Stroud's Auto Rebuild, a Tacoma, Wash., collision repair
facility prevailed in an arbitration proceeding against
Safeco Insurance Co. on a claim that it tortiously
interfered with a repair contract Stroud's had with a
consumer. In the case of Stroud's Auto Rebuild, Inc. v.
Safeco
Insurance Company, Stroud's convinced the arbitrator
that it had a valid business expectancy in performing the
work, but lost the job and the profit it would have
generated after Safeco actively pressured the vehicle
owner to remove his vehicle from Stroud's and have it
repaired at one of their “preferred” collision repair
shops.
Although the arbitrator awarded Stroud’s
the entire lost profit requested— $9,462.23—on Dec. 6,
2010, Safeco elected to appeal the arbitration award. Not
long after the appeal was filed, however, Stroud’s and
Safeco were able to settle the matter in the amount of the
entire arbitration award as well as Stroud’s attorney’s
fees.
Mike Harber, the owner of Stroud’s Auto
Rebuild said that he is delighted about the outcome.
“I am so pleased that the arbitrator understood the real
issues in this matter. I am a small business person
trying to perform quality services and take care of my
customers in the process. To have an insurance company
put my business and my customers at risk because it wants
to save money and increase its own profits is
reprehensible.”
Allen Shabino, the attorney for Stroud’s
is equally pleased. “Prevailing in a tortious
interference case can be very difficult because the legal
standard is vague and difficult to meet, particularly the
requirement that the defendant either be shown to have had
an improper objective of affirmatively harming the
plaintiff, or that the defendant employed ‘improper means’
to accomplish the interference. By rendering the award
that she did, the arbitrator agreed that Safeco either was
actuated by an improper motive or had used inappropriate
means to induce the consumer to move his vehicle to their
preferred shop.”
Harber and Shabino both hope that this
outcome will discourage Safeco and other insurers from
interfering with consumers’ choices of collision
repairers. “People need to feel comfortable with the
facility that will repair their damaged vehicles,” said
Harber. “The safety of anyone who rides in that vehicle
is in the hands of the repairer. Consumers need to know
they can have their vehicles repaired at the shops of
their choice and not feel forced by insurers to have
someone they don’t know or trust fix their damaged
vehicles.”
