Mass v Melymont
Annotate this CaseDecided on December 23, 2003
District Court Of Nassau County, Second District
DAVID MASS, Plaintiff,
against
FELIX MELYMONT, Defendant.
INDEX NO. SC2691/03
David Mass, pro se
Felix Mclymont, pro se
SCOTT FAIRGRIEVE, J.
Plaintiff David Mass commenced this small claims action to recover the difference between the cost to repair his 2003 Toyota Camry and the amount paid by the defendant's carrier USAA Casualty. The accident occurred on September 30, 2003 on the Southern State Parkway. The defendant admitted liability so the only issue is the extent of damages to which plaintiff is entitled to recover. Plaintiff brought his vehicle to "1042" Collision Repairs located in Farmingdale which was the repair shop of his choice. Repairs were completed for a total price of $7,728.31. The bill was itemized as follows:
Parts2280.32
Body Labor48.9 hrs @ $ 50.00/hr2445.00
Paint Labor22.3 hrs @ $ 50.00/hr1115.00
Mechanical Labor 0.6 hrs @ $ 55.00/hr 33.00
Frame Labor 5.5 hrs @ $ 55.00/hr 302.50
Sublet/Misc. 930.67
SUBTOTAL $7106.49
Sales Tax$7106.49 @ 8.7500% 621.82
[*2]
GRAND TOTAL $7728.31
Plaintiff contends that the per hour labor rates charged by "1042" are fair and reasonable market rate for body work. Plaintiff introduced into evidence the survey results from Manoussos & Associates published April 2003 by the Long Island Auto Body Repairmen's Association. The survey states that 130 repair shops responded to the survey. The average body labor rate was $57.50 per hour and the average paint rate was $57.38. The average mechanical labor rate per hour averaged $64.10 and the average frame labor rate averaged $62.61.
The survey had the following comments concerning the insurance industry and labor rates: The results are telling. Even the lowest rates (under the Minimum column) are way higher than the rates the insurance carriers actually pay shops across Long Island. These are the blaring facts. Insurance carriers, with minor and few exceptions, notoriously and significantly undercut the prevailing market rates of shops. So, though the rate is suppose to be negotiated between the parties and to reflect fair market value, this is not the case at all.Long Island is a large and diverse market, and rates and prices for services and goods do vary accordingly. A shop is entitled to get paid its market rates for its work performed. That is, if the work is necessary and the cost is reasonable, the shop is entitled to payment. An insurance carrier cannot force the shop - or the consumer - to accept payment that is below fair market value.It certainly can be concluded from this study that insurance companies systematically underpay without regard to economic indicators - that is, regardless of market rates and location. It can be further concluded that the supposed process of reaching a fair market value through negotiations, as called for in the insurance regulation, amounts in reality to nothing more than like a contract of adhesion - a strong-arm coerced agreement extracted by the grave inequalities of bargaining power. This take-it-or-leave-it posture exercised by the insurance industry is essentially economic extortion.
The claims manager of USAA testified . The claims manager introduced a letter dated October 8, 2003, addressed to Ms. Mass offering $5,941.28 to repair his vehicle because this amount was "sufficient to repair your vehicle to its pre-loss operational safety, function, and appearance at a repair shop reasonably convenient for you". The USAA representative testified that the average per hour body repair rate offered by insurance companies and accepted by repair shops is in the range of $38.00 - $42.00 per hour. In fact this witness stated that USAA negotiates in this range for work to be done for body work. The claims manager stated that State Farm pays $50.00 per hour for body [*3]repair work.
This problem concerning the labor rate to be awarded by the courts has become a major issue between insurance companies seeking to keep rates down for the repair of vehicles and auto body repair shops who seek to earn (what they consider) fair market rate per hour.
Insurers are prohibited from steering their insureds to a particular repair facility. See Insurance Law §2610(b); N.Y. Comp. Codes Rules and Regulations, Title 11, §216.7;
Rizzo v. Merchants and Businessmen's Mutual Insurance Company, 188 Misc 180, 727 NYS2d 250 (App. Term 2001).
The plaintiff claimant bears the burden of proving that the charge of "1042" collusion for the work was the reasonable cost of repairs necessary to put plaintiff's vehicle in the condition it was prior to the accident. See Rizzo, supra, wherein the court stated: Neither the statute nor regulations obligate the insured to use the shop recommended by the insurer and no such obligation, in contravention of the statute, can be implied or created by the disbursement and acceptance of insurance proceeds in the amount of the insurer's estimate of repairs. Nor may the statutory purpose and intent be circumvented by maintaining, as defendant does on appeal, that acceptance of the insurer's checks compels the insured to either use the insurer's recommended repair shop, or use her own shop and pay the balance of the repair costs. Defendant's position, which in effect would limit the insured's recovery of benefits to the insurer's estimate of repairs, represents precisely the type of "steering tactics that the Insurance Law and regulations were designed to proscribe. This does not mean that an insured is automatically entitled to be reimbursed for the full amount charged by the repair shop authorized by the insured to make the repairs. Where, as here, the parties cannot reach an agreed price, the insured bears the burden of establishing the reasonable cost of the repairs necessary to bring the vehicle to its condition prior to the loss. Upon a review of the trial testimony and evidentiary materials submitted by the parties, we find no basis upon the present record to disturb the trial court's determination that plaintiffs met their burden of proving that the repairs were necessary and that the damages claimed were reasonable and fair.
In Dorfler v. Cummings, Index No. SC195/03, (Nassau Dist. Ct. 5/8/03), Judge Pardes faced a similar fact pattern. Plaintiff's vehicle was damaged in an accident. Allstate offered $38.00 per hour to the body shop Mid Island which repaired the vehicle at a per hour rate of $55.00 per hour. The Allstate adjusters testified that nearly all the body shops in Nassau County accepted $38.00 per hour. Allstate also produced an auto claims supervisor, Peter Martin, who also claims that "over [*4]99% accept $38.00 per hour for a labor rate". The owner of Mid Island Collision stated that $55.00 per hour was Mid Island's charge but stated that at times Mid Island accepted less per hour.
Judge Pardes sustained Mid Island's rate of $55.00 per hour as being fair and reasonable. The court did note that Mid Island is a "high end shop".
The Appellate Term in Rizzo sustained a $50.00 per hour rate.
Based upon the testimony, court cases, and exhibits, the court concludes that plaintiff has sustained his burden of proving that per hour charges of "1042" fair and were
reasonable and is entitled to judgment for $1,565.49. The fact that the plaintiff negotiated USAA's settlement drafts with respect to the property damage doesn't preclude recovery based upon accord and satisfaction.
This court did not consider the affirmative defense of accord and satisfaction because this was never raised by defendant at trial. Failure to raise the defense of accord and satisfaction constitutes a waiver. See CPLR §3018(b); Conboy, McKay, Bachman & Kendall v. Armstrong, 110 AD2d 1042, 488 NYS2d 901 (4th Dept 1985). If plaintiff did in fact negotiate the settlement draft without the limiting language set forth in UCC §1-207, then an accord and satisfaction may have resulted causing plaintiff's claim to be dismissed. New York dictates that UCC §1-207 applies to transactions involving checks even though the underlying facts are outside the scope of the UCC. See DeVerna v. Kinney Systems, 146 Misc2d 276, 556 NYS2d 190 (App Term, 1st Dept 1990); McCreedy v. Lopera, 130 Misc2d 292, 498 NYS2d 666 (Dist Ct Suffolk Co. 1985).
An important distinction needs to be noted. In the case at bar, accord and satisfaction is an affirmative defense that can be raised by defendant and employed successfully to preclude recovery providing that it is properly raised. The factual pattern involved is a suit by a plaintiff who sustained property damage to his vehicle and seeks to recover damages from the defendant who caused the accident and the insurer provides a defense to its insured and pays the settlement. In this posture accord and satisfaction is an available affirmative defense that can be raised to defeat the action.
On the other hand, the Rizzo case involved a claim by the plaintiff insured against its own carrier. The Rizzo court ruled that the acceptance of the check didn't bar the claim for the balance of the cost to repair the vehicle. See Rizzo, supra; and 70 NY Jur2d Insurance §1639. The underlying policy of this rationale is to prevent insurance companies from forcing their insureds to accept the settlements being offered by cashing of the settlement checks and to prevent companies from accomplishing indirectly what they can't do directly - i.e. force insureds to have their vehicles repaired at a particular body shop. Conclusion
Plaintiff is entitled to recover the sum of $1,565.49.
So ordered. [*5]
E N T E R:
DISTRICT COURT JUDGE
Dated: December 23, 2003
cc:
SF:dc
Decision Date: December 23, 2003
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