Honda of Santa Monica, Calif. Settles Consumer Case for $1.37M

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A deceptive practices civil lawsuit against Honda of Santa Monica, California has been settled with the car dealership agreeing to a permanent injunction against the alleged practices and paying $1.37 million in civil penalties, costs and restitution, the Los Angeles County District Attorney’s office announced.

Head Deputy District Attorney Thomas Papageorge of the Consumer Protection Division said the monetary relief includes up to $829,000 in direct restitution to Los Angeles County consumers. The District Attorney’s office also will recover $548,000 in penalties and costs under terms of the stipulated judgment.

Honda of Santa Monica is owned by Kramer Motors Inc., headquartered in Charlotte, N.C. Under terms of the settlement, agreed to without admission of wrongdoing, Honda of Santa Monica will set up a restitution program for “potential restitution eligible customers.”

The civil action filed by the District Attorney’s Consumer Protection Division alleged that Honda of Santa Monica made false or misleading statements in contracts regarding the price of aftermarket products included with vehicles for sale or lease, and in other representations to consumers. The lawsuit also alleged the dealership was engaged in unfair competition because of these actions. Both allegations are violations of California’s Business and Professions Code.

Honda of Santa Monica was investigated by the District Attorney’s Consumer Protection Division as part of an ongoing probe of deceptive and unfair practices by Los Angeles-area car dealerships. Deputy District Attorneys Jeffrey McGrath and Dana Aratani worked on the case.

Papageorge said attorneys for Honda of Santa Monica and its parent company worked cooperatively with the District Attorney’s office to resolve the case.

The Consumer Protection Division has been looking at car dealerships for nearly a decade. One of the most highly publicized cases involved Gunderson Chevrolet in El Monte in 2001. That investigation resulted in both successful civil litigation and criminal convictions of seven former employees of the dealership.

As in the Honda of Santa Monica case, a plan for restitution to Gunderson consumers was set up through the stipulated judgment of that civil lawsuit.

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