Versichelli and Welch obtain dismissal of a putative class action

June 30, 2014 | Appeals

In one of only a handful of decisions nationwide to address the issue, Rivkin attorneys Michael Versichelli and Michael Welch obtained dismissal of a putative class action brought by an insured against his automobile insurer, GEICO, alleging that GEICO breached the policy and engaged in deceptive business practices by specifying non-Original Equipment Manufacturer (non-OEM) structural crash parts in vehicle repair estimates.  Plaintiff alleged that all structural, non-OEM crash parts (including bumpers, fenders, radiator supports and bumper reinforcements) are inferior to all OEM structural crash parts in terms of fit, form, finish, quality and performance.  The District Court (Irizarry, J.) essentially affirmed a prior court ruling in Patchen v. GEICO (a similar matter wherein Mike and Mike were successful in moving to dismiss the class action suit pre-answer), and held that the mere specification and use of non-OEM parts in repair estimates did not breach the policy which allows for parts of “like kind and quality.”  The court noted that plaintiff failed to plausibly allege either that: 1) the non-OEM structural crash parts specified in his repair estimate were inferior to the comparable OEM parts, or 2) that aftermarket structural crash parts are universally inferior to OEM structural crash parts.  The court further held that plaintiff did not state a claim for deceptive business practices under GBL 349 because plaintiff failed to plausibly allege that GEICO engaged in any materially deceptive conduct, or that plaintiff suffered any actual injury as a result of the allegedly deceptive acts.  For instance, the court noted that plaintiff’s allegation that GEICO failed to disclose material information about aftermarket parts used in adjusting claims was belied by the face of the repair estimate itself.  The court likewise dismissed plaintiff’s claims for declaratory and injunctive relief as deficient.  This is an important decision for the auto repair industry since many insurers ? and, indeed, the New York State Insurance Regulations permit ? the specification and use of non-OEM parts in repair estimates.

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