Sunday, 30 June 2002 17:00

100 OC repair shops sued over BAR violations

Over 100 auto repair shops, including at least six body shops, have been sued as a group in Orange County for violations of the State's Business & Professions Code (which includes violations of B.A.R. regulations). The suit, Consumer Enforcement Watch Corp. v 7 Day Tire, Muffler & Auto, et al. was filed April 11 in Orange County Superior Court, Santa Ana. It alleges that the various defendant repair shops harmed consumers when they violated B.A.R. regulations including failure to renew their registrations on time, writing improper estimates, failing to secure proper approval for estimates, and failing to return parts removed from vehicles.

Companion suits were later filed in Los Angeles and Sacramento against shops in those areas.

The law suit asks that the shops agree not to violate B.A.R. regulations for at least four years and asks for certain money damages including disgorgement of profits from repairs made illegally (i.e., if the estimate was improperly prepared or approved). After filing the legal action, the plaintiff's attorneys then contacted the repair shops they had sued and offered them the opportunity to settle the action if they agreed not to violate B.A.R. regulations and paid amounts ranging from $1,000 to $5,000.

The suit was filed under California's Business & Professions Code Statute 17200: "Unfair Competition." That law includes a section that permits parties to file lawsuits on behalf of the general population of the State, a law commonly known as the "private attorney general act." If the attorney prevails on behalf of the people of California, then he can ask the Court to award hourly fees and expenses incurred in bringing the lawsuit, which would be paid by the defendants.

Plaintiff's attorney Allan Hendrickson of the law firm Trevor & Associates in Beverly Hills said that he was motivated to file the suit after seeing how frustrated his clients were with shoddy auto repairs, mostly mechanical. "The amounts involved were usually under $2,000 and that's too small for any attorney to file a suit. So I would coach them on how to file a claim on their own in small claims court." He admits that he was one of the consumers who got the shaft at an auto repair shop. "I took my car in when I had trouble starting it. They charged me for a new starter and I later found out it was just a loose battery cable. Then I found out it wasn't even a new starter - it was rebuilt and they didn't show it that way on the invoice." Hendrickson said that after his own experience and hearing "nightmare stories" from clients, he decided that the private attorney general suit was the way to go.

At least one attorney who counseled the defendant shops isn't so sure Hendrickson's motives were so pure. Katie Jacobs of Jacobs and Gregory in Riverside represents the California Automotive Service Councils (ASC). She said that, "If they (the plaintiff's attorneys) can get an average settlement of $2,000 from 100 shops in a two month period, that would be quite some payoff. When you look at it from the shops' point of view, if you are in this alone, paying $2,000 to $5,000 is the cheapest way out, especially since this group (the plaintiffs) would take payments (instead of one lump sum)."

Jacobs also noted that instead of naming actual repair shops in the lawsuit, the attorneys named "John Doe" defendants. "It makes it more difficult for the individual shops being sued to get together and organize a defense." But get together they did at a meeting in Orange County sponsored by ASC and a group known as the Automotive Repair Coalition (ARC) whose membership is mostly larger automotive repair shop operators. The group was addressed by ARC Executive Director Marty Keller who is a former B.A.R. official and by attorneys including Jacobs who volunteered their time to assist the group.

"The plaintiffs made a mistake," said Jacobs, "in suing a Bridgestone/FireStore company store, which brought that large corporation's attorneys into the matter." Attorney Edward D. Sybesma, Jr. of the law firm Rutan and Tucker in Costa Mesa, representing the Bridgestone/Firestone store, took the lead as defense counsel and asked the Court to grant an early hearing on the matter so that the rest of the shops would not have the expense of filing their answers to the suit until after the demurrer hearing. Sybesma told shop owners present at the meeting that the lawsuit was unspecific as to what each defendant had done and was also improper since there was little in common between the various defendant shops.

"In looking at why the various shops were picked," explained Jacobs, "there was not a set pattern and no real thread of commonality as the law requires for suits like this." She noted that "most but not all" of the shops were owned by ethnic minorities, that the locations were spread out around the county, a few of the shops were shown on the B.A.R. website as having not paid registration fees, and while a large number had a record of one or more Notices of Violation, eleven of the shops had no violations.

Plaintiff's attorney Hendrickson disagreed with this characterization of the defendants as a benign group. "Some of them had three to four pages of B.A.R. violations."

Judge grants defense motions

Orange County Judge William M. Monroe agreed to an early hearing and then, at that hearing, agreed with the defense motion and effectively told the plaintiff's attorneys to go back and rewrite their complaint; that it could not go forward as written. That action effectively put the matter on hold.

"We've now amended the complaint," said plaintiff's attorney Hendrickson, "and fully expect it to go forward."

"The amended complaint," said defense attorney Sybesma, "still doesn't adequately address the joinder (commonality among defendants) issues." He indicated that the defense attorneys still intend to have the case dismissed on demurrer, which would be the least costly time for the defendants.

Some shops settle

In the meantime, according to plaintiff's attorney Hendricksen, about 35 of the defendants have been dismissed from the case, including the Bridgestone/Firestone store. Some of the dismissed defendants (not including Bridgestone/Firestone) settled for amounts ranging from $1,000 - $4,000. "We asked for different dollar amounts based on the seriousness and the number of violations," said Hendrickson. He said shops that settled also agreed not to commit any more violations for at least four years. "If they do, there's a safe harbor or provision in the law that gives them the opportunity to cure (correct) the violation. We're not just sitting here waiting for them to trip up so we can go after them again. We're not trying to put anybody out of business."

Cautioned attorney Jacobs, "If you do not live in Orange County or even if you do and were not named in this lawsuit, do not breathe easily. It could be only a matter of time before some attorney in your area decides to pick on you."

Attorney Katie Jacobs can be reached in Riverside at 909-781-9091. ASC members are entitled to a brief, free consultation. ARC Director Marty Keller can be reached at 916-447-8175.