In this U-B file photo, Gilbert Auto Honda dealership in College Place celebrates its grand opening in August 2011.
Photo by Andy Porter.
WALLA WALLA — The city of College Place has refiled a lawsuit seeking more than $2 million from a local car dealer in financial and various legal troubles for the city’s Commercial Drive project.
The suit, filed Thursday, reinstates the city’s complaint against defendants Mark W. and Susan Gilbert, Gilbert Imports and GA Group Properties. Mark Gilbert is the owner of Gilbert Auto Honda and other auto dealerships.
The action follows the failure of Gilbert to meet the terms of an agreement reached with the city in February that resulted in the dismissal of the original lawsuit filed Jan. 29 in Walla Walla County Superior Court.
The city’s complaint alleges the defendants have failed to make payments promised for the city’s construction of Commercial Drive. The road was built in late 2008 to serve the Honda dealership and a bank located on commercially zoned property alongside State Route 125. The dealership opened for business in the summer of 2011.
The lawsuit specifically alleges breach of contract, fraud and misrepresentation on the part of the defendants. The city is seeking damages totaling $2,025,000 and interest, less tax revenues to the city from sales generated by the dealership, plus interest dating on March 23, 2012, as well as attorney’s fees and costs.
To finance construction of Commercial Drive, the city entered an agreement with GA Group and other landowners in the vicinity. The GA Group was to dedicate a portion of its property for the road right of way and pay the city $150,000 after the city approved the agreement.
As part of the deal, the GA Group also agreed to pay the city $135,000 a year over the ensuing 15 years. Each annual payment was to be minus the amount of sales tax revenues received by the city from auto sales at the business.
According to the city’s lawsuit, the GA Group failed to make the initial payment of $150,000 and then failed to follow up with annual payments in 2009 and 2010.
In September 2010, the city and GA Group modified the agreement to allow Gilbert to obtain new financing. Under the modified agreement, Gilbert paid the city $171,512.07 and agreed to start making annual payments of $135,000 starting Feb. 15, 2012.
The lawsuit charges that the GA Group again failed to make the first $135,000 payment due in 2012. After serving the company with a notice of default in April of that year, the city filed its first lawsuit in January.
That suit was dismissed in February under an agreement in which, among other conditions, Gilbert was to pay the city $100,000 in three installments.
The first two installments of $25,000 each were paid on Feb. 21 and on March 4. But, according to City Administrator Pat Reay, Gilbert failed to make the third payment of $50,000 due on March 18.
Under the terms of the Feb. 20 agreement, the city’s lawsuit was dismissed “without prejudice,” meaning it could be refiled. The dismissal order also stated there was to be no award of costs to either party.
When asked for comments on the refiling of the lawsuit or why Gilbert failed to make the $50,000 payment on March 18 as required by the agreement with College Place, Jeff Wright, Gilbert’s public relations spokesman, said only that “details regarding the latest city of College Place lawsuit (are) currently being reviewed by Gilbert Auto.”
Andy Porter can be reached at firstname.lastname@example.org or 526-8318.