Salvage/Recycled Original Equipment Manufacture (OEM) Parts Held Not Covered Under West Virginia Crash Parts Act
A June 2014 opinion, Liberty Mut. Ins. Co. v. Morrisey, No. 13-0195 (W. Va. June 11, 2014), from the Supreme Court of Appeals of West Virginia concluded that West Virginia’s Automotive Crash Parts Act (Crash Parts Act) W. Va. Code § 46A-6B-1, et seq., applies only to the use of aftermarket crash parts, not the use of salvage/recycled original equipment manufacturer (OEM) parts. As such, the notice and consent provisions under the Crash Parts Act are inapplicable to the use of salvage/recycled OEM parts, and the Morrisey opinion approved the use of salvage/recycled OEM crash parts in the repair of motor vehicles when such repairs are negotiated by insurers within the year of the vehicle's manufacture, or in the two succeeding years.
The Crash Parts Act obligates body shops and insurance companies to disclose to motor vehicle owners the use of certain replacement crash parts in repairs conducted within three years of the repaired vehicle's original manufacture date. The Act further requires written consent of the vehicle owner to use aftermarket crash parts for repair, and requires the distribution of a statutory notice to the owner that aftermarket crash parts have been used.
In its opinion, the Court considered the applications of the Crash Parts Act and the West Virginia Consumer Credit and Protection Act ("WVCCPA") to body shops and automobile insurance companies employing the use of salvage/recycled OEM crash parts within the aforementioned timeframe. The Court found neither statute prohibited body shops or insurers from utilizing these parts, and, moreover, applauded the insurers for using measures to reduce premium costs for their customers.
"Crash parts" are defined by the Crash Parts Act as "exterior or interior sheet metal or fiberglass panels and parts that form the superstructure of the body of a motor vehicle . . ." and may include fenders, bumpers, door panels, hoods, and wheel wells. See W. Va. Code § 46A-6B-2(c). The Act also defines "aftermarket crash parts" as parts manufactured by an entity other than the original manufacturer of the original motor vehicle, and for which the original manufacturer of the motor vehicle has not authorized use of its name or trademark for the manufacture of crash parts. See W. Va. Code § 46A-6B-2(a). While undefined by the Crash Parts Act, "salvage crash parts" or "recycled genuine original equipment (OEM) parts" typically refer to parts manufactured by the original vehicle manufacturer, carrying an authorized name or trademark, and removed from a salvaged vehicle.
The Court found that the Crash Parts Act clearly intended to require disclosure and written consent for only some, not all, replacement crash parts. The Act expressly limited the use of aftermarket crash parts, but it did not mention the use of salvage/recycled OEM crash parts. Moreover, the statutory notice given to consumers for use of aftermarket parts expressly states that "aftermarket crash parts that are not manufactured by the original manufacturer of the vehicle" are used in repairs; however, the notice makes no mention of salvage/recycled OEM crash parts.
Essentially, the Court found that aftermarket crash parts and salvage/recycled OEM crash parts are diametrically different products and not interchangeable in the context of the statute. Most strikingly, aftermarket crash parts would not come from the vehicle's original manufacturer; however, permissible salvaged/recycled OEM parts would bear the original manufacturer's name and/or trademark. Thus, the use of salvaged/recycled OEM parts by the Petitioners did not violate the Crash Parts Act.
Additionally, the Court considered whether W. Va. Code § 46A-6-102(7)(M), as part of the WVCCPA, had any application to the use of salvage/recycled OEM parts. Pursuant to W. Va. Code § 46A-6-102(7)(M), prohibited "[u]nfair methods of competition and unfair or deceptive acts or practices" may include:
[t]he act, use or employment by any person of any deception, fraud, false pretense, false promise or misrepresentation, or the concealment, suppression or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any goods or services, whether or not any person has in fact been misled, deceived or damaged thereby. Id.
The Court found that, while the WVCCPA was a remedial statute intended to protect consumers, the statute could not be construed in a manner which would conflict with express legislative mandate. Thus, without additional mandate by the legislature that insurers and body shops must disclose and obtain consent prior to using salvage/recycled OEM parts, the Court found no unfair or deceptive act or practice in the use of salvage/recycled OEM parts.