Avoiding Allegations of Improper Work

Steve Tomaszewski, president of Alpine Collision Center in Grand Rapids, Mich., repaired a vehicle after a deer hit. The car needed repair on the front-right side, but Tomaszewski also noted there was structural damage that needed to be addressed. Both the insurance company and the customer declined to repair the vehicle’s inner structure. The insurer claimed the damage was unrelated to the loss.

“We repaired the vehicle to the best of our ability,” Tomaszewski says, knowing full well there was more damage that needed attention.

Eighteen months later, Tomaszewski received a call from another shop in his market. The deer-hit customer had been in another wreck with the same car and once again needed repairs. The shop had noticed the structural damage that Tomaszewski documented when he repaired the car the first time. They accused Tomaszewski of insurance fraud, alleging he had taken money for the job, didn’t complete the full necessary repairs and had his technician cover it up.

“They wanted me to pay for corrective repairs,” Tomaszewski says. “It was almost like extortion.”

Situations like this are all too familiar to Tomaszewski. In fact, he says it’s happened numerous times during his 23 years in business. Fortunately, he’s got a safety net for exactly these kind of problems: detailed documentation for every job that moves through the shop, from customer conversations to repair procedures, and images to support his notes.

Maintaining thorough records is critical to protect your shop from allegations of improper work. It can quickly put customer complaints to rest or, if a customer takes the complaint to the next level—the courtroom—it might well become your most trustworthy ally.

Protect Yourself

Documenting every aspect of the repairs your shop works on might sound tedious and time consuming. But it only takes one customer complaint to make that work worthwhile.

“Many shop owners learn the importance of maintaining repair documentation the hard way,” says Johnny Dickerson, performance training coordinator for I-CAR. “They don’t realize the significance of doing it until they have a problem on their hands.”

Customers often forget or get confused about the work that was done on their vehicle, Dickerson adds. And as soon as something else goes wrong with their vehicle, customers are quick to blame it on a faulty previous repair.

Tomaszewski knows that. “Consumers often want to make their problems your problem,” he says. That’s exactly what happened with his deer hit customer.

“Apparently, the customer had forgotten all about the conversations we had with him and his insurance carrier,” Tomaszewski says. That customer also failed to remember that he denied paying out-of-pocket to have the car fixed correctly. “The customer was prepared to let the other shop think the damage resulted from a poor quality repair at our facility.”

But because of Tomaszewski’s thorough documentation, the problem was easily resolved. He faxed his repair invoice file of documentation over to the other shop immediately, so they could see without a doubt that his version of events was accurate. That was the last he heard from them.

“People can’t make much of an argument when you have the documented proof readily available,” Tomaszewski says. “Having that documentation on hand not only saved me the money for a corrective repair—which would have been expensive—but more importantly, [it saved] my integrity as a quality repairer.”

Legal World

Repair documentation carries a significant amount of weight in the legal world as well. And if you’re ever forced to deal with a plaintiff’s attorney or prove your story in court, you’ll be glad to have this documentation at your fingertips.

Good documentation is very powerful to judges and attorneys, says Dickerson, who has testified in court on behalf of shops in liability cases. Legal professionals want to see a reasonable effort on behalf of business owners to do the right thing and keep a good set of records.

Luckily, Tomaszewski hasn’t had to go to court for any liability complaints, but he has gone to small claims court numerous times in cases where customers neglected to pay their deductible.

He makes sure to have the necessary documentation on hand to prove his payment arrangement with the customer, and that every effort has been made to collect, before involving the court system.

“All I’ve had to do is hand my notes over to the magistrate, and I’ve never had to plead my case in court,” Tomaszewski says, other than testifying to the truth and accuracy of those notes. He’s won every case.

Some states put the burden on shop owners to prove they performed the work properly as a way to protect consumers, says Andrew Rodenhouse, partner with Rodenhouse Kuipers and former vice president of Rodenhouse Body Shop in Grand Rapids, Mich. “You have almost no case in your favor without proper documentation; without it, you’re going to lose if you find yourself in court.”

Components of Documentation

The collision repair process can sometimes be lengthy, especially for heavy hit jobs that take weeks to complete. Those repairs often generate a ton of information for the repair—through supplements and multiple conversations with customers or insurers. So what information do you need to make sure you keep? The short answer: everything.

“Every state has different requirements for the documentation that shops need to have, and for certain forms they might need to have customers sign,” Rodenhouse says. “But from a general standpoint, it’s always best to over-document rather than under-document.”
Everyone knows you need to retain basic customer information, like the claim number, personal information and vehicle mileage. Other components are important, too:

• Copy of the estimate. Keep your original and the insurer’s estimate. This documents your original repair recommendations, and records all changes made from your original report. All changes from either report should be documented and communicated to all parties, Dickerson says.

• Conversations regarding a repair order. Document every conversation you have regarding a job, whether it’s with the customer or insurer. Record what was discussed and when the conversation took place. This includes any communication—verbal, written or electronic, including phone call, fax, email or text message interactions.

• Repairs performed. Make sure to list in detail all work performed on a vehicle, including the procedures and tools that were used to do it, Rodenhouse says.

Tomaszewski says the state of Michigan mandates that shops document and itemize all work performed on a customer vehicle, regardless of whether the shop was compensated for the work. If there’s anything done that the shop isn’t compensated for, like checking tire pressure, he keeps that on the repair order and puts “no charge” for that line item.

• Vehicle safety checks. Rodenhouse says to make a habit of checking the entire vehicle for problems—the supplemental restraint system, warning signals, dash lights and brakes, for example.

“The shop isn’t necessarily required to fix those things if there’s an issue,” Rodenhouse says. “But they are required to inform the customer that there may be a problem with those components.”

• Photos. Photos are considered an important part of the documentation process, Rodenhouse says. Be sure to take good photos: Photograph the vehicle at an angle that shows the maximum amount of damage.

• Sublet work. Carroll Proctor, owner of A.C. Proctor’s Paint & Body, sublets some of his mechanical work. He documents every repair recommendation the outsourced company makes. All of those company’s recommendations are documented in a customer file along with information on whether the customer agreed or declined to have the additional work done.

• Previous repairs. Proctor says his technicians often notice previous repairs as they tear down vehicles. They document and photograph those observations, especially for previous work that appears to be poorly done—like welding or paint work.

“If that previous repair fails someday, our documentation proves that it wasn’t our work that caused the problem,” Proctor says.

• Previous damage. Document any existing damage on the vehicle, Dickerson says. Document that it was discussed with the customer, and the reason that damage will or will not be repaired.

• Opt-out repairs. Carefully document any damage that’s not going to be corrected, Dickerson says. If you’re ever questioned, that will serve as proof that the decision was made by the customer, not negligence on behalf of the shop.

• Parts. Itemize and document all parts used for a repair, Dickerson says. Document every conversation regarding the use of recycled, aftermarket or OE part choices.

“We document whether the parts used are CAPA or non-CAPA right on our invoices,” Tomaszewski says, noting he always discusses the pros and cons of using certain parts with customers.

• Warranty information. If you offer a warranty on your work, make sure to put that in writing, Rodenhouse says.
All this documentation might seem like overkill at a glance. But the bottom line is that you can’t be too careful when it comes to protecting your own liability.

“Shop owners have to understand they’re the last expert to look at a vehicle until there’s another problem,” Rodenhouse says. “That shop will be the first to get a finger point if there’s a future issue.”

Documentation Storage

Documentation requirements vary from state to state, Rodenhouse says; certain documentation may or may not be required by your state law. It’s important to understand the law in your area, and what your requirements are.

Check with your state’s Bureau of Commercial Services or the Secretary of State’s office for more information on requirements in your area, Rodenhouse says. That information is generally available online for free, state by state.

Those resources will not only tell you what information you need to retain, but for how long. The statute of limitations—the time period that allows people to bring claims against you—also varies by state, Rodenhouse says. But generally speaking, it’s six years for contract claims, and three years for tort (negligence-type claims).

“Shops being sued for an improper repair would likely be under contract law because the shop has an implied contract to fix the car correctly,” Rodenhouse says.

So to be safe, Rodenhouse advises shop owners to keep all repair documentation for as long as possible, with a minimum of seven years.
Tomaszewski stores his documentation in two ways: one in his management system, and one as a hard copy. He says his state requires him to keep a hard copy on hand for a minimum of five years, and you need hard copies if you ever have to go to court. Tomaszewski says he has nearly 40 boxes filled with repair documentation that take up a large portion of a storage room on the second floor of his shop.

Many shops are trying to go paperless, Rodenhouse says, and it’s not a bad idea to scan this documentation and save it electronically. That can serve as a backup in case something happens at your shop that damages your files. Even so, Rodenhouse suggests shop operators should still keep a hard copy document on file somewhere in the shop just to be safe.

A Good Habit

Documentation is a good habit for all repairers. For shops that repair multiple cars each week, it’s likely one of those will come into question somewhere down the line—if one hasn’t already.

“The important thing is to not just do business with a handshake,” Rodenhouse says. “That’s the worst way to do business.”

Keeping documentation on hand isn’t just for legal purposes, Proctor says. There’s a customer service factor as well. If you document everything you possibly can for every job, you’ll be able to answer just about any question a customer might have about their vehicle.

“This is just good business practice,” Rodenhouse says. “If you’re in business, you need to document everything you do.”