In the transcript of a small claims appeal trial in fall 2009,
California Superior Court Judge James Bertoli took State Farm to
task for its rate survey process and arguments regarding
reasonable repair costs – with the judge distinguishing between
first- and third-party claims.
Two third-party claimants who were customers of G&C Auto Body in
Northern California had won small claims court cases filed against
State Farm insureds when the insurer refused to pay all of G&C’s
charges. The insurer appealed both cases, and the court heard the
two appeals together over two days.
Following his review of the cases, Bertoli told State Farm it
could use whatever method it specified in the insurance policy to
determine a reasonable price in first-party claims, even if it
determined that price, by reading chicken entrails, and consulting
with the three witches from Macbeth, which is just about as
accurate as the survey. Bertoli believed State Farm’s process for
determining prevailing rate, from a statistical standpoint, would
earn a first-year college student a flunking grade.
But in a third-party case, the judge said a reasonable charge
implies a range of charges and no particular charge can be said to
be the only reasonable charge.
He said State Farm didn’t try to establish that G&C’s rate was
unreasonable and the shop’s rate appeared to fall within a
reasonable range of prices.
“With regard to the third-party claims, this court doesn’t believe
they should’ve been litigated,” Bertoli said in finding for G &
C’s customers. "It’s an effort on behalf of the insurer to try and
suppress the price charged by someone outside of their
range.”
Return to:
Who’s at fault? Why some collision shops view third-party
claimants differently than first-party insureds
Go to:
Sidebar:
First- vs. third-party impacts diminished value claims
Sidebar: Track your first-party vs. third-party claims
