At its heart, this case is about what a quality body shop should be paid for its work.
Mid Island is a sophisticated collision center in Nassau County, but offering this high-quality service to consumers is not cheap. To provide its professional services, Mid Island employs forty to fifty technicians, some of whom cost hundreds of thousands of dollars to employ. It offers state of the art equipment for its services, puts its team through expensive training and certifications, and meanwhile the work of repairing automobiles has only become more complicated with time--consistent with the explosion of sophistication in automobile engineering.
To keep up with the costs of doing business, Mid Island posts labor rates that are sufficient to recoup its expenses and turn a reasonable profit—as does any business looking to stay afloat.
The problem is, during the time period in issue, one of the biggest insurance companies in the market--State Farm--offered only $50 per hour for labor, which is not only substantially below the posted rate at Mid Island, but was less than the labor rate that courts had sustained against State Farm nearly twenty years prior. If that rate were a legitimate expression of its insurance policy and comported with New York law, Mid Island feared it could be put out of business.
Mid Island thus sued State Farm, alleging that its insistence on the low level rates reflected bad faith under its insurance policy and a violation of New York regulations--which require, among other things, that car insurance companies offer coverage sufficient to successfully repair cars to their pre-accident condition.
In the summer of 2023, the trial-level court granted summary judgment against Mid Island—finding that State Farm could indeed provide coverage at this rate of labor, and sending a dark message to the industry that in the David vs. Goliath battle between local body shop businesses and largescale insurance companies, Goliath would win. After sustaining this defeat in the trial-level court, Mid Island hired Barket Epstein Kearon Aldea & LoTurco, LLP. Led by Alexander Klein, the firm scrupulously analyzed the record and the industry mechanics, and prepared a comprehensive appeal on Mid Island's behalf (attached).
The appeal culminated in an oral argument in October of 2025 (available here) (see 3:29:05 mark).
And finally, on May 27, 2026, the Appellate Division issued a decision—unanimously in favor of Mid Island, reversing the trial court's dismissal, and awarding Mid Island costs. The case will now proceed to trial, where the questions presented by Mid Island's case will be decided by a jury. While the fight is not over, the decision reflects a major victory for Mid Island and for body shops and collision centers across the State of New York.