Chrysler sues to take over Carrollton dealership

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By Sharon Graves


The News-Democrat

The Chrysler Corporation seized control of the Todd Nelson Chrysler Jeep Dodge dealership Monday after filing suit in Carroll County Circuit Court against the dealership and Nelson for default and breach of contract and seeking more than $2 million in missing funds.

While the service department at the dealership on State Hwy. 227 is still open, the doors to the showroom are locked. John Boots, a salesman who has been with Todd Nelson for more than a year, confirmed that the dealership is not selling any vehicles, but is continuing to repair vehicles.

In the suit – filed by DaimlerChrysler Financial Services Americas LLC against Nelson Automotive Group LLC of Carrollton and Todd Hughes Nelson of Hendersonville, Tenn. – the corporation claims that Nelson Automotive owes the corporation $1,476,359 in new vehicle financing, $624,954 in used vehicle financing and $22,719 for an electronic funds transfer halted due to insufficient funds.

The document asks the court to grant possession of the dealership to Chrysler Financial and to impose an injunction to prohibit vehicles or any other items financed by Chrysler to be sold or moved. It also seeks temporary restraining orders to prohibit Nelson or any of his associates from entering the building.

A hearing on the matter has been scheduled for 9 a.m. Monday, Aug. 25, at the William L. Wheeler Hall of Justice in Carrollton, before Circuit Court Judge Stephen L. Bates.

“I feel betrayed and falsely led,” Karen Evans, title clerk for the dealership, said Tuesday. “The [lower-level] employees are not directly accountable. We did what we were told to do.”

Evans said 39 customers who bought vehicles at the dealership since May will have to re-pay the taxes on their vehicles to get their titles. She said those customers have been notified of the situation.

“Seven customers will have major issues trying to get titles to their cars,” Evans said. Those customers should contact the Kentcuky Vehicle Commissioner at (502) 573-1000 to start the process and should fill out a complaint on the commission’s Web site.  “I want these local people to get their titles and their questions answered.”

Agreements broken

Chrysler Financial is a commercial lender that finances inventory, equipment and working capital for Chrysler-product dealerships, according to the documents filed by attorney Nick Marsh and Thompson Coburn LLP of St. Louis, Mo. According to Chrysler, Nelson, whose home address is listed as being in Henderson, entered into a Master Loan and Security Agreement with Chrysler Financial in January 2007. The agreement requires Nelson’s dealership to maintain at least $295,000 in capital to operate the dealership. His failure to maintain that funding placed him in default under the terms of the agreement.

Chrysler notified Nelson by letter June 26 of the deficiency and requested immediate action be taken to rectify the deficiency.

On June 27, a Chrysler audit determined that Nelson had sold 12 new and used vehicles financed by Chrysler Financial for a toal of $157,404. Nelson failed to remit the funds to Chrysler within 14 days, as required by the agreement. Chrysler notified Nelson Automotive that it was in default in a July 3 letter, wich demanded payment and “immediate turnover of all collateral” to the corporation.

The suit states that Nelson agreed July 17 to remit the funds for the 12 vehicles by Aug. 25. On Aug. 12, Nelson initiated an electronic funds transfer to Chrysler Financial to pay for one vehicle; however, the suit alleges that the corporation was notified Aug. 15 that the funds transfer was invalid due to insufficient funds on Nelson’s end.

The corporation also alleges that Nelson’s Tennessee dealership, Nelson Autoplex in Hendersonville, last month shut its doors and removed vehicles from the dealership lot overnight.

A telephone call Tuesday to the number listed for the Hendersonville dealership went unanswered.

In spite of the legal issues surrounding the dealership, Bob Sharp of Saline, Mich., was picking up his Jeep, which he had brought to the Carrollton dealership for a new transmission. “The service here is fantastic,” Sharp said. “I have a dealership six blocks from my home in Michigan, but when I knew I had transmission problems, I brought it all the way here.”