GEICO has elected to settle a lawsuit with Gunder's Auto Center on behalf of their customer rather than concede to a deposition of their claims representatives.
Like this article? Sign up to receive our weekly news blasts here.Attorney Brent Geohagan, representing Gunder's Auto Center, informed owner Ray Gunder of GEICO's decision to concede and pay Gunder's on behalf of their customer, J. Welcome, to dismiss a lawsuit that GEICO had forced Gunder's to file against their own customer.
Upon deeming Welcome's vehicle a total loss and disputing Gunder's billing for incurred charges, including a parts return fee, GEICO elected to post a bond through the county courts in the amount of Gunder's billing, $972, which allowed GEICO to take possession of Welcome's vehicle.
As required, GEICO provided full payment of the disputed amount to the Clerk of Courts and was issued a bond legally requiring Gunder's Auto Center to relinquish the vehicle along with his possessory lien on that vehicle.
Gunder's, according to stipulations in the bond statutes, was confronted with having to file a lawsuit against the vehicle owner, (Gunder's and GEICO's customer), as the only way to exercise their right of recovery, Geohagan said. Should Gunder's fail to file a lawsuit within 60 days, they would forfeit their right of collection and the money would be refunded to GEICO and Gunder's Auto Center would receive nothing.
Undaunted, Gunder proceeded to file a lawsuit against his customer, who understood the issues and did not dispute any portion of Gunder's billing nor did he have any part in or desire the bonding of the vehicle, according to Gunder's. In fact, the customer would testify that he was not even aware of GEICO's taking possession of his vehicle until after it had been removed.
The lawsuit was filed and in the process of arranging the depositions of GEICO's claims manager and a field claim's rep who bonded the vehicle, GEICO elected to avoid the depositions by settling the matter by paying Gunder's their full billing as well as all legal fees and costs of $2,621.09, for a total amount of $3,593.09.
"I surely hope this sets precedence that handling returned parts, with all the administrative efforts, costs, and assumed liabilities involved, is not merely a cost of doing business," Gunder said. "As I have learned from my good friend and business consultant Barrett Smith of ADE, performing such activities for free could very well be the cost of going out of business."
