William J. Wheeler & Associates Announces Court Decision Could Significantly Impact All GMAC Automobile Dealer Financing Agreements
Court Decision Could Significantly Impact All GMAC
Automobile Dealer Financing Agreements
William J. Wheeler & Associates Announces that a Ruling on His Case Could Impact Whether GMAC Agreements Are Classified As Demand or Default
A ruling in a Missouri case involving GMAC, Inc. and an automobile dealer could tremendously increase dealers’ legal rights who are floorplanned by GMAC. This decision could impact more than 3,000 dealers currently holding GMAC floorplan agreements.
In GMAC, Inc. vs. Lloyd Belt in Missouri Circuit Court, GMAC sought a judgment against Mr. Belt and his two dealerships. He operated Lloyd Belt GM Center, Inc. and Lloyd Belt Chrysler, Inc., both of Eldon, Missouri. In the 2009 action, GMAC argued that Belt was in default of the GMAC floorplan agreements for each of the Belt dealerships.
Belt argued that he was not in default and that GMAC wrongfully accelerated the payment provisions of both GMAC floorplan agreements.
The case centers on whether GMAC’s financing agreements are “demand” agreements or “default” agreements. In a demand agreement, a note holder may demand payment at any time without cause. In a default agreement, a borrower must be given an opportunity to cure a missed payment (if any) and the agreement must not contain any ambiguous language or GMAC could be held liable for breach of contract and breach of good faith.
GMAC treats its financing agreements as demand agreements. William Wheeler of William J. Wheeler & Associates, Philadelphia, counsel for Belt, argued that the GMAC agreements were, in fact, default agreements and that GMAC is liable for breach of contract and breach of fiduciary duty.
GMAC requested a summary judgment on GMAC’s lawsuit and requested a separate summary judgment on Belt’s counterclaims that are based on breach of contract. In a ruling on December 19, 2013, Missouri County Circuit Court Judge Jaynes denied both of GMAC’s summary judgment motions.
A trial date is pending.
“This case directly impacts any automobile dealer in the country with similar language in its GMAC financing agreement,” Wheeler said. “There is a significant difference between a demand agreement and a default agreement. We look forward to proving at trial that GMAC had default agreements with the Belt dealerships and therefore GMAC wrongfully demanded accelerated payment.”
Mr. Belt’s dealerships closed in 2009 after GMAC allegedly wrongfully terminated the floorplan agreements for both dealerships and allegedly wrongfully took possession of both dealerships’ open account. He is seeking more than $4 million in compensatory damages, plus punitive damages.
About William J. Wheeler & Associates, P.C.
For more than 30 years, William J. Wheeler & Associates of Philadelphia has represented new and used automobile dealers. The firm exclusively represents auto dealers. Firm principal William Wheeler previously served as a Deputy Attorney General for the Pennsylvania State Motor Vehicle Board and his subsequent experience as a Dodge dealer having operated a 1,200 unit planning volume dealership has provided him with invaluable experience in representing new vehicle dealers.
William J. Wheeler & Associates, P.C. can be contacted at: www.autodealerlawyer.net
(215) 988-9320 | email@example.com