2 Car Dealers to Settle False-Advertising Suit

The owners of two car dealerships agreed Tuesday to pay $32,000 to settle a state attorney general’s lawsuit alleging that they misled customers in Van Nuys and Orange County through false advertising.

Jim Smathers and Marvin Smith, who own Performance Lincoln-Mercury in Van Nuys and Cypress Nissan/Datsun in Cypress, agreed to pay the state $25,000 in civil penalties and $7,000 in attorneys’ fees and costs to settle the suit, which accused them of violations at both dealerships.

The suit accused the two Orange County businessmen of advertising low interest rates on cars for which they had increased prices and picturing vehicles with optional equipment not included in the advertised price. The men were also accused of advertising prices for vehicles without including the cost of dealer-installed options and misleading customers on the terms of lease and purchase agreements.

Didn’t Admit Guilt

Smathers and Smith agreed to pay the penalties without admitting guilt.

Al Spar, attorney for the merchants, said they deny all of the charges but agreed to settle the suit because it would have cost too much to fight it.

“They don’t have the money to litigate it,” Spar said, “and the publicity would have been terrible.”