Report: #1120788

Complaint Review: COSTCO Ameriprise IDS Progressive Insurance

  • Submitted: Tue, February 04, 2014
  • Updated: Wed, February 12, 2014
  • Reported By: LegalEagle — BEVERLY HILLS California
  • COSTCO Ameriprise IDS Progressive Insurance
    999 Lake Drive
    Issaquah, Select State/Province

COSTCO Ameriprise IDS Progressive Insurance Insurance Ripoff! Great rates but then they fail to pay claims! Issaquah Washington

Show customers why they should trust your business over your competitors...

I purchased insurance from Costco because I have been a loyal customer almost since the beginning when they first opened their doors.  I was accustomed to their very competitive prices and exceptional customer services and when I purchased insurance through Costco I figured I'd get the same customer service, customer satisfaction and quality.

WRONG!  Costco Insurance is actually Ameriprise Insurance and Ameriprise is infamous for charging low premiums but then failing to pay claims and making people take them to court in order to get them to pay.  In other words, Ameriprise has the exact opposite reputation as Costco.  (Happy customers versus ripped off customers.) 

What good is buying insurance if it is not there for you when you need it?  It doesn't matter how cheap the policy is if you end up being forced to file a lawsuit for your coverage.

In my case, during the lawsuit I was forced to file, we found numerous internal errors committed by Ameriprise/IDS/Progressive/Costo.  Yes, all these companies are involved!  Ameriprise plays a pea and shell game designed to make it harder for consumers to get their claims resolved. 

The biggest error was Costco/Ameriprise's failure to include collision on my policy, even though I had all other coverages and the car at issue was a 600SL mercedes!!!  A very expensive car.  Even when it was discovered they'd made nearly a dozen verifiable errors regarding my policy Costco Ameriprise still refused to pay my claim.  Errors were as fundamental as they had the wrong name and address on my policy! When they produced my policy documents in court one of the errors was they put some other person’s name as the policy holder on my policy and his address in San Diego (I live in Los Angeles.) There were many such serious and fundamental errors, all of which are documented.

I spoke to Lisa Castaneda at Costco. She is in charge of their insurance program.  When I told her what had happened to me and emailed her documents she said she thought what was done to me was wrong.  But then she came back to me and said:


“Thank you for sharing this with me. 

I understand your frustration & desire a successful resolution.

I have reached out to Ameriprise Auto & Home Insurance on your behalf but their decision in relation to the claim remains the same.”


With Costco’s Senior Executive for their Insurance Services being so effectively useless I’ve been forced to proceed with a lawsuit.

I filed my case in the local courthouse.  Guess what Costco Ameriprise did?  They removed it to Federal Court!  So now they have literally made me collision damage claim for my car a Federal Case!  Needless to say it is costing more to fight my case than the damage to my car but now it’s a matter of principle

Avoid Costco Ameriprise insurance like the plague!  What good is the insurance you pay for if its not there when you file a claim?

As Costco grows bigger it is becoming like all the other large corporations as it sacrifices the principles that made it big to begin with.  Customer Service and not putting pennies over customers.  Why else would Costco offer as an insurance provider Ameriprise, a company famous for crappy customer service and infamous for not paying its customers’ claims?

I am proceeding as a class action so if anyone has a similar story please contact me.

I'll try and paste the Complaint below which was removed to the Central District Federal Court here in California. (Not sure if the formatting will work though as I try and paste it.)

Case No.: CV13-04609 CAS (PJWx)



1.     Fraud and Fraudulent Inducement

2.     Bad Faith Breach of Contract

3.     Breach of Contract

4.     Class and Individual Action for Violations of the Consumer Legal Remedies Act

5.     Breach of Contract [COUNT TWO]

6.    Fraud and Fraudulent Deceit.

7.    Unfair Competition (§17200 et seq)

8.    Unfair Competittion (§17500 et seq)




1.              Venue is proper in Los Angeles County because the events occurred in this venue and all defendants either reside in Los Angeles County and/or acted or engaged in extensive business in Los Angeles County.

2.              Plaintiff  is an individual who is, and at all times relevant to this complaint was, a resident of Los Angeles County, California and the subject accident and damage to the subject vehicle occurred in the City of Los Angeles in the County of Los Angeles.

3.              Defendant Arieh Greenbaumhas, at all times relevant, been a resident of Los Angeles and subject to jurisdiction in this judicial district and is responsible for colliding with the Plaintiff’s vehicle and causing its damage.

4.              Defendants Costco Wholesale, Corp., Costco Membership, Inc., Ameriprise Auto & Home Insurance, Inc., Ids Property Casualty Insurance Company, Costco Insurance Agency, Inc., Drive Insurance (collectively referred to as "Defendants"), James Cracchiolo and Ken Ciakare doing business, respectively, in the County of Los Angeles in the State of California. 

5.              Defendants are engaged in the business of providing insurance and insurance-related services in the County of Los Angeles and the incidents at issue arose in Los Angeles County.

6.              The accident that is the subject of this lawsuit occurred in the City of Los Angeles.

7.              At all times relevant to this action, Defendants, and each of them, exclusive of Defendant Arieh Greenbaum, operated as affiliates, collaborative partners and/or principle/agents and were the corporate partner, corporate affiliate, joint venturer, principle/agent, employer and/or employee of each of the remaining defendants; and in doing the things alleged herein, acted within the course and scope of their employment, agency, partnership and/or joint venture with the advanced knowledge, authorization, acquiescence and/or ratification of each and every remaining defendant.

8.              Plaintiff is ignorant of the remaining true names and capacities, whether individual, corporate, partner, agent, affiliate, associate, employer, employee or otherwise, of the defendants sued herein, as DOES 1 through 10, inclusive, and therefore sues these defendants by such fictitious names.  Plaintiff will amend this complaint to allege the true names and capacities when ascertained.

9.                Plaintiff is informed and believes and thereon alleges that each of the fictitiously named defendants is legally responsible or negligent in some manner for the occurrences herein alleged, and that Plaintiff's injuries and damages as herein alleged were directly and legally caused by that act or negligence.

10.           In response to the advertisements from Defendants Costco Wholesale/Costco Membership Services for their automobile insurance which they were selling via their retail outlets, the Plaintiff contacted Costco, or so he believed based on Costco’s representations, for a quote to insure his motor vehicles, at least two of which are collectible vehicles, including a Ferrari and a $130,000 600SL Mercedes.

11.           Plaintiff does not commute and is very particular about the care of his vehicles, which are always garaged and covered in the garage.

12.           The Plaintiff’s vehicle that is the subject of this action, a cream puff Mercedes SL that was in new condition at the time of the accident, has lower miles on its odometer than any SL600 of the same year offered for sale on, Ebay or Autotrader in the United States when this Complaint was drafted.

13.           Further evidence of the Plaintiff’s desire to take full and proper care of his vehicle, and notwithstanding the fact the vehicle was hardly driven, the Plaintiff spent nearly $7,000 to purchase a five year extended warranty from Beverly Hills Mercedes. 

14.           The Defendants' Agent, who Plaintiff believed was an agent working on behalf of Costco, asked the Plaintiff what coverage he wanted.  Plaintiff stated he wanted comprehensive coverage to cover any and all possible loses for his expensive vehicles, which included an exotic sports car and the subject 600SL Mercedes convertible.

15.           The Plaintiff specifically disclosed that he was seeking insurance for at least two expensive automobiles, a Ferrari and an SL600 Mercedes V12, and that he needed full coverage in order to protect his investment as he owned the vehicles outright.

16.           The Defendants represented they had the necessary expertise to provide the coverages sought by the Plaintiffs to fully insure his vehicles.

17.           The Defendants’ agent asked the Plaintiff if he wanted the roadside assistance option to which Plaintiff stated he already had that covered as he had the top of the line AAA Premier membership, having been with AAA for a quarter of a century, and that he did not need additional roadside assistance. 

18.           The the Agent then spoke about rental car coverage and quoted the Plaintiff a price that was surprisingly low, something like $25, to add the coverage to the policy

19.           Plaintiff remembers this distinctly because they then had a conversation about how $25 was less than the cost to rent an economy car for just one day while the $25 would provide a month of rental car coverage.

20.           The Plaintiff advised the Agent this was something he definitely wanted on his policy. 

21.           The Defendants' agent outlined the policy and stated how much these coverages would cost. 

22.           The Plaintiff stated he wanted the “100,000/300,000” protections along with the rental car coverage, fire, theft and collision.

23.           The Agent stated the cost for the policy and then asked if the Plaintiff wanted the policy as offered, which included the coverages the Plaintiff had advised the Agent he required.

24.           The Plaintiff accepted the Agent's offer which provided an overall price for the insurance (as opposed to a breakdown of individual charges for each element of the coverage).

25.           Plaintiff provided the Defendants with his credit card information in order to pay for the policy electronically.

26.           At no time did the Defendants require the Plaintiff to review and then sign any policy documents, but instead, stated his policy would commence without the need or requirement for review, confirmation or execution.

27.           Relying on the Defendants' representations of full coverage, Plaintiff drove his cars on public roads, parked them in public places, etc., believing the Defendants' representations that he was covered in the event of an accident, theft, fire, etc.

28.           Without any effort on his part, the Plaintiff regularly paid his insurance bills electronically and automatically as the Defendants would charge his credit card at set intervals as they had it on file.

29.           Plaintiff is uncertain as to what each specific Defendant's behind the scenes actions were in this regard because they intentionally make this information confusing in a classic shell / whose on first sort of game. 

30.           For example, on one letter to the Plaintiff there are no less than three of the Defendants' companies'  names and logos listed as the parties providing the insurance. 

31.           Likewise, Plaintiff received letters from the Defendants’ “Vice President of Client Services” Carol Kammin.

32.           However, one of one letter heads has the logos of “Progressive” and also “IDS Property Insurance” while the other letterhead states it is from “Amerprise” letterhead and “IDS Property Insurance” and yet in both Kammin signs as the “Vice President of Client Services.”

33.           These letters clearly indicate Progressive, Ameriprise and IDS are really one in the same as they share the same Vice President of Client Services.

34.           Plaintiff alleges the Defendants intentionally create this confusion as an element of their corporate strategy: A strategy created, endorsed and implemented by Defendants JAMES CRACCHIOLO and KEN CIAK as they effectively employ a shell game to dodge and shirk liability by confusing consumers. 

35.           Prior to filing this lawsuit, the Plaintiff served a copy of the draft Complaint on the Defendants. 

36.           Plaintiff received a call from Ameriprise representative William Schuch and per Shuch's request, the Plaintiff faxed insurance documents he'd received, including insurance coverage documents with the Ameriprise logo /letterhead. 

37.           Even Schuch, who himself is employed by Ameriprise, was confused by the insurance document sent from his company to the Plaintiff, stating: "I will contact my underwriters to see if I can find out about the relationship between Ameriprise, Drive and Progressive."

38.           As such, even a seasoned Amerprise senior level customer service employee couldn't figure out the information Ameriprise was providing the Plaintiff.

39.           This wasn't the only issue Schuch didn't understand but stated he would look into.

40.            Only after the fact had the Plaintiff learned of a sneaky insertion, in particularly small font,  and a font smaller than all the other policy provisions, of a maximum policy limitation concerning the Plaintiff’s Ferrari, an even more expensive collectible car than the SL600 Mercedes.

41.           This policy limitation would have resulted in payment to Buckley of barely 20% of  vehicle's actual value in the event of a loss, potentially costing the Plaintiff tens of thousands of dollars had there been a loss of that vehicle.

42.           Plaintiff, relying on the Defendants’ false representations which were designed to induce him into a contract to purchase their insurance services, was under the false impression he had coverage for one of his other vehicles when there was a hidden policy limitation that was directly contrary to the Defendants’ Agent’s representations to the Plaintiff and one that would be used later to once gain deny the Plaintiff his coverage benefits.

43.             Plaintiff discovered, when speaking to any one of the Defendants they all could access the identical information concerning the Plaintiff, his vehicles and his policy, clearly indicating their joint venture operation, regardless of the Defendant’s entity name.

44.           Believing he had insurance protecting his vehicle, in March of 2011 the Plaintiff was driving his Mercedes when he was hit in the rear by Defendant Arieh Greenbaum’s SUV.

45.           Plaintiff contacted the Defendants and explained that he'd been in an accident and that he would need his car repaired and a rental vehicle.

46.           To his shock and dismay, the agent stated he had no coverage for either the collision or the rental car.

47.           The Plaintiff, who was just in the accident, was not in the state of mind to argue with the telephone representative.

48.           Plaintiff would later call back the Defendants and he explained how he had  specifically demanded the full coverage and that he even distinctly remembered the conversation he had with the Agent who offered him the policy concerning the full coverage and their side discussion about the rental car, that at $25 for a months rental car coverage it was a “no brainer.”

49.           The Agent stated he did not se the coverage for the collision but acknowledged it was odd to see all coverage in place except the collision.

50.           The Agent indicated the matter would be looked into further by a supervisor.

51.           Meanwhile, with the Mercedes severally damaged and requiring expensive repairs, the Plaintiff paid to have the Mercedes towed to a storage garage where the vehicle would remain, from then until now, costing the Plaintiff $90 per month or approximately $3,500.00 (and increasing) to preserve the evidence while the Defendants refused to pay for the vehicle's repair.

52.           In addition to the loss of use of the Mercedes, Plaintiff has lost more than three years of the value of the extended warranty he purchased from Mercedes of Beverly Hills, a cost of approximately $3,500.00 (and increasing).

53.           The loss of use for the SL600 is at least $500 per day.  For example, Midway Rentals in Los Angeles rents the SL550, a substantially less expensive version of the SL600, for $499 a day plus taxes and fees totaling more than $542.66 per day.  (The SL600 for 2011 had an MSRP of $176,000 compared to $126,000 for the SL550, a $50,000 difference.)

54.           Even just 100 days of lost use over two years (700 plus days) would amount to $54,266.00 in loss of use damages.

55.           As an additional element of damages, the Plaintiff was forced to drive his other vehicle instead of the Mercedes, a collector car vehicle that was adversely affected by accumulating far more miles than would been the case but for the Plaintiff’s no longer having available the subject Mercedes, subjecting that vehicle to a diminution in value attributable to the Defendants’ misfeasance of approximately $10,000.

56.           The Defendants falsely claim, and without any support or evidence to back up their claim, that the Plaintiff did not request these coverages, instead claiming the Plaintiff asked only for "comprehensive" but not for collision and not for rental car coverage. 

57.           This claim is completely illogical, defies common sense and is false.

58.           First, these expensive vehicles were owned outright by the Plaintiff and constituted substantial financial investments on his part which he would need to insure against such losses.

59.           Second, although the subject Mercedes was driven, on average, just 1,700 miles a year the Plaintiff was paying approximately $1,400 a year for an extended warranty, i.e., nearly a dollar a mile, thus indicating the Plaintiff was not looking to cut corners and skimp on protecting his investment.

60.           The Defendants are incorrect and simply looking to avoid liability through their errors, errors which the Plaintiff shows herein the Defendants routinely make.

61.           In fact, the Plaintiff discovered a string of gross errors committed by the Defendants, one of them potentially catastrophic déjà vu. 

62.           Needing a vehicle to replace his SL600 while it remained unrepaired and undrivable, the Plaintiff was set to purchase a Mercedes SL65, a vehicle which looks like the Plaintiff’s vehicle and which also had the same rare color combination of his Mercedes (silver exterior with a red interior) so the Plaintiff contacted the Defendants about adding the SL65 to his policy. 

63.           The Defendants’ Agent told him he could not add the SL65 to his policy because he would have too many cars at five.

64.           Now believing he had to find a new insurance provider based on the Defendants’ Agent’s statements, upon which the Plaintiff relied once again, the Plaintiff was forced to search for a new insurance provider, which he found. 

65.           Shortly after switching companies, another one of the Defendants' Agents contacted the Plaintiff again and asked if they could “win him back” as a customer.

66.           Plaintiff explained that was not possible because he'd been told he had "too many" vehicles.

67.           This Agent stated Plaintiff had been told incorrect information by the Defendants’ other Agent with whom he'd previously spoken. 

68.           The new Agent then asked the Plaintiff his new rate and coverage. 

69.           Plaintiff told her his new rate and that he had agreed coverage, for example, for $75,000 on the Plaintiff’s Ferrari.

70.           The Agent then reviewed the Policy the Plaintiff had with the Defendants before switching companies after being told he had too many vehicles.

71.           What the agent told the Plaintiff next was shocking and alarming:  She stated the Ferrari had only been insured by the Defendants for $20,000 minus the Plaintiff's $1,000 deductible for a net of just $19,000 in coverage…for a vehicle with a $75,000 replacement cost.

72.           Plaintiff stated to the Agent,  "That's insane! Who insures a Ferrari convertible for just $19,000!  The engine alone costs that much or more."

73.           Plaintiff realized that had something happened to the Ferrari, as had happened to the Mercedes, he would have been shortchanged and left unprotected by these Defendants yet again.

74.           Just as he knew he was told he was receiving collision coverage and rental car coverage, he was equally certain he'd never agreed nor been informed that he was insuring his Ferrari for just $19,000!

75.           Thoughts raced through the Plaintiff's mind of all the times he'd parked the car in public, with its convertible top down and feeling secure with the knowledge that he was insured when the truth was, if it had been stolen or wrecked, he would have lost tens of thousands of dollars.

76.           This was ludicrous, thought the Plaintiff.

77.           He then asked the Defendants’ Agent to fax him papers that showed this $19,000 coverage limitation.

78.           The Defendants’ Agent made another error as well!

79.           She faxed the Plaintiff someone else's private personal and policy information as well as their insurance card!

80.           Thus proving once again the frequency of mistakes made by these Defendants and their Agents.

81.           The Defendants’ repeated errors showed they were far from infallible and that mistakes were not only possible, but probable. 

82.           For example, Plaintiff clearly and distinctly remembers (1) the conversation about the strikingly low rental car cost and stating he wanted it included with his policy coverage but the Defendants’ Agent failed to add it; (2) the Plaintiff distinctly remembers being told he had "full coverage" on the Mercedes but the agent failed to include collision despite including comprehensive insurance and stating the Plaintiff would have “fire, theft and collision,” (3) Plaintiff  was told he was purchasing coverage for his Ferrari so that it would be fully covered in the event of a loss but yet the Ferrari was only covered up to $19,000, something that makes no sense at all and constitutes an independent fraud and breach of contract claim, (4)Plaintiff asked to see this showing documentation showing the Defendants were only providing $19,000 in coverage on the Ferrari and the Defendants’ Agent faxed the Plaintiff another person's private file information, and (5) Plaintiff was told by the Defendants’ Agent he could not add another vehicle and, in reliance on this representation, he then purchased new insurance from another company only to be later informed by another of the Defendants’ Agents that the information he was given was incorrect and he could have insured the additional vehicle.  That's five errors which clearly establish the Defendants are not only susceptible to making errors and mistakes but prone to making mistakes, including failing to provide the coverage they represented to the Plaintiff he would have on his Mercedes.

83.           Additional errors were discovered when the Plaintiff obtained his “policy documentation” file from the Defendants.

84.           For instance, the Defendants incorrectly listed the value of the Plaintiff’s SL600 vehicle at $89,220, which is the value for the entry level 500SL while Plaintiff had the 600SL which with a $129,270 MSRP, a $40,000 error on the Defendants part.

85.           The Defendants committed other graves errors such as getting the wrong name, address and business name on the Plaintiff’s policy.

86.           How do you get something so wrong as the name and address of the policy holder….and then fail to acknowledge a far simpler mistake like failing to add collision to a policy that already has all other coverages (e.g., fire, theft, etc.)?

87.           In the Plaintiff’s “policy record” created by the Defendants they not only listed incorrect vehicle information for the Plaintiff but even had the Plaintiff’s name and other information incorrect, instead having the name of Bill Schwenker as the policy holder.

88.           In addition to the wrong name on the Plaintiff’s policy they had the wrong address (an address in San Diego) and a business name on the account of “Skin Vital” which the Plaintiff has no connection with whatsoever. (The Plaintiff lives in Beverly Hills and has never resided in San Diego.)

89.           In addition to getting the Plaintiff’s name, address, business name and vehicle information incorrect, the Defendants incorrectly state in the Plaintiff’s policy records that he contacted them seeking insurance for 69 vehicles, which is absolutely ludicrous.  (Plaintiff is an attorney not a car dealer.)

90.           Of course, all of this information is flat out wrong as pertains to the Plaintiff and reveals the Defendants’ flagrant errors and omissions with respect to the management of the Plaintiff’s insurance.

91.           With this history of mistakes its clear the Defendants failure to include the collision coverage, as they’d represented to the Plaintiff, was just another one of their many errors in dealing with the Plaintiff’s account.

92.           Moreover, logic dictates that the Plaintiff would obtain collision coverage for his $130,000 Mercedes and not just coverage for the far less likely scenarios of fire or theft which the Defendants acknowledge were part of the Plaintiff’s policy coverage.

93.           Reflecting the Plaintiff’s mindset with respect to ensuring his vehicle was completely protected regardless of the expense, the Plaintiff barely drove the Mercedes that had just 13,000 miles on it yet he spent nearly $7,000 to purchase an extended warranty, clearly indicating the Plaintiff was not the type who would cut corners when it came to his safe guarding his extremely rare silver over red Mercedes.

94.           Thus, Plaintiff was spending nearly $1,400 a year for an extended warranty while the vehicle was driven on average just 1,700 miles  year.  (Nearly one dollar for every mile driven for warranty coverage in addition to his insurance coverage.)

95.           With respect to the $19,000 limit on the Plaintiff’s Ferrari, even the Defendants’ Agent on the phone had to take a few moments to find it on the policy because the limitation was not indicated where the coverages on the Ferrari were and where one would expect to find such a dramatic policy limitation.  

96.           In speaking further with one of the Defendants' other agents, she stated she wasn't even aware of such limitations on their policies. 

97.           Then Ameriprise's William Schuch also stated he too was unfamiliar with such limitations...but then acknowledged it when he saw it on the insurance document provided by Amerprise that the Plaintiff faxed to Schuch.

98.           Shuck stated he would look further into the matter of the Plaintiff’s coverages as the Plaintiff insisted he had collision coverage on the Mercedes just as sure as he would not insurance a $137,000 Ferrari for $19,000.

99.           If the Defendants’ own Agents are unaware of such policy tricks and limitations it should be easy to see how consumers could be mislead and deceived, as was the Plaintiff.  

100.        The Agent was eventually able to find the limitation as it was a font significantly smaller than the other font  on the page.  

101.        In other words, the most critical term on the policy which was never disclosed to the Plaintiff was hidden by the Defendants in a micro font (estimated at 8 point).

102.        On learning all these errors and realizing how unfair and wrongful the present situation was, Plaintiff contacted the Defendants' Agents and advised them of all the foregoing. 

103.        Plaintiff stated although his damages were now substantial, he would settle for the Defendants simply repairing his vehicle.  He would forgo his (i) loss of use claim; (ii) forego his storage fees; (iii) foregoes his of value of his $6,700 extended warranty, (iv) forego his towing fees, (v) forego his diminution in value on the Ferrari due to miles accumulation, and (vi) forego his breach of contract and fraud claims on the false deceptive Ferrari insurance.

104.        Plaintiff forwarded the Defendants’ Agents additional information via email, per their request.

105.        The Defendants indicated they would get back to the Plaintiff.

106.        They did not.

107.        Rather than then resolve this matter simply for the repair of the vehicle prior to filing the instant lawsuit, the Plaintiff received a letter from the Defendants’ attorney Douglas Galt denying the Plaintiff’s claim and stating, notwithstanding the Defendants’ documented gross negligence the Defendants would not pay the claim.

108.        Plaintiff called the Defendants' agent again and was advised, in sum, to go and "sue us,"  which ultimately led to the filing of the instant action.

109.        Plaintiff has since learned that these Defendants have a history of denying and under paying valid claims and that they use this tactic because they know most insured’s will not spend the money on legal fees prosecuting their claims against them. 

110.        This fraudulent conduct is indeed the Defendants modus operandi.

111.        The Defendants’ lure customers in with promises of a lower rate than the competition but then fail to pay claims justly once they are filed.

112.        Amperprise and its subsidiaries, including IDS have a history of ripping off unsuspecting consumers in this State and other States with their fraudulent and deceitful business practices.

113.        This action is filed as a class action and shall include all persons who the Defendants denied coverage, in full or in part, over the Consumers objections.

114.        These Defendants have a pattern and practice of engaging in bad faith insurance tactics and practices which has caused extreme detriment to the Plaintiff and consumers of this State.




 (Against all Named Defendants except Greenbaum)

115.        Plaintiff incorporates by reference herein paragraphs 1 through 114 as though fully set forth herein.

116.        The Plaintiff specifically represented to the Defendants his special and particular concerns regarding insuring his vehicles as they were both expensive vehicles (a Ferrari and a $130,000 Mercedes 600SL) and as they were both owned by the Plaintiff outright and constituted financial investments on his part which he sought to insure and secure.

117.        Plaintiff expressed that he sought insurance to protect his assets.

118.        In order to induce the Plaintiff into purchasing their insurance services, the Costco Defendants and their joint venturers represented they had the expertise and insurance available to adequately insure the Plaintiff’s vehicles and thus protect his investments.

119.        The Defendants, by and through their agents, as alleged herein, falsely represented to the Plaintiff that he would be covered in the event of a collision and that he would have rental car coverage for up to 30 days and these representations were made in order to induce him into purchasing their insurance services.

120.        The Defendants’ Agent, over the telephone, offered the Plaintiff what he represented was a policy which met the Plaintiff’s requirements and a specific price for that policy that was competitive with other companies providing services that met the Plaintiff’s needs for coverage.

121.        Plaintiff was seeking insurance to protect his assets while also purchasing peace of mind.

122.        Relying on these policy representations, the Plaintiff  was induced into paying the Defendants for their insurance services as they’d represented them to be.

123.        The Plaintiff paid the quoted insurance premium, fulfilling his legal obligations and his policy was current when his vehicle was involved in the accident.

124.        Plaintiff relied on the Defendants' representations, both when induced to purchase the insurance and when later driving his vehicles believing he was protected with “comprehensive coverage” including collision and rental car coverage in the event his vehicle was disabled, and in reliance on those representations and with a false peace of mind, the Plaintiff drove and parked his vehicles on public roads with the belief that he was insured in the event of a loss or damage.

125.        The Defendants made these representations via the telephone, when they first offered their insurance services to the Plaintiff and provided him with a rate, thereby making him an offer for insurance services and one designed by intent to induce the Plaintiff to purchase their services. 

126.        The Plaintiff accepted the Defendants' offer at that time and during that same telephone conversation. 

127.        In reliance on the Defendants’ representations the Plaintiff provided the Defendants with his credit card and the Defendants charged his card, repeatedly, for the service the Plaintiff thought he was receiving based on the Defendants’ representations.

128.        However, unbeknownst to the Plaintiff and according to the Defendants subsequent admissions, he was not receiving the insurance services he believed he had purchased from these Costco Defendants and their affiliate Defendants.

129.        Unbeknownst to the Plaintiff, the Defendants' representations  of their automobile insurance services, including the coverages and protections, were false.

130.        The Defendants subsequently admitted they had not provided the Plaintiff with the insurance services he’d required despite their representations to the contrary at the time when the Plaintiff was induced to accept their insurance services.  

131.        The Plaintiff's reliance on the Defendants' representations of coverage were justified as he believed he was purchasing his insurance through Costco and as a member of Costco based on the Costco Defendants’ representations.   

132.        In reliance on those representations, the Plaintiff did not obtain insurance from another company but agreed to be insured by the Defendants.

133.        In reliance on the Defendants' representations, the Plaintiff was driving his Mercedes when it was hit, believing he had coverage in the event of an accident.

134.        As a result of the Plaintiff's reliance on the Defendants' false and deceptive representations of coverage, Plaintiff purchased their insurance services and then when his vehicle was damaged he suffered substantial damages as a result of his reliance on the Defendants representations of coverage, including the costs to repair his Mercedes, the loss of use of his Mercedes, the loss of use of his $6,700 extended warranty, and monthly storage fees paid while the Mercedes awaited its repairs, tow fees, diminution in value of his other vehicle, etc.

135.        Defendants made statements of material fact to Plaintiff concerning his coverage upon which the Plaintiff reasonably and justifiably relied and to his extreme detriment.

136.        The Defendants knew or should have known their representations to the Plaintiff were untrue when made. 

137.        The Defendants engage in a shell game claiming they are not the responsible party, despite their names and logos on the policy and correspondence in an apparent effort to frustrate Insureds' efforts to collect under their policies for damages incurred.

138.        Plaintiff seeks general and special damages in an amount according to proof at trial.

139.        Plaintiff seeks punitive damages as provided under state and federal law to deter such fraudulent and deceitful practices.




(All Named Defendants except Greenbaum )


140.        Plaintiff incorporates by reference herein paragraphs 1 through 139 as though fully set forth herein.

141.        The Plaintiff entered into an insurance contract seeking security and peace of mind through protection against calamity.

142.        This is especially true considering the cost of the vehicles the Plaintiff insured, and the fact that these vehicles constituted Plaintiff’s primary investments, including a Ferrari and the subject Mercedes, with the Mercedes costing approximately $130,000 and the Ferrari $137,000.

143.        The bargained-for peace of mind for the Plaintiff came from the assurance that the Plaintiff would receive prompt payment of the money needed to repair or replace his vehicle in times of need.

144.        The Defendants have failed to pay the benefits due the Plaintiff under the policy as it was represented to the Plaintiff when he was induced into purchasing the Defendants insurance services from the Costco Defendants.  

145.        The Defendants have withheld payment unreasonably and in bad faith.

146.        As a result of the Defendants' bad faith, Plaintiff has (i) suffered the loss of use of his Mercedes ($546.66  per day for over 700 days); (ii) lost $3,500.00 in value from his Beverly Hills Mercedes extended warranty; (iii) had to pay $3,500 to store the damaged Mercedes, (iv) paid $143 to tow the vehicle, (v) an estimated $10,000 in diminution of value of Plaintiff’s other vehicle, and (vi) Plaintiff’s Mercedes remains in need of substantial repairs, bringing damage totals, to approximately $67,000.00 and according to proof at trial.




(All Named Defendants except Greenbaum)

147.        Plaintiff incorporates by this reference paragraphs 1 through 146 as though set forth fully herein.

148.        The Defendants offered the Plaintiff insurance services for his vehicles. 

149.        The Defendants' offer was presented to the Plaintiff during a phone call with the Defendants' Agent. 

150.        During this communication the Plaintiff specifically detailed the nature of the services he sought, and as he explained, he was looking to protect his expensive investment vehicles, a Ferrari and an SL600 Mercedes, against all possible losses.

151.        The Defendants represented they had the expertise and insurance services necessary to insure these sorts of vehicles.

152.        The Defendants agreed to provide the Plaintiff with insurance services the Plaintiff had stated he required for his vehicles, that is, to provide the full coverage protection.  

153.        The Defendants’ insurance services that were the terms of the Parties’ Agreement and which terms the Plaintiff required were to cover all possible losses, including fire, theft and collision. 

154.        In addition, the Plaintiff was to be provided a rental car for up to one month in the event his car was disabled per the specific terms of the Agreement.

155.        The Plaintiff accepted the terms offered by the Defendants which met the Plaintiff’s requirements during that same telephone conversation.

156.        The Plaintiff fulfilled his end of the bargain by providing the Defendants with his credit card information and authorizing Defendants to charge his credit card for their insurance service. 

157.        The Defendants used the Plaintiff's credit card information to bill and charge him repeatedly for their insurance premiums.

158.        The Defendants breached their Agreement with the Plaintiff when they failed to provide the insurance benefits they had represented to the Plaintiff and which he'd contracted for and agreed to, including paying for the repair of the subject Mercedes following the collision and providing the rental car during the repair duration.

159.        As a result of the Defendants' breach of the Parties' Agreement, Plaintiff has suffered the damages alleged herein and according to proof at trial.




(Against all Defendants and unknown DOE defendants except Greenbaum)


160.        Plaintiff incorporates by reference herein paragraphs 1 through 159 as though fully set forth herein.

161.        In doing the things alleged herein, including the advertising, marketing and representations to the public concerning their insurance services, which the Plaintiff relied upon in purchasing their services for his Mercedes and the Ferrari, the Costco defendants and their joint venturing partner Defendants violated Civil Code sec. 1770 et seq. , including subsections (a)(5)(9)(14) and (17), and have caused injury to the Plaintiff and the consumers of the State of California with CLRA violations that include:

(1)  Passing off goods or services as those of another.                       

                        (2) Misrepresenting the source, sponsorship, approval, or certification of goods or                                    services.

(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have.


(9) Advertising goods or services with intent not to sell them as advertised.


(14) Representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law.


(17) Representing that the consumer will receive a rebate, discount, or other economic benefit, if the earning of the benefit is contingent on an event to occur subsequent to the consummation of the transaction.

                        (19) Inserting an unconscionable provision in the contract

162.        Plaintiff has mailed the Defendants CLRA Notice in accordance with the Code's requirements but the Defendants refused to rectify the matter or take corrective action.

163.        As a result of the Defendants' violations of the Consumer Legal Remedies Act, as alleged herein, Plaintiff has been injured as outlined hereinbove.

164.        In accordance with CLRA remedies' provisions, Plaintiff seeks compensatory damages, injunctive relief, exemplary damages and attorneys fees.

165.        Plaintiff seeks an injunction on behalf of the Consumers of this State precluding the Costco Defendants from falsely advertising their insurance services.




(All Named Defendants excluding Greenbaum)

166.        Plaintiff incorporates by reference herein paragraphs 1 through 165 as though fully set forth herein.

167.        Plaintiff contracted with the Defendants to provide him coverage in the event of a loss (theft, fire, collision) of his Ferrari.

168.        The replacement value of the Plaintiff's Ferrari is approximately $85,000. 

169.        Plaintiff paid the Defendants automatically with his credit card that he’d provided them for their insurance services for the full coverage on the Plaintiff's Ferrari, thus rendering his full performance under the terms of the contract.

170.        Unbeknownst to the Plaintiff, the Defendants were shortchanging the Plaintiff in that they were only providing a net of $19,000 worth of coverage to the vehicle in the event of loss, thus failing to provide the service the Plaintiff had contracted for.

171.        The Defendants breached the terms of the Parties Agreement to provide coverage for the Plaintiff if the Plaintiff’s vehicle was damaged or stolen, thereby failing to provide the service as agreed to.



 (Against all Named Defendants except Greenbaum)

172.        Plaintiff incorporates by reference herein paragraphs 1 through 171 as though fully set forth herein.

173.        The Defendants, by and through their Agents, as alleged herein and in order to induce the Plaintiff into purchasing their insurance services, represented to the Plaintiff that, in the event of a loss of his Ferrari he would be covered for the full value replacement of the Ferrari, minus his $1,000 deductible.

174.        In reliance on these representations of insurance services at the price offered by the Defendants along with the full coverage of the Paintiff’s vehicle as represented by the Defendants, the Plaintiff was induced into purchasing the Defendants’ insurance services.

175.        In further reliance on the Defendants; representations he did not purchase insurance from other sellers of insurance services for his Ferrari.

176.        The Plaintiff paid the Defendants for coverage on the vehicle with the expectation that in the event of a loss he would be fully covered, minus his $1000 deductible.

177.        Plaintiff relied on the Defendants' representations that he and his vehicles were insured and in reliance on those representations, and with a false peace of mind, drove and parked his vehicles on public roads.

178.        The Defendants made these representations via the telephone, when they offered their insurance services to the Plaintiff and provided him with a rate, thereby making him an offer for insurance coverage.

179.        The Plaintiff provided the Defendants with his credit card and the Defendants charged his card repeatedly for the service the Plaintiff thought he was receiving but in reality was not.

180.        Unbeknownst to the Plaintiff, the Defendants' representations were false.

181.        The Defendants had in fact only insured the Plaintiff’s vehicle to a net loss of just $19,000, a fraction of the vehicle's value actual replacement cost.

182.        The Plaintiff's reliance on the Defendants' representations of coverage were justified as these were known companies with no obvious indication of an intent to deceive.

183.        In reliance on those representations, the Plaintiff did not obtain insurance from another company.

184.        The Defendants offered a lower price in order to induce the Plaintiff to purchase their insurance while they failed to disclose their lower price was premised on the concealed fact they would only insure his vehicle for a small fraction of its actual value.

185.        Had the Defendants provided the insurance coverages they represented their rates would have been higher and the Plaintiff would have sought insurance  from another seller.

186.        In fact, Plaintiff did later obtain insurance from another seller of insurance and he was paying less for this new insurance even though the new insurance provided nearly 80% greater coverage.

187.        In reliance on the Defendants' representations, the Plaintiff was driving his Ferrari, parking it in public places, etc., with a false peace of mind and sense of security.

188.        As a result of the Plaintiff's reliance on the Defendants' representation of coverage, Plaintiff suffered damages, including the payment of insurance premiums he would not have otherwise paid these Defendants as well as emotional distress and upset upon learning the Plaintiff was effectively operating his vehicles without coverage.

189.        As a further result the Plaintiff paid these Defendants more money than he would have paid another seller of insurance who would have provided significantly greater coverage for significantly less money.

190.        The Defendants made statements of material fact to the Plaintiff upon which the Plaintiff reasonably and justifiably relied and to his extreme detriment.

191.        The Defendants knew or should have known their representations to the Plaintiff were untrue when made. 

192.        Had something happened to the Ferrari the Plaintiff would be in the same boat he now finds himself in with respect to the Mercedes, thanks to the Defendants' misrepresentations and breach of contractual obligations.



 (Against all Defendants except Greenbaum)

193.        Plaintiff incorporates by reference herein paragraphs 1 through 192 as though fully set forth herein.

194.        Defendants have engaged in, and continue to engage in, acts or practices that constitute unfair competition, as that term is defined in section 17200 of the California Business and Professions Code. 

195.        These Defendants have engaged in, and continue to engage in, acts or practices that

constitute unfair competition, as The Defendants have violated, and continue to violate, Business and Professions Code section 17200 through their unlawful, unfair, fraudulent and/or deceptive business acts and/or practices as described hereinabove.

196.        The unlawful acts and practices of Defendants alleged above constitute unlawful  business acts and/or practices within the meaning of Business and Professions Code section 17200.

197.        Defendants’ unlawful business acts and/or practices as alleged herein have violated numerous state, statutory and/or common laws and said predicate acts are therefore per se violations of section 17200. These predicate unlawful business acts and/or practices include, but are not limited to, the following: Business and Professions Code section 17500 (False Advertising),  Civil Code section 1572 (Actual Fraud - Omissions), Civil Code section 1573 (Constructive Fraud by Omission), California Civil Code section 1710 (Deceit), California Civil Code section 1770 (the Consumers Legal Remedies Act – Deceptive Practices) and other California statutory and common law.

198.        The Costco Defendants and their joint venturers intended that California consumers would be misled and/or deceived into believing they were receiving insurance through Costco and with the Costco guarantees of customer satisfaction and customer service.

199.        Consumers were in fact likely to be deceived by the Defendants false and fraudulent representations and deceptions.

200.        Consumers were in fact deceived as a result of the Defendants’ conduct set forth herein.

201.        This practice is and was immoral, unethical, oppressive as it not only would deceive California consumers, cause them to rely to their detriment and cause them damage; but also mislead consumers into purchasing insurance services to protect their valuable chattels believing they had such protections when in fact they were not being provided with that which they had been represented and which they were relying on.

202.        The Defendants conduct was unscrupulous and injurious to consumers and thus unfair within the meaning of the Business and Professions Code §17200.

203.        At all times relevant, Defendants’ misconduct and omissions alleged herein: (a)

caused substantial injury to the Public; (b) had no countervailing benefit to consumers (c) was injurious and illegally so to competition from legitimate insurance service providers, (d) served no legitimate purpose could possibly outweigh these substantial injuries; and (e) caused injury to consumers and competitors that could would have otherwise been avoided were it not for the illegal activity by these Defendants. Thus, Defendants’ acts and/or practices as alleged herein were unfair within the meaning of Business and Professions Code section 17200.

204.        Defendants’ acts and practices, as alleged herein, were likely to, and did, deceive the Public.

205.          Defendants’ concealment, material omissions, acts, practices and non-disclosures, as alleged herein, therefore constitute fraudulent business acts and/or practices within the meaning of California Business and Professions Code section 17200.

206.          California consumers have been, and continue to be, deceived by Defendants’

concealment and material omissions as alleged herein.

            207.     California consumers have suffered injury and lost money as a direct result of the deceptive conduct as alleged herein.

208.     The unlawful, unfair, deceptive and/or fraudulent business acts and practices of Defendants, as fully described herein, present a continuing threat to the citizens of California to be misled and/or deceived by Defendants as alleged herein, and or to be substantially injured by these Defendants failure to render the services as the represent them to the public.

209.     Plaintiff seeks disgorgement of all profits received by these Defendants as a result of their violations of Section 17200.

209.     Plaintiff seeks restitution of all monies received by the Defendants  and to be returned to the individual consumers as determined by reference to the Defendants books and records.

210.     Plaintiff seeks an Order compelling Costco to issue advisement letters to all of its Members advising them of the true nature of the automobile insurance services being offered through Costco, including who it is that is actually providing said insurance services and that said insurance services is not actually being offered nor provided by Costco and that such services do not come with the expected Costco assurances and guarantees of quality and satisfaction.

210.     Plaintiff seeks an injunction prohibiting the Defendants from further conduct which violates Section 17200.

211.     Plaintiff seeks statutory damages on behalf of each senior citizen class member pursuant to the Code.

212.     Plaintiff seeks compensatory attorneys fees pursuant to Section 1021.5 of the Code of Civil Procedure.




 (Against all Defendants except the Greenbaum Defendant)


213.     Plaintiff incorporates by reference herein paragraphs 1 through 213 as though fully set forth herein.

214.     The representations made by the Defendants via publications, advertising devices, public outcry and proclamations, including via their use of the internet for such purposes, were untrue and misleading, as set forth herinabove.

215.     The Defendants knew, or by the exercise of reasonable care should have known, that their statements were untrue or misleading.

216.     Consumer complaints have been lodged with these Costco Defendants time and again thereby giving the Defendants direct and actual notice of what the Defendants already knew, that their public proclamations, advertisements and representations of insurance services were deceptive and misleading and that consumers were in fact being mislead and deceived, yet with this knowledge the Defendants continued their illicit and fraudulent conduct, further indicating their intent and absence of any mistake.                                                                     

217.     Members of the public were and remain likely to be deceived by the Defendants’ false advertising.

218.     Members of the public have in fact been deceived by the Defendants’ false advertising.

219.     Plaintiff seeks disgorgement of all profits received by these Defendants as a result of their violations of Section 17500 and 17200.

220.     Plaintiff seeks restitution of all monies received by the Defendants  and to be returned to the individual consumers as determined by reference to the Defendants books and records.

221.     Plaintiff seeks an injunction prohibiting the Defendants from further conduct which violates Section 17500 and 17200.

222.     Plaintiff seeks statutory damages on behalf of each senior citizen class member pursuant to the Code.

223.     Plaintiff seeks compensatory attorneys fees pursuant to Section 1021.5 of the Code of Civil Procedure.


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This report was posted on Ripoff Report on 02/04/2014 10:45 AM and is a permanent record located here: The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year. Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content

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