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Attorney General Lockyer Announces $5.8 Million Settlement with Caliber in Car Repair Fraud Case

Consumers Get Restitution; Department of Consumer Affairs Places 38 Shops On Probation
Thursday, August 19, 2004
Contact: (415) 703-5837

(SANTA ANA) – Attorney General Bill Lockyer today announced a $5.8 million settlement with Caliber Collision Centers (Caliber) to resolve a consumer fraud lawsuit filed by his office and disciplinary actions initiated by the state Department of Consumer Affairs (DCA) that alleged Caliber billed customers for parts and services that were not provided.

"Caliber violated the trust of thousands of consumers who came to its shops to get their cars and trucks fixed," said Lockyer. "This settlement will make whole defrauded victims, and ensure Caliber reforms its business practices and serves all customers honestly and fairly."

Lockyer today filed in Orange County Superior Court a $5.3 million settlement of a consumer protection lawsuit brought against Caliber in December 2003 by Lockyer and Fresno County District Attorney Elizabeth A. Egan. Superior Court Judge Michael Brenner approved the settlement. Separately, the state Bureau of Automotive Repair (BAR), a division of DCA, reached a $500,000 settlement to resolve its disciplinary actions against Caliber. The BAR launched those proceedings in 2003.

"The mission of the BAR is to provide protection, education and assistance to the consumers of this state and the automotive industry," said DCA Director Charlene Zettel. "This agreement with Caliber reinforces our dedication to this mission."

To settle the consumer fraud lawsuit, Caliber will pay $3.3 million in civil penalties and $2 million to cover the costs of investigating and prosecuting the case, and monitoring Caliber's compliance with the settlement. Additionally, Caliber will provide free repairs to victims identified by BAR, and thousands of other eligible customers who had their vehicles repaired at Caliber shops between August 1, 2002 and July 31, 2004.

In the separate settlement with BAR, Caliber will pay BAR $500,000 to cover costs, and all 38 Caliber shops in California will be placed on probation for three years. In addition, 19 of the 38 shops will be suspended from operating for a period of one to five days. Following is specific information on the suspended shops:

Miramar, Mission Viejo, Oceanside and San Juan Capistrano, one day; Chino, El Cajon, Escondido, Fresno, Los Angeles (Wilcox and La Cienega), Murrieta, Redlands, Rialto, Riverside, San Bernardino, San Diego (Daggett), San Marcos and Walnut, two days; and Costa Mesa, five days.

Additionally, Caliber must provide its Costa Mesa employees 24 hours of training. During the three-year probation period, the BAR settlement requires Caliber to allow BAR to conduct random inspections of vehicles undergoing repairs.

Under the settlement of Lockyer's lawsuit, consumers eligible for restitution will fall into two categories. The first includes approximately 100 customers identified by BAR as victims of fraudulent practices alleged in the lawsuit. For those customers, Caliber either will repair the vehicle free of charge, or, if the customer chooses to take the vehicle to another shop, pay for those repairs. If consumers in this category already have had their vehicles repaired at another shop, Caliber will provide full reimbursement of those costs.

The second category of customers eligible for restitution includes about 56,000 consumers who had their cars repaired at Caliber shops between August 1, 2002 and July 31, 2004, and paid more than $1,000 for the repairs.

Caliber must send each customer in this category a letter notifying them they are entitled to a free vehicle inspection at a Caliber shop. All such consumers will receive the notification letter within 170 days from today. If the inspection reveals the repairs failed to conform to accepted trade standards, or to Caliber's initial estimate and final invoice, Caliber must repair the vehicle again at no cost to the consumer.

Consumers in the second category who have their vehicles re-repaired by Caliber can ask BAR to inspect those repairs. If BAR conducts an inspection and deems the repairs deficient, Caliber must repair the vehicle again free of charge.

Lockyer's consumer fraud lawsuit alleged Caliber violated laws prohibiting unfair business practices, and false or deceptive statements. Specifically, the complaint alleged Caliber:

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; and performed work prior to providing customers a written estimate for parts and labor. The settlement of Lockyer's lawsuit includes an injunction that prohibits Caliber from engaging in these alleged business practices.

Besides 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, LTD, Chapparone Auto Body of Miramar, San Marcos Auto Body, Inc., Richard J. Kellejian, Inc., Corwin Industries and F&R Ventures, all doing business as Caliber in Southern and Central California. Certain executives of the businesses also were named as defendants.

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