The Status of Diminished Value Cases in New Jersey

Diminished value claims occur due to a loss in motor vehicle value – when a vehicle’s market value decreases following an accident caused by a defendant’s negligence if the vehicle is not restored to its pre-accident value during the subsequent repair.

In New Jersey, the time has never been better to bring about a diminished value case than the present. The law is particularly clear that if an individual’s personal property is damaged because of a defendant’s negligence, then that person would be entitled to money damages from the defendant for the amount of the loss suffered. Recentlydeveloped case law entitles a person to – not just the amount of the repair costs – but also the amount of the reduced value of the damaged automobile. New Jersey law has repeatedly enforced the concept of diminished value. While the courts may recognize the concept of diminished value, it does not necessarily follow that the courts always recognize the proof necessary to put forth the diminished value claim. I have been filing claims for diminished value in New Jersey for approximately 20 years. I have appeared before judges who were quite reluctant to recognize these claims, especially at the inception of these cases. Judges, though they have grown more receptive to these cases over the years, are often skeptical of the proof put before them to prove the loss in value. While a plaintiff can testify as to the

continued on pg. 37

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The Law Office of Mitchell H. Portnoi is centrally located in Mountainside, New Jersey. Our Firm concentrates on handling cases throughout Northern and Central New Jersey. We specialize in serious motor vehicle accidents, slip and fall injuries, work-place accidents and workers’ compensation cases. We have recovered millions of dollars for our clients throughout our combined years practicing law; which are a million reasons why you should retain the attorneys at The Law Office of Mitchell H. Portnoi, P.C.!

MITCHELL H. PORTNOI is a Certified Civil Trial Attorney, certified by the New Jersey Supreme Services including:Court licensed to practice in New Jersey and New York. KYLE S. REED is an Associate in the Firm, licensed to practice law in New Jersey in 2018. Kyle has already litigated numerous cases to a verdict or towards a favorable resolution for the clients he has represented.

To Schedule a Free Consultation: Call 908-228-8800 and ask for either Mitchell H. Portnoi or Kyle S. Reed, or contact our office online at mportnoi@portnoilaw.com or kreed@portnoilaw.com. Many people worry about the cost of hiring an attorney to represent them in their personal injury or workers’ compensation cases. We will charge you no attorney’s fee unless we recover a settlement for you.

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continued from pg. 25 It’s always been about communication for Rick Weber of Maxon Buick-GMC-Hyundai; however, he misses the days of connecting with customers on the phone.

“Years ago, I developed relationships on the phone with my customers. The internet has changed a lot of things. The personal relationship is disappearing. It’s all electronic now. It seems like things are going in a direction where it’s all faceless, nameless entities, and it’s really changing the business. Hand-shake agreements don’t exist anymore.” Rizzo-Donaruma has witnessed customers become frustrated with some of the web-based tools used in today’s world. She wants shops to know that these things aren’t there to make their world harder; it’s actually intended to make the process easier. “A lot of people don’t like change,” she admits. “If a customer has a return that needs to be picked up, we ask them to go on our website. It’s not to make the process painful…it’s to let the dispatcher know, so if they are in the area, they can send the right size truck to pick up the order. We try to help our customers as we know there can be a lot of stress for them.”

Another issue can stem from how shops place their orders. If they don’t place their order accurately, there will be problems getting what they want, when they want it. “You have to be well organized,” says one supplier. “You can’t place an order in two or three requests and expect to get everything at the same time if we only have the capabilities of making one delivery.”

It’s no secret that supply chain issues causing parts delays has had a severe effect on body shops, but the parts suppliers have been on the receiving end of the shops’ frustrations all this time.

“We constantly hear complaints about everything being on backorder, but it’s not our fault,” says RizzoDonaruma about the effects of current events. “We have to rely on the manufacturers, and we wish we could get the parts in faster too! Unfortunately, it doesn’t always happen. It’s very important to us when shops can be understanding about it. We know their frustrations. We know they are under pressure, but we are too, just on a different level.”

“The dealers are going through the same trouble as the shops with backordered parts,” offers Kaufmann.

These challenges have been hard on both sides, which is why working together is key.

“We need to be together in this. We all need each other,” states Rizzo-Donaruma. “Without communication, things will just get worse, and both sides will get bent out of shape,” Kaufmann advises.

One of Weber’s biggest frustrations is the customer who tries to play a game using the parts supplier as the pawn. His delivery drivers have witnessed shops try to file fraudulent claims by ordering a part, copying the invoice upon delivery and then sending the driver back with the part for return. “If you aren’t buying the part, you aren’t getting the invoice.” One supplier spoke of another game where he’s seen shops turn parts ordering into a contest. “Don’t order from us and another company to see who gets there fastest. That’s a waste of our time.” Another no-no for suppliers is bounced checks. In the words of Weber: “They are just difficult to deal with. It’s not a fun thing.” So, what does his ideal customer look like?

“I say it all the time. Order the right parts, don’t return anything unnecessarily, and pay your bill on time,” according to Weber. Kaufmann has taken the brunt of frustrations from customers, especially due to supply chain woes, but he’s finding most are starting to ease up and accept the way things are.

In his eyes, “a good customer will be calm and professional in handling things. There is no blame put on the supplier unless the supplier didn’t communicate correctly.” Just like shops cited many factors in what makes a “good” supplier, the suppliers have many ideas about what makes a good parts customer, as well. But there’s one thing both sides agree on, and it’s pretty clear:These relationships work best when both sides communicate well. Afterall, it does take two to tango.

NJA

AFTER HOURS

continued from pg. 20 he’s been commissioned to deliver boats. To date, he has sailed 30,000 miles in the open ocean.

Robin has been a member of AASP/NJ since shortly after the shop opened in 1977. He served on the board from 1979-1991 and has remained an active member ever since.

“We love our Charlie Bryant,’ he says of the association’s longtime executive director.

It is no surprise that Robin’s career as an auto body professional has indeed lent a hand to his voyages at sea. Robin has restored five boats to date, including the boat which won him his national title back in 2005. He had owned it only seven days before it was destroyed by an accident. It took six months and the help of five others to restore it to brand new condition.

While shop owners often own many cars, Robin has had many boats instead. He’s owned seven sailboats and five power boats “so far.”

At age 74, Robin shows no signs of slowing down and intends to continue to enjoy life – or in his case, the voyage.

continued from pg. 34 loss in value, it is strongly encouraged to provide expert testimony about the loss in value of the auto. A failure to provide this testimony can lead to a dismissal via motion of the defendant. Additionally, a plaintiff who relies on either a verbal offer or offers, or a written estimate, risks the exclusion of this evidence as hearsay testimony.

As of July 1, 2022, a diminished value claim of under $20,000 can be brought in the Law Division, Special Civil Part which has a reduced discovery period, and the case can be heard within two to four months, whereas a loss of over $20,000 needs to be brought to Superior Court with a longer discovery period, the possibility of depositions and more significant discovery among the parties. A jury trial can be utilized in both courts; however, doing so necessitates a much more time-consuming endeavor. A case heard by a judge alone obviously allows for the judge’s own personal bias to play a role in the decision. The cases my office has taken tend to favor higherend cars and more significant monetary losses. I also combine personal injury cases along with diminished value cases when the need arises. For more information about either your diminished value case or those of your clients, please call Mitchell Portnoi or Kyle Reed at (908) 228-8800.

NJA

LYNNES

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continued from pg. 29 “There’s a fine line you have to walk to be profitable and still do the quality job you’re obligated to do for your customers. I couldn’t figure that out, so I’d rather not participate. It didn’t work for me, but it’s a business decision that a lot of good guys make in good faith, and I hope they’re more successful in the venture.”

“There’s a DRP down the street, and I’d be a fool to believe they’re not profitable,” admitted the Essex County repairer. “There’s too many DRPs out there for them not to be profitable, but I don’t know what the secret sauce is since I’m on the other side of the fence. My customers don’t understand why there are so many delays, so I have to explain to them that the DRP works for the insurance company; their loyalty is to repairing the car as cheaply as possible to keep the insurer happy. My priority is safely repairing the car and retaining the customer for the future. Supposedly, there’s a lot of oversight for DRPs, but I can’t imagine what methodology they’re using to repair today’s high-tech cars safely under so many restrictions…and still make a profit.”

According to Dennis Cataldo, Jr., it is possible. D&M Auto Body (Old Bridge) participates in one DRP for a regional carrier. “If you can find a relationship with an insurer that is reasonable and willing to work with shops, you can be profitable and fix cars correctly.” “Yeah, it’s been profitable,” acknowledged the Bergen County auto body professional. “The flow of work coming through the shop has helped us grow. We’ve worked hard and done well. “Do we make more money on non-DRP work? Yes, we do,” he admitted. “But our country has gone into a Walmart mentality of high production, and if anyone hasn’t realized it yet, it may be time to accept that reality. At the same time, we recognize that insurers are not our partners. Our relationship with them is a vendorship, not a partnership.” Industry experts have suggested that a new type of partnership may be helping kill off DRPs. “You need to be cognizant of the fact that OEs are playing – and will continue to play – a much bigger role in how their brand is being repaired, and that momentum will continue,” Pete Tagliapietra (Data Touch LLC) predicted at SEMA 2021. “You will also see further relationship-building between insurance companies and manufacturers. There’s an argument to be made that OEs will have greater influence over insurers as things move on.” Bryant agrees that OEM certification is going to play a role.

“As advanced as cars are these days, shops have to get the training. It’s not even a matter of ‘should’ anymore; you can’t even buy certain parts without having the right training and equipment. It seems like we’re moving away from DRPs and going toward certified shops.” “There’s no doubt that we’re moving toward a certified shop environment,” added the Bergen county shop owner. His facility holds one certification, and although he’d like to pursue more, there are some obstacles. “To become certified, OEMs ask for a larger building footprint than New Jersey shops traditionally have. On average, a shop in this area is 2,300-5,000 square feet, so if you have to commit a large portion of that to an aluminum section to prevent material migration, it makes it difficult to have more than one certification. Our building is too small for a large certification program.” He also identified two more challenges to becoming certified: “Dealers can only sponsor two shops, so shops’ ability to become certified is limited to that dealer sponsorship. Shops also have to realize the expense of a certification program that has some teeth to it. It takes a solid commitment to send your guys to training every year, purchase the latest welder, maintain your I-CAR certifications, etc. It’s very expensive to complete a highend OEM program, and that leaves a lot of shops unable to afford it, and they feel alienated as a result.”

When New Jersey Automotive first asked Garden State shops about their plans for OEM certification in the 2017 Industry Survey, 47 percent indicated their intent to obtain certification, while 14 percent indicated that they would not be pursuing OEM relationships and felt it would have no impact on their business. The 2021 survey iteration saw a reduction to 32 percent of shops chasing their certification, while 41 percent do not believe OEM certification will have enough of an impact on their business to warrant the investment.

“I’m not sure what direction the industry is moving, but I’m unsure how shops can be OEM-certified and have DRP relationships…and satisfy the requirements of both relationships,” offered Cataldo, whose shop currently does not have any OEM certifications. The Essex County shop owner doesn’t believe DRPs will go away, even if OEM certification becomes more prevalent. “There are theories, and then there’s reality. In reality, I’ve seen a lot of anti-DRP shops jump on board when the opportunity arises. So, as some shops get off the DRPs, that’s just going to leave room for others to sign onto those contracts.”

“I see more guys moving away from DRPs because they think they’ll be able to charge better labor rates with OEM certification,” Symons said, predicting, “I think the OEMs are going to be just like the DRPs. They’re going to flood the market out in some areas, making that certification less meaningful.” Hawtin believes consolidation will prevent certification from overtaking DRPs. “The conglomerates are coming around, buying as much as they can. And they thrive on DRPs.”

Is it time for the Grim Reaper to come calling for DRPs, or are DRPs still alive and thriving? We’d love to hear what you think. Reach out to chasidy@grecopublishing.com to share your thoughts!