A body shop’s arbitration experience

by Anne Koppel Conway

PORTLAND, OR—Stemming from a 2005 repair, a customer sued a greater Portland area body shop for fraud, breach of warranty, holding the customer’s vehicle without justification for 18 months and violations of the Unlawful Trade Practices Act.

Strong charges. (For this article the body shop chose anonymity.)

This past spring the suit ended up in arbitration.

After hearing 2½ days of testimony from the parties and their expert witnesses and participating in the examination of the vehicle in question, the judge / arbitrator in making his ruling, said that the claimant (customer) had gone after the body shop’s “jugular” and had been pursuing the case “as if the controversy was over the death of a child, rather than the repair of an automobile.”

In an effort to be charitable, the judge said the claimant “may have been following his experts’ advice throughout” the case, but “such reliance turned out to be mistaken and unreasonable.”

The claimant “vigorously pursued” the case – “adding punitive damages and refusing to negotiate in any range that bore a reasonable relationship to the claimed actual damages.”

During the mediation, the claimant “wanted something with six-figures.”

To defend itself the body shop and its attorney were “reasonably required to put up a correspondingly strong defense.”

As a result, the judge awarded the body shop $97,666.25 for attorney’s fees, costs and disbursements.

How we got there In 2005 the claimant’s vehicle had been rear-ended by another vehicle. The claimant took his car to the body shop to get it repaired back to pre-loss condition.

Herein lies one of the differences of opinion. The claimant wanted this vehicle returned to pre-pre-loss condition. It had been in previous accidents and had been repaired inadequately.

Work unrelated to accident

The claimant wanted the body shop to correct those “shoddy” repairs that had been performed by other repair shops, as well as fix the damage attributed to the September 2005 accident but didn’t feel obligated to pay for the additional work, said the judge.

Disagreeing with the claimant’s viewpoint, the judge said, the shop performed the repairs in a “workmanlike manner. The remaining defects are not related to anything that” the shop “was asked to repair as a result of the September 2005 accident.”

The claimant through his experts “pursued many claims for damages wholly unrelated to any work on his vehicle that the body shop was hired to repair,” the judge said.

As far as the shop holding the all-wheel drive vehicle without the permission of the claimant, the judge said, “Once the claimant paid for the repairs in June 2006, he was free to pick” up his vehicle.

“One important reason the vehicle got ‘stuck’ on the shop’s lot was that [the claimant] kept insisting, personally and through his lawyers, that the shop perform work that was unrelated to the accident and for which no one was agreeing to pay.”

“In short” the claimant’s “failure to pick up his vehicle earlier than he did was his own choice,” His Honor said.

This sporty vehicle had been “involved in five prior accidents, and much of the prior repair work had been done poorly.” ...

“The at-fault vehicle insurance carrier, [for the September 2005 accident] and the claimant’s own insurer had no duty to pay for prior improper repairs stemming from unrelated earlier accidents. Nor did the shop owe this repair obligation” to the claimant.

“These unreasonable” repair requests by the claimant “persisted for months in 2006.” During arbitration, the claimant dropped many of his claimed damage charges, said the judge.

Some witnesses were more expert than others, according to His Honor The judge felt compelled to comment about the integrity of the witnesses. Regarding one of the claimant’s witnesses, the judge said, “I did not find [him] to be credible.

“He seemed proud that he started his auto mechanic career by fixing up wrecked cars in such a skillful manner that car dealers would be deceived into thinking that the cars had not been wrecked. He even sprayed dirt underneath the vehicles to more thoroughly hide his deceptive craft.”

Concerning the claimant’s other two witnesses, an auto appraiser and a mechanic, the judge said, “Although I found [them] to be pleasant and skilled in auto appraising and mechanics, respectively, they seemed rather biased and overly consumer-oriented, as though on a campaign to tar the body shop.”

Much of their testimony dealt with items for which the shop had no responsibility: e.g., the hole in the grill, the heat shield or with items the shop had actually replaced (but they were claiming had not been replaced).

In stark contrast, the judge found the shop’s expert witness to be “extremely credible and well-informed.”

Remarking that this witness “routinely testifies for consumers against car dealers and repair facilities, but for the first time in his career he testified in favor of a repair facility against the car owner in this case.

The judge found the shop’s witness’s testimony to be “logical and believable,” testifying that the parts invoiced by the shop were actually installed” in the claimant’s vehicle.

The judge also noted that “both [claimant’s insurer] and the shop’s own mechanic manager verified that the parts” had been replaced.

Concluding, the judge found in favor of the shop saying that the claimant failed to meet his burden of proof as to each of his four claims.

“I find that the parts that the shop charged for were actually installed in the vehicle and all work charged for was actually and properly performed” by the shop or its subcontractors, said the judge.

As far as the claimant’s charge that the shop had violated the Unlawful Trade Practices Act, the judge said that the charge added “no substantive additional claims concerning the work done by the shop.”

But since the claimant added to his mix of charges the Unlawful Trade Practices Act, which enables the prevailing party (the winner) to recover attorney’s fees, see ORS 646.638 (3), the judge was able to award full attorney’s fees to the body shop.

Collateral damage

Believing that the shop suffered collateral damage as a result of this prolonged lawsuit with its ricocheting accusations, the judge said, “I find that the claimant has engaged in a continued course of unfairly charging the shop with fraud and shabby work.” The claimant pursued these charges not only in this arbitration, but also with the Department of Justice.

“A claim of fraud involves charges of dishonesty and deceit and would naturally cause harm to the recipient’s reputation in his business and in the community generally,” said the Judge.

“It is unfortunate that this may have occurred in [the body shop’s] case.”