News

Stanford Driving School closes; students stranded

Thousands of refunds remain in limbo

One of the Bay Area's oldest driving schools suddenly closed its doors last month, and hundreds of parents and student drivers are feeling ditched by the side of the road, former clients are saying.

A Palo Alto mainstay, Stanford Driving School shut down on May 18, leaving parents and students scrambling to get their money back -- and to get into new schools during a peak time for driving lessons.

At the heart of the closure is a dispute between business owner Gary L. Morris of GLM Group, Inc., and its would-be owner, Cathy Sechrist of Sechrist Enterprises LLC. Sechrist pulled out of escrow after the deal went awry, she told the Weekly.

Stanford Driving School was one of the largest in the area, with about 14 employees, according to Sechrist. An employee from another local driving school estimated it served hundreds, if not more than a thousand, students.

Ruth Levine of Los Altos signed up with Stanford for eight hours of driving lessons for her 16-year-old son, Eli, paying hundreds of dollars. After two sessions and then scheduling a third, she tried to get in touch with the school last month. That's when she realized the website was down, the building on El Camino Real was empty and it was impossible to reach anyone, she said.

"Turns out they closed more or less overnight without any explanation, leaving us and many other families high and dry. Eventually, after multiple emails, they responded with a letter documenting the lessons so that we could go to another school, pay again and finish the sessions required for a license.

"Many neighbors of ours also lost money -- some hadn't gotten any lessons but had recently paid -- and all were inconvenienced significantly," Levine wrote in an email to the Weekly.

News of Stanford's closing surprised some rivals, who said they have been scrambling to keep up with the influx of former Stanford clients and even to hire a few of the employees who are now out of work.

Karla Valentine, manager at Bay Cities Driving School in Redwood City, said her company and other driving schools are trying to help Stanford students transfer their credits so they won't have to start over. Student drivers can transfer credits for lessons already taken if they have a letter on the Stanford Driving School letterhead certifying the number of completed hours, she said.

Only students under 18 years old need the transfer letter. They have one year from the day they got their learner's permit to finish their driving lessons. All that is required is six hours of driving-school training and 50 hours of driving with a parent or guardian, she said.

Some parents said they have received the letters, which were promised to clients in a message left on the Stanford phone: "A letter will be mailed to you regarding hours completed at our school."

But Palo Alto resident Ben Lenail said the notice did not mention a refund.

"It was an extremely short letter. It was not signed by any person. There was no phone number, no name, no email, no address. It was like a legal notice. It said, 'Sorry for the inconvenience.' At the very least, they could've sold the customer list for a referral to other schools, but not even that," he said.

Stanford asked for $375 upfront when Lenail's second son, Max, enrolled -- a significant down payment for two and a half hours of professional driving instruction at the wheel, Lenail said.

It's not just students and their families who are feeling burned by what has transpired; Sechrist said the aborted deal has left her at her financial wit's end.

Buying Stanford Driving School, which had operated in Palo Alto since 1981, seemed like a good bet, said Sechrist, a business analyst for 22 years. She left the high-tech industry a couple of years ago with the goal of owning her own business and worked for a startup to learn the ins and outs of a small business, she said.

While the business was still in escrow in February, Sechrist said, she began working there, believing she had bought a turn-key operation. But then Morris let the company's lease expire at its Palo Alto location, and she moved the business to 4962 El Camino Real in Los Altos.

She put $40,000 into the business to improve its cash flow, she said.

Sechrist pulled out after discovering certain aspects of the business had allegedly not been disclosed when she made the offer, she said.

After she pulled out of escrow, Morris, who has since moved to Atlanta, closed the business, Sechrist said. Morris did not return requests by the Weekly for comment.

Sechrist said she has lost her life savings and faces additional legal costs.

"I lost my shirt. This was my opportunity to own a business that I felt I can do something with for the community, and it was just a disaster. I would like to let people know how sorry I am. It's very sad for everybody. The saddest thing about it is the 14 employees who lost their jobs overnight because of this," she said.

Meanwhile, Stanford's closure is proving to be a boon for other driver-ed businesses. Stanford's closure affected an estimated 800 to 1,200 people, the office manager of Premier Driving School in Sunnyvale estimated.

Jonathan Zelaya, owner of California Driver Academy in Menlo Park, said his business has been flooded with requests.

"We're booking way out to July now. It is really crazy," he said.

Zelaya said he worked for Stanford Driving as an instructor from 2008 until 2013. He has talked to three of the former Stanford instructors and wants to take on additional workers to meet the demand. And Ken Wang, owner of Bay Cities Driving School, said he is also trying to take on hiring some of Stanford's instructors.

As for clients getting refunds, Sechrist said that identifying who pays is "up to the lawyers." In her view, Morris is still the legal owner of the business.

Morris had owned the fictitious business name since 2006 and abandoned the name on Feb. 13, 2015, according to the Santa Clara County Office of the Clerk Recorder. Sechrist took over the name under Sechrist Enterprises LLC, starting Feb. 2, 2015, but she officially abandoned the name on May 6, according to the clerk-recorder.

DMV spokesman Jaime Garza said students can file an online complaint with the California Department of Motor Vehicles (DMV) regarding driving schools, which are licensed by the state. An informational brochure on how to file a complaint and a copy of the form are available at dmv.ca.gov.

A consumer might also have to file a civil lawsuit to recoup their money, he said.

Stanford's customers could potentially get refunds through a bond by a surety insurer, which the business is required to have, according to the DMV.

Comments

Like this comment
Posted by Bob
a resident of Atherton: West Atherton
on Jun 27, 2015 at 6:27 am

Exit Scam. Customers who paid with credit cards or checks should get in contact with their banks and request a charge back. Meanwhile law enforcement should be investigating this as a criminal matter.


Like this comment
Posted by Mother of teen driver
a resident of Portola Valley: Central Portola Valley
on Jun 29, 2015 at 4:06 pm

My son took 1 lesson with Stanford Driving before they closed and it was clear something was amiss with the company. It took a painfully long time to schedule the apppointment and when the appointment finally rolled around, the instructor was very unprofessional. It was a terrible experience for a young driver.
After Stanford Driving School closed, I am grateful to report that my bank refunded our credit card payment in full. We have shifted our business to Bay Cities Driving School. My son had his first lesson with a first rate instructor a couple of weeks ago.
A good example of market forces at work!


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