CollisionWeek Interview - Progressive Steering Lawsuit: Interview with Greg Coccaro

Meet the NY shop owner behind the multi-million dollar steering suit against Progressive.

In early 2007, Greg Coccaro, president of North State Custom in Bedford Hills, NY, made national news by suing Progressive Insurance for $40 million dollars for steering and deceptive trade practices. His decision to do that was not an easy one. According to Greg, "You don't just wake up one morning and say, you know what, I feel like suing an insurance company for $40 million dollars... no one does that."

So what would make a single-location, independent shop owner risk the future of his business, one he spent 30 years building, by suing the third largest insurer in the country? Coccaro said he felt he was left with no other options after Progressive tried to put him out of business and ruin his reputation when they sued him first more than a year earlier.

North State Custom in Bedford Hills, NY

CollisionWeek sat down with Greg to discuss the circumstances leading up to where he is now, and find out just what causes someone take on a top-ten insurer in a multi-million dollar lawsuit.

Coccaro has owned and operated North State Custom for 37 years. He started the business with his brother and still works there everyday, now with his son, Greg Jr., in a shop that primarily specializes in higher-end vehicle repairs, such as Volvo, Mercedes, BMW and Jaguar. North State Custom is one of only two shops in New York State that is CL Class certified by Mercedes and Jaguar certified for aluminum repair.

The story behind Greg's decision to sue Progressive started with a referral from his local Mercedes dealer.

Progressive Sues North State for Fraud

Progressive's initial fraud suit against North State involved the repair of a one year old Mercedes extensively damaged after rolling down a steep embankment. Progressive's first estimate written at the accident scene totaled $7142.36. After a second inspection at the shop, the damage was rewritten for $26804.20 still much less than the $34,091.37 representing Coccaro's final invoice.

Digging deep for fraud

Greg said that Progressive is going to great lengths to find evidence of fraud in their case against him. "During the discovery phase of the suit, they initially began digging through my shop records to find evidence that I charged for parts that I didn't put on the car. When they couldn't find anything in my paperwork, they investigated the records of my Mercedes dealer's parts department. I guess they were looking for parts returns- showing I purchased the parts and then returned them for the credit once I allegedly repaired the damaged panels- rather than replaced them.

"I have a very low parts return rate," Coccaro said, "I spend hundred of thousands of dollars a year with that dealer. If I was returning parts like that- they wouldn't deal with me for very long, would they?"

"So after they couldn't find any evidence of fraud in the parts department, Progressive then asked for all the records from the dealership's accounting department. Progressive refused to give up. They asked for the dealer's main office accounting records to compare against the parts department invoices. They wanted to make sure that the parts department guys and I weren't in cahoots."

"All that happened a little while ago. They gave up on the parts fraud idea, I think. Now they are hoping to find evidence of fraud in my labor charges. They asked for all my time cards."

Coccaro recalls that Progressive tried to have the car moved to one of their preferred shops, but the customer wanted to stay at North State- because that's where her Mercedes dealer recommended she take it.

In the end, North State repaired the car, and Progressive did pay the $34,091 but two months later Progressive filed suit against North State for fraud on that repair.

Coccaro feels that Progressive filed suit against him for retribution, to "make an example of him," as Greg explains it, and get rid of a "troublemaker" in the market. "My shop is one of the largest in this market, if other shops see that Progressive can do this to me, and damage my business like this, then they will show they can do it to anyone," Coccaro explained.

"I guess Progressive figured that they could accuse me of fraud, and worry about finding evidence of fraud later. They think all body shops are fraudulent- But they picked the wrong shop to make an example of," Coccaro said of Progressive's suit against him.

"At best they may find clerical errors or typos in our bill, but they aren't going to find fraud," Greg explained. "We do everything straight by the book. We even reduced some of the times and were able to repair some expensive parts in trying to negate some of the expense to our customer, because as at that point she was paying for the repair out of her own pocket."

Fraud or not, Greg said the accusation itself was damaging North State's reputation and hurting his business. After the suit was filed, according to Coccaro, Progressive representatives were spreading the news in his local market that North State had committed fraud.

"I started getting questions from my suppliers," Coccaro explained. "I hear you were bagged for insurance fraud they said. Progressive was spreading the story and trying to ruin my reputation. I ended all my DRP agreements years ago, my business survives by my reputation. That is all I have, the quality of my work and my reputation. Once these rumors began to spread, I started to lose work."

"I really began to feel the impact on my business, and felt very threatened- and the courts are the only recourse shop owners seem to have today.

North State Files Suit Against Progressive

In 2007, North State Custom filed its suit against Progressive. The complaint alleged that Progressive has engaged in a scheme to injure North State and deceive the public by engaging in deceptive business practices- including telling customers that North State inflates estimates, does shoddy work, and is a problem shop.

Timeline

Dec. 2004 Customer crashes vehicle

Dec 4- Progressive inspects vehicle at accident scene, estimates approx $7000 in damage, vehicle towed to North State next day

Dec 10- Progressive rewrites estimate at North State for approximately 26,000 - requests that North State not yet begin repairs

Dec 17- Progressive still holding repairs to have vehicle inspected by MBUSA due to suspicion that faulty braking system may have been responsible for accident. MBUSA inspectors eventually find nothing.

Jan 2005 - Progressive creates negative supplement for approximately $8,000. Work still not started.

Jan 2005 - North State tells vehicle owner new estimate not enough to complete repair. Customer opts to move forward with repair and agrees to accept personal responsibility for repair costs.

Jan 2005 - North State opens repair order with customer for Progressive's second estimate of $26,000, noting that a tear down has not yet been completed and there are still many open items on estimate.

March 2005- Repairs completed, final bill totals $34,000

March 2005 - At customer's request, North State supplies Progressive with copies of additional parts invoices needed for repair totaling approximately $9000.

Mar 22 2005 - Progressive manager calls North State agreeing to pay entire bill. Says car will be towed directly to insured's residence as a special customer service due to extended delays and problems with claims handling.

Mar 23 2005 Progressive representative pays bill on behalf of insured, picks up vehicle with tow truck.

May 2005 - North State served with summons - Progressive alleging fraud.

Feb 2007 North State files suit against Progressive for steering and deceptive business practices

Specifically, the suit claims that Progressive made misleading, false, or exaggerated statements concerning North State in an effort to coerce claimants to have their car repaired at Progressive's DRP shops. The North State complaint also states that Progressive successfully coerced vehicle owners to remove their vehicles from North State after telling them that North State is not a reputable body shop.

Also in the complaint, North State describes Progressive's scheme to steer customers as being motivated by money and greed without regard for their insureds.

According to Coccaro, part of what North State is going to show in court is that Progressive's initial estimates are intentionally underwritten as part of its attempt to steer consumers. Progressive will tell consumers that their DRP shop will fix the car for the amount of Progressive's estimate, costing the consumer nothing, but if they select the higher priced shop, they may be liable for out of pocket expenses. In the end, North State maintains that the final repair cost will be substantially similar to what North State would have charged, however the quality of the work at the DRP shop will be much lower.

Originally, there were eight separate causes of action in the suit against Progressive, each claiming damages of $5 million dollars for a total of $40 million. Progressive filed a motion to have all of those complaints dismissed. Progressive's attorneys had successfully argued that New York law does not allow an insurance company to be sued for steering. The judge agreed with Progressive, eliminating five of the eight counts, leaving three causes of action intact for a total of $15 million. (see related story below)

When Coccaro's suit against Progressive was first filed, the New York State Auto Collision Technicians Association (NYSACTA) was quick to support him. At the time, Mike Orso, President of NYSACTA said, "We all know the tricks and games that are being played by a majority of the insurance companies, their appraisers and adjusters. The inside information obtained in this lawsuit only confirms our suspicions..."

"It's not about the money," Greg said. "It was never about the money. I just couldn't stand by and watch them destroy my reputation and the business I worked hard to create. If they could do this to me, they could do this to anyone."

North State's lawsuit against Progressive is currently in the discovery phase- where both sides collect the information they need, and interview the witnesses involved, in preparation for the trial. No date has been set in that case.

In Progressive's lawsuit against North State, a trial date has been set for April 1.

"That is the one I worry about. That is the one that matters most to my business," Greg says. "The steering case is just standing up for what's right. Unlike the fraud case, I actually enjoy working on the steering suit. I just don't enjoy having to defend my reputation against accusations of fraud, trumped up in an attempt to put me out of business."