The AG is going after 22 Midas shops for recommending to resurface rotors after the Bureau spent thousands doctoring rotors to look used and worn and grinding down brake pads.

Imagine that, recommending resurfacing when putting new pads on.

I’m sure the bureau lied about the last time pads were changed, the last time rotors were changed, etc.

God I would love this case. There’s so much to work with. It’s like going to a doctor, lying about symptoms, allergies, and the last time you ate – then suing the doctor for malpractice when you die from an adverse reaction to a known (only to you) allergy. It’s insane.

Soon they’ll learn. It’s just unfortunate it’s gone this far. The lengths the Bureau will go to put shops out of business is phenomenal.

Consider this the wrong way:

http://www.lodinews.com/articles/2009/05/21/news/3_arrests_090521.txt

What would have been the best way to handle this? Let the Bureau look around all they want. Why? Because I’m sure that warrant or subpoena granting access to the shop had more holes in it than a rusted out quarter panel – you don’t fight the Bureau or the Police for that matter – you’ll never win the street law battle.

The real battle is in court – probable cause – do they have an ironclad warrant? Where’s their evidence? Who’s the judge that signed off on it?

Suppress any evidence obtained – of course the constitution protects private property, effects, including business records, etc.  You have rights – enforce them through the legal process… not with a baseball bat.

Small claims court punishes plantiffs – the people who bring the suit. If they lose at the small claims level, their right to appeal is gone. If they try to bring suit in limited civil court, alleging the small claims court trial was mishandled, it’s defeated with res ajudicata, a principle that lets the plaintiff know they’ve already had a bite at the apple – they’ve had their shot.

What I care about for my clients is the right to appeal – that’s where you win or lose. I could care less about the initial small claims court hearing. Win, lose, or draw – I want to get my client to an appeal. If you file in small claims, you can’t appeal – but if you’re a defendant, you have a right to appeal.

In an appeal, that’s where you bring in the legal doctrine to defeat your opponent. We’re talking statutes, legislation, contractual obligations, theories of unjust enrichment, estoppel theory, and everything else under the sun.

You’re allowed to bring an attorney to an appeal. You’re also allowed to file a brief – a motion of points and authorities – basically a memo telling the judge why the case should be decided in your favor.

Small claims court is decidedly informal – no attorneys allowed. Because of this, rules are generally broken in favor of “splitting the baby” – which usually results in some sort of financial liability for the shop or tech. It’s really a glorified ADR (alternative dispute resolution) hearing – not a court of law. The judge doesn’t really apply the law correctly, as he’s usually a commissioner, a practicing attorney filling in, resulting in misapplication.

What you want is a court of law – you want to be in front of a judge – you want to file a brief – you want the judge to know why you’re right.

Any lawyer worth his salt will tell you the trial is won or lost on the written brief.

Who cares if you lose at the small claims hearing – an appeal is where small claims court plaintiffs get slaughtered.

This is no longer the case.

Chances are the shop or tech’s issue doesn’t break the $7,500 limit for small claims court filings, leading you to believe the proper place to enforce your legal rights is small claims court. You’d be wrong.

There are some great things about small claims court – the $20 filing fee, the quickness you’re able to appear in court, the simplicity of the form, and the best part – no one can bring a lawyer. You can seek the advice of an attorney beforehand of course, but it’s you versus them – that’s it.

So what’s the downside?

Small claims court is generally judged by commissioners – local practicing attorneys who “fill in” for the court.

Commissioners generally try to “split the baby” – even if you’re right. Even if you have a signed copy of the invoice, a notation describing the phone call where additional work was authorized, etc. – expect any damages to be halved, immediately upon entering small claims court.  Not to mention the high regard commissioners have for people in the automotive industry – seen as hustlers trying to pull the wool over unsuspecting customer’s eyes.

Also, your right to appeal your decision if the commissioner misapplies the law, misapplies the facts, decides he doesn’t like mechanics. . .

The right to appeal is the one of the most important avenues in the litigation toolbox of a technician – because that’s where the law is looked at – not some whining customer who claims they didn’t authorize work.

So where do you file? Limited Civil Court. You get to turn in a brief of points and authorities on the law, in front of a real judge, where your signed invoice is the only evidence you need.

You want to be able to bring a lawyer – you want to force the other side to have to hire a lawyer. You want the other side knowing you mean business. No one takes small claims court seriously.

Your attorney should take care of your lawsuit while you’re in the shop making money.

That’s the way it should be.

- William Ferreira

In taking a look at the Song-Beverly act, at §1792 of the California Civil Code, each part sold comes with an implied warranty of fitness for the specific purpose:

(b) “Implied warranty of fitness” means (1) that when the retailer, distributor, or manufacturer has reason to know any particular purpose for which the consumer goods are required, and further, that the buyer is relying on the skill and judgment of the seller to select and furnish suitable goods, then there is an implied warranty that the goods shall be fit for such purpose…

(c) The duration of the implied warranty of merchantability and where present the implied warranty of fitness shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the
express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer. Where no duration for an express warranty is stated with respect to consumer goods, or parts thereof, the duration of the implied warranty shall be the maximum period prescribed above.

(d) Any buyer of consumer goods injured by a breach of the implied warranty of merchantability and where applicable by a breach of the implied warranty of fitness has the remedies provided in Chapter 6 (commencing with Section 2601) and Chapter 7 (commencing with Section 2701) of Division 2 of the Commercial Code, and, in any action brought under such provisions, Section 1794 of this chapter shall apply.

What does this tell you? Well, reading in between the lines, through the legalese, 60 days from purchase, you have an implied warranty of fitness in the purchased part. If it fails, it’s under warranty.

Guess what remedies are provided under the commercial code? That’s right – recovery of labor to remove the part and replace it. The part should have worked the first time.

Don’t send the part to the manufacturer. Gather some independent evidence. 90% of the time, the manufacturer will claim installation error or technician error as the result. Right – a technician with 30 years on the job, ASE certified master technician installed a two-bolt alternator wrong.

If you believe that, I’ve got a bridge to sell you.

Don’t let manufactures skirt the warranty, document your position, get them to reimburse you for your time. It’s the law.

Here’s an interesting story about the lien sales issue when the economy is down.

First and foremost, send the clunker to someone else – chances are that 1986 Toyota Corolla that was towed in, sitting for 6 years because it had a “small radiator leak”and the customer parked it will end up needing significant work. After diagnosing it, writing up an estimate, chances are you won’t see the customer again – after all, why pay your labor fee for the diagnostic when they just gave you a free car!

You don’t need the hassle, send the junk to the junkyard. If you are stuck with someone’s junk, write up a simple contract, i.e., in consideration of the diagnostic service performed, I release any and all interest in on 19XX Manf. Model, VIN #…

This will save a lot of hassle later down the road. Seek out junkyards or scrap metal places – this might be a whole lot easier than trying to sell the thing. Think about it, if you spend an hour listing the car with Autotrader, then spend 2 hours answering phone calls and showing it to tire kickers, assuming your hourly labor rate is $100 an hour, include the cost to store the thing, etc…

It’s not pretty, but get rid of the thing. At least a junkyard will probably allow you to recover your diagnostic fee. Chalk it up to a learning experience, and move on – you’re more valuable in the shop.

Saw this website the other day – I’m not surprised it died on the house floor when I looked up this bill – no way manufacturers and their powerful lobbyists allow this to pass.

Although this bill was co-sponsored by a ridiculous number of congressmen and women, this extremely helpful bill for independent automotive repair shops, simply died.

Lets look at why. . .

Ever wonder why sophisticated laptop computers cost a few hundred dollars while scanners that have the ability to work across different manufacturers platforms cost several thousand dollars, with the need to purchase updates every year?

It’s simple – to keep the service monopoly, sending more business to overpriced dealerships, making independents look incompetent and unable to service vehicles as if they were “untrained” on new technologies.

Manufacturers code their computer systems to disguise what is a simple monitoring system to adjust different output voltage from sensor inputs, i.e., taking the MAP and adjusting A/F ratio, and creating the need for system of manufacturer specific diagnostic systems. It’s no surprise that dealerships have this information and technology, but the independent is forced to purchase ridiculously priced machines to keep pace.

There’s two ways a company like SnapOn could get access to this technology. One, either the manufacturers license this information to SnapOn for a ridiculous amount of money, requiring a cut from every unit sold (why do you think there are 20 different keys for the scanners?) or two, reverse engineering the software and or technology independently “breaking” the specific manufacturers code in order to provide it to independent dealers at a reduced cost, avoiding the licensing fee.

If I were running the manufacturer, it would be easy to prevent the latter from happening. Under basic patent law and intellectual property rights, I’d be able to enjoin (a fancy legal term to prevent someone from doing something) start up company X who reverse engineered a scanning machine able to break the manufacturers specific code for diagnostic purposes, from distributing or using said technology as this was a protected “trade secret” computer technology and monitoring system that took hours and hours of R&D to create (no, it didn’t) that manufacturers probably filed with the US patent office, thus invoking the presumption of protection of “trade secrets”.

So If company X was able to create a cheap scanner for manufacturer Y, and I’m that manufacturer, I sue to enjoin them from manufacturing it, tying them up in court for hopefully, if my law firm knows IP law (Intellectual Property Law – the area of law that deals with patents or other protected information), for several years before they’re allowed to start providing this service.

If I lose, they’ve wasted 2 years and thousands of dollars in legal fees without the ability to sell their product. Eventually, I bet, if I were the manufacturer, I’d be able to buy their company through a shell corporation or simply outright on the cheap and just fire everyone, nixing that whole competition thing.

This would force people who need diagnostic services for my vehicles to head to the dealership, as the license fees for said technology are too high for the average independent to afford constant scanner updates, but we have an agreement that dealerships get access for free. Incidentally, this means more money in the manufacturers pocket.

Aren’t monopolies grand?

I hope the legislature pulls through and re-submits a like minded bill, providing access to independents to the “special code” to monitor systems and properly diagnose them with simple scan tools that are now available on the market.

It’s criminal for independents to have to pay thousands of dollars a year for “updates” for a system to measure voltage readouts for sensors and modules, a relatively easy thing for a computer to do. I hope the FTC or someone else recognizes how this process violates just about every goal of anti-trust legislation, standing up for independent repair facilities that are just as competent, if not more so, than dealerships.

Hey, you never know, maybe I’ll be able to take a shot at em’ one day.

- William Ferreira

I saw this article in Popular Mechanics the other day and it reminded me of what a pain the work order can be – especially in California. This article uses a New York invoice, but the principles are the same.

You must have a check box if they want the old parts back, you must separate the state charged environmental fees for waste disposal, you must separate parts and labor, tax is separate, you must place to odometer reading at the time of service, and the name of the customer’s first born child must be present on the first page. . .

I understand the principles behind the requirement for each section – in theory. It prevents fraud, complies with requirements, etc. – however, in practice, it can be a pain.

The work order has been the bane of a shop’s existence at times, and at others, a life saver. It works both ways. It’s pretty hard for the customer to complain they never authorized a certain amount of work when their signature is clearly on the work order, along with notations describing phone conversations post diagnostic authorizing further repair – however, the problem is upkeep.

It’s a pain to make those notations, it’s a pain to separate every little detail. We’re technicians – our job is in the shop, in the bays, under the hood, and underneath the lift – not filling out paperwork.

To ignore the work orders would be the epitome of foolishness – it’s your only protection against claims of fraud – and the only thing standing between you and your hard earned money, not to mention the Bureau of Automotive Repair and your license.

Sure it takes 5 extra minutes to do the job. If you run your shop as a solo, it can take away from your labor hours – but don’t overlook it.

When a client asks about the validity of their work order, i.e., contract, and whether or not we can collect, the first thing I ask them is whether or not they did it right – it could be the difference between an ironclad mechanics lien that’s relatively painless to foreclose, with the ability to hold their car as leverage, and having to sue a customer under unjust enrichment in civil court 6 months later after you’re forced to release the car.

It goes without saying that one should never overlook the work order. Consumers, including the bureau, may think its for their protection – creating requirements to force techs and shops to engage in full disclosure, but its not for the customers –

It’s for the shop.

The work order is proof of work that was done, its proof of compliance with statutes and legislation creating contractual on the part of the vehicle owner, and in the legal world, when you need to collect, either by foreclosing on a mechanics lien or suing on your behalf – the work order is exactly what you need.

Make sure you use the work order to protect yourself.

William Ferreira

I saw this article the other day about the economic effects the current climate will have on the automotive repair industry.

It’s twofold – yes, more people will put off routine maintenance and drive older cars as credit evaporates for new car purchases, leading to more work for technicians and shops – but the concern I have are the types of scams people are willing to pull as desperation sinks in when their cars need repair.

It’s a fact of life that when times get tough, people’s moral compass doesn’t always point north. There are many instances where a customer will authorize thousands of dollars of major repair, only to come back, claim he never authorized said repair, call the BAR, the BBB, and file a small claims court action against the shop, threatening to sue on every cause of action under the sun.

Another favorite is the payment plan option – where a customer needs to pay over time, but needs the car for work, taking the kids to school, etc., and the shop agrees, only to never see another payment or the car ever again.

One scam I heard of was having the car work finished, then using a spare key to drive the car out of the shop’s parking lot, using bolt cutters to cut gate locks, then taking said car to the local dealership, using it for a trade in the next day, walking away with a new car using your fresh work as a down payment.

So how do you protect yourself from these types of situations?

Here are some helpful hints.

If you agree to take payment plans, draw up a simple contract that outlines the specific terms – it can be simple – I agree to pay in weekly, monthly, etc…

California provides repossession of a car derived from a shops possession through fraud, device, or trickery – if you have someone who pays with a credit card, then disputes the charges, or reneges on a payment plan, puts a stop order on a check, repossess the car as provided by statute, but make sure you do it right – the last thing you need is a charge of grand theft – but repossess that car. Don’t let your hard earned work walk out the door without a fight.

Make sure there’s a attorney’s fees provision in your work order – somewhere. An attorney’s fee provision, along with costs to collect in the event of breach of contract, allows the shop to collect the costs of collection of bad debt, from the repossession, taking someone to court, and or the costs to foreclose on a mechanics lien – a simple clause will make sure those costs become the defaulting customer’s responsibility.

Lock finished cars inside the shop – I doubt the aforementioned customer described above would enjoy the various felonies of breaking and entering, grand theft, and burglary that would accompany such endeavors.

Most importantly, make sure your work orders are done right – sometimes this is the only evidence you have of work performed as many times the car in question mysteriously disappears before a trial, hearing, or other judicial action.

Try and make the first payment, if the shop does a payment plan – after they draw up a contract – to cover all the parts. As shop owners, we can’t stand losing out of pocket money for parts. Labor losses are a little easier to stomach – as lost time is easier to deal with than the parts bill that still has to be paid – even if the customer doesn’t.

Say you perform $500 worth of work. The customer wants to pay $100 a week for 5 weeks. Your parts cost (not the invoice price, but your cost) was $125. Make the minimum first payment $125. You can wait a month or two for a hearing to recover your labor costs, but the parts house doesn’t understand “I’ll have it next month.” You cant afford to have your account closed.

Understand that after 15 days of presentment of invoice, 30 days after completion of work, your right to file a mechanics lien disappears. This means 30 days after completion, despite your iron clad, valid mechanics lien, you must release the car – and sue in court for you hard earned $.

What does this tell you? File the lien. Inform the customer you understand they need some time, or that they over extended themselves and are unable to pay for your services, but you have to file the lien within 30 days – it’s the law. If you don’t, you’ll be breaking the law holding their car any longer, along with losing your possessory mechanics lien. You can always stop the mechanics lien process, but after 15 or 30 days, depending on the circumstances, you can’t always start.

I hope these tips will help you during this very lucrative time for the automotive repair industry.

- William Ferreira

I saw this article from motor the other day and can’t help but agree. It goes without saying that the technician needs to be prepared for new technologies, including hybrids and other forms of green technologies as our country moves away from traditional fuels – however, I was wondering who, beyond the dealerships, is going to work on these vehicles?

The lack of specialized technicians for hybrid technologies creates a marketable opportunity for a technician to specialize in hybrids. Like claiming specializations in high end vehicles, no one questions your ability to work on the Caliber when you advertise specialties in hi-end luxury cars. If you become the hybrid car, no one questions your ability under the hood.

When I first saw the innards of a hybrid motor and transmission at the LA auto show last year it became rather clear – they turned engines, transmissions, and dif’s into a giant alternator – that’s it.

It really is that simple – once you break things down into their different components, the windings surrounding the rotating mass acting as a giant magnet, polarizing and creating a charge, bushings, diodes, and voltage regulators… that’s all there is.

Of course, you’ll need to study car specific training manuals to make sure you don’t cross a wire or two and fry a battery, but if you break the system down into components, you can begin to understand the technology and corner the market for hybrids in your area.

Furthermore, chances are battery changes are going to predominate hybrid work.

So next time you’ve got an alternator down – instead of sending the core back right away – take one apart, check out the components, see how the bushings look, check out the magnets on the shaft, try replacing a diode or two or the voltage regulator assembly – and maybe the practice will help you understand the technology for hybrids, perhaps cornering a market on what could be an emerging practice in automotive technology.

- William Ferreira

Please bear with us while we work on finishing up our site!

Soon our firm will be open and able to help you with any automotive legal issues you may need assistance with.

See you soon!

- Automotive Defense Specialists