In this U-B file photo, Gilbert Auto Honda dealership in College Place celebrates its grand opening in August 2011.
Photo by Andy Porter.
COLLEGE PLACE — A local auto seller with a string of dealerships in the Pacific Northwest is facing new legal challenges.
The dealerships owned by Mark W. Gilbert are being sued by the state Attorney General’s Office for violations of the state’s consumer protection laws. In a separate action filed in federal court, the American Honda Finance Corp. is suing Gilbert, Gilbert Honda and GA Group Properties for alleged violations of construction loan and wholesale financing agreements.
Acting on a motion from the AG’s office, Walla Walla County Superior Court Judge Scott Wolfram granted a preliminary injunction Friday that ordered Gilbert’s businesses to comply with Washington auto dealer and consumer protection laws requiring prompt payoff of customers’ trade-in vehicles.
Dealerships named in the lawsuit include Gilbert Auto Honda of College Place, Gilbert Chrysler Jeep Dodge Ram of Walla Walla, Gilbert Auto Nissan of Moses Lake and Gilbert Auto Ford of Moscow, Idaho.
According to the Attorney General’s Office complaint, the Gilbert dealerships have failed to pay off buyers’ trade-in vehicles as required under Washington and Idaho law, resulting in some buyers being forced to make payments on both the new vehicle and their trade-in to avoid collections agencies and repossession.
The suit charges the dealerships have amassed significant liabilities to consumers and lenders related to unpaid off trade-in liens. The Attorney General named the bonding company, Sentry Select Insurance Co., as a defendant in the lawsuit. Each dealership carries a bond of $30,000 to protect consumers.
The attorney general’s office also alleges Gilbert has failed to transfer titles as required by law.
Janelle Guthrie, communications director for the attorney general’s office, said consumers who have faced similar experiences during transactions with Gilbert’s dealerships should file a complaint with the AG’s office to assist it with its investigation.
The lawsuit by the American Honda Finance Corp. was filed last month in U.S. District Court for Eastern Washington. The corporation is seeking $5.2 million from Gilbert for breach of a construction loan agreement which provided funds to build his dealership in College Place.
The lawsuit also alleges the College Place dealership violated the terms of a financing agreement by selling vehicles bought with loans provided by American Honda and then not making prompt repayment to the corporation.
The federal court granted a temporary restraining order Feb. 22 in the case and has set a hearing on the request by American Honda for a preliminary injunction for April 2 at the federal courthouse in Richland.
According to news reports, the Nissan Motor Acceptance Co. has also filed suit in Grant County Superior Court over a financing agreement which provided loans to the business for new and used cars. The suit claims the dealership sold vehicles without paying the Nissan company back.
In a decision handed down Friday, Grant County Superior Court Judge John Antosz ruled that Gilbert Nissan didn’t comply with an injunction issued by the court in February and is required to turn over 37 vehicles it has on the Moses Lake lot to Nissan.
Another lawsuit filed by the city of College Place last month was dismissed recently when Gilbert and the city reached an agreement over payments for construction of a roadway serving the Gilbert Honda dealership.
The city had sued Gilbert, GA Group Properties and Gilbert Imports for failure to make payments as promised to the city for the Commercial Drive project, which opened up access to property alongside State Route 125 where the auto dealership and a bank are located.
Under the terms of the agreement, Gilbert agreed to pay the city $100,000 for money owed during 2011 to the city under the construction agreement. Gilbert paid the first $25,000 on Feb. 21 and the next installment of $25,000 was due Monday. That money was paid on time, said Pat Reay, College Place city administrator.
The final installment of $50,000 is due March 18, according to the terms of the agreement. As part of the agreement, the city’s suit was dismissed “without prejudice,” meaning it can be re-filed if the terms of the agreement are not met.