"These repair shops have systematically defrauded California motorists, ripped them off and betrayed their trust," said Lockyer. "When businesses profit from deceit, they hurt consumers and competitors and should be held accountable."
The complaint alleges the defendants, among other violations:
• Invoiced and accepted payment for repairs or parts that were not provided.
• Told consumers parts were new when they were not.
• Misrepresented the quality of parts and repairs.
• Told consumers a part or repair was needed when it was not.
• Performed additional repairs without obtaining prior authorization from customers.
• Departed from accepted trade standards for repair work without customers' approval.
• Performed work prior to providing customers a written estimate for parts and labor.
Caliber "does not commit fraud"
Caliber was quick to respond to the latest state action against its shops. "The anti-business bureaucrats in the Bureau of Automotive Repairs (BAR) are at it again. The 17200 shakedown suit is based on the same unfounded allegations that the BAR has unfairly trumpeted to the media over the last year. There is not a single new allegation, and the lawyers filing today's case have not independently investigated BAR's actions. Caliber has not - and does not - commit fraud," stated President Bill Lawrence on behalf of Caliber Collision Centers on December 4, 2003.
"Caliber is proud of its track record of quality collision repair. Caliber's repair work is backed by a lifetime warranty. Caliber has one of the highest consumer satisfaction scores in the industry, and receives few customer complaints. Remarkably, BAR's sensationalist allegations are based on neither consumer nor insurer complaints. Instead, this is a desperate political attempt to justify a $112 million budget which funds the enforcement of outdated regulations that are inconsistent with industry best practices.
"The facts will show that BAR is retaliating against Caliber for the two lawsuits Caliber successfully filed against the BAR earlier this year and for Caliber's refusal to accept the BAR's baseless accusations and unfair treatment of small businesses in California. The BAR's calculated actions are another misdirected attempt to justify their existence and save their agency from the budget axe."
Caliber operates 38 shops in California, with facilities in the Inland Empire, Orange County, Los Angeles, San Diego and Fresno. The company also has shops in Texas, and in October 2003 reported annual revenues of $200 million.
Senator Speier weighs in
State Senator Jackie Speier (D-San Francisco) lauded the consumer protection action taken by the attorney general.
Speier authored the 2000 law (SB 1988) that required the BAR to inspect repaired vehicles for auto body fraud. The BAR recently published a summary of those inspections, reporting that 42 percent of the vehicles it inspected were subject to fraudulent repairs.
Speier also authored SB 1648 in 2002 which would have prevented insurers from owning auto body shops. Caliber, which is partially owned by Interinsurance Exchange, the parent company of So. Cal. Automobile Club, was part of the successful opposition to SB 1648.
Last year Senator Speier, as chair of the Senate Insurance Committee, held investigative hearings regarding why certain insurers were refusing to provide the BAR and the Attorney General with invoices from Caliber shops.
Speier stated, "This $50 million consumer protection lawsuit will help uncover the facts for California consumers. I applaud the actions of the Attorney General and District Attorney Egan."
The filing of the lawsuit culminates a one-year investigation of Caliber conducted by BAR, which submitted its evidence and findings to the Attorney General's Office and Fresno County District Attorney's Office. The BAR launched the probe based on information received from the state Department of Insurance and the results of inspections conducted by BAR pursuant to state law. The BAR inspected more than 100 vehicles during its investigation.
The BAR's 2001 enforcement action resulted in a five-day license suspension and three years probation for a Caliber shop in Costa Mesa. The 2003 enforcement actions remain pending, and involve accusations against Caliber facilities in Los Angeles, San Bernardino, Riverside, San Marcos, El Cajon, Murrieta, Costa Mesa, Fresno, Chino, Walnut, Rialto and Redlands.
Along with Caliber and its parent, Caliber Bodyworks, Inc., the other defendant companies in Lockyer's complaint all are wholly-owned Caliber subsidiaries. They include D.R. Long, Chapparone Auto Body of Miramar, San Marcos Auto Body, Richard J. Kellejian, Inc., Corwin Industries and F&R Ventures, all doing business as Caliber in Southern and Central California. Executives of the businesses, including Caliber chief executive officer Matthew Ohrnstein, also are named as defendants.