By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
Promila Kohli readily admits that the accident was her fault. A little over two years ago, she was driving behind Sharpstown Mall when she tried to make a left turn off Clarewood. Suddenly, an oncoming car she hadn't seen sideswiped her two-month-old 1993 Mazda 626 Sedan. The date was November 18, 1992; it's a date Kohli has been unable to forget.
That day lingers in Kohli's memory not because of any injuries she suffered. Though slightly shaken up, Kohli was quickly ferried by ambulance to Memorial Hospital Southwest, where she was checked out and released.
And it lingers not because of the severity of the accident. In many ways, there was nothing spectacular about Kohli's collision. It was just another fender bender, just a routine urban trauma, just one of 63,702 vehicular accidents reported to the Houston police in 1992. It should have resulted in nothing more than a temporary transportation inconvenience and a small financial setback.
Promila Kohli should have been so lucky.
While Kohli was on her way to Memorial Southwest, a scene that transpires dozens of times daily on Houston's streets and freeways was playing out on Clarewood. Some half-dozen wrecker drivers, alerted to the collision by police scanner, had descended on the accident site. One of the wreckers would eventually hitch up the damaged Mazda and tow it away to a repair shop in southwest Houston. When it did, it did a lot more than simply haul Promila Kohli's bruised vehicle off the street; it took Promila Kohli straight to a place that many Houstonians are far too familiar with: Wrecker Hell.
It would be 10 months before Kohli would get behind the wheel of her Mazda again, and even then, she says, the car wasn't working right. She had it examined by other body shops, then let it sit in her garage for another year before a car dealer finally agreed to accept the damaged vehicle as a trade-in. All told, Kohli figures that her left turn on Clarewood, and the wrecker/repair shop maze it led her into, ended up costing her $20,000.
With variations, similar stories abound in Houston. Any motorist who's had the bad luck to be in an accident, or to be late on a repair bill, can have his misfortune compounded and his wallet lightened when trying to navigate through the subterranean and interlocking world of wreckers, auto storage lots and body shops. In a city so auto-dependent, where a car is a necessity and the frequency of accidents makes auto insurance premiums sky-high, the network of fetch-and-repair and tow specialists can exert an amazing amount of power over people's everyday lives.
Of course, you don't have to be involved in an accident to be consigned to Wrecker Hell. One all-to-frequent phenomenon involves wrecker owners in the repossession business exercising mechanic's liens on cars for small debts on repair bills, then charging huge fees for the return of the vehicles. Or worse. Take the recent case of a 1989 Jaguar, whose owner brought it to Gessner Auto Repair to have its air conditioner repaired. When he couldn't pay about $100 more than the original estimate for the work, the shop agreed to let him leave with the car as long as he covered the balance of his bill later.
The money wasn't paid, so Gessner Auto Repair arranged with The Recovery Co., which listed an address on the Southwest Freeway, to tow the Jaguar from owner Sidi Boubacar Toure's residence -- while, as it happened, Toure was out the of country. The towing company apparently aimed to recover the money Toure owed for the repairs, and also turn a buck from the towing and storage fees it would charge him.
But after it was lifted from Toure's residence, the Jaguar somehow "disappeared." When Toure got back into the country and began asking after his car, no one could seem to find it. Concerned about what might happen to his automobile, Toure got a judge to issue a restraining order preventing Gessner Auto Repair from selling the Jaguar. But the restraining order was unnecessary: the shop couldn't find Toure's Jaguar, much less sell it. When police went looking for the wrecker driver to determine where the car had been taken, they had trouble even locating the towing company. Its address turned out be a vacant office, and the only evidence of its existence was an answering service for beeper-equipped wrecker drivers.
Adding to the mystery was a piece of African art worth $40,000 that Toure claims was in his Jaguar's trunk when it disappeared. He retained lawyers Paul Licata and Arno Schwamkrug to help locate the car in the wrecker underworld. Whether because of their efforts or the police helicopters that buzzed storage lots searching for the lost vehicle, the Jaguar recently materialized in front of Gessner Auto Repair. It was badly damaged and without the art Toure had said was in the trunk.
"It took two lawyers and a bunch of cops two months to get this Jaguar returned," says Licata. "Most people don't have the resources to find a car that has been grabbed. It's a real mess. These people, it's their own little world, and they're not afraid of anyone."
In Houston, that little world is held together by a tangled web of relationships between wrecker drivers, storage lots and repair shops. "There are," says one critical observer, "kickbacks all the way down the chain." Those in the business prefer to call them "finder's fees" or "commissions." And as much as customers might be upset by what they encounter, there's nothing at all illegal about the arrangements -- which ensures that this hidden world can continue to spin happily in its own well-greased grooves.
And as Promila Kohli found out, there's not a whole lot someone who thinks she's been wronged can do about it. Kohli eventually hired a lawyer and filed suit against the body shop where her Mazda ended up after her accident; so far, she hasn't recovered a dime.
From a distance, sorting out who's who in the world of wreckers can be confusing.
At the far fringes are repo men, who collect cars that have been repossessed, sometimes, as in Sidi Boubacar Toure's case, for the smallest of unpaid debts. Regulation of those operations is slack, although at a minimum repo towers are required to have a T-tag (for transfer tag), an easily obtainable tow permit issued by the city of Houston that essentially allows the holder to move a vehicle from one place to another, say from a driveway to a repair shop or storage lot.
"They operate at the edge of the law," says one city official familiar with complaints about the repo business. "They almost steal these cars. The police department and the district attorney have been hesitant to take action against them."
Perhaps reflective of the repo man's reputation is the case from last year of a car owner in northeast Houston who shot a tow-truck driver he saw hitching up his car in his driveway one night. The repo man died from his wounds; the car owner was never charged with a crime.
Higher up the food chain are the holders of the P-tag (for private tag), which allows the holder to transfer vehicles from one spot to another and also permits him to tow a car that's broken down on a roadway or one that's been stolen. The city sets no limit on the number of P-tags and T-tags it can issue; a holder of such a permit only has to apply for one and then meet certain background and insurance requirements.
Then there's the prized E-tag (for emergency tag), which allows a wrecker driver to engage in police-authorized tows, either of vehicles from accident scenes or vehicles whose drivers have been taken into custody. By law, only E-tag holders can make a "non-consent" tow (meaning the driver hasn't given his permission) from an accident scene. The E-tag holder is also limited to charging $57 for the tow, and must take the vehicle to a storage lot authorized to receive police-designated tows. If a motorist is drunk, arrested or injured, the police officer at the scene has the wrecker drivers draw names or discs from a hat to determine who gets to tow the car.
There is an exception: if a driver who's been in an accident is awake, alert and not arrested, he can choose the wrecker company he wants and negotiate the price for a tow to the location of his choice. In such an instance, a P-tag holder can also handle the job.
The city has issued only 236 E-tag permits, at a renewal cost of just $200 a year, with the idea that limiting their number controls congestion at accident scenes and keeps drivers from being victimized by unscrupulous tow merchants. The intent is admirable, but the problem is that once an E-tag is granted, it can be withdrawn only if the holder is convicted of certain crimes, including theft, sexual assault or drug violations. And then there's the problem that the E-tag may not always be used by the person who was granted it (even if the tag holder is ultimately responsible for it). Outside the city's purview, E-tags are considered so valuable that they can change hands on the open market for $30,000 to $50,000, and they're routinely leased by drivers and repair shops for $1,000 to $3,000 a month.
"There's no review process [for E-tags]," explains Ellis Milam, a former police officer who oversees the city of Houston office charged with regulating wreckers, cabs, limousine services and school buses. "Once they have them, they have them."
And having them can be a gold mine. That's because the charge for hitching up a car and hauling it away is only one of the ways to make money in the wrecker business. Some wrecker drivers get a commission from storage lots for transporting cars there; many of the E-tags are held by people in the storage lot business. Storage lots or wrecker drivers that make referrals to body shops can expect a flat commission or a finder's fee from the shop or a percentage of the gross cost of repairs for each vehicle they deliver. A reimbursement of from 1 percent to 8 percent of a bill -- and in some cases even more -- can mean hundreds of extra dollars, depending on the extent of the repairs. That helps explain why the competition for business among wrecker drivers -- a competition familiar to Houston motorists who've had the unnerving experience of being between a speeding wrecker and an accident -- is so fierce, and why on occasion fisticuffs and verbal altercations erupt between rival drivers at accident scenes.
There's an element of speculation in at least one not atypical arrangement, as wrecker drivers will bargain with storage lot owners on the fee they're reimbursed for a tow. Though a car owner can be charged only $57 for a police-authorized tow when he retrieves his vehicle from a storage lot, in addition to the tow fee he can be assessed a storage fee of $11 per day. Some lot owners will gamble that a stored car won't be picked up immediately -- especially newer model cars that owners may allow to sit for days while awaiting inspection by an insurance adjuster -- and they'll agree to pay a wrecker driver more than $57 in hopes of recouping the overpayment and more in storage fees.
Critics say the city's supervision of the wrecker business is dominated by ex-police officers and ex-wrecker drivers, resulting in a too cozy relationship between the regulated and the regulators. But Ken Ulmer, the president of the Houston Auto Wreckers Association, which represents a large number of the 105 people who hold the city's 236 E-tags, says the current level of regulation -- wreckers by the city, storage lots by the Texas Railroad Commission -- works to the advantage of consumers in distress.
"We try to keep reputable business owners in business, and we try to get rid of the non-reputable people," says Ulmer, who holds four E-tags and operates a storage lot. "There are some [disreputable operators], sure, but in any industry there are. And most people know who they are, but it's people in the industry who know who they are -- it's not the consumer. A consumer is going to be totally unaware of what's happening, and nine times out ten they're in shock anyway, from the accident."
And if Houston drivers think the wrecker situation is a problem now, wrecker drivers and some city officials warn that a federal trucking deregulation law that went into effect last year could make things even worse if it results in deregulation of the local industry, ending the exclusive franchise enjoyed by holders of E-tags.
"Deregulation could create chaos in the streets," predicts City Councilman Al Calloway, who chairs one of the council's transportation committees. "You'd literally be encouraging fighting over tows, while we thought what we were doing in the past was trying to prevent some of that from happening."
Promila Kohli doesn't remember much about what happened immediately after her accident on Clarewood. According to documents in her lawsuit, her car was towed by a wrecker affiliated with Collision Repair Specialists, or CRS, to the company's shop on Beverly Hill. At the time, Kohli had never heard of CRS, but more than two years later her eyes narrow and her voice takes on a bitter edge at the mere mention of its name.
A native of India and a citizen of Canada, Kohli had been in Houston for only a year when she had her wreck -- her first, she says, in 20 years of driving. She claims that when she found her car at CRS two or three days after her accident, a worker there suggested her insurance deductible of $500 would be waived if she let CRS do the repairs. (The CRS employee has denied making the suggestion.) Kohli says she wanted to take the car to the dealer for repairs, but CRS had already removed a door, so she decided to leave the car where it was. A check from her insurer to cover the estimated cost of the repairs -- about $9,000 -- was shortly dispatched to CRS. Kohli was promised her car back in about a month.
But months passed and the car remained at CRS. More than once, Kohli was told that replacement parts had not arrived but would be ready soon. More months passed. Kohli was confused and frustrated, but unsure of what she should do.
"My hands were tied," she says. "And I don't know the law here." Finally, eight months after her car was towed to CRS, she consulted a lawyer.
CRS owner Wesley Spence, a former Houston policeman whose wife is currently a police officer, has denied his shop was negligent or at fault in keeping Kohli's car for so long.
"It sat here for six months because it was the first year they came out with that new style Mazda 626, that bubble-looking style," he says. "The right back door was hit, and there was no new door anywhere, at any dealership in Texas or the nation. We got receipts to verify everything, that it was a nationwide back order on this. No dealership had one. We covered our rear end on this."
During the wait, Kohli continued to pay the $385 monthly note on her $24,000 car, as well as other related expenses. She says in her lawsuit against CRS that the company promised to pay the cost of a rental car and didn't. (CRS has denied making that promise.)
"I am mad at them, because I'm paying the insurance, I'm paying the car payment, I'm paying [for a rental car]," Kohli says. "On top of it, I had to pay the lawyer fee. I'm going through hell, you know."
Kohli finally took her car back in September 1993, almost a year after her accident. When she did, she says, she discovered that one of the doors wouldn't shut properly, the dome light remained on, the sunroof leaked and the steering wheel shook. She returned the Mazda to CRS, where it spent the rest of 1993.
In the spring of 1994 two Mazda dealers checked Kohli's car. One refused to work on it, and the other charged her an additional $1,800 to correct some still existing problems. Kohli finally got her car back in June of last year. She parked it in her garage, insisting it remained undrivable. Last September, she used the Mazda as a trade-in for another car.
Once the Mazda that Kohli drove for two months and let sit for two years was history, she pinned her hopes for recovering her losses on her lawsuit against CRS. She was looking for more than compensation; she was also looking for revenge. But she's gotten neither. As the December trial date of her suit approached, Wesley Spence, doing business as CRS, filed for Chapter 13 bankruptcy, effectively putting all lawsuits against the company on hold.
That maneuver baffles and angers Kohli, since CRS hasn't closed, though it has moved its operation from 6343 Beverly Hill to 6909 Hillcroft near Bellaire. The landlord on Beverly Hill was listed as a creditor in CRS' bankruptcy filing.
"I know they are not bankrupt, because they opened up another place on Hillcroft, they moved. I have no idea about the law. I have no idea what is going on," says Kohli. "But I can tell you I paid lots of money. I wanted my money back. And they should suffer, they should pay for it."
Kohli's not alone in her frustration with CRS. At least two other disgruntled car owners had lawsuits pending against the repair shop when Spence filed for Chapter 13 protection. Yet another, David Person, resolved his dispute with CRS only when a business associated with the shop, American Auto Storage Lot, agreed to pay for his damages. Person's success at securing a settlement points up the subsurface network of agreements among some accident entrepreneurs.
After his 1986 Lincoln Continental was damaged in an accident last March, Person's car was towed by a CRS E-tag wrecker to American Auto Storage Lot. The lot and the wrecker driver, he says, referred him to CRS for repairs. His car was towed there, and Person says he advanced CRS a cashier's check for $1,500 to cover about half of the damage to his Lincoln's front end. He was promised his car back in seven to 10 days.
Person says that it wasn't until 33 days later that he was able to retrieve his Lincoln, and when he did, he didn't get far. He noticed a problem with the front end and immediately drove his car to another repair shop, where it was discovered that the front end for a 1988 Lincoln had been placed on his '86 model. After having already paid CRS $3,400, Person paid the second repair shop an additional $700 to fix the problem. Person, a lawyer himself, obtained counsel and sued CRS.
He says he was eventually able to collect a settlement from American Auto Storage Lot based on an written agreement between the lot and CRS that, he claims, in effect made them business partners. That agreement, which called for CRS to sell its storage lot business to the owner of American Auto Storage, included a provision in which CRS agreed to pay the storage lot 10 percent "of the gross amount of any collision repair work" on vehicles the lot referred to CRS. In return, CRS agreed to have its wreckers, as well as other wrecker drivers, deliver "a minimum of 150 motor vehicles" each month to the storage lot; for each vehicle a non-CRS wrecker brought to American Auto Storage, CRS was to get $5.
Gerald Birnberg, an attorney who is principal owner of American Auto Storage, says he wasn't aware of the referral fee when he signed the document, and he insists that the arrangements spelled out in the agreement were never acted upon.
"We never received a penny from that and we never referred anyone to them that I'm aware of," Birnberg says, suggesting that favoring one repair shop would be bad for the storage lot's business. CRS wreckers did deliver -- and continue to deliver -- cars to his lot, Birnberg says, but nowhere near 150 a month.
Ellis Milam, the administrator of the city's wrecker permits office, says he's heard talk of such arrangements, in which storage lots get a cut of repair costs in return for referrals, but hasn't seen evidence that they exist. Even if they do, he doesn't sound too concerned about it.
"I don't know anything illegal about it," Milam says. "They [storage lots] are advertising for some body shop. There's nothing wrong with that. I don't know if I want to take that guy's advice, but there's nothing wrong with him doing it."
What is clearly illegal, though by some accounts common, is the use of wrecker drivers as "runners" to solicit business for personal injury lawyers. In such instances, the drivers recommend lawyers to accident victims, giving them business cards or even having them sign contingency-fee retainer agreements at an accident site. The practice is known as barratry, and it can be a felony.
Allegations of such solicitations are included in a professional misconduct suit filed by the State Bar of Texas against lawyer Ronald J. DeSimone. Among the charges are that a wrecker driver gave a 17-year-old accident victim a ride from an accident scene directly to a doctor in whose office she signed an agreement to be represented by DeSimone, and that a couple who had been in an accident were given one of DeSimone's business cards by a wrecker driver who suggested they call the lawyer. (DeSimone, who's being represented by Richard "Racehorse" Haynes in the State Bar suit, could not be reached by the Press.)
None of the seven allegations made against DeSimone mention CRS, but he has had ties to the shop. The lawyer was a cosigner on a June 1993 loan to CRS from Amerisource Funding Inc. A $37,645 unsecured debt to Amerisource is listed in Spence's bankruptcy filing.
And DeSimone originally represented CRS and Spence in lawsuits brought by both Promila Kohli and Jennie Cordero, whose 1993 Ford Probe was towed to CRS in January 1994 for repair of a damaged front end. When the car had not been fixed by March, Cordero's attorney, Norman Roser, won an emergency court order from Judge Toni Lindsay to remove the car from CRS. In Roser's petition to the court, he predicted that without the judge's intervention "defendants shall never return her vehicle, shall use bankruptcy as a shield against future liability."
"She ordered them to simply return the car, now, without getting any payment," Roser says. "It was through the order of the court, which was an extraordinary remedy. For a judge to do that is a hall of famer."
Roser took the case on a contingency basis, but says he determined early on that he would not be getting anything out of CRS. He thought his best shot was just to get Cordero's car back -- fixed or unfixed. Four months after it was towed to CRS, he did.
"We took it back in pieces on a tow truck," Roser says. "It's a damn good thing we did, because they went bankrupt shortly thereafter, in which case she never would have gotten her car back."
Like Promila Kohli, Roser's client probably never imagined that the routine act of being towed away for repairs would force her to hire a lawyer and go to court. Betty "Kit" Clark, the lawyer who represented Kohli, specializes in consumer fraud suits and says many of the 100 or so would-be clients who contact her each month are seeking redress for auto-related complaints.
"Sometimes when people walk in my office and tell me what's happened to them, I just want to break down and cry," Clark says. "It's cruel, particularly in situations where their cars are concerned, because that's their bread and butter." What she's encountered in her practice has led Clark to believe that the wrecker/body shop industry "is out of control."
Until that changes, though, about the only sage bit of advice that can be given to Houston's drivers as they speed along the interstates and surface roads that bind the city together is to watch your back. And as someone once said in a different context -- be careful out there.