A lot of people will be surprised to learn that a dealer body shop’s shoddy repair work resulted in a $42m negligence verdict. And it wasn’t even the shop’s customer who sued, but a downstream purchaser of the car.
Matthew and Marcia Seebachan purchased a used 2010 Honda Fit from a Texas Kia dealer in August 2013. They told the salesperson that they were looking for a low-mile, high-condition, accident-free car. With a clean CARFAX report, the Seebachans were confident they had purchased exactly what they were looking for.
Four months later, the Seebachans were driving the Fit on a Texas roadway on a rainy day, headed to Mrs. Seebachan’s grandmother’s home for Christmas. A Toyota Tundra driving in the other direction hydroplaned, crossed over the center line and struck the Seebachans. The impact was full frontal for the Fit, side for the Tundra. The Tundra had modest damage, and neither of its occupants was injured. But the Fit looked like it had gone through a crusher.
The Seebachans were trapped in the Fit. Soon, the punctured fuel tank developed into a growing fire. The Tundra occupants managed to pull Marcia Seebachan out through the passenger’s window, but were having little luck pulling Matthew Seebachan through the driver’s window. As his legs were being badly burned by the fire, two passersby stopped to help, and the four managed to extricate him from the Fit — not a moment too soon.
First glance
The Seebachans retained Todd Tracy and his eponymous The Tracy Firm to represent them. Tracy specializes in vehicle crashworthiness cases, claiming that he has handled more of these cases “than any attorney in the world.” Upon seeing the Fit, he became immediately suspicious, thinking that it should not have been as heavily damaged as it was, given the level of the impact. The resulting lawsuit was filed against the other driver for negligent driving and Honda for defects in the automobile.
Upon inspecting the wreck, Honda engineers noticed issues with the roof. It had come apart from the rest of the body, and the car’s safety structure collapsed. That should not have happened, and they prompted a deeper investigation. That led to the discovery that the roof had been replaced, and the work was not done correctly. The roof is an integral part of the Fit’s safety structure, and its failure was catastrophic.
Shoddy repair
Research revealed that the Fit had been damaged by hail when under previous ownership. The owner took it to the local dealership, John Eagle Honda, and their body shop replaced the roof. The roof replacement was attached to the body structure using 3M 8115 adhesive, which is a relatively common procedure with many cars. However, Honda repair specifications state that the roof is to be attached with 104 spot welds, not glue. Further, 3M guidelines state that although the use of adhesives to attach non-structural exterior panels has gained wide industry acceptance, shops should nonetheless follow manufacturers’ recommendations. Notably, 3M points out that Honda and Acura specify welding the roof to the top, with adhesive allowed only around the crimp.
Amended complaint
After these discoveries, Tracy amended the complaint to drop Honda as a defendant and substitute the John Eagle Collision Center.
At trial, the body shop’s personnel defended their repair work, claiming that the adhesive provided a superior repair to welding the top, and that using adhesive was accepted industry practice. The evidence to the contrary was apparently overwhelming, and the jury returned a $42m verdict, 75% of it against the body shop and 25% against the Toyota driver. The verdict is not being appealed, and has been satisfied.
Far-reaching liability
The law has evolved to the point where one can be held liable for negligence even without having any relationship with the injured party. Rather, liability is largely focused on the foreseeability of harm.
Foreseeability is somewhat akin to predictiveness. If a shop is negligent in a brake repair, it is easy to foresee that the loss of brakes could cause the customer to run into a light pole and get injured. It is equally foreseeable that the driver would instead run into another car and injure the other driver or a passenger. Similarly, it is foreseeable that the customer might sell the car to another person, who would be driving the car when the brakes fail.
All of these consequences are easily foreseen if one spends just a few minutes thinking about how the negligent work might end up injuring or killing someone. Thus, once John Eagle Collision Center deviated from the Honda repair specifications, it was foreseeable that a future owner could be injured in a crash.
But these considerations don’t apply only to businesses. They apply equally to individuals.
In a Washington case, a pickup owner was working on his own car when he damaged the automatic transmission’s neutral safety switch. He didn’t have a replacement part, so he just wired it to bypass the switch, allowing the truck to be started while in gear. The truck later broke down for another reason. Frustrated, he pulled the driveshaft, towed it to a dealer, and traded it in on another car without mentioning his neutral safety-switch bypass. After repair of the running problem, a salesman accidentally started the truck while in gear and ran over a customer.
In a Florida case, an individual self-constructed a three-wheeled motorcycle. After three private sales, a sale to a dealer, and a final sale to another individual, the trike broke down as the result of a defective weld, injuring the new owner.
In both these cases, the individual who worked on his own vehicle was held liable for negligence. Interestingly, both of them had sold the vehicles “as-is.” In both cases, the as-is provision had no effect, as it applies only to contractual warranties, not negligence claims.
Round two
That $42m is a big verdict, but it isn’t over yet. Testimony in the trial has led to the filing of a second suit, this time against State Farm Mutual Automobile Insurance Company, which insured the previous owner of the Fit and paid for the roof repair.
In a deposition, one of the body shop representatives apparently tried to deflect criticism over the improper repair by suggesting that State Farm made them do it that way.
He testified: “Well, unfortunately, we’re guided by insurance. So — the — if you brought your car into my shop, right, the insurance company’s going to dictate what — how we’re going to repair your car.”
Asked how an insurance company could possibly trump the OEM specifications for a repair, the answer was, “By not paying the bill.”
It’s pretty common knowledge that insurance companies all over the country try to manage their claims cost by supervising the repairs. They adjust their own claims, often giving their insureds an estimate they can take to their choice of body shop, insisting that the shop honor the insurance adjuster’s estimate.
Insurance companies steer repair business to their chosen repair shops, which maintain their chosen status by giving discounts to the insurance companies or otherwise managing to stay in the insurance companies’ good graces. They micromanage repairs by specifying when non-OEM or used parts are to be used, and other mechanisms to minimize cost.
It is an uneasy situation, raising the question as to who the customer really is. It’s your car, and you have the right to use any repair shop you want, but the insurance company is paying the bill. It’s easy to see that the insurance company has the ability to exert influence over the work being done for you.
This case challenges State Farm about having gone too far. Clearly, an understandable desire to control costs must stop short of ignoring safety issues to save money.
The deposition testimony isn’t a knockout blow — the witness didn’t actually say that State Farm directed them to glue the top instead of welding it. However, it has given the plaintiffs an opening, and further investigation and testimony might develop this into a significant case. Or perhaps there is nothing really there.
Postscript
The Tracy Firm’s website offers some very interesting post-trial news. It announces that Todd Tracy and body shop executive John Eagle have agreed to work together to improve safety standards in the nation’s collision-repair industry. It also states that, despite Mr. Eagle’s sincere desire to settle the Seebachan claim, their insurance carrier insisted on taking it to trial. ♦
JOHN DRANEAS is an attorney in Oregon. His comments are general in nature and are not intended to substitute for consultation with an attorney. He can be reached through www.draneaslaw.com.