Salvaged Car Buyers Sue Insurance Company
Angry consumers have filed lawsuits in Cleveland, Columbus, Dayton, Toledo, Celina, Napoleon and Ottawa, in the last few weeks, against State Farm Insurance Company and local car dealers for not telling the truth about salvage cars they were selling and which the insurance company had totaled out and then resold.
Indiana authorities caught State Farm reselling wrecked cars in violation of its state law more than eight years ago. Indiana went to court and in 1998 a judge ordered the company to stop and the company is reported to have said that it would. Apparently it didn't.
Instead, the practice continued and between 1997 and 2002 State Farm resold, nationwide, at least another 30,000 totaled vehicles without salvage titles.
In Ohio alone, violating the law like that could have cost State Farm $25,000 per vehicle in government fines alone, with one-fourth of each fine ending up in the local county treasury.
But in a private deal negotiated quietly between State Farm and 49 state attorney generals offices, the company agreed to pay what is reported to average out to about $1,300 to each consumer who would give up all their rights against the company, although industry standards and publications report a motor vehicle that has a salvage title is worth between 20% and 50% less than the value with a "clean" title.
For their part in helping make the deal work, the state attorney generals got paid one million dollars by State Farm, to be divided up between them anyway they wanted. Consumer, on the other hand, got far less and still don't know how safe --- or unsafe --- their vehicles may be.
Because the deal appears to be endorsed by state attorneys general, including Ohio's Jim Petro, many consumers believe the deal must be fair. Some, however, don't agree.
In a class action case filed in Dayton (Montgomery County):
Maria Loftis v State Farm, A & B Auto Sales, Jeff Miller Auto Sales
When Mr. And Mrs. Loftis bought a 1987 Chevrolet Monte Carlo Super Sport in Preble County last year, they thought the Super Sport would be safe transportation and ideal to restore to near "show" quality for car shows. That changed last September when they got a letter from the state of Ohio that said their car was just "salvage" with a title that was no good. Worse yet, they would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. Sometime in 1999 the vehicle had been declared a total loss by State Farm in Ohio. State Farm retitled the vehicle into its own name in Montgomery County and then sold the car A & B Auto Sales with a "clean" title that hid the fact that the car had been totaled. A & B rebuilt the car and then dumped it on the used car market without retitling the vehicle as "salvage" either. A & B sold it to Jeff Miller Auto Sales in New Lebanon, where it was later sold to James Myers and Myers later sold it to Mr. And Mrs. Loftis. No one ever told the Loftis family about the vehicle's history or that it had been declared salvage. State Farm offered Mr. and Mrs. Loftis $1,000. They have filed a class action against State Farm, asking the court to allow them to represent all State Farm consumer victims in 25 southwest Ohio counties: Darke, Shelby, Logan, Union, Franklin, Miami, Champaign, Madison, Preble, Montgomery, Clark, Pickaway, Greene, Butler, Warren, Clinton, Fayette, Ross, Hamilton, Clermont, Brown, Adams, Scioto, Pike, and Highland counties, where almost 100 other victims reside.
In Columbus (Franklin County):
King v State Farm, Ricart Ford, Huntington Bank
When Larry King bought a 2000 Mazda pickup truck at a Columbus car lot in 2003, he thought the Mazda would be safe and reliable transportation. That changed last September when Larry King got a letter from the state of Ohio that said the truck was just "salvage" with a title that was no good. Worse yet, he would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. In 2001 the vehicle had been declared a total loss by State Farm in Kentucky. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Someone bought the vehicle from State Farm and rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Ricart Ford where Larry King saw it. No one ever told him about the vehicle's history or that it had been declared salvage. His vehicle's accident damage included at least the front end and airbag system. For Larry King's car that cost him nearly $6,000, State Farm offered $1,400.
In Cleveland (Cuyahoga County):
Kendall v State Farm, Sunnyside Auto, FirstMerit Bank
When Darren Kendall bought a 1998 Nissan Sentra at a Middleburg Heights car lot in December 2002, he thought the 1998 Nissan Sentra would be safe transportation for driving to and from his home and work and Cleveland Community College where he was a college student. That changed in September when Darren Kendall got a letter from the state of Ohio that said his 1998 Nissan Sentra was just "salvage" with a title that was no good. Worse yet, he would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. Sometime in 1999 or 2000 the vehicle had been declared a total loss by State Farm in Michigan. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Someone bought the vehicle from State Farm and apparently rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Sunnyside Automotive, Inc., where Darren Kendall saw it. No one ever told Kendall about the vehicle's history or that it had been declared salvage. In fact, when he was buying it, Sunnyside specifically told Darren Kendall that it was not salvage. In his case, the car's frame is still bent. Although his car cost more than $5,100, State Farm only offered him $1,000.
In Cleveland (Cuyahoga County):
Winners v State Farm, FBS Autosales
When Brian Winners bought a 1996 Jeep Grand Cherokee out of the Cleveland Plain Dealer want ads in January 2000 he thought the Jeep would be good, reliable and safe for driving to and from his home and work. That changed in September when he got a letter from the state of Ohio that said his 1996 Jeep Grand Cherokee was just "salvage" with a title that was no good. Worse yet, he would have to get a new title issued that was branded as a "rebuilt salvage" vehicle. Sometime before 1998 the vehicle had been declared a total loss by State Farm. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. FBS Autosales, Inc. and Boris Nulman bought the vehicle from State Farm and apparently rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way into the newspaper want ads where Brian Winners saw it. Thinking it was a good deal, he paid $16,000 for what turned out to be a nothing more than a totaled out vehicle. State Farm offered Winners $1,400.
In Toledo (Lucas County):
Veler v State Farm, Franklin Park Lincoln Mercury
When Teri Veler bought a 1995 Buick LeSabre at a Toledo car lot in January 2002, she thought the 1995 Buick LeSabre would be safe and reliable transportation to and from work and to take her children to their BMX bicycle races. That changed last September when Teri Veler got a letter from the state of Ohio that said their 1995 Buick LeSabre was just "salvage" with a title that was no good. Worse yet, Teri Veler would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. It is believed that sometime before 2001 the vehicle had been declared a total loss by State Farm in Texas. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Someone bought the vehicle from State Farm and rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Franklin Park Lincoln Mercury, Inc., where Teri Veler saw it. No one ever told Teri Veler about the vehicle's history or that it had been declared salvage. For Teri Veler, State Farm offered $1,000 on a car that she had spent over $9,000 to buy.
In Toledo (Lucas County):
Walker v State Farm, Central Auto Mart, Focus Credit Union
When Quanitra Walker bought a 1999 Oldsmobile Alero for $6,000 at a Toledo car lot in January 25, 2005, she thought the 1999 Oldsmobile Alero would be safe transportation, especially since it came with a one year warranty. That changed in September when Quanitra Walker got a letter from the state of Ohio that said her 1999 Oldsmobile Alero was just "salvage" with a title that was no good. Worse yet, she would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. Sometime before 2001, the vehicle is believed to have been declared a total loss by State Farm in Michigan. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Someone bought the vehicle from State Farm and is believed to have rebuilt it. The rebuilder then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Central Auto Mart, where Quanitra Walker saw it. No one ever told her about the vehicle's history or that it had been declared salvage. For Ms. Walker, State Farm offered $1,650.
In Toledo (Lucas County):
Kriegel v State Farm
When Mr. And Mrs. Kriegel bought a 1996 Toyota Camry at a used car lot in 1999, they thought the car would be safe family transportation. That changed last September when they got a letter from the state of Ohio that said their 1996 Toyota Camry was just "salvage" with a title that was no good. Worse yet, they would have to get a new title issued that was branded as a "rebuilt salvage" vehicle because before they bought it the vehicle had been declared a total loss by State Farm in Texas. It was later sold by State Farm with a "clean" title that hid the fact that the car had been totaled out. An unknown car rebuilder apparently bought the vehicle from State Farm and rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Dave's Ideal Wheels used car dealership in New Mexico, where Mr. and Mrs. Kriegel bought it for over $12,000. No one ever told Mr. and Mrs. Kriegel about the vehicle's history or that it had been declared salvage and they have spent almost $3,800 on the car just to keep it running since they bought it. State Farm offered the Kriegel's $1,200.
In Toledo (Lucas County):
Lewandowski v State Farm
When Richard Lewandowski bought a 1997 Dodge Neon at a Central Avenue used car lot in March 2001, he thought the 1997 Dodge Neon would be safe transportation for his family. That changed last September when he got a letter from the state of Ohio that said his 1997 Dodge Neon was just "salvage" with a title that was no good. Worse yet, Lewandowski would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. Sometime before 1999 the vehicle had been declared a total loss by State Farm, probably in Michigan. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. An unknown rebuilder, referred to here as John Doe Rebuilder, bought the vehicle from State Farm and rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Central Avenue Autos, owned by G & G Company, where Richard Lewandowski saw it. No one ever told Richard Lewandowski about the vehicle's history or that it had been declared salvage.
In Celina (Mercer County):
Gerlach v State Farm, Lakeside Auto, Hogrefe Auto Parts
When Cassie Gerlach bought a 1999 Ford Explorer at a Celina car lot in 2003, she thought the SUV would be safe transportation for driving to and from her home and Wright State University where she is a senior college student. That changed in September when her dad got a letter from the state of Ohio that said their Ford was just "salvage" with a title that was no good. Worse yet, they would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. In 1999 the vehicle had been declared a total loss by State Farm in Michigan. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Hogrefe Auto Parts in Napoleon, Ohio, bought the vehicle from State Farm and rebuilt it, using at least one door off a 1997 Ford Explorer presently being owned and driven in Indiana by someone else. The parts shop then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Lakeshore Auto Sales, where Cassie Gerlach saw it. No one ever told Cassie or her father, Douglas Gerlach, about the vehicle's history or that it had been declared salvage. The entire roof had been replaced, with the old roof cut off at the edges and replacement metal put back on, using a welder which overheated the area around the weld. Doing that softened the factory metal because of the high heat. Now, the structural integrity of the passenger cage has been compromised. Although the car cost her nearly $10,000, State Farm offered her only $1,850.
In Napoleon (Henry County):
Rychener v State Farm, GMAC
When Jeffrey Rychener bought a 1998 Jeep Wrangler at a Napoleon car lot in 1999, he thought the Jeep would be safe and reliable transportation. That changed last September when he got a letter from the state of Ohio that said his Jeep was just "salvage" with a title that was no good. Worse yet, he would have to get a new title issued, branded as a "rebuilt salvage." Sometime before the dealer sold it to him, the vehicle had been declared a total loss by State Farm in Michigan. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Someone bought the vehicle from State Farm and rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Patton Pontiac Buick Cadillac GMC, Inc. where Jeffrey Rychener saw it. No one ever told Jeffrey Rychener about the vehicle's history or that it had been declared salvage. For Jeffrey Rychener, State Farm offered $2,700 on a car that cost him nearly $33,000.
In Ottawa (Putnam County):
Wagoner v State Farm
When Terri Wagoner bought a 1999 Chevrolet Tahoe at an Ottawa car lot in 2001, Terri Wagoner thought the 1999 Chevrolet Tahoe would be safe and reliable transportation for family use. That changed last September when Terri Wagoner got a letter from the state of Ohio that said the Chevrolet Tahoe was just "salvage" with a title that was no good. Worse yet, she would have to get a new title issued that branded the vehicle as a "rebuilt salvage" vehicle. Apparently in 1998 or 1999 the vehicle had been declared a total loss by State Farm in Michigan or Indiana and then sold by State Farm with a "clean" title that hid the fact that the car had been totaled. Someone bought the vehicle from State Farm, rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. Eventually it made its way to Ottawa Chevrolet Oldsmobile, where Terri Wagoner bought it. No one ever told Terri Wagoner about the vehicle's history or that it had been declared salvage. When her husband tried to learn more about the history of the vehicle, no one would disclose anything. The local Chevrolet dealer would not talk. State Farm would not talk. Government officials would not talk either. But they did tell Terri that she not only would have to get a "rebuilt salvage" title issued for her Tahoe, but she would have to pay for it too. For Terri Wagoner car that cost her $24,000, State Farm offered $3,000.
In Edgerton (Williams County):
James Harter v State Farm, C & C Auto Sales, B & S Auto Salvage
When James Harter bought a 1997 Plymouth Grand Voyager at an Indiana used car lot in 2004, he thought the van would be safe and reliable personal transportation. That changed last September when James Harter got a letter from the state of Ohio that said the van was just "salvage" with a title that was no good. Worse yet, he would have to get a new car title issued that was branded as a "rebuilt salvage" vehicle. Just months before he bought it, the vehicle had been declared a total loss by State Farm in Michigan. Then it was sold by State Farm with a "clean" title that hid the fact that the car had been totaled. B & S Auto Salvage and Sales, located in Indiana just a few miles from the Michigan border, bought the vehicle from State Farm and rebuilt it and then dumped the vehicle on the used car market without retitling the vehicle as "salvage" either. B & S sold it to C and C Auto Sales, in Indiana, where James Harter bought it. State Farm offered him $1,200.
Issued by Dayton, Ohio Attorney Ronald Burdge
For more information, contact:
Burdge Law Office
Phone 1.888.331.6422 or 937.432.9500
2299 Miamisburg Centerville Road, Dayton, Ohio 45459
Email: Ron@OhioLemonLaw.com
Documents Attached:
1. Indiana's 1998 Injunction
2. The Assurance of Voluntary Consent signed by St Farm and 49 state attorney generals
3. Loftis vs State Farm Insurance Co., (Class Action Case) Montgomery County Common Pleas Court, Ohio
Helping Consumers, and Consumer Law Attorneys, Since 1978
Ronald L. Burdge Attorney at Law Burdge Law Office 2299 Miamisburg Centerville Road Dayton, OH 45459-3817 Ron@OhioLemonLaw.com www.OhioLemonLaw.com tel: fax: 937.432.9500 937.432.9503