Dealership sold amid Nissan lawsuit

Johnson Auto was started in 1992 in Brighton, Colorado, by Dick and Mary Lou Johnson.

Matt Boone, a manager at the company, told the Laramie Boomerang that Laramie’s similar population to Brighton made the opportunity ideal for Johnson Auto. Brighton has an estimated population of about 40,000.

“We are a family-owned and -run organization,” Boone said. “We like the smaller town feel and we have a great relationship with Chrysler. We have 130 employees in Brighton, and we hope to translate that to a good long-term business up here.”

Boone said the sale happened faster than most.

“We had been working on it for a little while, but it came together at the end very quickly,” he said. “Normally, you’d like to have a couple weeks to sort everything out.”

Boone said JAG Auto’s financial woes detailed in the lawsuit with Nissan have no bearing on Johnson Auto’s operation of the dealership.

“You don’t have to worry about buying a car that’s not going to get paid off by the bank,” he said. “We’re excited to be here and move forward and provide good service to Laramie, because (community members) probably have a sour taste in their mouth (regarding Snowy Range Dodge). This business needed a fresh set of ideas because the relationship with the vendor obviously went bad.”

At the beginning of July, a federal judge imposed some strict business practices on JAG Auto, which allegedly was selling Nissan vehicles without paying the car manufacturer for the product.

Nissan’s financing of the car dealership allowed JAG Auto to acquire an inventory of new and used vehicles without pre-paying.

Nissan’s attorneys have said that JAG Auto has sold 27 vehicles, valued at $1.1 million, and failed to pay off the related liens upon sale. The car manufacturer also claimed JAG Auto also “refused to turn over vehicles and other secured collateral following (Nissan)’s lawful demand.”

Boone said Johnson Auto bought the Chrysler franchise on the Pierce Street location, but not the alleged debt in the lawsuit.

“We want people to know that we’re not related to that business and we’re starting fresh,” Boone said. “Nissan gave us a full release on every car on the lot.”

Boone said Johnson Auto purchased all the vehicles on the lot as part of the purchase of the franchise.

However, no Nissan vehicles were part of that deal, and Boone said none of the business practices imposed by court injunction should affect Johnson Auto’s operation of the business.

Nissan and the JAG Auto entered into a financing agreement in May 2017, and Nissan then discovered in late 2018 the car dealership had “failed to keep its working capital and net cash at or above guidelines” established by Nissan.

Court documents indicate the two parties agreed to have JAG Auto “cure the default by, among other things, depositing additional money” into the dealership’s accounts.

After the car dealership defaulted on that agreement, however, Nissan “elected to terminate the lending relationship effective as of May 13.”

Nissan then repurchased 28 new Nissan vehicles, but the car company’s attorneys allege that the car dealership owes substantially more.

Nissan originally asked U.S. District Court Judge Alan Johnson to force the car dealership to return the $4.7 million worth of Nissan vehicles it currently owns.

Instead, a later agreement between the two parties had Johnson impose a preliminary injunction that allowed JAG Auto to continue selling Nissan vehicles so long as a Nissan representative is on site.

The Pierce Street dealership opened in 2014. Griffen bought the store in June 2017, and the dealership’s name was changed from Adventure Dodge to Snowy Range Dodge in March 2018.

A court hearing in the Nissan lawsuit was scheduled for Tuesday, but Johnson canceled that hearing “in light of a sale of JAG’s business and this court’s stipulated order granting a preliminary injunction.”