Friday, 31 May 2002 17:00

CA regulators shut down Caliber Collision shop

Caliber Collision Center's Costa Mesa, California location was closed for a week by the California Bureau of Auto Repair (BAR) as part of a settlement agreement reached by Caliber and BAR following the BAR's allegations of fraud, gross negligence, faulty record-keeping, and failure to comply with the regulations of the Automotive Repair Act.

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The lot at Caliber Collision Center on Pomona Ave. in Costa Mesa is empty and the gate closed on Monday morning as a Caliber employee explains to a customer why the shop is closed. Several customers drove up after the notice of closure had been posted by BAR inspector Larry Merril.

Caliber Collision Centers, the nation's largest collision repair consolidator with 62 shops in California and Texas, has come under increased scrutiny lately since it accepted a financial investment from the Inter-Insurance Exchange which operates insurer Auto Club in California and Texas. A bill was recently introduced in the California State Senate that would make such investment unlawful.

The BAR's complaint alleged numerous failures to comply with State regulations, including invoicing for parts not actually provided, the use of unclear abbreviations on an invoice to describe service work, failure to state clearly if a part was new, used, rebuilt or reconditioned, failure to identify all crash parts used in the repair as OEM or non-OEM aftermarket parts, failure to obtain a vehicle owner's permission before repairing the vehicle and failure to properly annotate a repair order when a change to the original estimate was authorized verbally by a customer.

Pays $8,000 fine

To settle the complaint, Caliber admitted to the truth of all the charges except for the fraud allegations, which it denied. The company agreed on February 13 to pay the BAR $8,000 as partial cost recovery for the investigation, close its Costa Mesa shop for five days beginning April 29 and to prominently post a sign indicating the reason for suspension. The shop will remain on probation for three years with random inspections by BAR personnel.

First disciplinary action for Caliber

Caliber President William Lawrence told Autobody News that the problems arose out of a repair made in March 2000, that they were the result of estimator and administrator errors and that "of the 95,000 cars we've repaired since December 1999, there have been less than 20 BAR inquiries and this is the only one that resulted in disciplinary action."

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Lawrence said that Caliber cooperated fully with Allen Wood, the BAR official in charge of the matter. "We take this seriously. They sent a clear message. They're doing their jobs and we're endeavoring to do quality work with every single repair." He said that systems have been put in place - including enhanced computer software and additional employee training in State auto repair regulations - to ensure Caliber stays compliant with BAR regulations. "We're a different company today than we were then," said Lawrence. "We're not going to end up being defined by this Costa Mesa incident."

BAR faults paperwork

BAR's Allen Wood, reacting to Lawrence's comments, said, "They cooperated? Perhaps we were in different meetings. Their paperwork was terrible. No accountability, no accuracy. They could not produce the same document twice. We would look at the document on a completed repair, then ask for the same (computer generated) document again a week later and the two would be different." He said on some jobs the repair order had been changed from replacing a part to repairing it, yet it was unclear from the repair order that the customer had ever been informed of or approved the change as required by BAR regulations.

Caliber making changes

Caliber's Lawrence said that Caliber has spent heavily to improve its systems and to develop a better interface between its estimating systems and its management systems. "We have put into place a system to 'lock' the file after the job is complete to prevent it from being altered without proper authorization," he explained. Previously, Caliber would close out the estimate but it would not be locked and the shop personnel could reopen it for "review."


"If they've made that change, good." responded Wood, "The real problem we had with Caliber was their process of reconciling their documents. Our investigators would ask for documents (repair orders) and be told they weren't available because they hadn't been reconciled yet." He gave the example of Caliber receiving an insurance check on a completed job and then going back and making their paperwork match the check. "That's not allowed. The insurance company may think it's fine, but we don't. The whole industry must play under the same rules."

BAR's lead investigator in the matter was Larry Merril, a California State employee for 3½ years with over twenty years of auto body repair experience. Said Merril, "The law requires first a complete estimate of repairs to be performed and then an invoice for work actually done be given to the customer. And that invoice is final. What we found was that, at a later date, they would adjust the invoice to make the dollars equal what they'd been paid by the insurer."
Problems go deeper than just Caliber

Merril said this is an issue not only at Caliber, but at other shops that keep all of their documents on a computer instead of hard copy. "We want to see their records reflect the exact same invoice as they gave to the customer." Merril noted that this investigation required several months of time including the initial investigation of the consumer complaint, the random check on other repair orders and then the extensive examination of Caliber documents during the final stage of the investigation known as "discovery."

Oil cooler, apron panel, fender not replaced

The BAR's specific complaint cites three incidents beginning in March 2000, including invoicing one customer $481.96 for an oil cooler that was not replaced on a '91 Toyota Land Cruiser during a $6,200 repair job paid for by Valley Insurance.

In the second incident, also in March 2000, the BAR alleged that a right side apron panel on a '99 Toyota 4Runner was invoiced for in the amount of $474.03 but not replaced. 21st Century Insurance had paid $7,546.51 total for that repair.

The third incident cited involved a February 2000 repair in which Caliber had not replaced the left fender limited on a '97 Toyota 4Runner, with the total value of work not performed placed at $305.18.

Started with alignment issue

Lawrence said the BAR became involved in the Land Cruiser incident after the vehicle's owner returned his car to Caliber complaining about uneven tire wear. Caliber personnel did not handle the complaint themselves but instead referred the customer to the subcontractor who had performed the alignment. The customer was not satisfied by the alignment shop and complained to the BAR. "We later bought the guy four new tires and paid for a new alignment," noted Lawrence. When the BAR investigated the repair, they found that the oil cooler had not in fact been replaced.

"When we get a complaint," said Merril, "we look over the complete job. Many times we find the customer has no idea that work he was billed for really wasn't done." Merril said the Land Cruiser investigation then led to a random check of other records at that Caliber location and resulted in the second and third incidents in the BAR complaint.

As to the shop shutdown, BAR's Wood said that during the suspension period the shop could only work on Caliber corporate-owned vehicles or on commercial (fleet) accounts. "They can't sublet any work that was taken in at that shop, even to other Caliber locations," he said. "Our people will be on site Monday morning to make certain that they are complying with the settlement."


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