City replaces scorned towing firm [Honolulu Star-Advertiser (HI)]

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A towing company under investigation for allegations of insurance fraud has been replaced as the city's exclusive vendor for Oahu's busiest tow region, ending an eight-year tenure marked by controversy, a prolonged legal fight and scores of consumer complaints.

Stoneridge Recoveries' contract to handle police-ordered tows from downtown to Makapuu expired Oct. 31, and even though the company bid for a new deal, the city selected a competing bidder, Kuni's Automotive & Towing.

Kuni's received a six-month emergency contract for the exclusive rights to handle police-initiated tows -- mostly covering traffic accidents, parking violations and stolen-vehicle cases -- in the area from Alakea Street downtown to Makapuu.

"It's been smooth sailing," Brian Kunishige, Kuni's president, said of the first few weeks of operations.

Stoneridge's tenure as exclusive vendor was anything but smooth, especially in the initial years after it received an "emergency" contract in 2003. That contract, except for one brief gap, essentially remained in place until Oct. 31.

For much of those eight years, Stoneridge battled the city in court over contract issues -- a battle eventually won by the city. But as that fight unfolded, the city was unable to replace Stoneridge despite a litany of complaints, fines and breach-of-contract concerns.

The relationship grew so bad that in 2005 and 2006, then-Police Chief Boisse Correa recommended that Stoneridge be replaced as exclusive vendor -- a recommendation the city said it wasn't able to implement because of pending litigation.

More recently, Stoneridge has become the target of a criminal investigation over whether it fraudulently inflated tow bills -- a contention the company has disputed.

A spokeswoman with the state's insurance fraud unit said Friday that the investigation is continuing.

A Stoneridge spokesman did not return calls this week seeking comment, but he previously said the company has provided good service under challenging conditions.

Consumers who learned that Stoneridge no longer has the contact for Oahu's busiest tow region were pleased.

"Yay!" said Celeste Cheeseman, a Mililani real estate agent who received a settlement from Stoneridge after her towed car was damaged in 2005. "There were a lot of people who had complaints about them."

Stoneridge had been paying the city $21,000 a month for exclusive rights for the Alakea Street-to-Makapuu region.

When the contract was about to expire, the city asked the company whether it wanted to renew the agreement at the same price, according to the city.

Stoneridge declined, saying it was losing money on the deal, a city spokesman said. That prompted the city to solicit bids for a new contract effective Nov. 1. Stoneridge was among the bidders.

Kuni's offered to pay the city $21,200 per month for the exclusive rights, according to Kunishige and the city.

Kunishige said his company should be able to make a profit even though it's paying a higher monthly fee than Stoneridge did.

The switch to Kuni's should result in savings for motorists whose cars are towed.

Unlike Stoneridge, whose vehicle storage lot is in Mapunapuna -- about four miles outside the downtown end of its tow zone -- Kuni's has its storage lot inside the zone, on Isenberg Street. Because towing fees ($7.50 per mile) are calculated based on the distance from the tow spot to the storage lot, tow distances will be less, resulting in lower charges.

A car towed from Alakea Street to Kuni'sIsenberg Street lot, for instance, would travel three miles, about one mile less than the distance to Stoneridge's Mapunapuna lot. The disparity would be even greater for tow spots farther from Mapunapuna.

The new contract is supposed to be in effect through April, at the latest.

Before then the city is expecting to award a permanent contract for exclusive rights to police-initiated tows for all of Oahu -- a major change from the existing system, which divides Oahu into multiple tow zones.

By dealing with only one company instead of multiple ones, the city expects the new system to be more efficient and consumer-friendly.

Companies had to submit bids for the permanent contract by Oct. 31, and the city is evaluating them. It would not disclose how many companies submitted proposals.

Credit: Rob Perez