Cutting-edge Silver Lake biofuel company is embroiled in a legal battle
Lovecraft Biofuels' owner and former owner are at odds. The conflict is straining some customers' loyalty.
By Susannah Rosenblatt
Los Angeles Times Staff Writer

April 18, 2008

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.

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.

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, 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."

Many customers sing the praises of grease-powered fleets bought from Friedman that reliably putter on oil scavenged from restaurants or purchased in bulk from Costco.

"I was just as pleased as punch; just thought it was the coolest thing ever," Nathan Amondson, 36, said of his beige 1985 station wagon. "I was able to be independent of, to be off the grid."

Other waste-oil drivers, however, relate Lovecraft horror stories. Kristina Wong, 29, bought a pink Mercedes from Friedman in 2006, paying $5,800. Despite a six-month warranty on the car, "the mechanics were these total Mickey Mouse mechanics," Wong said. Her 27-year-old vehicle leaked oil and generated pages of problems in a AAA diagnostic evaluation that she presented to Lovecraft while the car was still under warranty, Wong said in an interview. Wong believes no real fixes were made.

"I still believe in this idea of: 'Here's a car that runs on something different,' " Wong said. "I would, if I could have, acquired this same car by other means for a lot less."

Friedman owes another customer, Douglas Mcgowan, more than $3,300, according to a small claims court judgment, for a lemon that Mcgowan said didn't work properly. These days, Lovecraft converts a couple of cars a day for between $800 and $1,300, and sells 100 or so conversion kits a month, mostly online. It no longer sells cars.

None of the conversions are legally sanctioned: Vegetable oil has not been approved as an alternative fuel by the federal Environmental Protection Agency, which must test the substance's emissions, according to an agency spokeswoman. State air quality regulators also require special permission to convert a car to run on grease.

But because Lovecraft's cars also can still run on diesel, Webb said, the business is operating "a bit like a head shop."

"To be honest, no one is really challenging us," she said. "Until they do, I will always do what is right to comply" with the law.

Biofuels aren't always as clean as they're cracked up to be, said John Swanton, an air pollution specialist with the state Air Resources Board. The reclaimed grease generally emits lower levels of particulates, he said, but still releases significant amounts of other pollutants, such as nitrogen oxide.

Although wannabe green drivers have good intentions, he said, "These kinds of modifications tend to lengthen the lifetime of the older diesel vehicles that we would really just prefer be retired."

There are a handful of established vegetable oil conversion businesses around the country, and more do-it-yourself shops are appearing all over, said Justin Carven, the founder and president of Greasecar Vegetable Fuel Systems based in East Hampton, Mass. Carven has a degree in mechanical design; another leading vegetable oil company founder was a high-end German car mechanic. Friedman had dabbled in retail and cobbled together his conversion device by tin-can tinkering with a friend.

Jeff Phillips, owner and chief executive of L.A. Biocars, which does custom conversions in Pasadena, said Lovecraft's veggie oil kits aren't the most mechanically sophisticated on the market.

Carven described Lovecraft as a flashier, more "image-based" veggie oil conversion outlet: "I think a larger part of their marketing is about pretty people driving funky-colored old Mercedes around town," he said.

Lovecraft owner Webb begs to differ. She is laboring to move past the legal hassles and focus on expanding Lovecraft's reach. Just down the sidewalk from its crammed-full garage, a stone's throw from a Jiffy Lube, is the company's annex, a roughly 4,000-square-foot storage space with a couple of cars inside. Webb envisions installing complex devices to convert algae into fuel; she's organizing a children's fashion camp this summer.

For now, while Webb and Friedman bury each other in legal briefs, the storeroom -- complete with a view of the Hollywood sign -- sits all but empty.

susannah.rosenblatt @latimes.com

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