- Court
- New York Supreme Court, Appellate Division, Second Department
- Case
- M.V.B. Collision, Inc. v. State Farm Mutual Automobile Insurance Co.
- Docket
- 2023-09496
- Filed
- May 27, 2026
- Slip Op
- 2026 NY Slip Op 03297
- Citation
- 2026 NY Slip Op 03297 (N.Y. App. Div. 2d Dep’t 2026)
Background
M.V.B. Collision, Inc., an auto body repair shop, commenced an action against State Farm Mutual Automobile Insurance Company to recover damages for breach of an insurance contract. The dispute arose from repairs M.V.B. Collision made to a vehicle owned by Jerone Sealy, a State Farm insured who had assigned his insurance claim to the repair shop. M.V.B. Collision alleged that State Farm breached the insurance contract by failing to pay the full cost of the repairs and by failing to abide by the statutes, rules, and regulations of the State of New York and the New York State Department of Financial Services.
State Farm moved for summary judgment dismissing the complaint, and M.V.B. Collision opposed. The Supreme Court, Nassau County granted State Farm’s motion, and M.V.B. Collision appealed.
Holding
The Appellate Division, Second Department reversed the Supreme Court’s order and denied State Farm’s motion for summary judgment. The court found that State Farm’s own submissions failed to eliminate triable issues of fact as to whether the insurer paid “the prevailing competitive price” for the vehicle repairs as required under the applicable regulations.
The court applied fundamental principles of insurance contract interpretation, noting that an insurance policy is “a written contract between an insurer and an insured and is based, in essence, on contract law,” citing American Western Home Ins. Co. v. Gjonaj Realty & Mgt. Co., 192 AD3d 28. The court emphasized that applicable provisions of the Insurance Law are “deemed to be part of the insurance contract as though written into it,” citing Trizzano v. Allstate Ins. Co., 7 AD3d 783.
Specifically, the court found that State Farm did not establish that it satisfied the requirements of 11 NYCRR 216.7(b)(3) and (7), which regulate how insurers handle auto body repair claims, including the obligation to pay the prevailing competitive price for labor and to ensure that supplemental estimates are sufficient to cover complete repairs. Because State Farm failed to meet its prima facie burden, the motion was properly denied regardless of the sufficiency of M.V.B. Collision’s opposition papers.
Takeaways
This decision is significant for the auto body repair industry and for insurers handling collision claims in New York. The court’s holding makes clear that insurers must comply with the Department of Financial Services regulations governing auto repair claims, and that these regulatory obligations are incorporated into the insurance contract itself. An insurer cannot obtain summary judgment by simply arguing that it paid for the repairs without demonstrating compliance with the specific regulatory standards governing how repair costs are calculated.
The “prevailing competitive price” standard under 11 NYCRR 216.7 is a fact-intensive inquiry that may not be suitable for summary disposition, particularly when the insurer’s evidence raises questions about whether its payment fully covered the cost of necessary repairs. Repair shops that accept assignments of insurance claims stand in the shoes of the insured and can enforce the contract directly against the insurer.
Practitioners should note the application of the Winegrad principle: when the moving party’s own papers raise triable issues, summary judgment must be denied without regard to the opposition.
Why It Matters
This case addresses a common source of friction in the auto insurance industry — the gap between what a repair shop charges for collision repairs and what an insurer is willing to pay. By holding that regulatory standards governing the “prevailing competitive price” are part of the insurance contract, the court ensures that insurers cannot unilaterally dictate repair costs without reference to the regulatory framework. For auto body shops, the decision provides important legal support for challenging insurer underpayments. For insurers, it signals that summary judgment motions in these cases must be supported by evidence demonstrating full regulatory compliance, not merely evidence of payment.