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In an unpublished opinion rendered by the Appellate Division on December 8, 2010 the Three Judge panel decided and discussed the case of Policastro v. Jackson Auto Body /Complete Collision Centers, Docket No. A-0145-09T1.  The case is of importance to the body shop industry and sheds light on a number of aspects of its practice and should be a cautionary tale for the industry moving forward.

The Appellate Division upheld the decision of the trial court in its entirety which is a good first lesson in and of itself.  Very few cases are won (or even overturned) at the Appellate Division and if one needs to go there you can likely already count it as a loss.  The case was heard in the trial court by a judge sitting without a jury. The plaintiff Policastro brought a claim under the Consumer Fraud Act and common law claims against the defendants Jackson Auto Body/Complete Collision Centers and AutoOne Insurance Company.  The claims against the auto body shop included (1) failing to properly notify the plaintiff of the work that was being performed on her vehicle, N.J.A.C. 13:21-21(a); (2) failing to provide her with a written estimate of the total cost of these repairs, and  (3) commencing additional repairs without her authorization, N.J.A.C. 13:21-21.11(b).

The facts of the case are somewhat lengthy and an overview is as follows:  The plaintiff leased a 2001

Mitchell H. Portnoi, Esq.
Attorney-At-Law of New Jersey

Mercedes Benz CL 55 AMG from Ray Catena Motor Corp in 2003. Plaintiff was financially responsible for all damage under the lease and promised to obtain collision insurance equal to just over $80,000 - the cash value of the vehicle. Plaintiff only secured collision coverage in the amount of $40,000.  Only the plaintiff was listed as an authorized driver of the vehicle.  In August of 2005 the plaintiff’s Mercedes was involved in a loss while being driven by plaintiff’s friend who told the police at the scene that he had taken over the payments for the vehicle.  The friend signed the authorization the following day allowing the Jackson Auto to perform repairs - problem number one.  The plaintiff then signed a follow up authorization the following day however neither authorization contained an estimate of the amount of the repairs.  The insurance company retained an investigative company who then hired an appraisal company who eventually performed an inspection and an appraisal.  Apparently the appraiser knew there was the potential for additional damage once the car was teared down.  A re-inspection was done after the tear down and significant additional damage was found.  The appraiser orally authorized Jackson Auto to continue with the repairs and Jackson did so in spite of the contact from AutoOne that “due to coverage issues, they may wish to halt repairs.”  The first estimate was for approximately $32,000 and the second estimate was for approximately another $24,000 (obviously well in excess of the plaintiff’s $40,000 coverage).  No supplemental estimate was ever given or signed by the plaintiff even though Jackson’s manager testified that plaintiff “without question” knew that the repair cost was going to increase based upon the supplemental estimate.  There was testimony that the first body shop knew of the limited amount of the policy was after the repair had been completed.  The insurance person testified that she never gave authority for Jackson to perform any repairs and that all checks were paid directly to the insured directly.

The shop ended up holding the plaintiff’s car under a mechanics lien and litigation ensued.  The plaintiff testified that she never knew that the cost of the repairs would exceed her insurance coverage and if she did know that fact she would have taken her car elsewhere or pushed AutoOne to total the car.  Jackson’s owner testified that if he had known of the cap on the policy he would have stopped repairs before the cost exceeded her coverage.  Not knowing that, he continued the repairs.  The shop refused to accept less than full payment and the case was ultimately decided by a trial court judge.  The court found that Jackson Auto violated the CFA but that the plaintiff suffered no “ascertainable loss.”  Accordingly, the judge dismissed the plaintiff’s claim for treble damages under the CFA but awarded counsel fees to the plaintiff in connection with the lack of authorization of the supplemental repairs.  The court held for the body shop in relation to the initial repair and awarded the amount of the initial estimate - approximately $32,000.  This was overwhelmed by the cost of the attorney fees awarded to the plaintiff’s counsel which was in the amount of $34,000.  The original amount requested by the plaintiff’s attorney was in excess of $95,000 but was reduced by the court due to the level of success of the plaintiff.  The Appellate Court stated in affirming the lower court, ”the amount of counsel fees awarded to a prevailing party under the CFA is committed to the sound discretion of the trial court, “guided by those principles that run consistently through our caselaw when courts address the appropriate quantum of fees allowable pursuant to various fee-shifting statutes.  Thus along with other factors, courts must look at the level of success achieved in the litigation.”  Since the plaintiff had failed to meet her burden of proofs demonstrating that an ascertainable loss was causally related to Jackson’s actions and in view of the results the court reached, the court felt it appropriate to significantly limit the attorney’s fees requested by the plaintiff.

Though some of the salient details are left out of this article for the sake of brevity the lessons that can be taken are numerous.  Have all written estimates signed by the owner of the vehicle.  Make sure you know the limits of any policy you are relying upon for payment and have an assignment to pay form signed by all customers.  Beware of the Consumer Fraud Act as it has teeth which can bite and bite hard.

Should any shop like to have a copy off this case, please do not hesitate to contact me at my office.