COLLEGE PLACE — A creditor of the Gilbert Auto Honda dealership has started proceedings to foreclose on the dealership’s property.
American Honda Finance Company filed a complaint in Walla Walla Superior Court Monday over the dealership lot at 1240 S.E. Commercial Dr. in College Place.
According to court documents, defendants in the suit are GA Group Properties, Mark and Susan Gilbert, Gilbert Imports and Sallee Chevolet, Inc. Sallee was identified as being a party which may claim an interest in the property due to a deed filed in July 2012. Sallee Chevrolet has filed a separate lawsuit over the sale of its Milton-Freewater Chevrolet dealership to Gilbert in 2006.
The lawsuit alleges that in 2010 the GA Group obtained a $4.4 million construction loan from Honda to build the Gilbert Auto dealership and secured the money through a deed of trust executed by GA Group and delivered to American Honda. The amount of the loan was later increased to $4.8 million.
Earlier this year, American Honda Finance Company filed suit in U.S. District Court against the Gilberts, GA Group Properties and Gilbert Imports. The lawsuit alleged the Gilberts, GA Group Properties and Gilbert Imports had defaulted on loan agreements, including the construction loan agreement. The suit asked the court to award Honda damages amounting to about $5.2 million and allow Honda to seize collateral.
On April 1, attorneys for both sides agreed to halt litigation for 60 days due to the possibility of the dealership being sold. However, attorneys for Honda filed notice May 30 that the stay had ended because on May 23 the potential purchaser had terminated the transaction to acquire the dealership.
Honda’s attorneys then filed a notice Monday to have the U.S. District Court dismiss its claim for breach of the construction loan agreement from the federal lawsuit “in favor of a state-court judicial foreclosure complaint.”