by Sean Preston, Coverall Law
When was the last time you addressed the deficiencies in your shop’s forms? With changes to the standard insurance policy – and pending changes in the legislature – it is only a matter of time before the clauses in your shop’s forms don’t match the letter of the law.
But legislative changes aren’t the most common reason for required updates. You need procedures in place to ensure that your shop’s forms keep up with the changing way we do business and the ever-changing challenges to shops operating in Massachusetts. This is exactly what our firm, Coverall Law, was created to do.
At the AASP statewide meeting, Breaking Free in ’23 part 3, members of our industry gathered at the Assabet auditorium in Marlborough to discuss some of the challenges we’re currently seeing.
I had the honor of speaking after lunch, covering the legal developments we have witnessed across the Commonwealth over the last year, proper formation and operation of a shop’s legal entity and (of course) shop forms.
My colleague, Attorney David Henig, also of Coverall Law, joined in the audience and took exhaustive notes of the lively forum. Audience members from far and wide chimed in with their experiences and questions for us.
The energy remained high as the group spent the three afternoon hours working through a 23-question survey, which allowed Attorney Henig and me to compare the similar and differing experiences across our industry when it comes to legal conflict management, total losses, drafting forms and more.
Forms out of date?
If you think you need updates to your shop’s forms, you are not alone. The many points and questions brought up in the meeting made it clear that shops across Massachusetts recognize their shop’s forms are deficient in one or more ways. Perhaps most striking was the reported age of many of the shops’ forms as represented in the audience.
A significant number of questionnaires received reported forms that were twenty years or older! Twenty years ago may seem like only yesterday. But that’s 20 years of leaving money on the table, while avoiding an important investment in your legal infrastructure. And when it has been that long, it’s time to invest in an upgrade.
Shops that are updating seem to do so based on the experiences in their individual shop, making little changes where they have been personally burnt before and wondering about the applicability of newer technologies like text messaging and email.
But it’s the big picture changes that matter much more. Operating your shop in a vacuum presents constant disadvantages to your shop in areas that other shops have (1) seen, (2) addressed and (3) incorporated into their forms and procedures.
New laws and regulations are just the tip of the iceberg when it comes to changes in the legal landscape. There are court decisions in each county which affect your customers and your shop. The AASP meeting is a great place to compare recent experiences in the ever-evolving challenge of making ends meet and getting paid for the work you perform every day.
The more intimate details of the discussions at the October 21 meeting are available by contacting AASP/MA Executive Director Lucky Papageorg. This article seems like a great place to cover some basic legal requirements for shop authorization forms and perhaps some of the additional ideas for your shop to consider.
Title 940 of the Code of Massachusetts Regulations (“CMR”), section 5.05, part (2) requires written recording of: (a) the customer’s name, address and telephone number, (b) the date and time their vehicle was delivered and its (c) year, make and registration number, along with (d) odometer reading at delivery and (e) the specific repairs requested by the customer or a brief description of the immediate issue.
Later in part (7), the CMR asserts that any additional repairs over $10 require customer consent, unless they have a signed waiver per part (3), clause (d). The regulation makes clear that the waiver must be in writing, and (as with all contracts) the customer must adopt the waiver in a “knowing, voluntary and intelligent manner.” The CMR has recommended language which you can be sure conforms and which states that approval is not needed from the adopting customer for repairs not expected to exceed an amount you and the customer can set forth at the time of signing.
Storage charges are a crucial piece to include at this stage. None of our shops have an unlimited amount of real estate; those spaces are valuable and need to be available for the next customers coming through the door. Similar to outside storage, inside storage is likely to be at a premium, and part (4) of the above CMR dictates that the customer must be informed of your storage policy and rates.
While a posted sign may be sufficient notice, I highly recommend including this in your shop’s forms, along with notification that the customer may inspect or receive any old or damaged parts being replaced. Of note, in that same regulation, you must inform them of your estimate or diagnosis charge. Again, the above can be accomplished by posting it on your premises, but shop forms are better, and both are best.
You need to maintain written records any time you receive oral authorization. Nowadays, I’d prefer your shop to get authorization via an email or even a text message, but the CMR does lay out that your shop records the date and time of any supplemental authorization, along with the shop employee receiving the authorization and who gave the authorization. These authorization records must include the specific authorization received and the authorizing person’s phone number if the shop initiated the call.
Per part (9), at the conclusion of the repair when closing your customer’s file, the CMRs require several things which can be accomplished on an invoice stating: (a) names and addresses of customer and shop, (b) date vehicle was delivered to shop and (c) vehicle odometer reading on delivery date. Those three mirror the required recordings from the start of the relationship in part (2) above.
But part (9) requires (d) an itemized list of repairs performed on the vehicle and (e) a list of each part supplied, by name and number of parts, with each part’s price as well as the total charged for the parts. Note that per part (f), any used parts must be expressly classified as “used, reconditioned, or rebuilt.” Finally, in addition to the totals for parts and labor, part (g) requires the number of hours and hourly rate charged and their designations as either flat rate or actual hours.
But what is missing in everyone’s forms?
Up to this point, I haven’t seen a single shop in Massachusetts that’s properly updating their shop forms. Just as the only constant in life is change, shops need to be conscious of movement in the legislature, decisions of the courts, and updates in the best practices and technological effects on the way we do business, as well as changes in the actions and activities of the other interested parties – namely, vehicle owners, lessors and insurers.
Your shop’s forms should establish the rights and responsibilities of the parties, defining each with specificity and considering the rights and roles of financing companies and insurers. The customer has a recognized freedom to contract, but in your shop’s forms, you must be cognizant that the terms put the customer in a profitable position given the circumstances. In other words, the deal must make sense to each party.
While many shops enlist a direction to pay to receive direct payment from the insurer, there may be circumstances where it makes sense to step into the customer’s position through an assignment of rights. The customer is entitled to payment from the insurer, and rarely can a customer be expected to effectively advocate for themselves.
Total losses are becoming increasingly common. Your shop can make clear what your processes and procedures are for handling vehicle intake and analysis, explain the value added and assert that your shop will be compensated. Similarly, the customer can be put on notice that any short pay from their insurer in a total loss must be explained by the insurer, with clear relation to their policy language and the circumstances of the matter.
The terms and conditions of any contract are an important piece that can dictate the rules of future conflict and save terms within a contract when challenged in the future. For example, choice of law and venue dictate what rules apply and which court is going to be hearing your matter. Most of the forms I’ve seen don’t consider these things.
Each shop in Massachusetts ought to take the time to address their shop forms. Drafting a shop’s forms is among the first things I did for a collision repair client when I began serving this industry more than a year ago, and I’ve spent the last six months researching Massachusetts case law, comparing forms, talking to countless people in the industry and defending shops so I can confidently offer the highest quality shop forms for the clients of Coverall Law.
What do the best forms look like?
With the help of several other attorneys from Massachusetts and beyond, Coverall Law is prepared to offer customized shop forms for the protection of Massachusetts shops, plus we will monitor developments across the state and provide updates for life so that shops never have to worry about forms again and help implement these customized forms into each shop’s daily routine so that the forms are properly used to give the maximum protection to your shop.
Shops across the country have witnessed evolving strategies which always seem to end in either shortchanging the shop, shortchanging the customer or both. The best forms give your shop the legal foundation needed to present a realistic legal challenge. And partnering with Coverall Law is your opportunity to have someone in your corner watching out for those changes and keeping you one step ahead for the survival of your business.
This is not a one-size-fits-all approach. My travels to different shops have made it clear that the needs of each shop are as starkly different as the owners and managers running those shops. If you think your shop’s forms are pretty close, you can circle around with us for a review of your shop forms and a write-up of any recommendations we might have. It’s a way to connect with Coverall Law, meet some of our people and see some of our work.
But if you’re ready to hand this off, contact us to have Coverall Law draft your shop’s forms, help you make them your own and implement them into your shop’s systems and procedures. You should consider getting lifetime updates, because Coverall Law is keeping their pulse on our industry, and this changing legal landscape is guaranteed to require changes to our legal footing (meaning, our forms).
If for any reason the above isn’t enough reason to join our cause, then please email me and ask about our Litigation Guarantee. It’s your own insurance policy that says, “In case any of the clauses in these forms aren’t enforced in a judicial court of law, Coverall Law will pay your legal fees….” If you have any questions about your current customer intake forms, contact me with any questions about our services. If you elect to utilize these services from Coverall Law, you will never have to worry about your shop’s forms again.
Want more? Check out the December 2023 issue of New England Automotive Report!