Three Insurance Attorneys Mislead Committee During Anti-Steering Legislation Hearing

March 8, 2007 by
Filed under: Collision Repair Industry 

Here in Connecticut we have been very active in pursuing legislation that would end much of the current insurance abuses suffered by collision repairers. At the moment there are six bills making their way through the process. One of those bills is a new anti-steering bill. It would tighten up a lot of the lose ends in the current anti-steering bill that allow insurance companies to circumvent the “spirit” of the law.

In Connecticut these bills have to get through the Insurance and Real Estate committee before heading to the House and Senate. Before this committee can vote the bill forward or kill it they have to hold a public hearing. The hearing for the anti-steering bill took place on February 22, 2007. During that hearing the insurance industry had people testify as to why this new law would be terrible, and we (the collision repair industry) had people testify as to why this new law would be great.

For the insurance industry, three attorneys testified about the legal and constitutional aspects of this anti-steering bill. One of the attorneys is a full time lobbyist for the insurance industry in Hartford, the insurance capital of the world. All three attorneys cited a previous case known as Allstate v. Serio, which began in 1997 in New York.

Apparently New York has a law, Section 2610(b) that prohibits insurance company personnel from recommending a shop unless they are asked to do so by the insured/claimant. In other words, they can’t steer. So Allstate (and it seems Geico) sued on the basis that this law violated their “commercial free speech.” As with all lawsuits involving any party with lots of money, this went on for many years. In 2000 a court ruled in favor of Allstate. The court ruled that Section 2610(b) violated Allstate’s commercial free speech. New York then sent a “Circular Letter” to insurance companies telling them it was OK to recommend a body shop to their customers.

So these three geniuses get up in front of this committee and pull this case out of their backsides and present it as Gospel. And, as you know, lawyers are just so impressed with precedence. They love citing cases decided by another judge or jury, in another time and place. Legal precedence, especially coming from the State of New York, stating that a law prohibiting an insurance company from “recommending” body shops is unconstitutional because it abridges freedom of speech, probably scared the Depends right off those committee members. It didn’t look good for Connecticut’s collision repair industry.

But!… Wait just one minute! The three stooges left one very important fact out of their impressive testimony. Larry, Curly and Moe all forgot to mention that this decision in 2000 was overturned or vacated in 2003 by a higher court. Another letter was sent out by the State of New York shortly thereafter telling insurers it was, again, illegal to steer. Someone representing the collision repairers at this hearing was paying attention and checked the facts. These bumbling idiots got caught red handed.

One could argue that it was a mere coincidence that three esteemed lawyers all were missing a page in their law journals. One could also argue that Rosie O’Donnell would look better stepping out of a limousine than would Britney Spears. Not even another lesbian would accept that argument.

There are a few possibilities of what really happened here.

  1. All three attorneys are incompetent morons. They each failed to research beyond the first paragraph of the court decision.
  2. One attorney looked up the case law, but in his excited zeal failed to read any further than the information he was looking for. Then he got together with the other two attorneys and shared the information. That would still mean all three were incompetent morons because the other two didn’t check their facts before testifying.
  3. The three of them, independently, intentionally lied to the committee members. That would make all three of them crooks.
  4. The three of them conspired to lie to and mislead the Insurance and Real Estate committee.  This would make them very big crooks, eligible for disbarment.

I’ll let you decide which is the more plausible situation here.

A much more honest attorney has sent each of the three lawyers representing the insurance industry a letter demanding that they each retract their testimony and send a letter to the Insurance and Real Estate committee explaining the error. A copy of this letter was sent to the committee members, so they will learn of these misrepresentations even if the three stooges hide under their desks and do not respond.

What will become of all of this is unclear. I would hope that the committee members get pissed off at being lied to and punish the insurance industry by pushing this bill through and using their clout to get it through the House and Senate. It would be very satisfying to see the three insurance attorneys disciplined for their behavior. Couldn’t they be disbarred for giving false testimony?

This episode brings to light an important point, and an issue that I have thought about much of my adult life. That is this issue of legal precedence. I think it is moronic. Legal precedence comes from decisions made by people. Fallible people. People with agendas. Judges should have only one yardstick to gauge their decisions on, and that is the Constitution. Whether it is the U.S. Constitution or the States’ Constitutions, those are the only preceding laws that should be considered when deciding a legal case.

Let me give you an example of what happens when you fail to begin from “the source.” Pretend you are building a house and are installing the studs to frame the wall. Standards say that the centers of those framing studs (2 x 4’s) are to be 16″ apart. So you start to layout the studs and make your first measurement from the edge of an adjacent wall to the 16″ mark. In your haste you forgot to add 3/4 of an inch. That is how far it is from the edge of a 2 x 4 to its center.  You nail in your stud and measure 16″ from that stud to the next mark, again, forgetting to allow for that 3/4″ offset. As you add each stud you make the same mistake. Soon that 3/4″ mistake has multiplied, and your entire wall is screwed up.

But if you kept using the starting point to measure from, only the first stud would be in the wrong place the next stud would be in the correct position, as would each one after that. Measuring from the same point prevents error multiplication.

When judges rely on other judges decisions as a benchmark they too risk error multiplication. Proof of this mistake is everywhere and it is destroying our Republic. For instance, no where in our Constitution does it mention separation of church and state. But at some point some very fallible judge, probably an atheist, misinterpreted the Constitution and decided that “Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof …” translates to “separation of church and state.” Now you have a starting point that is in the wrong place, and along comes another judge who believes that “separation of church and state” translates into “no Christmas trees allowed in public schools.” Had we not had the use of precedence, that judge would probably had been forced to go back to and read the Constitution in order to make his decision about allowing a Christmas tree in a kindergarten classroom. He or she probably would have come up with a different decision.

One more point. The entire case that the three insurance attorneys misquoted was based on the right to commercial free speech. OK, if an insurance company should have a right to engage in any form of speech with an insured/claimant, or with a DRP shop to further their profit potential, even if it means interfering with my livelihood, shouldn’t I have the right to engage in any form of free speech to further my potential profit, even if it means interfering with the insurance company’s business? Does that mean I could organize a boycott of an insurance company? Isn’t it free speech to discuss with other shop owners how to get more money out of an insurance company? It’s not the same thing as an insurance company “recommending” a body shop, but in the end it has the same effect. Steering hurts body shops financially. Conspiring with another shop in your area hurts an insurer financially.

And what about insurers conspiring with attorneys to give false testimony to a legislative committee? Where does that fit in the free speech argument?

Updated 3/9/07: Erica Eversman has been kind enough to post links to the case law, decisions and circular letters regarding Allstate v. Serio on her website. You can access them here.

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4 Comments on Three Insurance Attorneys Mislead Committee During Anti-Steering Legislation Hearing

  1. JIMMY MONGER on Thu, 8th Mar 2007 2:37 pm

  3. lou ann norris on Thu, 8th Mar 2007 2:58 pm
  4. Just last week we had an adjuster , tell one of our clients, who happens to be my sister, (they did not know), that if she would take it to one of their shops that they would not call her lein holder of the damage and that they would guarantee the work .
    she told him she knew us and our work quality and that she wanted to let us repair her 2007 mustang convertible.
    Agent told her that they could not guarantee our work,HELLO!!!!, we do not need the insurance company to guarantee our work, our reputation preceeds our work and we give a lifetime guarantee on all our work!
    we have been in business for 30 years and will put our work up against any other PREFERRED SHOP in the area!!!!

    We work for our customers , not the insurance companies. I do not recall the insurance companies investing any capital in our business when we opened the doors. If they want to shell out some cash investment, then maybe we will be willing to work for them.

  5. Peter Suszczynski on Thu, 8th Mar 2007 5:12 pm
  6. I have been following alot of these legal battles, but it seems that the deeper pocket always comes out ahead. As Lou Ann said that she would go against any DRP shop quality wise as would I. Allstate did it to me personally, I called in a deer hit on my vehicle. The girl on the other end of the phone proceeded to tell me that i could bring it to a drive-in (not knowing i was the owner of the repair facilty) I politely told her that I wanted it appraised at the shop i chose. She then informed me that this shop was not longer taking in any more work at this time. Need i say how the remainder of the conversation went.
    Needless to say, Dutchess County NY has been a thorn in the insurance industies side. But, he who has deeper pockets wins. SAD. Hopefully, things will change, even alittle. Just keep consumer awareness up, a well educated consumer is our best bet. I am proud to say that the last 7 Progressive insured are no longer with that company after the dog and pony show they put on.
    Thanks for listening.

  7. George on Thu, 8th Mar 2007 5:54 pm
  8. As far as steering, we are the brunt of many calculated,repetative and familiar insurance company excuses why a customer should not have a car repaired at our facility. Our only crime is that we still believe that repairs should be done as close as possible to return vehicles to pre-loss condition along with a liftime gaurantee for any repairs we do. We back up our repairs with CSI reports from our customers that never have been below 96 percent and normally average 98 to 100 percent satisfaction meaning that a customer would likely refer a friend or relative to come to our facility for a repair. We have done many re-repairs on vehicles that were butchered at various DRP shops in the surrounding area, and believe me, I often wonder why some of my new found customers even accepted their cars back in that condition to begin with. In my opinion the Insurance Industry in this great country of ours is slowly and methodically turning every car involved in an accident into a ticking bomb by coercing the owners to accept sub standard parts and labor practices to save them money in an unjust fashion.

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