College Place wins judgment against auto dealer

The city’s lawsuit against the Gilbert dealership sought $2 million.

The Gilbert Auto Honda dealership in College Place. The dealership, which opened in the summer of 2011, has since the start of this year been at the center of an ongoing series of legal disputes.

The Gilbert Auto Honda dealership in College Place. The dealership, which opened in the summer of 2011, has since the start of this year been at the center of an ongoing series of legal disputes. Photo by Andy Porter.

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COLLEGE PLACE — The city of College Place has won a lawsuit seeking approximately $2 million from a local auto dealer for a road building project to serve the business.

Walla Walla County Superior Court Judge Scott Wolfram on Monday granted an order of default against Mark W. and Susan Gilbert, Gilbert Imports and GA Group Properties. The court’s ruling came after the defendants’ attorney failed to respond to the city’s motion that the court issue a ruling in its favor.

The city’s attorney, Charles Phillips, said the failure of the defendants to respond to the city’s motion was unexpected.

“I was really surprised that there was no reply from their attorney,” Phillips said.

In court documents, Phillips said that he had notified the defendant’s attorney, David E. Eash of Spokane, on May 17 of the Monday court date. But Eash “failed to serve an answer on Mr. Phillips and the defendants have not answered the plaintiff’s complaint or otherwise defended in this action,” the court’s order said.

Jillian Henze of AMI Advertising Agency, who had been acting as Gilbert’s spokeswoman, was contacted Tuesday afternoon and asked to provide a response from Gilbert on the College Place lawsuit. Henze said in an email this morning the company is no longer handling public relations for Gilbert. An attempt to contact Gilbert this morning was not successful.

The city filed its lawsuit in early April to restart legal proceedings which began in late January with legal action against the Gilberts and the two companies. The city’s complaint alleged the defendants failed to make payments promised for construction of the Commercial Drive project, a roadway built in late 2008 to provide access to the Honda dealership and a bank on commercially zoned property alongside State Route 125.

In its lawsuit, the city asked for $2,025,000, less tax revenues to the city generated by sales from Gilbert Auto Honda. It also sought interest on the missed payments.

According to the lawsuit, in order to finance Commercial Drive the city entered an agreement with the 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.

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.

The city and GA Group modified the agreement in September 2010 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 charged 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.

That lawsuit was dismissed in February under an agreement in which, among other conditions, Gilbert agreed to pay the city $100,000 in three installments. The first two installments of $25,000 apiece were paid on Feb. 21 and on March 4, but Gilbert failed to make the third payment of $50,000 due on March 18.

Phillips said Tuesday the next step will be to obtain a judgement. “We’re still early in the process,” he said.

Andy Porter can be reached at andyporter@wwub.com or 526-8318.

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