Onondaga County (N.Y.) Court Judge William D. Walsh has ruled in favor of Nick Orso's Body Shop vs. Adirondack Insurance Exchange in an assignment of proceeds case that has statewide implications.
The body shop had taken an assignment of proceeds from two customers insured by Adirondack Insurance after the insurance company capped, or refused to negotiate, certain short pay elements of the claims, including labor rates, p-page items, paint and material allowances and junkyard or aftermarket vs OEM parts.
Mike Orso, president of Nick Orso's decided to take the two cases to court and sued Adirondack for violation of the GBL Section 349. The short pay on these claims totaled some $4,600 plus attorney fees, costs and penalties.
Orso filed claims in Syracuse City Court where Adirondack filed a motion seeking dismissal on "standing" arguing "Orso" did have standing to accept or receive an assignment of the insured's policy rights due to specific policy language regarding assignment. The lower court agreed with Adirondack. Orso undaunted filed an appeal to the New York State Supreme Court. As is typical in NY the case was later adjudicated in the next court of jurisdiction, Onondaga County Court.
Mike Orso said, "This case has been in the pipeline for almost two years. Our Attorneys, guided by Joseph Talarico Esq. worked tirelessly on the appeal. I feel he truly believes in our attempts to collect on our full repair." He was assisted by Erica L. Eversman, J.D., who submitted an Amicus Brief in support of the relevance of the Assignment issue with supporting case law.
Talarico said, "This was an important and pivotal point in the assignment of claim proceeds issue. We have hundreds of claims pending against various insurance companies and we've put substantial resources and effort into these short pay collections."
Ed Kizenberger, executive director of the New York State Auto Collision Technicians Association said, "I'm very proud and thankful Mike Orso was tenacious enough to see this through. All body shops that pursue collections through assignments on behalf of their customers owe Mike and the attorneys involved a big thank you. Insurance companies are well equipped to fight these issues on a broad front. This Certainly brings the issues of illegal caps and short pays into the limelight as consumers seek a fair recovery and shops attempt to negotiate a quality safe repair for their customers."
Orso said, "the importance of this decision is that we can continue to help our customer by delivering a proper safe repair and in the absence of our offer of 'reasonable negotiation' and have a chance to stand in the consumer's shoes to collect for the repairs we've done. I think some insurance companies would rather not face the shop but instead deny a consumer payment and spin it so the shop is made out to be the bad guy. Shops need to admit they are saddled with all the liability and responsibility of the repair; who better to resolve the cost of the repairs than us from a position of knowledge? We are still the professionals."
In response Judge Walsh said, "It is indeed well settled New York Law that enforceability of anti-assignment clauses contained (sic) in insurance contracts are limited, in that as a general matter such provisions are valid with respect to pre-loss assignments, but not with respect to post –loss assignments."
Judge Walsh added, "New York is among the majority of jurisdictions in the United States which allow post-loss assignment, despite express anti-assignment clauses contained in insurance contracts, under theory that although the insurer’s exposure to risk is altered if the insured assigns the policy prior to a covered loss the risk the insurer has contracted to cover is not altered post-loss, when the claimant is not the party who was the original insured."
Orso's has prevailed in hundreds of cases where assignment of proceeds collections were involved. Orso said, "Many of the companies we've sued have come to a decision that it would be prudent to simply follow the regulations and 'negotiate a settlement' at the shop on each repair or enter into 'global settlements' before spending money on legal fees for matters they can't win. It appears most attorneys tend to follow the N.Y. Regulations settling the claims on the merits before subjecting their insurer clients to court fees and sanctions or exposure to continued patterns of unfair claims activity. Cases have resulted in summary judgment where Nick's received full payment, court costs and penalties."
