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Attorney General Lockyer Files $50 Million Consumer Protection Lawsuit in Car Repair Fraud Case

Caliber Collision Centers And Its Subsidiaries Billed For Phony Repairs and Parts
Thursday, December 4, 2003
Contact: (415) 703-5837

(FRESNO) – Attorney General Bill Lockyer today filed a $50 million lawsuit against Irvine-based Caliber Collision Centers and its subsidiaries, alleging they committed widespread fraud by billing consumers for services and parts that were not provided.

"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 – filed in Fresno County Superior Court by Lockyer and Fresno County District Attorney Elizabeth A. Egan – seeks at least $50 million in civil penalties for violations of state laws prohibiting unfair business practices and false or misleading statements. Additionally, the complaint asks the court to require the defendants to pay restitution to defrauded consumers.

The court also should permanently prohibit the defendants from engaging in the alleged unlawful conduct, the complaint states. All told, the complaint alleges the defendants violated nine separate state laws and three regulations administered by the state Bureau of Automotive Repair (BAR). The BAR in 2001 and earlier this year filed separate, administrative enforcement actions against Caliber Collision Centers (Caliber).

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, 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. 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 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.

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.

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