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McGraw suit against insurer, body shop moved to federal court

By Jessica M. Karmasek | Jan 13, 2012


CHARLESTON, W.Va. (Legal Newsline) - A lawsuit filed by West Virginia Attorney General Darrell McGraw against an insurer and a frame and body shop has been moved to federal court.

In December, McGraw filed a lawsuit against Liberty Mutual Insurance Co. and Greg Chandler's Frame and Body LLC in St. Albans for allegedly repairing vehicles with used parts.

The lawsuit, originally filed in Kanawha County Circuit Court, details repeated violations of the state's Consumer Credit and Protection Act by both Liberty Mutual and Chandler's.

In particular, McGraw alleges Liberty Mutual required body shops to repair vehicles using reconditioned, remanufactured and used parts in violation of state law.

In addition, McGraw contends the insurer failed to provide consumers with the proper notices and written statements.

According to the Attorney General's Office, it is unlawful in West Virginia for an insurer to require the use of salvaged, used or reconditioned crash parts when negotiating the repairs of vehicles within three years of manufacture and without the owner's consent.

On Tuesday, Liberty Mutual and Chandler's filed a notice of removal in the U.S. District Court for the Southern District of West Virginia.

"The right to relief sought by the WVAG in its complaint and petition raises and depends on the resolution of a substantial question of federal law as the WVAG's right to relief will ultimately be resolved by the application and interpretation of the Magnuson-Moss Warranty Act," the defendants wrote.

But the Attorney General's Office argues that the allegations in its complaint raise no federal question and the case should be sent back to Kanawha Circuit Court.

On Wednesday, it filed a motion for an expedited hearing on its motion for remand, filed the same day. It also asked the federal court to issue an expedited ruling on the matter.

McGraw's office goes as far as to argue that the defendants' move to transfer the case to federal court was a way for Liberty Mutual, in particular, to avoid a preliminary injunction hearing that was scheduled for Thursday.

The attorney general had asked the lower court to enjoin both the insurer and Chandler's from engaging in such activity in the future.

"Instead of allowing the state court to rule on the meaning and purpose of a state statute, the defendants chose to delay the inevitable ruling by removing this action so they could continue to use salvaged parts in the repair of new vehicles without consumers' written consent in direct violation of the Circuit Court of Kanawha County's ruling," McGraw's office wrote.

To continue litigation of the lawsuit in federal court prior to a ruling on the State's motion for remand will result in "unnecessary costs," the attorney general argues.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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