Appeals Court Reopens N.Y. Body Shop's Lawsuit Against Progressive, Nationwide

Order Reprints

Nov. 14, 2017—The Second Circuit’s Court of Appeals reversed a lower court’s ruling in a New York body shop's (Nick's Garage) lawsuit against Nationwide and Progressive for alleged breach of contract and deceptive business practices when it came to labor rate payments.

Both Nick’s Garage v. Progressive and Nick’s Garage v. Nationwide, reviving the collision repairer’s lawsuit against the insurers for alleged breach of contract.

The lawsuits accuse Progressive and Nationwide of breaching their contracts and refusing to pay the amount necessary to repair vehicles to pre-accident condition.

Here are two excerpts from a document detailing Nick's Garage's case against Progressive, which note pressure from Progressive to not follow OEM procedures and what Nick's Garage refers to as "deceptive business practices":

"In preparing the Insurer Estimates and in the estimating process, Defendants used improper and inappropriate methods in determining the number of hours of labor for which they were willing to pay in connection with the repairs of the Vehicles, including without limitation refusing to pay for necessary steps in a given repair, refusing to allow hours  for items which were recommended by the manufacturer guidelines and/or best practices, and refusing to adjust for additional time in repairs needed above and beyond that suggested in the estimating software which were needed due to differences between the repair times for new and undamaged parts contained in the estimating software and the repair times required in collision situations such as those with the Vehicles and Claims listed above."

"Upon information and belief, in the case of some or all of the Vehicles, repairs, and claim numbers specified above, Defendant represented to the customer that another repair shop would repair the vehicle to its pre-accident condition for the amount in Defendant's Estimates, when in fact no other repair shop had inspected the Vehicles..."


And here are two excerpts from a document detailing Nick's Garage's case against Nationwide, detailing more deceptive business practices:

"In each case, Defendant were obligated to provide enough coverage to restore the Vehicles to the same condition they were in immediately prior to the Accidents."

"Defendant impeded and delayed fair settlement by, among other things, dictating and allocating price allowances, setting arbitrary price caps, refusing to negotiate labor rates, refusing to pay proper amounts for paint and parts invoices, and in many cases by failing to inspect or re-inspect the Vehicles within the time frames specified by regulation."


Previously, the U.S. District Court for the Northern District of New York ruled in favor of the insurers, dismissing the respective lawsuits.

Fixed Ops Business will report on the case as it continues to unfold.

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