Supreme Court Adopts Bernstein Shur’s Arguments and Sets New Precedent to Protect Auto Body Shops in New Hampshire

By Hilary Holmes Rheaume

Last year, Bernstein Shur filed an Amicus Brief on behalf of the New Hampshire Automobile Dealers Association (NHADA) concerning whether an anti-assignment provision barred a New Hampshire body shop, Keene Auto Body, from filing a lawsuit against an insurance company for the costs associated with a customer’s repair.  The New Hampshire Supreme Court recently ruled in favor of the body shop and adopted the arguments that Bernstein Shur made in its Amicus Brief, which set a new precedent for body shops in New Hampshire.

The Case

In July of 2021, a New Hampshire auto body shop served a customer whose insurance company covered the vehicle repair but refused to pay the $1,000 estimate cost. In an effort to get paid for this work, the shop asked the customer to execute a formal agreement to allow the shop to seek funds directly from the insurance company. The shop then filed a lawsuit against the insurance company in the Keene District Court to win back the unpaid amount but lost the case: the insurance company convinced the Court that a clause in the customer’s insurance policy prevented the customer from assigning the policy rights to someone else, so the shop did not have standing to seek the unpaid amounts.

The body shop appealed the district court’s decision to the Supreme Court. The NHADA, of which the body shop is a member, requested permission to help clarify issues and assist the court in deciding the case. The request was granted, and the NHADA brought in Bernstein Shur’s cross-functional attorney team—Hilary Holmes Rheaume and Ned Sackman—to argue that the insurance company’s policy did not prevent the body shop from trying to pursue payments from the company directly.

The Outcome

Through strategic counsel, Bernstein Shur uncovered the ambiguity in the customer’s insurance policy to win the case: the Supreme Court ruled in favor of the position that the provision in the insurance policy did not prevent the shop from pursuing this type of lawsuit.

The outcome was a win for the NHADA, Keene Auto Body, and body shops across the State of New Hampshire.

Bernstein Shur’s Auto and Equipment Dealers Practice represents the New Hampshire Automobile Dealers Association alongside automotive and equipment dealers in a variety of matters. For more information or support with legal counsel at your dealership, contact Hilary Holmes Rheaume at hrheaume@bernsteinshur.com or Ned Sackman at nsackman@bernsteinshur.com.