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1HomePageMap small w 0816Local news stories affecting the auto body industry in California, NevadaOregon, Washington, Idaho, Montana, Hawaii, Alaska and Wyoming

California Insurance Commissioner Steve Poizner today filed a cease and desist order against two California men and several corporations for allegedly operating unlicensed insurance companies and using deceptive and illegal telemarketing. Robert Lewis Chapman, James C. Sletner and several corporations they own and manage, including SafeData Management Services, Inc., d.b.a. Consumer Direct Warranty Services, Warranty Administration Services, Inc., and Warranty Administration Solutions, Inc., face substantial fines. 

“If you want to sell insurance in California, you must obtain a license, have adequate financial reserves and you must not deceive consumers,” said Commissioner Poizner. “In order to protect California consumers, there are specific requirements for insurance companies seeking to do business in California. If companies do not abide by these requirements, they will not be permitted to sell insurance in our state.”

The Department of Insurance alleges that Consumer Direct sold insurance policies and vehicle service contracts without a license and in blatant disregard of numerous, longstanding legal requirements designed to protect California consumers. The unlawful insurance policies, which promise to repair breakdowns to engines, transmissions and other parts, typically sell for $1,500 - $2,500. Chapman, Sletner and Consumer Direct each face a fine of $5,000 for every day they conducted business in California, or five times the revenue received from California consumers, whichever is greater.

Douglas Auto Body in Pasadena, CA, founder, George K. Daghlian, passed away May 22nd, leaving Takouhi, his wife of 47 years, four children and many grandchildren. His oldest son, Armen, and youngest son, Kevin, started Douglas Auto Body with George, and will continue to operate the collision repair facility.  The funeral was held at Forest Lawn Hill's Red Church on May 27th, and a memorial dinner was given at Verdugo Hills Country Club in Glendale.

George had an unusually extensive background in the collision repair industry, both in the U.S. and abroad. He began working in a body shop at the age of 13, in Aleppo, Syria. At the age of 18, he opened his own shop in Kuwait, and five years later he returned to Aleppo, and opened a shop there. When he saw that life in Syria could become difficult and even dangerous, he brought his family to the United States and opened a shop in Pasadena, in 1987. The shop grew every year until in 2006, George could celebrate fifty continuous years in the collision repair business, with a shop that had now grown to about 50,000 square feet.

The California Autobody Association (CAA) learned last week about fifty-three Orange County estimators and owners that were arrested and charged on felony insurance fraud following a 5-month investigation by the Orange County Automotive Insurance Fraud Unit that targeted auto body repair shops. The OCDA conducted 152 undercover operations throughout Orange County between January and May 2010.

These undercover sting operations have been going on periodically since the early 2000’s throughout California. An undercover investigator will bring a car into a shop in which the investigator wants the shop estimator to help him / her defraud their insurance company. At this time, the undercover investigator makes it clear that it is his / her intention to present this estimate to the insurer to commit insurance fraud. At this time, the investigator is recording or videoing the
conversation.

Attorney General Edmund G. Brown Jr. has announced that he has asked to intervene in a lawsuit in order to protect newly adopted motor vehicle emission standards that are estimated to save nearly two billion barrels of oil and reduce greenhouse gas emissions by approximately one billion tons.

Brown filed a motion to intervene in the U.S. Court of Appeals in support of the federal Environmental Protection Agency (EPA) in a suit brought by energy companies and other industries challenging the EPA's authority to enforce the tough emission standards beginning in 2012.

"The thousands of barrels of oil spilling in the Gulf of Mexico each day are a graphic reminder that we need to cut oil consumption in America," said Brown. "These regulations would do that, as well as vastly reducing pollution from tailpipe emissions."

The fallout from the Orange County auto body sting operation which swept up 53 shop owners and estimators earlier this month has already cost many of those implicated their DRP arrangements. Several major shops involved, with the notable exception of two of the state’s three Sterling shops owned by Allstate, have already had their DRPs cancelled by their insurer partners.

Details of the specific charges are still forthcoming, but those involved will likely be charged  under CP code 550b(2), which reads, in part:

(b) It is unlawful to do, or to knowingly assist or conspire with any person to do, any of the following:

(1) Present or cause to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact.

(2) Prepare or make any written or oral statement that is intended to be presented to any insurer or any insurance claimant in connection with, or in support of or opposition to, any claim or payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact.

More than 300 auto industry representatives, community leaders, students, faculty and administrators celebrated the official grand opening of the 10,000 square-foot Automotive Partners Building at Cerritos College on Friday, May 21.

The event, held inside the facility's glass-lined showroom, marked the culmination of years of planning, fundraising and collaboration between the college, public officials and local auto dealers. Cerritos College apportioned community bond funding toward the $5.1-million facility, and major private donors included the Southland Motor Car Dealers Association (SMCDA) and the Greater Los Angeles New Car Dealers Association (GLANCDA), who each contributed a half million dollars toward the facility. L. A. County 4th District Supervisor Don Knabe and the Conant Auto Retail Group each provided gifts of $100,000.