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Throwing fry oil on the fire

A Silver Lake biofuel firm's owner and ex-owner are locked in a legal battle with allegations of fraud.

April 18, 2008|Susannah Rosenblatt | Times Staff Writer

Crawling by it in Sunset Junction traffic, past a scruffy row of mod clothing boutiques, Circus of Books and a gelato parlor, you'd hardly know the black garage on the corner is at the heart of a mushrooming environmental movement.

Lovecraft Biofuels is a counterculture Jiffy Lube, where urban pioneers bring aging Mercedes diesels for a conversion to run on vegetable oil. Essentially cornering the Southern California market on veggie oil fuel transformations, Lovecraft's business exploded since its inception about three years ago, attracting customers including actress Mandy Moore and Gov. Arnold Schwarzenegger.

But now a bitter legal battle between the business' current and former owners has divided customer loyalty and left things at Lovecraft murkier than a barrel of old fry grease.

With back-and-forth lawsuits and allegations of drug use, bribery and fraud, the tiff has morphed into what one not-very-satisfied customer called a "huge hipster soap opera."

The tiny garage, where black-clad mechanics in sunglasses tinker on Mercedes-Benzes next to a ramshackle office with plywood floors, still has a homespun feel. But under new management, Lovecraft has grappled with adolescent growing pains in the evolution from a backyard experiment to a sophisticated, media-savvy enterprise.

Entrepreneur Tacee Webb took over the veggie oil conversion business from founder Brian Friedman last year, agreeing to keep the former tattoo, piercing and comics shop owner on as a consultant. But somewhere along the way, the arrangement apparently soured.

Allegations

Webb filed a complaint against Friedman, alleging that he continued to do business under the Lovecraft name in breach of non-competition provisions of the contract. She also alleged that Friedman harassed and threatened Lovecraft employees, sabotaged operations and misrepresented the company's earnings and debt.

Webb's complaint alleged that Friedman swiped the database of 7,000 customers, hacked into the company's computer system, changed the business phone number, sold cars without a license and accepted payment from people for cars he never delivered, damaging the Lovecraft name.

"Friedman's wrongful conduct is causing, and will continue to cause, great and irreparable injury to Lovecraft's business, name, goodwill and reputation," the complaint read.

In February, a Los Angeles County Superior Court judge signed a preliminary injunction against Friedman, barring him from doing any business that could compete with the veggie oil company or from setting foot on the Silver Lake premises. "This is a long. . . battle that I'm forced to react to every day," Webb said. "I just want it to be over so I can just grow my company and do something good for the planet."

Friedman denies Webb's allegations, and says she took more than her share of Lovecraft: "I'm doing everything humanly possible to fight this scam," said Friedman, who at times has gone by the name Brian Lovecraft.

Court documents filed by Friedman say the pair were originally to be partners in the business, with Webb keeping the rights to Friedman's converter technology, but that the eventual transaction was "grossly mishandled" and "riddled with illegality," according to Friedman's cross-complaint.

The complaint alleges that Webb unfairly cut Friedman out of Lovecraft profits by fraudulently changing the terms of their agreement. "No sooner was the patent transferred than Webb reneged on the deal," said a brief filed last month by Friedman's attorney, seeking to disqualify Webb's attorney.

Webb dismisses Friedman's claims. In an interview she labeled him a "veggie car con man."

Friedman contends that Webb liquidated the car inventory after customers had been promised vehicles and tried to evict him and his girlfriend from a Topanga Canyon house owned by Webb. Friedman's legal documents say that Webb promised Friedman the house in exchange for a share of the business.

Webb "has more money than me; she's trying to spin it that she is a savior," Friedman said.

According to one of Webb's legal filings, Webb bought the home for Friedman with the understanding that he would "provide services in exchange for the rental." However, "even before the home was purchased, Friedman, on his own, moved in without notice and without consent. . . ." Webb ended the car sales portion of the business because Friedman was selling "junk cars," and ruining the company's good name, she said in an interview.

Customer view

Customers are at odds as to whether they welcome Lovecraft's departure from a bohemian operation where few, if any, transactions were written down. But everyone agrees that things there are different.

"Things probably did have to change," said Charles Runnette, 39, a magazine editor who bought a 1984 Mercedes 190 from Lovecraft a couple of years ago. "In the era when Brian ran it, it was a little bit of a mess."

But despite that, Runnette said, Lovecraft "felt like there was a little bit of a soul to it. Now it feels totally soulless."

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