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Alliance Bank ordered to turn titles over to Auto USA

August 22, 2008|Fred Petke

A judge ordered Alliance Bank to turn over the titles to eight vehicles it was holding as collateral against AutoUSA.

Last week, the used car dealership won a preliminary ruling in the case which stems from the dealership's financing plan with the bank. The bank claims the dealership has defaulted on its floor plan financing agreement while the dealership claims the bank has acted outside its authority, confiscating all the vehicles, business records and computers from the business in July.

In court documents, the dealership said it twice requested the titles for eight vehicles it sold from the bank, but received no response.

The bank also said the dealership did not respond to requests for documents, including proof of insurance, original titles for vehicles and explanations of the whereabouts of vehicles listed in bank records that are not on the lot.

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In its response, attorneys for Alliance Bank claim the dealership defaulted on its financing agreement. The bank claims 45 of the 66 vehicles on the dealership's financing floor plan agreement are missing from the lot and 38 titles are unaccounted for. The bank argued Auto USA should be ordered to pay the loans before the titles are turned over.

Judge Julia Hylton Adams ruled Aug. 14 that Alliance Bank should release the titles in question and identify where the vehicles are located.

The legal situation began in July when the bank confiscated all the cars from the lot, along with records and computers from the office. Auto USA filed a petition for a judgment against the bank days later and the cars were returned.

In its response, the bank said the dealership was in default and can't account for most of the inventory financed by Alliance Bank.

The bank said it is planning to file a response to the original suit and a counterclaim against Auto USA "that will more fully address Plaintiff's defaults."

Contact Fred Petke at fpetke@winchestersun.

com.

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