An Illinois judge has given the green light to a lawsuit brought by three Kenosha collision repair shops against the nation’s largest auto insurer.
The ruling issued Thursday sets the stage for the lawsuit to move ahead.
Pulera Collision, Armando’s Collision Center and Jay-Bee Collision Repair Center sued State Farm Mutual Automobile Insurance Co. in Lake County, Ill., Circuit Court.
The hearing on Thursday addressed a motion by State Farm to dismiss the suit, as well as other matters.
The original multi-part complaint alleged State Farm had engaged in “wrongful conduct” that harmed the three businesses.
“There were two main counts,” said David Novoselsky, the attorney representing the body shops. “One was breach of contract, the other was tortious interference. The breach of contract was straight forward. The other was (about) interference with the business. Our position is that (State Farm) was steering business away from (the three collision repair centers). Those were the two key counts.”
“In a nutshell, about a year and a half ago, someone (at State Farm) decided to put Kenosha in the Chicago market,” Tom Capponi of Armando’s Collision Center previously told the Kenosha News.
That move, similar to how medical insurance companies set reimbursement rates, had the effect of lowering the amount the shops would be paid for collision repairs covered by the insurer, Capponi explained.
The hourly rate was lowered from $56 an hour to $50 an hour.
The shops were affected adversely when State Farm lowered the hourly labor rate it paid for insurance-covered repairs, the suit claims.