California shop owners intent on pursuing class action lawsuit vs. State Farm

Jan. 1, 2020
Some 75 California collision repair professionals representing about 40 body shops spent their Thursday evening discussing the details involved in filing a class action lawsuit against State Farm Insurance over alleged steering. The consensus reached

Some 75 California collision repair professionals representing about 40 body shops spent their Thursday evening discussing the details involved in filing a class action lawsuit against State Farm Insurance over alleged steering. The consensus reached at the Nov. 12 gathering was that they should move forward with all deliberate speed.

The next step is to continue gathering the evidence and documentation needed to overcome the withering scrutiny that comes with such an important court case.

“My intent is to sue the heck out of State Farm; I just want their neck over the barbed wire before I clip it,” says industry activist Gene Crozat of G&C AutoBody, who organized the meeting at a Sacramento hotel.

A number of shop owners traveled a long distance to be there.

The attendees expressed how much they are “frustrated with the current state of affairs and frustrated with steering that just doesn’t seem to go away,” reports G&C spokesman Peter Bizaca.

“They left the meeting feeling good that someone was out there doing something positive,” he notes. “They left feeling that they are not alone and that there is hope.”

“The class action sounds good,” says Gary Liu, manager of Bee Automotive Collision Center in San Francisco. “It’s something that needs to be done. We’ve been battling the insurance industry for a long while – it’s like David and Goliath,” he points out.

“It’s hard for a mom and pop shop to fight this battle,” Liu continues. “We’re going to need help, but we’re going to do it.”

Liu is particularly pleased that Crozat and his staff handed out binders filled with information that repairers can use to further pursue their case. The packet includes “instructions on how to get written evidence,” such as forms and regulations plus testimonials from G&C customers who have successfully taken State Farm to small claims court.

“It was all-encompassing,” says Bizaca as he recounts the agenda. Steering, labor rate surveys and small claims court filings were covered along with contemplating the proposed class action case.

“We had shops from all over Northern California,” he says. “The tables were filled.” Although about 80 shop owners had indicated they would attend, the final tally is still enough to drive home the value of a concentrated effort.

“They are ready to participate, but they are aware that it will be difficult,” Bizaca explains.

Mainstream media outlets may shine the glare of publicity onto the scenario as the Los Angeles Times and Sacramento Bee each sent reporters to cover the event. “We have the press on top of this,” says Bizaca.

A second meeting is to be scheduled in January, set in Orange County to reach repairers throughout the Los Angeles basin and stretching down to the San Diego border region.

The Sacramento session stressed that class action lawsuits can be a tough road to navigate, which is why thorough documentation plays such a large role. Two lawyers, Mark Venardi and Martin Zurada, were on hand to present some of the particulars.

A united front is imperative, according to Venardi, who cites a string of unsuccessful class action filings over the years. The burden of proof is strong.

Nonetheless, “the legal system is the last potential remedy.”

Commenting on the trials and tribulations inherent in the longtime shops vs. carriers conflicts within the Golden State marketplace, Zenardi observes that “you can’t count on the legislature (and) you can’t count on the Department of Insurance – so what can you do? You can count on yourselves and you can hire a lawyer.”

California insurance industry representatives, including State Farm executives, have consistently denied that steering takes place, insisting that they strictly adhere to all existing regulations.

About the Author

James Guyette

James E. Guyette is a long-time contributing editor to Aftermarket Business World, ABRN and Motor Age magazines.

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