From left: Mark Allen, Erica Eversman, John Ellis, Aaron Clark, and Todd Tracy, discuss the importance of adhering to repair standards and not bowing to insurance pressure.

Consequences of improper repairs can be far-reaching and life threatening

John Eagle case decision highlights collision repairers’ liability in following standards

Las Vegas—New materials require different collision repair methods, and advanced driver assistance system (ADAS) sensors and modules must be calibrated to work properly. At the same time, the collision repair industry faces a shortage of skilled technicians and pressure from insurance companies to control costs. But the consequences of not performing a specified repair can be dire, as was demonstrated in the recent $42 million verdict in the John Eagle Collision Center case.

In that case, the Dallas repairer was found to not follow OEM-specified procedures when it replaced a Honda Fit’s hail-damaged roof with adhesive bonding, not welds. When that car’s new owners were in a subsequent collision, the adhesive joints failed, the roof buckled, and because of the car’s lessened structural integrity, so did the floor. That caused the fuel tank to rupture and the car to catch fire, causing severe injuries to its occupants.

The Society of Collision Repair Specialists (SCRS) earlier this year reaffirmed its longstanding position that OEM procedures are what are to be followed in performing a repair. Its panel forum at the recent SEMA Show, “The Hidden Dangers of Vehicle Technology, Improper Repair Methodology and Your Liabilities,” discussed the importance of those procedures and the challenges of getting the industry to adopt repair standards and to be reimbursed by insurers.

Moderated by John Ellis, the managing director of Ellis & Associates, the panel featured the plaintiffs’ attorney in the John Eagle case, Attorney Todd Tracy, of the Tracy Law Firm; Erica Eversman, general counsel for Vehicle Information Services; Mark Allen, collision programs director of Audi of America; and Aaron Clark, vice president and general manager of the Assured Performance Network and a former collision repair shop owner.

“Shops aren’t spending enough time to educate themselves, investigating all of the things they need to do to fix the car,” Clark said. Allen agreed, pointing to surveys showing that only 20 percent of the country’s shops consistently use OEM procedures.

“‘Safe and proper repair’ is a phrase I like to use frequently, because that is what your obligation is,” Eversman said. “If you neglect to repair in a manner that is safe and proper, then you will potentially end up in jail someday for having killed someone.”

Tracy said in his case, the repairer was “bullied by the insurer” to “glue a roof on instead of put the 108 welds the OEM repair specifications said to do. The jury came back and said, ‘If you’re going to make the decision that the insurance companies dictate safety to you, we’re going to make a business decision for you, and that is award $42 million, which is what was asked for.’”

Collision repairers should think of themselves as doctors, Allen said, responsible for the welfare of the vehicle’s occupants, and to stop thinking that all collision damage is repairable.

Continuing that analogy, Eversman called for “at least minimal regulation” of repairers, including licensing.

“Just because I say I’m a doctor, it doesn’t mean I get to do open-heart surgery on someone without all of the training and education.

“And if there is no law saying the repairer must perform to these [OEM] repair standards, the insurers will always blow it off.”

Allen said he was baffled that another repairer would think he could deviate from OEM-developed and crash-tested repair methods and improve upon them, while Eversman pointed out that when an OEM repair procedure says, “recommend,” it should be read as “required.”

The reason manufacturers don’t write “required” is one of pure economics, she said: The Magnuson-Moss Act — [which, while preserving consumer choices for things such as not requiring an OEM’s oil filter be used for the vehicle to remain under warranty unless it is supplied free of charge] means the manufacturer would be required to pay for parts or “other things.” “And insurers use that to their advantage, because they say, ‘If the OE meant that, they would have said, ‘You have to do it this way.’”

“The industry’s changing, and you need to change with it,” Clark said. “You have to be disciplined, you have to protect the best interests of your consumers, and you have to be committed to repairing vehicles correctly. If you can’t fix it correctly, don’t fix it, and make sure you’re spending the time to research the vehicle you’re about to repair to make sure you’re armed with everything to make a proper repair.”

Repairers must make the repair decision not based on what the insurer will pay, he said. “You can’t let ‘how much’ define ‘how to,’” he said. “‘How-to’ is a prescription; it’s defined, it’s in a box, and you can’t deviate from it. ‘How much’ is a completely different question. That’s a business question, and my recommendation is to learn how to say no. And until you do, until you guys get paid differently, nothing’s going to change.”

The collision repair industry can learn a lesson from the recent “Harvey Weinstein movement,” Eversman said.

“Everyone is coming forward because of Harvey Weinstein,” she said, “and I’m sorry to say this, but we need the John Eagle Movement. Because John Eagle is not the only repair entity that has fixed a vehicle improperly because of insurer interference.” Eversman said repairers need to work with their local and state collision repair associations to make sure their legislators know “what the problem is.”

“We have the ability now to make this an enormous movement, and we have to do it now.”

Parts & People

Parts & People is published monthly by Automotive Counseling and Publishing Company, Inc., a Colorado corporation, P.O. Box 18731 Denver, CO 80203, 303-765-4664. President-Lance Buchner. Founded by Lance Buchner and Dave Lucia.