215 A.3d 1084
Vt.2019Background
- Parker’s Classic Auto Works (Parker’s) repaired vehicles for Nationwide-insured customers from 2009–2014, then obtained post-loss assignments and billed Nationwide for the repairs.
- Nationwide paid initial estimates and some supplemental payments after disassembly, but consistently paid less than Parker’s billed (alleged "short pays").
- Parker’s sued as assignee of the insureds for breach of the insurance contracts, consolidating over seventy claims governed by identical policies.
- At trial a jury found Nationwide liable and awarded Parker’s $41,737.89; the trial court later granted Nationwide judgment as a matter of law under V.R.C.P. 50(b).
- The trial court concluded the policy allowed Nationwide to unilaterally fix the amount it would pay and that the insureds (and thus assignee) had no damages; the Vermont Supreme Court reversed.
Issues
| Issue | Parker’s Argument | Nationwide’s Argument | Held |
|---|---|---|---|
| Whether insurer may unilaterally determine the dollar value of an insured’s collision loss | Policy does not give insurer sole power to set dollar amount; insured (or assignee) may challenge valuation | Policy requires payment of an amount the insurer determines sufficient to do repairs, so valuation is within insurer’s discretion | Rejected Nationwide’s view; insured/assignee may contest insurer valuation — insurer cannot unilaterally fix value under this policy |
| Whether a repair shop assignee may sue insurer for alleged short pays | As assignee, Parker’s can assert insureds’ claims to recover unpaid repair costs | Because insurer paid something and vehicles were repaired, insureds suffered no compensable loss; assignee lacks standing | Parker’s may maintain suit as assignee; payments and completed repairs do not bar challenge to sufficiency of payments |
| Proper measure of “damage” under the collision policy (cost of repair vs. diminution in value vs. lowest bid) | “Damage” equals cost to repair to preaccident condition (not exceeding preaccident market value); reasonable-market or lowest-available bid question for jury | Policy does not require payment of repair shop bills; limitation clause lets insurer cap at cash value | Court adopts cost-of-repair to restore to preaccident condition (capped by preaccident fair market value); jury decides reasonableness/market-rate issues |
| Whether unpaid but uncollected bills or accrual-based claims constitute a “financial loss” | An unpaid amount covered by the policy is a financial loss to the insured; assignee can collect without first suing insured | Because Parker’s never demanded payment from insureds, there was no proven financial loss | Jury reasonably could find an accrual-based financial loss; assignee’s lack of collection attempts is not dispositive |
Key Cases Cited
- Brueckner v. Norwich Univ., 169 Vt. 118, 730 A.2d 1086 (Vt. 1999) (standard for viewing evidence on post-trial JMOL review)
- Shriner v. Amica Mut. Ins., 204 Vt. 321, 167 A.3d 326 (Vt. 2017) (policy ambiguity construed for insured; interpret policy from perspective of reasonably prudent applicant)
- Purington v. Newton, 114 Vt. 490, 49 A.2d 98 (Vt. 1946) (measure of vehicle damage and role of repair cost evidence)
- Auto Glass Exp., Inc. v. Hanover Ins., 975 A.2d 1266 (Conn. 2009) (insurer must pay amount reasonable in the marketplace rather than lowest available rate)
- Cascade Auto Glass, Inc. v. Idaho Farm Bureau Ins., 115 P.3d 751 (Idaho 2005) (holding that insurer’s pre-authorization letters could fix insurer’s obligation; distinguished by Vermont Supreme Court)
- Nick’s Garage, Inc. v. Progressive Cas. Ins., 875 F.3d 107 (2d Cir. 2017) (rejecting argument that repair-and-return of vehicle eliminates short-pay claim)