FIRST PERSON/OPINION Via e-mail: Dear Friend, Customer, Industry member, and California resident, Many of you have heard about the lawsuit against CARB that Moto Forza and GP Motorcycles were involved with. The case was closed in May after both parties agreed to a settlement amount to be paid to CARB. A few weeks ago CARB issued to the media a rather damaging press release claiming that we were involved in illegal activities in order to street register off-highway Husqvarna motorcycles. Nothing could be further from the truth. No sentence was ever spoken against Moto Forza, nor is there any evidence that we conducted our business in any sort of illegal manner. Under my ownership and management, Moto Forza is run on high moral and ethical standards and after reading the press release from the CARB, I feel obligated to set the record straight and do everything in my power to inform the industry and the public about the true facts of this case. I hope after reading my response you will realize that Moto Forza (along with GP Motorcycles and Munroe Motors) simply got caught in the middle of two huge governmental agencies and their blatant ineffectiveness and apparent disinterest to work and communicate together. Rather than accepting responsibility for their inefficiencies, they were looking to find an escape goat which they did by pointing the finger and extorting money from three small, hard working California businesses, with a complete disregard for the survival of these businesses. In 2005 we were visited by a CARB investigator and DMV detectives to get copies of our DMV documentation for Husqvarna motorcycles we sold during 2004 and 2005. According to the investigator they detected an issue with the DMV and found out that some of these motorcycles wrongly received license plates and street registrations when in fact they should have received off-highway registrations. A few months later CARB brought suit against us (and GP Motorcycles and Munroe Motors) for purposely registering off-road motorcycles as street legal vehicles as well as mis-representing these Husqvarna off-road motorcycles as street-legal bikes to our customers. Here are the facts of what really went on: 1) During the homologation process for a vehicle to be sold in California, the manufacturer submits the VIN numbers to the DMV for approval. The Husqvarna motorcycles in question were all approved to be sold in California by CARB and the DMV. Not only did CARB certify these vehicles for commerce but the DMV also had knowledge of what the VIN numbers were going to be. The certification from CARB simply states that the vehicles were approved for sale. The certification makes no distinction for a particular use, i.e. on-highway versus off-highway use. 2) CARB alleged that we the dealer registered these motorcycles as street legal bikes when in fact they weren’t. As a dealer we do not have the authority, nor do we claim to register vehicles. The only institution that has the authority to register a vehicle is the Department of Motor Vehicles. We, as the dealer, submit an application for registration on behalf of our customer to the DMV and the DMV then issues the registration based on their guidelines, which are not known to us. When we first asked the DMV to issue registrations for these Husqvarna motorcycles, we were surprised to receive license plates and street registrations as we were under the impression that these bikes were off-highway vehicles. When I questioned the DMV clerk, I was told that based on the VIN number (of which they had former knowledge and the VIN # had been approved during the certification process) these motorcycles must be issued a license plate. In one instance, I submitted paperwork for a little kid’s 50cc motorcycle and I was handed a license plate. I informed the DMV clerk that this had to be a mistake as a little 6-year old boy would be riding this motorcycle but I was vehemently told that according to the DMV system, this bike MUST receive a license plate. After a number of these incidents we stopped questioning the DMV and accepted the street registrations as the DMV is the authority who determines what type of registration a vehicle should receive. 3) The court has a sworn deposition of a DMV expert Benton who states that there has been a disconnect and lack of communication between the DMV and CARB for many years. Benton stated that this issue on hand of vehicles receiving “wrong” registration has been going on for many years (5+years) and he has been unsuccessful in resolving this problem. 4) The CARB accused us of falsifying or purposely filling out the DMV application for registration form incorrectly. During his deposition, DMV expert Benton looked at the forms as they were completed by us and stated that everything was filled in correctly and there is no evidence of falsification. 5) The CARB accused us of misrepresenting these off-road Husqvarna motorcycles as street legal motorcycles to our customers. When we started to realize that the DMV issued license plates for these motorcycles, we communicated to the customers that there was a good chance that their Husqvarna motorcycle would be receiving a license plate. However, we were very clear that even with a license plate these motorcycles were NOT street-legal as they were missing a number of items required to be street legal. While these bikes were delivered to us from the manufacturer with head light (no high/low beam) and a non DOT approved taillight, the bikes were missing brake light, turn signals, horn, rear view mirror, or DOT approved tires, all necessary equipment for a vehicle to be street legal. 6) During her sworn deposition, the CARB investigator testified that notes she took during the investigation, which could have used as evidence and may have been material to the out-come of this case were shredded or otherwise destroyed and were no longer available in either hard copy or electronic form. Furthermore, old e-mail traffic that she had with her supervisor in regards to this case was also no longer available as they had been cleaned off the CARB server. 7) When this entire issue of wrongly registered Husqvarna motorcycles was brought up to us, Moto Forza voluntarily took the proactive step to contact all the affected customers and on their behalf, we turned in the license plates and submitted the necessary paperwork to the DMV to transfer the bikes in question from on-highway to off-road registrations. In all cases Moto Forza paid for the processing fees charged by the DMV for this transfer. In at least one case the DMV re-issued license plates to the customer accompanied with a letter stating that their motorcycle was a street legal vehicle. CARB was not interested in making any concessions or offering any relief to us for taking the voluntary step to fix a problem we did not cause. 8) CARB’s investigator for this case had absolutely no motorcycle experience at all. She could not distinguish the differences between different types of motorcycles and continuously mixed up facts between dual-sport, off-road, supermoto, and street legal bikes. One would think that CARB would put someone who is familiar with motorcycles on a motorcycle case, but that obviously isn’t how the CARB operates. To the contrary, they use our hard earned tax money to put the least qualified person on the case, as Blanton not only showed complete ignorance about motorcycles but in fact it was her very first case she investigated and obviously was more interested in advancing her career rather than finding the truth thereby jeopardizing the livelihood of a number of small business owners, all their employees and their families. 9) CARB’s purpose is to regulate and control the effect certain products and industries have on California’s air. CARB is not in place to regulate or control vehicle registration procedures. During the 4 years of dealing with this issue, 4 years of depositions, testimonies, court hearings, etc., the environmental impact these bikes may or may not have had, was never brought up, not a single discussion about it, not a word. Clean air is obviously not high on the agenda of CARB officials, but extracting ridiculous amounts of money from businesses across the state is what seems to make them tick. We ended up settling the case as the legal costs to pursue the matter would have cost more than the settlement amount. Unlike most other trials where the losing party has to cover the legal cost of the winning party, CARB has complete immunity. Even if we would have won the case in court, we would still have to pay our own legal costs and that simply became financially not feasible. When CARB issued a press release a few weeks ago about this case to newspapers (SDUT, LA Times), TV stations (channel 6 and 10), and other institutions (US Marine Corps), we were very surprised. Not only was a settlement of $90,000 bad enough during this economically very challenging times, no, CARB had to drag us even more through the dirt with a press release that was not only damaging, but it was a complete and utter lie. What were they trying to achieve with this press release other than killing our business completely, putting 7 people out of a job, onto the street? Their press release stated that we were fined $90,000 for street registering off-road motorcycles by illegally modifying these bikes. This release is a complete manufactured lie that the CARB published without giving us the chance to respond or to rectify. We were NOT fined. We settled the case without going to trial and no sentence ever being spoken. With that, there is absolutely NO evidence that we ever did anything illegal or broke the law in any way. We did not register any motorcycles ever, nor will we. The DMV registers motorcycles and is the only organization that has the authority to do so. We never modified any motorcycles. I don’t even know where that came from. Whether or not we modified motorcycles was never even discussed during the 4 years of depositions, investigations, and hearings. It was never brought to the table and there is absolutely ZERO evidence that we ever did modify/convert an off-road bike to an on-road motorcycle, because we simply never did. So that part of the release is completely manufactured by CARB and could not be further from the truth. It is obvious that CARB is not interested in finding the truth but is only interested in extracting moneys from California businesses and they will not hesitate to bend the truth in their favor to extort the money from hard working people. It is a sad state of affairs when a government agency that is put in place by the people for the people is allowed to take on their own rules and standards and is given such immunity that it is financially impossible for a business to defend its rights. The most ironic thing about this whole fiasco is that neither CARB nor the DMV have fixed the situation. Even today, in 2009 I can turn in the completely and correctly filled out application for registration for a 2009 off-highway only Husqvarna motorcycle and the DMV will issue license plate and street registration. We have to stop the DMV clerk every time and argue to make sure we receive an off-highway registration. So what this comes down to is that the CARB felt it had the right to extort money from us because we did not make sure that the DMV did their job correctly. CARB had mentioned during the proceedings that they felt it was our responsibility to police the DMV, although we have no authority over the DMV. Go figure that one out! I have always prided myself in running an honest and reputable business which treats its customers with the highest priority and while they are competitors, I can say the same for the other two dealers that were involved in this case. Moto Forza has never had a complaint filed against us, a large portion of our customer base is repeat customers and many customers have become personal friends to Moto Forza and its fantastic staff. I work very hard at making Moto Forza the best motorcycle dealership it can be and it is very disheartening to see an agency like CARB doing all they can to destroy California businesses like ours. With this experience I have gained, the only advice I have for someone looking to start a business and offer employment to Californians is to stay the heck out of California. Here is the CARB press release: ~http://www.arb.ca.gov/enf/casesett/motoforza.htm~ Balz Renggli Moto Forza Escondido, California www.moto-forza.com