Morrison Mahoney partners John Graceffa and Larry Slotnick recently prevailed in the Massachusetts Appeals Court in a class action case involving total loss automobile collision claims. The court affirmed a summary judgment decision previously entered in the Business Law Session of the Suffolk County Superior Court. Puopolo v. Commerce Insurance Company, 2022 WL 1217215 (Mass. App. Ct. Apr. 26, 2022).
The case concerned automobile owners who took their cars to body shops after being involved in collisions. Although most body shops charge a reasonable rate for storage of total loss vehicles, some of these shops attempt to increases profits by charging unreasonable fees. In so doing, they take advantage of a statutory lien allowing them to retain possession of the total loss vehicle, and its inherent salvage value, unless and until someone pays the unreasonable storage fees.
In this instance, our client, Commerce Insurance Company paid the allegedly unreasonable fee thereby allowing the vehicle to be removed and preventing the continued accrual of storage charges. It then deducted the portion of the charge considered to be unreasonable from the insured’s total loss settlement, because the insured chose the body shop and agreed to its rates.
The plaintiffs filed a class action against the company, arguing that the failure to pay the body shop’s full charge, however unreasonable, was a breach of contract, and that the insurer’s practice of deducting the unreasonable charges was a violation of G.L. c.93A and G.L. c.176D. The Business Law Session accepted the case and initially certified the class. After discovery, on Morrison Mahoney’s motion, the BLS decertified the class and granted summary judgment to our client, noting that the insurance contract only required the insurer to pay reasonable storage fees. In addition, the BLS ruled that the practice of paying and deducting was not a violation of G.L. c.93A. The Massachusetts Appeals Court affirmed the BLS’s decision granting summary judgment on the contract and 93A issues, thereby mooting the decertification issue.