by James A. Castleman, Esq.
An important lesson for repair shops on navigating the sometimes grey area of repair authorizations.
I received an urgent call from a collision repair shop owner a few weeks ago. A young woman sitting in his waiting room had been angrily screaming at him, telling him that he had no right to repair her car. Despite the fact that the vehicle was half repaired and taken apart, with a fender sitting on the floor waiting to be painted, the woman was demanding that the shop put the car back together so she could take it somewhere else – even though the shop had a signed repair order.
The problem was that the woman owned the car, but she was not the person who had brought the vehicle into the shop and signed the repair order. Rather, her “no good brother” brought the car to the shop and signed the authorization to repair without checking with her first. The vehicle owner’s anger stemmed from her belief that the shop owner had convinced her brother to authorize unnecessary, expensive repairs. She further argued that her brother had no right to authorize the repairs since he did not own the vehicle.
The shop owner asked if the woman could really demand that the car be put together and released to her. Moreover, did he have the right to get paid at least for the repairs that had been made and the parts that had been purchased? After all, he did have a signed repair order in his hand. Unfortunately, the answer was unclear.
I suggested that the shop owner try to negotiate something with the woman, get her to agree to at least some portion of the cost of the repairs that he had made and do what she wanted – i.e. put the car together and let her take it out of there. That is what he did. And by being a calm and skilled negotiator, he convinced the woman to agree to pay for a greater amount of the repairs than I might have guessed. The shop did not make much money on the repairs, but at least, it did not lose money, and the shop owner avoided having to further deal with a customer who would never have been happy with his shop.
This was not the first time that I had run into this problem. In fact, this was the second shop owner that had called me with the same issue within a few weeks – except that the other shop owner had been yelled at by a woman complaining about her “no good boyfriend” instead of her brother. And this is an issue that I have run into, in one form or another, many times over the years.
Who can authorize repairs?
Is the vehicle owner the only person who can authorize repairs? No. But if they are not the one providing the authorization, then a repair shop should be wary and should make sure that the person authorizing repairs has the right to do so.
Under the Massachusetts Attorney General’s consumer protection regulations, if a customer authorizes repairs in the manner set out in the regulation (and if other requirements of the regulation are met), the shop can charge the customer for the authorized repairs. But who is the “customer”? Arguably, the “no good brother” and “no good boyfriend” who brought someone else’s car in for repairs are the shops’ customers. After all, they did bring in damaged cars and did sign repair orders. They may well be personally liable for the cost of the repairs that they authorized and that were made. After all, the shops made repairs in good faith, relying on what they had been told – repairs for which the brother and boyfriend signed contracts.
Unfortunately for the repair shops in both of these cases, it is also quite possible that the car owners themselves are not liable for the cost of repairs, and it is likely that the shops would not have an enforceable garage keeper’s lien against the vehicles that they repaired. Nor would the shop have the right to demand that an insurer covering the repairs pay the shop directly for those repairs, even if the brother or boyfriend signed a “direction to pay” form. No shop owner wants to be in a position where they are chasing an individual to try to get paid – particularly an individual who does not own the car and who may be unable to come up with the funds needed to pay.
In order for the vehicle owner to be liable for the cost of repairs, or for a garage keeper’s lien against a car to be valid (as set out in the applicable statute), a damaged vehicle needs to be brought to a shop either by the owner “or with the consent of” the owner. By the same token, generally under Massachusetts law, for the vehicle owner to be the “customer” who is liable under the repair contract, the vehicle owner must authorize the repairs – either personally or through a proxy who has their consent to do so.
How does a repair shop know whether someone has the owner’s consent to authorize repairs?
It is not always easy for a shop to know whether the person they are dealing with is the owner of a vehicle, or if the person they are dealing with has the consent of the vehicle owner to authorize repairs. A good place to start, however, is simply to check the vehicle’s registration, a document that all drivers are required to have with them or in an easily accessible location. Who is named as the registered owner, and is that the person with whom you are dealing?
If the person that you are dealing with is not the person named on the registration, the next thing to do is to ask the person sitting in your shop directly if they have the owner’s permission to contract for repairs; however, even if they claim to have permission, you should follow up with a phone call to the registered owner to ensure that the person whom you are dealing with does have their authority. It does not matter if the person whom you are dealing with is the owner’s spouse, their parent or their “no good” brother or boyfriend. It is prudent to make that phone call, just in case.
You think that you have never had this problem and that you are unlikely ever to have it? That’s what I heard from the two shop owners that called me with their problem, and it is something that I hear often from shop owners who call me with a problem. Believe me: It does happen.
Leased vehicles can present additional problems. Many car leases have provisions that require the lessee to make repairs to a damaged vehicle and authorize the lessee to contract for repairs. But this is not the case with all leases, and some leases require the lessor to approve all repairs. The problem is that you don’t know what the particular lease says when that car is sitting in your repair shop, and chances are that the lessee doesn’t know either. The only way to make sure that you are going to get paid for the repairs you make is to contact the lessor and ask them what their policy is.
The issue also arises when you negotiate repairs with a customer’s insurer and then proceed to make those repairs without letting your customer know what repairs are needed and what you negotiated – and again, specifically obtaining the customer’s authority for those repairs. No matter what an insurer tries to tell you, the insurer’s agreement to pay for negotiated repairs (whether on an original appraisal or on a supplemental appraisal) does not bind your customer and does not bind you. Only your customer can authorize what repairs they want you to make.
Under Massachusetts law, your customer has the right to pocket the insurer’s claim payment check and make whatever agreement they want with you for repairs. Or the customer can choose to have no repairs made at all, cash the claim payment check and pour it into the slots at Foxwoods. Of course, in that situation, neither you nor your customer can represent to the insurer that all repairs were made according to their appraisal, and the insurer has the right to reduce the insured’s actual cash value of the vehicle by the amount of repairs not made. But that does not change the fact that your customer, not their insurer, is the only one able to authorize repairs to their vehicle.
The question of authority to contract for repairs may also arise if a vehicle is owned by a business. If a corporation or an LLC owns the car, who within that entity has the authority to sign repair contracts or otherwise authorize repairs? If it is a small company, it may be worth a few minutes to check the Massachusetts Secretary of State’s website to see who the officers of the entity are. Notably, for a business, you are probably in a better position than with an individual car owner. One reason for that is because businesses are usually not covered by the Attorney General’s consumer protection regulations; they are businesses, not consumers. Additionally, unlike individuals, businesses generally can be held liable if the person with whom you are dealing has apparent authority to authorize repairs – and that is a relatively easy (yet not universally achievable) standard to meet. Even so, it still may be worth your while to make a call to the business to make sure that they are aware that the vehicle is at your shop and that the person with whom you are dealing has their consent to authorize repairs.
What can you do if you discover that the person whom you are dealing with does not have the vehicle owner’s consent to authorize repairs?
The answer to this question depends on when you make that discovery. If it occurs at any time before you have started repairs, then you can either try to get the owner to personally authorize the repairs, or you can just refuse to make the repairs. This applies whether the person who authorized repairs is an individual (again the “no good brother”) or the customer’s insurer.
Once repairs have begun, you can still try to get the vehicle owner to agree to the repairs or affirm that they authorized the person with whom you are dealing to contract for repairs. It does not matter that the owner did not authorize the repairs in advance. If, after the fact, they affirm that they agree or affirm that the person has authority for them, the owner will then be liable. This will be easiest to accomplish when no dispute has arisen, i.e. before the angry young woman is standing in your shop and screaming at you.
If you do find yourself faced with the irate car owner, demanding that you stop repairs and release their vehicle, then the best advice that I can suggest is to do what that shop owner who recently called me did: Try to remain calm, but point out that you acted in good faith and that you spent time making repairs and spent money paying for parts. If you can negotiate a final figure that you and they can live with, take it, let the car go and be thankful that you got something for the repairs that you made and that you do not have to deal any further with that unhappy car owner.
Please continue to be aware that the only people who can authorize that repairs be made to a vehicle brought to your shop are the vehicle owner or someone who has the consent of the vehicle owner. Do not just assume that the person with whom you are dealing has proper authority. Instead, protect yourself. Whether or not it has happened to you in the past, it can still happen in the future, possibly even with the next car that comes into your shop!
Want more? Check out the January 2022 issue of New England Automotive Report!