A higher court in Utah has overturned a small claims court victory achieved by a collision repairer in an alleged short-pay case involving GEICO.

“Never in a million years” was such a ruling expected from Utah’s Second District Court, says Cory Stanger, manager of Alpine Body Shop in Ogden.

The defeat is especially galling to Stanger because the judge who adjudicated the lower court proceeding had issued a quick verdict in Alpine’s favor. “It was so cut and dried in small claims,” he says, noting that he had anticipated an equally pleasant result Oct. 5 when the case was heard on GEICO’s appeal.

It was not to be, however. Despite Stanger’s documentation that he felt firmly established Alpine’s rates as meeting the “fair and reasonable” threshold, Judge Pamela G. Heffernan discounted the argument.

“She said that doesn’t matter – we should have had an agreed-upon price before we started the repairs,” Stanger recounts. “She wasn’t listening to what I had to say. I showed her that I had two supplements; she really spent no time trying to understand the industry or how it works.”

GEICO’s legal representation had little input as well, according to Stanger. “They didn’t hardly have to say two words in their defense. There was really no open debate at all.”

At stake was nearly $900. The Alpine customer’s car had been struck by a vehicle driven by an at-fault GEICO policyholder. When GEICO refused to pay the full amount of the repair, Stanger filed suit in small claims court.

The official defendant was the other driver, with legal representation supplied by GEICO. Stanger had “assumed the assets” of his customer in the case, giving him legal standing to pursue the matter. Alpine is owned by Stanger’s father, Don, who started the business 25 years ago as a one-bay shop. It has since grown to 28 bays and eight employees.

Cory Stanger represented himself in both proceedings, although his lawyer brother-in-law provided behind-the-scenes assistance by offering advice and proofreading documents.

Stanger says he compiled reams of information seemingly providing proof that GEICO’s payment limitations were based on the rates charged by the insurer’s direct repair program (DRP) participants, which failed to take into account a shop’s size, overhead or other elements that that would better illustrate an enterprise’s true cost of doing business, setting appropriate rates and establishing a suitable profit margin.

He said he spent less than $100 pursuing the case.

The small claims action was quick and easy as the judge readily accepted Stanger’s stance that Alpine’s rates were fair and reasonable. There was little deliberation prior to a positive verdict being rendered.

Stanger professed that he was “thrilled” when GEICO filed its appeal. He believed that the expected ruling in Alpine’s favor would set a precedent for future filings from other shops throughout the state. (In many jurisdictions, small claims court cases are not subject to review by a higher authority – what happens in small claims court stays in small claims court. Utah and California are among the exceptions that allow appeals.)

A positive outcome was confidently anticipated by Stanger based on how well things went in the lower court. When Heffernan’s negative ruling came down with equal swiftness, it came as a significant jolt to Stanger’s hopes – the precedent set is not a good one as other Utah small claims courts are likely to cite Heffernan’s decision as the prevailing legal standard.

Dealing with GEICO has been especially troublesome, according to Stanger. Alpine belongs to 14 DRPs, and “we have pretty successful working relationships” that garner a substantial amount of referrals. The shop is not forced to discount parts, although lower labor rates are settled upon with each DRP carrier.

With the walk-in trade, however, “GEICO’s been the toughest by far” for obtaining full payment. “With GEICO, there’s no negotiating” on the price, Stanger says.

Meanwhile, Stanger is calling on his Utah collision repair industry colleagues to revive a long-gone state association.

“Shops have been bending over for insurance companies for years,” he contends. “Why? Because we are not unified!”

A state association went by the wayside some 15 years ago after a number of members collectively decided to raise their rates. “Somebody from the insurance industry caught wind of it, and several shops got fined,” reports Stanger. The state’s insurance department cracked down over what was considered price-fixing.

Utah repairers felt the taint of guilt-by-association with the association, and the organization eventually disbanded.

“Ever since that time, the shops in this state have been too scared to band together,” says Stanger, who insists that the time has come for Utah’s shop owners to once again unite and protect their common business interests. “The insurance companies are a large industry, but it’s kind of like every shop for itself,” he laments.

Stanger can be contacted via cory@alpinebodyshop.com or by calling 801-392-9731.