The owners of 753 “potentially dangerous” salvaged used cars sold by the Hertz car-rental firm can either get their money back or have their autos inspected and fixed free, the San Diego County district attorney’s office announced Wednesday in settling a lawsuit.
All 753 cars are Hertz Corp. rentals that had been in crashes, then sold from 1984 to 1987 through a Chula Vista auto auctioneer without the document that would alert buyers that the cars had been in serious collisions, Dist. Atty. Edwin L. Miller Jr. said at a press conference.
Under the settlement of the suit filed by the district attorney’s office against Hertz and the Chula Vista-based County Auto Pool, Hertz agreed to buy back or to inspect and repair the cars, Miller said. The pact could yield as much as $2 million in benefits for the 753 owners, Miller said, calling the case the “largest consumer-protection settlement” ever produced by his office.
Hertz executives and the company’s San Diego lawyers, however, said the agency figured the program would cost a maximum of $1 million and insisted that none of the cars were, or are, unsafe. And one of the lawyers, Robert G. Steiner, called the settlement “discriminatory enforcement, not consumer protection.”
As many as 60 other private firms and government agencies followed the same resale procedure Hertz did, but only Hertz was sued, Steiner said.
Although Hertz believed it was “free from fault or illegality,” it agreed to settle the case “as a safety matter” and to show it is a “very responsible company,” Steiner said. Besides, though the settlement also included the payment of civil penalties and fees--$285,000 by Hertz and $50,000 by County Auto Pool, or $335,000--to the district attorney’s office and to the Department of Motor Vehicles, it was still more economical than years of litigation, Steiner said.
According to the suit, Hertz sold wrecked cars from its California fleet through County Auto Pool, unlawfully passing along with each a certificate of title--the familiar DMV “pink sheet"--that provided no clue that the cars were salvage vehicles.
California law says a car that has been so banged up in a crash that the owner finds it uneconomical to repair must be sold not with the “pink sheet” but with a “salvage certificate,” which lets buyers know they are buying a damaged car, Deputy Dist. Atty. Clifford P. Dobrin said.
The cars suffered “frame damage, brake damage, steering damage--that sort of thing,” a DMV investigator, John Acuna, said at the press conference.
About 1,040 Hertz cars that should have had salvage certificates were sold through County Auto Pool from July 1, 1984, through June 30, 1987, the suit said. Of those, 753 still do not have the salvage certificate, Miller said.
Hertz contended that the law originally required only insurance companies to obtain salvage certificates before sale. The law has been amended several times, but, until 1987, it was unclear whether private and fleet owners also had to obtain salvage certificates, the company said in a statement.
Because the law was fuzzy, Hertz did not believe the cars it sold through County Auto Pool during those three years fit the definition of salvage vehicles, the statement said.
Since the law was changed in 1987 to specify that fleet owners must apply for salvage certificates, all damaged Hertz vehicles have been sold with that document, the statement said.
There is “no indication” that autos Hertz sold through its own used car lots from 1984 through 1987 were in any way defective or that any cars other than Hertz autos sold then through County Auto Pool were lacking the correct documents, Miller said.
Although Miller repeatedly said at the press conference and in a statement distributed to reporters that the 753 remaining cars could be unsafe, he conceded that his office has “no evidence of injury” to drivers or passengers.
Hertz lawyer Steiner adamantly denied that any of the cars were dangerous. “There are no reports of unsafe cars on the road arising from these sales,” Steiner said.
Owners of the 753 cars will be receiving a letter from Hertz in the next 60 days outlining the repair or buy-back plan, Miller said.