Bauman 24 American Honda Motor Co. to Address Certification, OEM Repair

Procedures at NORTHEAST 2016

26 ABD HOLIDAY PARTY HIGHLIGHTS

Photos by Jacquelyn Bauman

LEGAL PERSPECTIVE by Mitchell Portnoi, Esq. 30 Social Host Responsibility

LOCAL NEWS 34 Governor Christie Signs Counterfeit Airbag Law; Takata Backlash Grows

by Joel Gausten

Anthony Sauta, East Coast Auto Body 732-869-9999 / ecabofnj@aol.com

36 Kearny High School Competes in Quaker State Best in Class Challenge

Anthony Trama, Bloomfield Auto Body 973-748-2608 / anthony@bloomfieldautobody.com

NATIONAL NEWS by Joel Gausten 40 RICO Case Dismissed; Plaintiffs Set to Refile

Randy Scoras, Holmdel Auto Body 732-946-8388 / randy@holmdelautobody.com

BOARD ALLIED Joe Amato, The Amato Agency 732-530-6740 / joesr@amatoagency.com

Mike Kaufmann, Advantage Dealer Services 973-332-7014 / mkaufmann@advantageds.com PAST PRESIDENT ATTENDING Tom Elder, Compact Kars 609-259-6373 / compactkars@aol.com

PUBLISHER Thomas Greco (thomas@grecopublishing.com)

DIRECTOR OF SALES Alicia Figurelli (alicia@grecopublishing.com) EDITOR Joel Gausten (tgpjoel@verizon.net)

MANAGING EDITOR Jacquelyn Bauman (jacquelyn@grecopublishing.com) ART DIRECTOR Lea Velocci (lea@grecopublishing.com)

OFFICE MANAGER Donna Greco (donna@grecopublishing.com)

CONTRIBUTING EDITORS

Charles Bryant • Tom Greco • Jeff McDowell Mitch Portnoi • Dave Laganella • Ron Ananian

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

www.grecopublishing.com NEW JERSEY AUTOMOTIVE is published monthly and is sent to AASP/NJ and ARANJ members free of charge. Subscriptions are $24 per year. NEW JERSEY AUTOMOTIVE is published by Thomas Greco Publishing Inc., 244 Chestnut St., Nutley, NJ 07110. The editorial contents of NEW JERSEY AUTOMOTIVE are copyright © 2016 by Thomas Greco Publishing Inc. and may not be reproduced in any manner, either in whole or in part, without written permission from the publisher and/or editor. Articles in this publication do not necessarily reflect the opinions of Thomas Greco Publishing Inc. Cover and Images courtesy of www.istockphoto.com.

by Jacquelyn Bauman

COVER STORY by Joel Gausten

46 “Refining” the Market: Inside State Farm’s Labor Rate Increase NO BRAKES by Ron Ananian 50 Down for the Count

AUTOMOTIVE RECYCLERS OF NEW JERSEY 56 Legal Update 56 Wharton Insurance Briefs NEWSFLASH by Jacquelyn Bauman 57 Auto Body Shop Choice Bill Becomes Law in WI Joe Amato, Sr. Ron Ananian Jim Bowers Charles Bryant Don Chard Guy Citro Pete Cook Ed Day Dave Demarest Tom Elder Bob Everett

Thomas Greco Dan Hawtin Rich Johnson Wes Kearney Nick Kostakis Jim Kowalak Joe Lubrano Michael Lovullo Sam Mikhail Ron Mucklow George Petrask

Russ Robson Jerry Russomano George Threlfall Cynthia Tursi Lee Vetland Paul Vigilant Rich Weber Brian Vesley Glenn Villacari Stan Wilson

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OUT OF BODY (AND MECHANICAL) EXPERIENCES

The White Pearl A few months ago, I briefly mentioned in my column that my cousin Billy had passed away. Like many people, the end of one year and the beginning of another tends to put me in a reflective mood. As we grow older, it seems we lose more and more of those who are closest to us. Billy was one of those people. But this isn’t going to be a sad story, simply because Billy was the funniest S.O.B. I ever knew. He’d kick my ass if I got sappy on him.

Billy was the youngest child of my aunt on my father’s side. My family shared a two-family house with Aunt Mill, Uncle Mike, Billy and his sister Annie before I came along.

Billy was 10 years older than me, so I have no memory of those days. But according to my siblings, he was the wild child of the family. It’s easy to see that in our old Super 8s; Billy was always the one screwing around or getting smacked.

When I was born, my family moved to Nutley; Billy’s family followed soon after. They settled just down the hill from us,

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by THOMAS GRECO, PUBLISHER

so we saw them all the time. The first thing that I remember about Billy back then was how jacked he was. He must have been only 17 or 18, but he had muscles on top of muscles and was strong as an ox. He wasn’t a big kid by any means, but I can remember holding onto his biceps as he lifted me up off the ground.

One thing that stands out for me was the night Uncle Mike died. He had been stricken with cancer and taken much too young. He was a wonderful man, the kind who put all your toys together at Christmas and had an awesome train set in his basement. That night was the first time death had touched my life. Billy was obviously upset, and I can still hear my dad trying to console him. It didn’t work.

With no real father figure, Billy became the wild child of Nutley. (But not the troublemaking kind; after all, he was still – and always would be – the mischievous little boy sticking his tongue out in all those old Super 8s.) He bought a motorcycle, rode with the toughest black guy in town (I only point

that out because only about 50 out of 28,000 people in Nutley at that time were black), got into fights and basically raised a lot of hell.

Due to our age difference, I only got to hear most of these stories later on in life. All I knew was that every time Billy was around, we laughed. Like at my brother’s wedding.

I was in the bridal party with Billy and a few others. When it was pointed out that I had one hair sticking up out of my head, Billy promptly came over, spat on me, pressed it down and said, “All good.” Well, maybe I didn’t laugh then, but it’s funny now. Or the time I was inside my house and I heard someone screaming from the backyard. I looked out and there was Billy in the pool, hanging onto the diving board and yelling, “T!” He always called me “T” – the only person in the world who called me “T.” (He did refer to me as Charles Bronson when I grew a moustache, but that didn’t last.)

“T! T!” he screamed.

“What’s the matter?”

“T! I need your help!”

“What’s wrong?”

He pulled himself up on the diving board. He was bucknaked. Mind you, this was a Saturday afternoon in the summer with neighbors all around us.

“T! Get my shorts for me!”

“Where are they?” I asked, laughing hysterically.

“Look on the basket!”

I looked up on the basketball backboard and wouldn’t you know it, there were a pair of underwear and shorts on top of it.

“How did they get up there?”

“Your brother and his friends de-pantsed me! You gotta get them down!”

I grabbed the skimmer from the pool, pulled the shorts off the backboard and threw them to him. I would not have wanted to be my brother and his friends when Billy found them.

Billy had numerous nicknames, like the “White Pearl.”

You see, Billy fancied himself to be as good a basketball player as NBA Hall of Famer Earl “the Pearl” Monroe. We’d be playing ball and Billy would make his grand entrance.

“Hit the Pearl! Pass it to the Pearl!” He’d make it up and down the court one or two times, raise his hand and say, “That’s enough for the White Pearl.” Then he’d light up a Marlboro, grab a Budweiser and sit down. He also was known as “Mumps” and “Midtown,” but I still don’t know why.

Not only was Billy strong, but he looked like Burt Reynolds and was super cool. After the motorcycle, he started buying Corvettes. He’d take me for rides in the continued on page 22

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PRESIDENT’S MESSAGE

Things Are Looking Up! As we turn the page on another year, there is no shortage of issues that will be affecting our members and readers in the future of their businesses. All you have to do is take a look at any

recent issue of New Jersey Automotive to see an increase of developments in a number of areas, from insurer relations and parts procurement to OEM certification and repair recommendations.

by JEFF MCDOWELL

Personally, I feel that there is a lot to look forward to around here.

Flipping through the pages of this or any of our recent issues, you’ll get a glimpse into all the industry activity surrounding us these days. From our members coming out in droves to address General Motors’ MyPriceLink.com initiative at our recent Annual Meeting (covered in last month’s issue) to industry-leading companies flocking to sign up for the upcoming NORTHEAST® 2016 Automotive Services Show (more on that in a minute), our industry has clearly shown that they are more engaged, active and vocal than ever before. With every passing day, we hear about more and more shops taking action to protect their businesses, whether it’s through legal channels or simply investing the time and energy into increased training and education for their employees. In the face of so many outside influences trying to pull our industry apart and keep us “down,” it is incredibly promising to see people in our industry banding together and bettering themselves. I can’t wait to see where we end up as a group at the close of this year.

Speaking of NORTHEAST, I can’t emphasize enough that if you have any commitment to being successful in this industry (now and into the future), you need to be at this year’s event. We are looking forward to what will undoubtedly be our most well-attended NORTHEAST to date, with increased presence from manufacturers, paint companies, tool and equipment providers and everything in between. Stay tuned for important announcements on our training schedule, which we are finalizing as we speak. No matter what area of the industry you represent, there will be plenty for you and your colleagues to take in at NORTHEAST 2016. FREE online pre-registration is now open; visit tinyurl.com/NE16reg today to sign up.

NJA

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EXECUTIVE DIRECTOR’S MESSAGE

“We Don’t Pay for That” is NOT in the Auto Policy “your covered auto” or any “nonowned auto,” including their equipment, minus any applicable deductible shown in the Declarations.

I am getting really tired of fielding calls on the AASP/NJ Hot Line from people reporting that appraisers are coming out to shops and making statements like, “We don’t pay for that,” “We only pay $x for labor,” “We don’t negotiate Labor Rates” or simply, “That’s it.” In many of my past articles, I’ve explained that an appraiser does not have the right to dictate price (including what the insurer will pay for procedures) without first negotiating. (The exception to this is if the insurer chooses the option in the auto policy to repair the property, as opposed to paying for the repairs made.) As I have said many times before, there is information that collision shops need to be aware of that comes directly from an insurance contract and the regulations that govern fair claim settlement practices in New Jersey.

Sure, all auto insurance policies contain exclusions, but I challenge anyone to find one in an auto policy that would allow an insurance representative to say that the carrier won’t pay for a procedure or operation that is necessary to repair a damaged vehicle safely and properly. Here is an example of the standard language that is contained in an auto insurance policy: INSURING AGREEMENT A. Collision and Comprehensive (Other than Collision). We will pay for direct and accidental loss to

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There is a big difference between an exclusion for things like wear and tear or mechanical breakdown and one for a procedure or operation that is necessary to properly repair a damaged vehicle. Here is an example of the types of things an insurer can deny payment for due to an exclusion in the policy: EXCLUSIONS We will not pay for: 1. Loss to “your covered auto,” which occurs while it is used to carry persons or property for a fee. This exclusion (1.) does not apply to a share-the-expense car pool.

2. Damage due and confined to: a. wear and tear; b. freezing; c. mechanical or electrical breakdown or failure; or d. road damage to tires.

On top of this, there are provisions in the regulations that clearly spell out that an insurer cannot deny or compromise a claim without pointing to the language in the policy that gives it that right. Here is the provision in the regulations (with some wording highlighted for emphasis): SUBCHAPTER 17. UNFAIR CLAIMS SETTLEMENT PRACTICES N.J.A.C. 11:2-17.8 Rules for fair and equitable settlements

by CHARLES BRYANT

and reasonable explanations applicable to all insurance

(a) No insurer shall deny or offer to compromise a claim because of a policy provision, including any concerning liability, a condition, or an exclusion without providing a specific reference to such language and a statement of the facts which make that language operative. (b) Any denial or offers of compromise to the claimant shall be confirmed in writing and shall be kept in the appropriate claim file.

The next time an appraiser makes that ridiculous statement, ask that person to point to the language in the policy that allows him or her to do so.

Of course, another ridiculous issue in our industry is the Labor Rate. I am constantly getting reports of appraisers saying things like, “That’s all we pay.” Even when a collision shop owner attempts to explain why his or her facility can’t repair today’s complicated vehicles for the rates that insurers want to pay, the conversation is quickly shut down by the appraiser saying, “That’s it; there is nothing more to talk about. That’s all we pay.”

When I hear things like that, it makes my blood boil. If an insurer has chosen the option in the auto policy to repair the property – that is, to physically take the vehicle and have it repaired – then the insurer has the right to dictate who will repair the vehicle, what type of parts will be used and how much they are going to pay for the work:

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EXECUTIVE DIRECTOR’S MESSAGE N.J.A.C. 11:3-10.3 Adjustment of partial losses (h) Whenever an insurer elects to repair its insured’s vehicle, that is, physically take the vehicle and have it repaired, the election must be in writing addressed to the insured and contain a reasonable estimate of the time period within which the vehicle will be repaired.

The insurer shall guarantee, in writing, that the work performed meets generally accepted

standards for safe and proper repairs.

If an insurer chooses this option, it must guarantee the repairs along with the shop that is making them. This puts the shop in a liable position for negligent repairs and basically breaks the limit of the policy.

However, even when the insurer has not chosen the option to repair the property, the regulations still allow the insurers to attempt to negotiate

with a shop owner of the insured’s choice on the method and cost of the repairs. The same regulations make it crystal clear that those negotiations must be conducted in good faith and that the insurer must make all reasonable efforts to reach an agreed price.

It does not allow the insurer to dictate what type of parts are to be used, the methodology of the repairs or how much the insurer is going to pay for that service. Here are some more of the provisions under N.J.A.C. 11:310.3 (Adjustment of partial losses) for your reference: (c) If the insurer inspects the damaged vehicle or causes it to be inspected, the insurer shall promptly upon completing the inspection furnish the insured or the designated representative of the insured with a detailed written estimate of the cost of repairing the damage resulting from the loss, specifying all appropriate deductions. (d) No insurer shall negotiate the settlement of any physical damage claim involving an automobile as defined at N.J.S.A. 39:13-1b with an unlicensed auto body repair facility or in any manner utilize an unlicensed facility in the adjustment, negotiation or settlement of such a claim. It shall be the responsibility of the insurer to make a reasonable and diligent effort to determine whether the facility is properly licensed. (e) Subject to the requirements of (d) above, the insured may use any repair facility of his or her own choice. With respect to automobile damage claims, the insurer shall notify in writing any insured who elects to use his or her own repair facility that, pursuant to law, any entity engaged in the

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business of auto body repairs must be duly licensed. The notice shall further advise the insured that the insurer is prohibited by law from negotiating, adjusting or settling an automobile damage claim with an unlicensed facility.

The written notice shall be furnished at the time of acknowledgment of the claim as provided at N.J.A.C. 11:217.6 or upon the furnishing of its written estimate, as specified at (c)...whichever is sooner. The insurer must make all reasonable efforts to obtain an agreed price with the facility selected by the insured. The insurer may recommend, and if the insured requests, must recommend a qualified repair facility at a location reasonably convenient to the insured motor vehicle who will repair the damaged

motor vehicle at the insurer’s estimated cost of repairs, but in either event the provisions of (g) below apply. (f) All estimates, including revisions and adjustments, prepared by any repair facility, estimator or appraiser must be included in each claim file. (g) If the insured’s vehicle is repaired at a repair facility whose name is furnished by the insurer under (e) above for a sum estimated by the insurer as the reasonable cost to repair the vehicle, the insurer: 1. Shall select a repair facility that issues written guarantees that any work performed in repairing damaged vehicles meets generally accepted standards for safe and proper repairs;

2. Shall cause the damaged vehicle to be restored to the condition it was in prior to the loss, at no additional cost to the insured and within a reasonable time, if the repair facility does not repair the damaged vehicle in accordance with generally accepted standards for a safe and proper repair.

The important part that collision shops should take away from this is that when an insured chooses the shop he or she wants to do the repair, the insurer must make all reasonable efforts to reach an agreed price with that shop, not dictate all of the aspects of the repair. The ONLY time an insurer has the right to dictate such things is when the insurer chooses the option in the policy to repair the property as explained in N.J.A.C. 11:3-10.3 Adjustment of partial losses (h).

continued on page 22

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CALENDAR

OUT OF BODY (AND MECHANICAL) EXPERIENCES continued from page 11

’Vette, always with a cigarette and a beer in his hands (he’d drive with his legs) and Dean Martin on the stereo.

He always dated the hot chicks. (There’s a notorious story my cousin Robert tells about being behind Billy and a date at a red light on Franklin Ave. in Nutley one afternoon. Robert swears he looked down for a second and when he looked up, he only saw Billy. Cousin Billy was legendary to the guys in our family.)

Billy worked for my dad’s construction company for a good part of his life, and even that didn’t stop him from doing crazy things. One of my dad’s brothers, my Uncle Tom, happened to be working on a job with them. Uncle Tom was…a worrier. (I guess you would call him “anal-retentive” these days.) From the time he got on the job to the time he got home, Uncle Tom drove my father crazy with his worries. One day, my dad had enough. To get Tom off his back, my dad told him to take the company truck and get it cleaned. Now as I’m sure you know, if you tell an anal-retentive person to get something cleaned, they are going to make it shine like the Hope Diamond.

So Uncle Tom went and got the car cleaned. It was spotless. The minute he got back, he went to the bathroom and Billy made a beeline for the truck. Moments later, Uncle Tom came running out of the bathroom screaming with his pants below his knees as Billy did donuts in the mud. I wish I was there.

I could go on for days and days. The stories are endless.

I wish he were here.

NJA

Steering and Suspension Damage Analysis Virtual Classroom

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Corrosion Protection Virtual Classroom

JANUARY 11

Aluminum Panels and Structures Damage Analysis Comfort Suites, Mahwah Welded and Adhesively Bonded Panel Replacement Virtual Classroom

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EXECUTIVE DIRECTOR’S MESSAGE

Suspension Systems Virtual Classroom

continued from page 19

JANUARY 19

It is so important for the collision industry to understand what is going on here. Insurers are acting like they have chosen the option to repair the property that gives them the right to dictate all the items addressed in this message. In reality, they have not chosen that option and are therefore misrepresenting the rights they are claiming to have. As long as an insurer has not chosen the right to repair the property and the shop’s charges are reasonable, the insurer owes for the repairs the shop performs. If anyone has any questions about the information in this article or would like to discuss any of the information, I can be reached on the AASP/NJ Hot Line at (732) 922-8909.

Vehicle Technology and Trends 2016 Holiday Inn & Suites, Parsippany Corrosion Protection Virtual Classroom

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Problem Solving for Workflow Changes Virtual Classroom

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JANUARY 28

For more information, visit i-car.com

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NJA

NJA

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NORTHEAST® 2016 SPOTLIGHT by Jacquelyn Bauman

American Honda Motor Co. to Address Certification, OEM Repair Procedures at NORTHEAST 2016 With Honda being one of the top-selling retail car brands in the US (and one of the top 10 largest automobile manufacturers in the world), information directly from the company is an invaluable key to staying ahead in the ever-changing auto body field. For repairers in New Jersey and beyond, there is no better place to connect with the manufacturer and receive its guidance than the 39th Annual NORTHEAST Automotive Services Show, held March 18-20 at the Meadowlands Exposition Center in Secaucus.

As a continued supporter of NORTHEAST, American Honda Motor Co.’s presence at the show is no surprise. Ever focused on evolving the way its message is distributed to the industry, American Honda Motor Co. will have a number of updates to its booth on the show floor.

“We’re going to have a couple of crashed Acura MDXs at our booth to demonstrate the need to use correct repair procedures,” says American Honda Motor Co. Assistant National Manager Gary Ledoux. “One of the MDXs is a production car that was crashed so that visitors to our booth can see how it fared in the collision and the way that it handled the crash. The other MDX is a previously damaged and incorrectly repaired vehicle that was then crashed again. Attendees will see very clearly how it did not fare as well in its crash due to improper repair.

“We know from talking to various people within the industry that not a whole lot of repairers take a look at the procedures before they start digging into a car,” he continues. “They go in and start repairing it the same way they’ve been doing it for 20 years, and that is not going to cut it anymore. We need to have people look at the procedures, know what they’re working on, know what they’re getting into, [know] whether it’s high-strength steel or not and know how to make proper welds and things like that. The improperly repaired, crashed MDX will show repairers how important it actually is.”

With “certification” being one of the most pervasive buzzwords in the industry recently, it is no wonder that Honda’s ProFirst Certification program is going to be one of the biggest topics of conversation at NORTHEAST. In addition to covering the basics of the program at its booth one-on-one with repairers, American Honda Motor Co. will be hosting its first annual ProFirst Lunch and Learn. The 90-minute event is an exclusive

opportunity for the first 50 individuals from ProFirst Certified shops who sign up.

“We’ll be serving lunch for our guests, and we’ll have a couple of speakers come in to engage and enlighten our attendees,” Ledoux explains. “One speaker will talk about the latest in Honda technology, and our other speaker will discuss how to promote your shop as a ProFirst Certified location. People have already contacted me trying to secure their space, so the event is filling up pretty quickly. The Lunch and Learn is limited to only ProFirst Certified shops.”

When Honda was determining where to host the ProFirst Lunch and Learn, NORTHEAST was an easy decision for a number of reasons.

“We like the show; we think it has a lot of energy,” expresses Ledoux. “The right people go to this event. We see a lot of repairers and technicians [and] a lot of people working at the ground level. I think we’re seeing a lot of people we probably wouldn’t see at a show in say, Orlando, Dallas or Las Vegas. I don’t know if they would travel that far, especially when they’ve got a great show in their backyard.”

Regardless of whether you visit the show for American Honda’s presence, the informative seminars, the industry networking or to talk business with vendors, Ledoux urges that the most important thing is simply that you come.

“This industry is changing at a blinding speed,” he says.

“New car technology is moving along rapidly – and it’s going to have to if the industry is going to get to 54.5 miles per gallon by 2025 [as] projected under the new CAFE fuel efficiency standards. We’re going to continue to see new, different technology used in the cars – in the way they’re built, the way their electronics work and the way they need to be repaired.

Repairers need to keep up with that. If you’re going to be a viable body shop in the future, you have to attend these events, read the trade magazines and be informed. You have to be engaged with the industry and you need to know what’s going on. A place like NORTHEAST is a great place to do it.”

If you’re going to be one of the thousands of industry professionals filtering into the Meadowlands Exposition Center this spring, Ledoux asks just one thing: NJA “Stop by and say hello! We’ll be here for you.”

Free registration for the 39th Annual NORTHEAST Automotive Services Show is now open at tinyurl.com/NE16reg. The show will be held March 1820, 2016 at the Meadowlands Exposition Center in Secaucus, NJ. For more information, please visit aaspnjnortheast.com.

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AASP/NJ’s

Networking.

Education.

Innovation.

Technology.

IT’S ALL HERE. March 18, 19, 20, 2016 | Meadowlands Exposition Center | Secaucus, NJ Online FREE Registration is NOW OPEN!

www.aaspnjnortheast.com New Jersey Automotive | January 2016 | 25

ABD HOLIDAY PARTY HIGHLIGHTS Galloping Hill Caterers, Union - December 10, 2015

Auto Body Distributing Co. would like to extend special thanks to this year’s generous prize sponsors!

3M Acme Nissan All American Auto Salvage Auto Body Jobbers Bell Mitsubishi BMW/Mini of Manhattan Clinton Acura Clinton Honda Ditschman/Flemington Ford Douglas Auto Group Dover Dodge Flemington Audi/Porsche/Volkswagen Flemington BMW

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Flemington Chrysler Flemington GM Flemington Infiniti Flemington Nissan Flemington Subaru Franklin Sussex Auto Mall Gerber RV Group 1 Mercedes & Volkswagen Intercar Mercedes Lusid /GenRock/Northstar Refinish Morris County Jaguar Maxon Mazda & Hyundai Malouf Ford

Medco Tool Mike Kaufmann Dealer Group National Oak Distributors Norton NUCAR Connection Princeton Land Rover Roberlo Sussex Honda Toyota of Morristown Toyota of Hackensack Valspar/DeBeer Refinish

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LEGAL PERSPECTIVE by Mitchell Portnoi, Esq.

SOCIAL HOST RESPONSIBILITY While you may not be reading this until well into the new year, I am writing this article in the throes of the holiday season while attending multiple parties thrown by friends, colleagues, coworkers and family members. What do you need to know about a host’s responsibility for the service of alcohol to those attending your party? I will offer some answers by discussing the “social host statute,” which sets forth the exclusive civil remedy for personal injury/property damage resulting from a social host’s provision of alcoholic beverages to a person who has reached the

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legal age to purchase and consume them.

If an injury occurs as a result of a social host’s provision to an underage person (currently under 21), the more liberal common law governs the person’s recovery.

Therefore, it is more difficult to prove a case against a social host who provides alcohol to a person over 21 than it is if he or she provides alcohol to a minor.

An adult person who sustains injury as a result of a social host’s provision of alcohol to him or her may recover damages from that host only if:

the social host willfully and knowingly provided alcoholic beverages to a person who was visibly intoxicated in the host’s presence, or provided it to a person who was visibly intoxicated under circumstances manifesting reckless disregard of the consequences as affecting the life or property of another;

the social host provided alcohol to a visibly intoxicated person under circumstances creating an unreasonable risk of foreseeable harm to the life or property of another, and the host failed to exercise

reasonable care and diligence to avoid that unreasonable risk; and

the injury arose out of an accident caused by the negligent operation of a vehicle by the visibly intoxicated person who was provided alcohol by the social host.

Although there are many terms within the statute that need interpretation (such as “provide”), the cases interpret these terms liberally enough so that teeth may be given to the statute and recovery may be had by those injured as a result of the reckless and negligent service of alcohol to those who should not be served under the circumstances.

A whole different set of rules is involved in the service of alcohol to minors and, as indicated previously, applies the “common law” to these circumstances. As such, while a social host may not be “strictly liable” for any and all harm that comes about as a result of the service of alcohol to minors, it can be emphatically stated that if one serves alcohol to minors and personal injury occurs as a result of such service (which can take the form of assault and battery, sexual assault, aggressive behavior as a result of drinking and more), a social host may be found liable for all the injuries that occur that are considered related to the alcohol consumption.

A common question is, what is considered service of the alcoholic beverage?

While the statute and the case law differ, I believe the law is moving in a direction that favors a more liberal interpretation that if alcohol is available, then that satisfies the “knowingly provided” section of the statute.

Of course, the moral of this story is to exercise caution in the service of alcohol to all guests and to ensure that no one is served alcohol in an inebriated state. No one should get behind the wheel of a car after ingesting a significant amount of alcohol – whether they are an adult or (especially) a minor.

If anyone should have any questions regarding this topic, please call Mitchell Portnoi, Esq. at (973) 228-9900.

NJA

New Jersey Automotive | January 2016 | 31

Audi dealers strive to make you an A

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Audi Genuine Parts fan

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Audi Bridgewater 701 Route 202-206 N Bridgewater, NJ 08807 Toll Free: 888.685.5712 Parts Direct: 908.800.9000 Fax: 908.595.0237 email: parts@bernardsvilleaudi.com www.audibridgewater.com

Audi Brooklyn 211 63rd Street Brooklyn, NY 11220 Phone: 718.492.6400 Fax: 718.492.8899 rmerchant@audibrooklyn.com www.audibrooklyn.com

Princeton Audi 902 Route 206 Princeton, NJ 08540 Toll free direct: 800.218.1546 Fax: 609.688.3186 email: ldoerr@princetonauto.com www.princetonaudi.com *Details available at your authorized Audi dealer.

LOCAL NEWS By Joel Gausten

Governor Christie Signs Counterfeit Airbag Law; Takata Backlash Grows There are a number of dangerous places on the Internet, including plenty that could land you in jail if you’re not careful. If you’ve ever encountered a website promoting heavily discounted airbags, it’s very possible that the items advertised are counterfeit and don’t come anywhere close to matching the fit and safety of a legitimate OEM product. As of November 20, pressing the “order” key on that website (or obtaining one of these airbags through another method) will land you on the wrong side of Garden State law in a huge – and very expensive – way.

Signed by New Jersey Governor Chris Christie, Senate Bill 2174/Assembly Bill 3364 establishes that anyone who “manufactures, imports, installs, reinstalls, sells or offers for sale any device with the intent that the device replace an airbag in any motor vehicle and knows or reasonably should know that the device is a counterfeit airbag, a nonfunctional airbag, or does not meet federal safety requirements...is guilty of a crime of the fourth degree.”

Fourth-degree crimes are punishable by up to 18 months imprisonment, a fine of up to $10,000 or both. The legislation also states that “each manufacture, importation, installation, reinstallation, sale or offer for sale shall constitute a separate and distinct violation.”

Additionally, an offense created under the new law constitutes an unlawful practice under the Consumer Fraud Act, which is punishable by a penalty of up to $10,000 for a first offense and up to $20,000 for any subsequent offense. A violation can also result in cease and desist orders issued by the Attorney General and the awarding of treble damages and costs to the injured party.

Introduced in 2014 (“New Jersey Latest State to Introduce Legislation to Ban Fake Airbags,” NJA July 2014), the recently signed bills are the latest in a widespread effort to curtail the spread of counterfeit airbags across the country. In July

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2014, representatives from the Department of Homeland Security appeared at the Collision Industry Conference (CIC) to warn body shop technicians and repairers of the dangers associated with using these products.

“If a legitimate item is $1,000 and you’re getting it ‘on sale’ for $400, that price is often a very good indicator of a counterfeit,” offered William Hayes, a deputy special agent for the Department.

According to Department data, 82 percent of the counterfeit goods seized in 2013 and 2014 came from China. The majority of fake airbags enter the US through small parcels shipped via the US Postal Service or Express Mail. The situation is exacerbated by the fact that some fake airbags enter the country on commercial passenger airlines. Perhaps worst of all, the Department has confirmed that many phony bags end up in military vehicles, thus putting American soldiers at risk.

While the use of these dangerous airbags was strong enough in New Jersey to warrant legislation, the practice is far from common within the AASP/NJ community.

Like many of his peers, association member Dennis Cataldo (D&M Auto Body, Old Bridge) strictly buys OEM airbags from a reputable dealership and refuses customer requests to install used ones.

“When it comes to any part on the car, my first choice is OEM because it fits,” he explains. “Whatever [vehicle] that person is driving is made by that manufacturer; it’s not made by a secondary [source].”

Cataldo adds that defending his position is a simple matter of echoing what the automakers advise during the repair process.

“I would just print out any resource from a manufacturer that says you have to use a new replacement [part],” he says.

In related news, beleaguered Japanbased airbag manufacturer Takata continues

to face a firestorm of controversy and fines in response to revelations regarding the life-threatening condition of its products (“Lives on the Line: Inside an Explosive Airbag Recall,” NJA January 2015). On November 3, the National Highway Traffic Safety Administration (NHTSA) imposed a record civil penalty of up to $200 million against Takata. According to NHTSA’s official statement on the matter, this figure is comprised of a $70 million cash penalty with an additional $130 million charge if Takata fails to meet its commitments in a Consent Order that requires the company to “phase out the manufacture and sale of inflators that use phase-stabilized ammonium nitrate propellant, which is believed to be a factor in explosive ruptures that have caused seven deaths and nearly 100 injuries in the United States.” Additionally, the Consent Order “lays out a schedule for recalling all Takata ammonium nitrate inflators now on the roads unless the company can prove they are safe or can show it has determined why its inflators are prone to rupture.”

The order also imposes “unprecedented oversight on Takata for the next five years, including an independent monitor selected by NHTSA to assess, track and report the company’s compliance with the phase-out schedule and other requirements of the Consent Order, and to oversee the Coordinated Remedy Program.”

“Today, we are holding Takata responsible for its failures, and we are taking strong action to protect the traveling public,” said NHTSA Administrator Mark Rosekind in the statement. “We are accelerating Takata recalls to get safe airbags into American vehicles more quickly, ensuring that consumers at the greatest risk are protected, and addressing the long-term risk of Takata’s use of a suspect propellant.”

A list of all makes and models affected

by Takata airbag recalls is available online at tinyurl.com/q5u5a4h.

NJA

New Jersey Automotive | January 2016 | 35

LOCAL NEWS By Jacquelyn Bauman

Kearny High School Competes in Quaker State Best in Class Challenge

Best in Class

The Kearny High School auto shop students and Best in Class participants

For six weeks, automotive repair students from five schools around the country worked tirelessly to restore a 2003 Chevrolet Impala as part of the first annual Quaker State Best in Class Challenge. This program, meant to inject new life into the automotive repair industry, tested the skills of these competent students around the US on all aspects of the repair process. Kearny High School sat among the five finalists of the competition, alongside Iredell-Statesville Schools Automotive Technology Center (Troutman, NC), New Trier High School (Winnetka, IL), Satellite High School (Satellite Beach, FL) and Maxwell High School of Technology (Lawrencville, GA). Quaker State began looking for

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qualifying schools in April, eventually narrowing down the selection from over 100 down to 26. In October, the company finally settled on the five finalist teams that would each repair an Impala throughout the event.

“We really saw this as an opportunity to do something at the grassroots level; what a great way of doing that by working with high school auto shop programs,” says Laura Jamie, North American marketing manager for Quaker State.

“We thought, ‘What’s a good way to give back to the future of the industry?’

Working with our industry partners, we brainstormed and put together the Best in Class Challenge. This was a good opportunity for the brand to give back

and to support the future of the automotive industry.”

The competition tested students on their skills in both the mechanical and bodywork aspects of automotive repair.

There were 20 points of completion for the teams to focus on, including proper fluid levels, correct installation (of lights, filters, hoses and more), repairs to dents and scratches, custom paintwork and – most importantly – the difference in dyno test results at the beginning and end of the six weeks. Members of the public who were interested in the Best in Class Challenge were also able to vote for their favorite team on the Popular Mechanics website, which contributed to a “popular vote” aspect of the judging

process. The students were judged three weeks in at the halfway mark and at the end of the competition via video chat with two industry legends – Tommy Pike of Tommy Pike Customs and Paul Menard, driver of the No. 27 Chevrolet SS in the NASCAR Sprint Cup Series.

The teams were provided with $2,000 donated by AutoZone to use on supplies to repair the cars, as well as a $5,000 stipend to use on ancillary costs.

The top three winning schools had their vehicles auctioned at the Mecum Auction in Austin, TX and were given the proceeds from the sale. The Grand Prize winner received a $2,000 AutoZone gift card and a $500 toolkit (as well as a feature in Popular Mechanics in February),

Kearny student Tyler Whaley tapes the team’s car for painting. and teams in second and third place won $1,500 AutoZone gift cards. The fourth and fifth place teams were given $1,000 AutoZone gift cards and were able to keep their finished vehicles.

The final winners were announced at the end of last year. Although Kearny High School did not place in the top three, instructors were proud of their students’ accomplishments and grateful for the opportunity to participate in the competition.

“The best thing about the kids competing was how they worked as a group,” said Kearny High School Automotive Technology Instructor Victor Riberio in a video interview conducted

by Quaker State chronicling the contest.

“They put their skills into effect; they did a lot of work, and this was real-world work for them.”

NJA

Photos courtesy of Coyne PR

New Jersey Automotive | January 2016 | 37

See us at NORTHEAST® Booth # 212

©2016 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of all traffic laws at all times.

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New Jersey Automotive | January 2016 | 39

NATIONAL NEWS By Joel Gausten

RICO Case Dismissed; Plaintiffs Set to Refile

As the nation prepared for the Thanksgiving holiday, one of the industry’s most talked-about legal battles against insurance carriers faced its greatest challenge.

On November 25, Middle District of Florida Judge Gregory Presnell dismissed a class-action RICO lawsuit (Crawford’s Auto Center Inc. and K&M Collision LLC et al. v. State Farm Mutual Automobile Insurance et al.) brought against the top insurers in the nation. As previously reported in New Jersey Automotive (“Federal Lawsuit Alleges Insurers’ Conspiracy to Control Collision Repair Costs,” NJA June 2014), the lengthy lawsuit accuses seven of the country’s top auto insurers – State Farm, Allstate, GEICO, Progressive, Farmers, Liberty Mutual and Nationwide – of conspiring to control the cost of collision repairs. The Plaintiffs argue that the Defendant insurers committed fraud and extortion in violation of the Racketeer Influenced and Corrupt Organization Act (RICO) by creating artificial “prevailing” rates based on their DRP shops’ use of products by the industry’s three leading Information Providers (Audatex [AudaExplore], CCC or Mitchell). The suit, which also names the three IPs as well as USAA, Travelers and American Family as conspirators, was originally filed in the US

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District Court for the Northern District of Illinois, Eastern Division on April 30, 2014. Later that year, the case was transferred into current Multidistrict Litigation (MDL) being heard in the US District Court for the Middle District of Florida, despite the Plaintiffs’ objections.

In his scathing 19-page decision (available online at tinyurl.com/nwyn nwv, courtesy of Repairer Driven News), Judge Presnell criticized the Plaintiffs for filing a “shotgun pleading,” a term commonly given to a legal complaint (or an answer to a complaint) that presents an excessive number of facts without clear organization to describe a defense or cause of action. Calling the complaint “likely 100 pages longer than it ought to be,” he noted that a RICO claim against State Farm included in the suit “incorporates all 292 paragraphs that precede it, including a number that have no relevance to that Defendant.” In another example, the Judge’s report states that a RICO claim against Defendant Allstate “incorporates all 310 paragraphs that come before it, including a number of the initial 292 [paragraphs] that have nothing to do with Defendant Allstate.”

Addressing the RICO claim, Judge Presnell stated that the Plaintiffs failed to effectively show that the Defendants participated in an illegal enterprise through a pattern of racketeering:

The reader who makes it all the way through the Amended Complaint comes away with detailed knowledge of automobile repair industry minutiae but little information about what any Defendant did that was actually improper. For present purposes, however, the Plaintiffs’ failure to properly plead a pattern of racketeering activity overshadows their failure to describe the workings of these alleged enterprises.

Elsewhere in the order, Presnell states that the Plaintiffs “have utterly failed to comply” with the requirements of the Federal Rule of Civil Procedure for establishing a claim for fraud. These requirements include providing: the precise statements, documents or misrepresentations made;

the time, place and person responsible for the statement;

the content and manner in which these statements misled the Plaintiffs; and what the Defendants gained by the alleged fraud.

“The alleged fraud [in the Crawford’s complaint] is described in only the most general terms, with no effort made to

identify the allegedly fraudulent statements or the Defendants who uttered them,” he wrote.

Although the Judge noted that the Plaintiffs provided “a list of 59 ‘representative transactions’... as satisfying the particularity requirement,” these documents were “merely spreadsheets listing a series of transactions where the insurers’ estimates [and resulting payments] were lower than the Plaintiffs’ invoices, along with [apparently] an itemization of the procedures or parts which the insurers had not included in their estimates and for which they did not pay.” He argued that there was nothing included on these spreadsheets that indicated insurer fraud, or even that the insurer described its estimate as being based on a “prevailing rate.”

In response to the Plaintiffs’ claims of extortion, Presnell was again unsympathetic:

In this case, the Plaintiffs contend that the Defendant Insurers...extorted [the] Plaintiffs and the proposed classes through wrongful use of fear of economic loss, in that Plaintiffs and the members of the classes would not be able to perform the insured repairs unless they accepted the suppressed compensation paid by Defendant Insurers...Taken at face value, this argument is nonsensical. The Plaintiffs are arguing (1) that what they feared losing was not money but the ability to perform repairs on insured vehicles, and (2) that receiving compensation paid by insurance companies was not the benefit they received, but rather the burden they shouldered to be able to continue performing repairs on insured vehicles. In actuality, the Plaintiffs admit throughout the Amended Complaint that they accepted what they believed to be suppressed compensation because if they refused to

work that cheaply, some other repair shop would get the work...Extortion involves a victim “agreeing” to do something because of a threat – e.g., “Pay me or I’ll burn down your business.” In the Amended Complaint, however, the Plaintiffs claim that they accepted reduced compensation for fear that the insurers would stop trying to offer them reduced compensation. ‘Give me a discount or I’ll leave you alone’ is not extortion.

Presnell dismissed the Crawford’s case “without prejudice,” meaning that the Plaintiffs have an opportunity to file an amended complaint by early January. New Jersey Automotive will provide updates on the case as it develops.

NJA

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COVER STORY By Joel Gausten

“Refining” the Market: Inside State Farm’s Labor Rate Increase If you’ve had a State Farm claim hit your desk recently, there’s a very good chance you’ve seen a major change to the Labor Rate paid by the insurer.

Back in July, State Farm announced that it would be making “market refinements” to its repair shop survey. According to the company, the surveys it conducts “allow eligible auto body repair facilities in the various markets the insurer serves to help identify prevailing competitive prices [PCP] and paint and materials pricing levels. Information provided by repairers through the survey process is used to help identify appropriate pricing for State Farm staff-prepared estimates. The State Farm Auto Repair Facility Survey has been in place for several years, with periodic updates taking place when business needs arise.”

“We are refining market boundaries used to determine prevailing competitive prices to serve our customers and to better align with government-defined market areas,” offered State Farm spokesman Justin Tomczak in a prepared statement.

State Farm added that these updates “may result in PCP adjustments in some areas in addition to the periodic changes in PCP relating to updated repairer pricing and capacity information.” The insurer noted that repairers could voluntarily update their repair capacity and pricing information at any time on the State Farm b2b website.

By November, the results of State Farm’s “market refinements” were springing up in the Garden State. According to

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documents obtained by New Jersey Automotive, new State Farm rate information for the New York-Newark-Jersey City market area is as follows: Body: $60

Refinish: $60

Frame: $75

AASP/NJ Collision Chairman Jerry McNee (Ultimate Collision, Edison) views the change to State Farm’s Labor Rate as a sign that the collision industry is moving in the right direction.

“I’d like to think that the shops are correctly filling out the Labor Rate surveys from State Farm,” he says. “At the end of the day, I’m sure that the lawsuits that are taking place are having an effect; maybe they see a trend when it comes to the suits that they have to start moving in a new direction. In reality, when you’re paying your guys $30 face value, their true cost is much higher than that. When you have an insurance company paying you rates that barely cover that value, there’s no meat on the bones.”

Not surprisingly, McNee is using the good news to his advantage at his shop.

“The moment we got the news that State Farm had increased its rates, we started hitting every insurance appraiser who came in the door with that information; we asked them what they were going to do about it and when they’re going to step on board,” he reveals. “We immediately raised our posted rates right on down the line.”

McNee adds that he has heard reports that some repairers are

standing up and telling other carriers that they would not be able to continue on their programs because their shops were now charging rates comparable to State Farm’s new figures. He sees this trend continuing unless the insurance industry truly begins paying shops what they deserve.

“Insurers are shooting themselves in the foot in the long term because there are very few techs coming into this industry,” he says. “It’s really just going to boil down to what these technicians can be paid.”

NOT EVERYONE’S HAPPY Although State Farm appears to be redefining its PCP in New Jersey for the better, the news has not been as positive in other parts of the country. In a December 2 notice to its members and auto body media, the Louisiana Collision Industry Association (LaCIA) revealed that some shops in the state are reporting $5/hour decreases in Labor Rates since the insurer kicked in its new structure.

“DRP and non-DRP shops are getting slammed with these lower rates,” wrote LaCIA Executive Director Alysia Hanks. “I wish there was a magic word I could give you all to make this problem go away; all I can tell you is we are working very hard to fight this, but we need your help. We need you to be proactive in your stance against these changes. We need you to share with us what is going on. We need you to reach out to the other shops in your area and make a stand not only for your shop, but [for] the whole industry.”

LaCIA is actively encouraging its members to contact the Louisiana Attorney General’s Office as well as the Louisiana Department of Insurance with complaints regarding the trend (or to file a claim). Most importantly, Hanks urges her members to reach out to the other collision repair facilities in their neighborhoods.

“I’m very certain there is another owner/manager sitting there with the same problems as you have, wondering if they really are ‘the only ones,’” she wrote.

This is not Louisiana’s first rumble with State Farm. As previously reported in New Jersey Automotive (“Mutiny: The Nation Fights Back Against PartsTrader,” NJA October 2014), Louisiana Attorney General James “Buddy” Caldwell filed a suit against the insurer in the state’s 19th Judicial District Court. The complaint alleges that State Farm violated Louisiana’s Unfair Trade Practices Act and Monopolies Law by (according to an official statement by the AG’s office) “using scare tactics to steer Louisiana consumers to State Farm’s preferred repair shops and forcing shops to perform vehicle repairs cheaply and quickly, rather than in accordance with consumer safety and vehicle manufacturer performance standards.”

As Caldwell’s litigation began grabbing major headlines in and out of the collision repair field, State Farm had the case transferred to the Multidistrict Litigation in Florida. In December 2014, Caldwell filed motions to have the case transferred back to the state court in Louisiana. On August 19 of this year, the Attorney

PartsTrader Announces

LAYOFFS As the holiday season approached, PartsTrader announced that it had dropped nearly 20 members of its US staff. According to a November 26 report by ZDNet.com, the “cash-rich” parts procurement provider laid off approximately 50 members of its development team (including 18 in the US and 32 in the company’s home country in New Zealand). The company had previously increased its development staff from 50 to 100 in response to demand from American users.

PartsTrader General Manager Glenn Morrow confirmed the layoffs, claiming that the cuts were made to accommodate the company’s shift from development to marketing.

“We’ve reached a point where we really need to focus on sales and marketing,” he said. “It’s a switch in resources, and we are still keeping a team of 50 with significant capability. The huge demand has been met.”

NJA

General announced that his request was granted.

“We are pleased that the Court ruled in our favor and will be sending the case back to Louisiana, where it belongs,” he offered in a prepared statement. “We look forward to moving this case forward for the benefit and safety of our citizens.”

According to the Louisiana Attorney General’s Office, State Farm currently holds the largest share of auto insurance policies in the state. In 2012, State Farm wrote one-third of all auto insurance policies in Louisiana, totaling over $1 billion in premiums. LaCIA has been a public supporter of Caldwell’s efforts.

Is there a connection between Louisiana’s Labor Rate woes and the Attorney General’s battle against State Farm? Why does New Jersey get an increase when another state drops to such a shocking level? Unfortunately, State Farm prefers to keep it all a mystery. For years, State Farm was easily one of the most accessible and press-prepared insurance entities out there, willing to take the time to respond to direct questions and feedback regarding its practices – even during the months-long media blitz against the always controversial PartsTrader. However, Tomczak was “not in a position to grant an interview” with us regarding the criteria used to determine rates in the “government defined market areas.”

Some industry experts have speculated that State Farm’s new market structure was developed using Core Based Statistical Areas (CBSAs) defined by the US Office of Management and Budget.

New Jersey Automotive | January 2016 | 47

The US Census Bureau defines CBSAs as those that “consist of the county or counties or equivalent entities associated with at least one core [urbanized area or urban cluster] of at least 10,000 population, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties with the counties associated with the core.”

State Farm has not offered an official confirmation/correction regarding the assumption that CBSAs are the driving factors in its new Labor Rates.

DON’T START THE PARTY YET While many shops have already embraced the new State Farm rates and are using them as leverage in their dealings with other insurers, McNee is quick to point out that the New Jersey industry as a whole has been frustratingly slow to act on this development.

“Even up to this week, I still have insurance appraisers who have not heard about the rate increase from State Farm,” he shared in early December – one month

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after the new rates went into effect. “This is completely disheartening to me because clearly nobody’s willing to take that stance.”

McNee is also concerned about the industry’s slow participation in the AASP/NJ VRS Ray Gunder Real-Time Labor Rate Survey (“Fair, Reasonable & Profitable: Exploring the Variable Rate System”, NJA June 2015). Despite the presence of this crucial service in the Garden State, the number of shops actually utilizing it remains low. According the 2013 US Census, there are 1,027 auto body shops in New Jersey. As of December 2015, only 173 shops have filled out the New Jersey VRS survey sponsored by AASP/NJ. In order to attain statistical significance at a 95-percent confidence level and a +/- 5 percent margin of error, New Jersey needs 107 more shops to complete the process.

“If you had roughly 200 more shops in New Jersey fill out the survey, that would give us a greater stronghold,” McNee says.

Of course, any Labor Rate increase is meaningless unless the shop receiving it is

familiar enough with its numbers to make the rate profitable. The only way to do that is to know exactly how much money goes into every job – and how much is expected to be made from it.

“At the end, it really boils down to survival,” McNee says. “If the shop can’t afford to cover its expenses, who’s going to do it? At the end of the day, it has to be run like a corporation and a business. You really need to know your numbers [and] what it takes to run your business inside and out.

If you’re just guessing, or if you don’t know and are waiting for your accountant to tell you, that’s a huge mistake. Don’t blame the insurance companies for taking advantage of that situation; the insurance companies are just playing the cards that are being dealt to them, and that’s the problem. There’s no better time to join AASP/NJ and get the information you need to stand up to the things working against you.”

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NO BRAKES by Ron Ananian

DOWN FOR THE COUNT

As I write this month’s column, I am reflecting on the past year. Seems timely, right?

We started the year with a surprise. My long-term, 18-year office manager left abruptly, giving a standard two weeks’ notice.

It was a shocking and disappointing way to end, but it was also strange – no harsh words, no argument, just, “It’s time to go.”

Hey, everything comes to an end; you just never seem to be ready for it. But ready you must be, as this is the business we are in. I had to laugh a few weeks ago when a very good regular customer (who is also an office manager, but for a larger company than mine) told me she was leaving her gig, too. She told me that her boss was upset but understanding, and that he was actively looking for a replacement. The difference was that she gave him six months’ notice.

“It’s a key position and I couldn’t leave him hanging,” she said.

I guess I must have missed something with my guy. Like my late father-in-law always said, “There will be moments you have to pick yourself up and move on.” Still, it doesn’t seem right that this business is viewed as a different animal; it’s just a body in the office, right? Moving on…

Cars definitely got tougher this year – way more electrical diagnoses, less services needed and more computer reflashing/software updates. I’m wondering what the future holds, and for how long. When does the next shoe drop, and am I ready for it? Are you? My policy on diagnoses changed this year as well. Nothing happens to a vehicle without one, and we hold the line on customers who don’t want to pay for it to be done. There’s the door; don’t let it hit you… I also notice my “other” shop repairs were up this year; diagnosis (there it is again) and reflashing are a second line of work. I upgraded all my scan tools, both aftermarket and OE-level. As I write this, I am currently setting up a new four-channel lab scope from ATS and putting together three laptops for assorted purposes. My business plan for next year incorporates more diagnostics, more equipment and much more training.

I’m still trying to figure out where summer went, but at least we got to do some cruising with the hot rod and do a few remotes live on location with the radio show. It’s always good to connect with the audience (and customers, too) to see the wants and needs of their automotive curiosity. People still enjoy cars; they still want to know what makes them tick and still take pride in owning them (whether new or old). You can see it by their expressions at these remotes, which is something I can’t see when I am in the studio.

The ASE recerts also came up this year. It seems like I have less patience, which is maybe why I did all eight at once. I just wanted to get it over with; for the purpose of the State of New Jersey inspection program, I still have issues as to why it’s needed. Someone needs to explain that to me. Just wait until the next evolution occurs, which some say is around the corner. Inspection by E-ZPass or cell phone…don’t laugh, it could happen.

But with all the shop went through this year, this past week was the roughest. Stupidly, I cold-cocked myself on the lift a week ago. I didn’t quite knock myself out, but it was close. It hurt bad enough that I went to the hospital for a checkup, just to be sure. I have a bit of a concussion and am moving slower these days, but I’m still moving. For that, I am grateful.

Life gets very close and dramatic when you are lying in the emergency room and seeing those around you suffering from all sorts of ailments. It makes you appreciate the simple things, especially this time of year. I am down but not out, beaten but not burnt and looking forward to the challenges of the coming year and beyond. I’m going to try and kick it up a notch this year and do my job even better. After all, if we don’t try and rebound to improve, then what’s the point in any of this? Be safe and watch out for the lift arms; they sure don’t move when struck…

NJA

’Til next time, I’m Ron Ananian, The Car Doctor, reminding you that “Good mechanics aren’t expensive; they’re priceless.”

Ron Ananian, owner of R\A Automotive in Waldwick, NJ (est. 1978), is heard weekly in 140 markets on his nationally syndicated radio talk show. He is a working technician and former AASP/NJ Board member. Beyond his radio show, Ron writes and speaks for the automotive industry at trade shows and events. Visit The Car Doctor online at www.cardoctorshow.com.

“The Car Doctor” can be heard LIVE in the New York market. Tune in Saturdays, 2-4pm on WRCR AM 1700 for new shows!

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OVER 8,000 PARTS THAT ALL MEET ORIGINAL MINI SPECS...THE BUILDING BLOCKS OF MOTORING MATTER. At your local MINI dealer, we believe that using Original MINI collision replacement parts will speed your repairs and increase your profitability. Original MINI parts assure an absolute perfect fit and function.

For Original MINI parts, contact any of these authorized MINI dealers.

Princeton MINI

MINI OF Mt. Laurel

3466 US Highway 1 Princeton, NJ 08540 609-452-9400 fax: 609-945-1010 PRINCETONMINI.COM

1311 Rt. 73 Mt. Laurel, NJ 08054 856-778-3000 Fax: 856-813-4622 MINIOFMTLAUREL.COM FACEBOOK.COM/MINIOFMTLAUREL

Š 2016 MINI, a division of BMW of North America, LLC. The MINI name, model names and logo are registered trademarks.

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ARANJ 2016 Officers

President Bob Dirkes Dirkes Used Auto Parts (609) 625-1718 dirkesauto@gmail.com

1st Vice President Ian Szoboszlay Ocean County Auto (732) 349-0332 ian@cosmosautoparts.com 2nd Vice President Darryl Carmen Lentini Auto Salvage (908) 782-6838 darryl@las-parts.com

3rd Vice President Joe Goodman Leesville Auto (732) 388-0783 joeg@leesvilleauto.com Executive Director Brian Snyder Auto Recyclers of NJ (609) 714-2339 brian@aranj.org

ARANJ 2016 Board of Directors Mike Ronayne Tilghmans Auto Parts (609) 723-7469 tilghmans@snip.net

Mike Yeager EL & M Auto (609) 561-2266 elandmauto@aol.com

Rodney Krawczyk Ace Auto Wreckers (732) 254-9816 aceautonj@comcast.net

Mike Caputo Lacey Used Auto Parts, Inc. (609) 693-0898 laceyautomike@aol.com Bert Witcraft Auto Express (856) 728-8367 Ed Silipena American II Autos (609) 965-6700 esilipena@yahoo.com Harry Shover Porchtown Auto (856) 694-1555

ARANJ

Legal Update

The Automotive Recyclers Association of New Jersey

The Importance of Anti-Harassment Policies

Earlier this year, the New Jersey Supreme Court established that the adoption of an effective anti-harassment policy may serve as a defense for businesses against claims of sexual harassment by employees. In Aguas v.

State of New Jersey, the Plaintiff brought a suit against her employer in which she alleged that the sexual harassment she suffered at the hands of her supervisor created a hostile work environment. She alleged that the employer was liable for the supervisor’s conduct under theories of negligence and vicarious liability. The Court considered the impact of the employer’s anti-harassment policy on these claims.

With respect to the negligence claim, the Court found (consistent with previous decisions) that “an employer’s implementation and enforcement of an effective anti-harassment policy, or its failure to maintain such a policy, is a critical factor in determining negligence” claims. The initial burden is on the Plaintiff to prove that her employer “failed to exercise due care with respect to sexual harassment in the workplace, that its breach of the duty of due care caused the Plaintiffs harm and that she sustained damages.” In determining whether an employer was negligent, the Court must consider five factors. Those factors include the existence of:

• formal policies prohibiting harassment in the workplace; • complaint structures for employees’ use, both formal and informal in nature; • anti-harassment training, which must be mandatory for supervisors and managers and available to all employees of the organization; • the existence of effective sensing or monitoring mechanisms to check the trustworthiness of the policies and complaint structures; and • an unequivocal commitment from the highest levels of the employer that harassment would not be tolerated, and demonstration of that policy commitment by consistent practice.

The Court held that an employer’s anti-harassment policy should be considered when assessing these factors.

With respect to the vicarious liability claim, the Court adopted an affirmative defense to liability previously recognized by the United States Supreme Court. To establish the affirmative defense, the employer must prove, by a preponderance of the evidence, “(a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the Plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”

The Aguas Court recognized that the implementation and en-forcement of an effective anti-harassment policy would be sufficient to satisfy the employer’s obligation to exercise reasonable care. However, the affirmative defense would not available if the employer took any tangible employment action against the employee, such as a demotion or termination. Moreover, in a separate case, the Appellate Division subsequently questioned whether an anti-harassment policy adequately satisfied the requirements for asserting the affirmative defense if the employee was not adequately advised of the policy and the remedies available.

The decision in the Aguas case emphasizes the importance of maintaining an effective anti-discrimination policy. Not only will it assist in protecting your employees from undue harassment, but it will also assist in protecting your business from liability for the untoward actions of deviant supervisors. The simple step of adopting an anti-harassment policy is particularly important given the New Jersey Supreme Court’s adoption of a more expansive definition of “supervisor” in Aguas, which encompasses not only employees granted the authority to make tangible employment decisions, but also those placed in charge of the complainant’s daily work activities. With the expansion of this definition, all businesses should take care to implement and enforce an effective anti-harassment policy to minimize liability.

For further information, please contact George J. Tyler, Esq. or Matthew J. Krantz, Esq. at (609) 631-0600.

Wharton Insurance Briefs An ARA Member

Managing safety isn’t just good for your employees; it’s good for your business, too. OSHA estimates that for every dollar invested in a safety program, a business could yield two to four in return. Safety doesn’t just happen, especially in the dismantling industry. Like any other aspect of your business, developing an effective safety program requires planning. A safety manual is a good place to start and should, at least, address the following: Management Commitment, Program Goals & Objectives, Policy Statement, Employee Responsibilities & Accountability, Safety Rules, Inspections (audits & evaluations), Accident Investigation and Communication.

Norm Vachon Port Murray Auto (908) 689-3152 portmurrayauto@yahoo.com

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Mario DeFilippis, AAI, Vice President (800) 221-0003 (ext. 1320) • (908) 513-8588 (cell) mdefilippis@whartoninsurance.com

NEWSFLASH By Jacquelyn Bauman

Auto Body Shop Choice Bill Becomes Law in WI

Little triumphs are what lead up to big victories.

One such success came recently to repairers in Wisconsin when Republican Governor Scott Walker signed a bill stating that car insurance companies cannot demand repairs be made at a particular auto body shop.

On November 12, Walker signed Senate Bill 93, which “prohibits an insurer that issues a motor vehicle insurance policy that covers repairs to a motor vehicle from: 1) requiring that repairs must be made by a particular contractor or repair facility as a condition of that coverage; or 2) failing to initiate or conclude with due dispatch an investigation of a claim for repairs on the basis of whether the repair will be made by a particular contractor or repair facility.”

The legislation also states that “a consumer has the right to select the motor vehicle repair facility of his or her choice.”

The Wisconsin Auto Collision Technicians Association Ltd. (WACTAL), an automotive repair association similar to AASP/NJ, was instrumental in getting this bill passed. This success is one example of how an industry association can institute change through the legal arena.

“Through the dedication and perseverance of WACTAL Board member Art Krolikowski, WACTAL lobbyist Jolene Plautz and lead bill authors Rep. Ed Brooks and Sen. Howard Markelin, WACTAL was successful in getting this legislation passed,” the association stated in a newsletter following the bill’s signing. “Art's tireless efforts in working with his legislator, Rep. Brooks, and [his] many trips to the Capitol are commendable. To those members who made phone calls and met with their legislators, and attended public hearings - THANK YOU! Your efforts paid off!”

To read the bill in its entirety, visit tinyurl.com/ WI-SB93.

NJA

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WE KNOW WHAT YOU’RE THINKING. YOU WANT TO KNOW IF THE PART’S IN STOCK, HOW MUCH IT COSTS, AND WHEN IT’S GONNA GET THERE. We get it.

You want the best part for a Toyota, but you’ve got to know when and how much.

Well, now you can. In addition to tools that can help you find and order the right VIN-based parts, now you can see if it’s in stock, schedule the delivery, even see your shop’s net price from your participating Toyota Dealer.* Now you’re thinking: “Cool!”

ToyotaPartsAndService.com

©2014 Toyota Motor Sales, U.S.A., Inc.

For Toyota Genuine Parts please call one of these authorized local Toyota Dealers: Toyota of Hackensack 278 River Street, Hackensack, NJ 07601 Toll Free: 888-PARTS-28 Direct: 201-488-5756 Fax: 201-487-2618 paulc@toyotaofhackensack.com www.toyotaofhackensack.com

Glen Toyota 23-07 Maple Ave, Fair Lawn, NJ 07410 Toll Free: 800-444-1959 Direct: 201-791-1133 Fax: 201-703-5652 parts@glentoyota.com www.glentoyota.com

Toyota of Morristown 169 Ridgedale Ave, Morristown, NJ 08960 Toll Free: 800-541-1127 Fax: 973-292-0872 www.toyotaofmorristown.com

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THERE HAS NEVER BEEN A BETTER WAY TO BUY THE WORLD’S BEST ENGINEERED PARTS. For Original BMW Parts, contact one of these authorized BMW centers: BMW of Springfield 391-399 Route 22 E. Springfield, NJ 07081 Toll Free: 800-648-0053 Fax: 973-467-2185 www.bmwofspringfieldnj.com

BMW of Freehold 4225 Route 9 North Freehold, NJ 07728 PH: 732-462-6286 Fax: 732-577-0518 www.bmwoffreehold.com

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Flemington BMW 216 Route 202/31 Flemington, NJ 08822 PH: 908-782-2441 Fax: 908-824-9913 www.flemingtonbmw.com

Princeton BMW 3630 Quaker Bridge Road Hamilton, NJ 08619 PH: 609-570-1611 Fax: 609-570-1602 www.princetonbmw.com

Wide World BMW 125 East Route 59 Spring Valley, NY 10977 PH: 877-817-3895 Fax: 845-425-5080 www.wideworldofcarsbmw.com

Original BMW Parts

www.bmwusa.com

The Ultimate Driving Machine®

They’re called “Original BMW Parts” for good reason. For uncompromising precision and incomparable quality, your BMW center is your One-Stop shop for everything BMW.

Circle BMW 500 Route 36 Eatontown, NJ 07724 Parts Direct: 732-440-1235 Fax: 732-440-1239 wholesale@circlebmw.com www.circlebmw.com

Paul Miller BMW 1515 Route 23 South Wayne, NJ 07470 PH: 973-696-6060 Fax: 973-696-8274 www.paulmillerbmw.com

BMW of Mount Laurel 1220 Route 73 South Mount Laurel, NJ 08054 PH:856-840-1486 FAX:856-222-0506 www.bmwofmtlaurel.com

Park Ave BMW 530 Huyler Street South Hackensack, NJ 07606 PH: 201-843-8112 FAX:201-291-2376 www.parkavebmw.com

BMW of Bridgewater 655 Route 202/206 Bridgewater, NJ 08807 PH: 908-287-1800 FAX:908-722-1729 www.bridgewaterbmw.com

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ADVERTISERS’ INDEX

See us at NORTHEAST® Booth # 311

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Acme Nissan ........................................54 Amato Agency ......................................23 American Honda Motor Company ..........27 AP Media ..............................................11 Audi Group............................................32-33 Axalta Coating Systems ........................6 BMW Group ..........................................60-61 BMW of Springfield................................21 Bridgewater Acura ................................52 Cadillac of Mahwah ..............................39 Classic Audi ..........................................18 Clinton Acura ........................................41 Cosmos Ocean County Autowreckers ....12 Dover Dodge Chrysler Jeep....................IBC Empire Auto Parts..................................62 Flemington Audi ....................................5 Flemington Group..................................35 Fred Beans Parts ..................................43 Grand Prix Subaru ................................29 Glen Toyota ..........................................OBC Hyundai Group ......................................20 IkotecUSA ............................................57 JMK Saab/JMK Fiat ..............................48 Klean Frame..........................................31 Levittown Ford ......................................29 Maxon Mazda........................................4 Maxon Hyundai......................................45 Mazda Group ........................................55 Mercedes-Benz of Freehold ..................19 The Mike Kaufmann Dealer Group..........10 MINI Group............................................51 Mitsubishi Group ..................................53 Mopar Group ........................................58 NORTHEAST® 2016 ..............................25 NUCAR..................................................14-15 Paul Miller Audi ....................................49 Porsche Group ......................................17 PPG ......................................................3 PPGMS ................................................30 Princeton BMW ....................................13 Princeton MINI ......................................37 Subaru Group........................................42 Town Motors ........................................38 Toyota Group ........................................59 Toyota of Hackensack ............................IFC Tri-State Luxury Collection ....................8-9 Valtek....................................................31 VIP Honda ............................................52 VW Group ............................................44 Westbury Jeep Chrysler Dodge Ram SRT...28 Wheel Collision Center ..........................62

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