rob
August 11th 08, 12:45 PM
August 11, 2008 - 12:01 am ET
SIERRA VISTA, Ariz. — In her decade as spokeswoman for Fort Huachuca, Tanja
Linton says, the Army base here has declared some rowdy bars off-limits to
soldiers.
But this spring, base officers ordered military personnel not to do business
with two auto dealerships here and one in nearby Tucson, all owned and run
by Rick Johnston and his two sons.
Linton says the base felt the need to "protect" its soldiers — as many as 80
percent of whom are sent to Iraq or Afghanistan — from abuse by the
dealerships.
"We were concerned that our service members are being taken advantage of,"
she told Automotive News. Linton and others cite complaints that the
dealerships cheated or at least misled soldier customers and threatened them
with arrest or a tarnished credit history when they complained. Linton says
many soldiers who complained asked not to be identified out of "fear of
retribution" by the dealerships.
The dealerships — Wildcat Mitsubishi in Tucson and Ideal Automotive, which
operates Mitsubishi and Suzuki stores here in Sierra Vista — also are under
civilian scrutiny. The state of Arizona is investigating the dealerships'
practices, after the local Better Business Bureau fielded 30 complaints
about them over the past three years.
In an interview here, dealer Rick Johnston, 59, and his sons, Heath, 37, and
Beau, 34, who manage the dealerships, concede mistakes.
They admit selling vehicles with improperly recorded identification
numbers — a clerical error, Beau Johnston says. And they acknowledge
financing some deals without a needed state license — a bureaucratic mix-up,
Rick Johnston claims.
But Rick Johnston insists: "We're not bad people. We're just a family trying
to make a living."
The three dealerships sold about 2,000 new cars and trucks last year. The
Johnstons say bad publicity and other effects of the military ban could cut
that business in half.
Last month, Rick Johnston's company filed for bankruptcy, looking for
breathing space to reorganize. In a court filing, the company reported owing
its 20 largest unsecured creditors more than $2.1 million.
A soldier's story
Heath Johnston challenges officers at Fort Huachuca to "come up with one
instance where we are hurting the morale and welfare of their soldiers." The
Johnstons defend their conduct in their dealings with soldier James Tuman.
In February 2006, Tuman bought a used 1995 Pontiac Firebird from Ideal
Automotive. He soon returned the car to the dealership, claiming it had
mechanical problems.
Tuman tried to cancel the purchase, financed by a $10,760 loan he had taken
from Ideal Automotive, and buy a car at a competing dealership. But the
Johnstons refused to return his trade-ins, a 1994 Isuzu Rodeo and a
motorcycle.
"We told him he could switch to another car on our lot," Heath Johnston
says. "But we're not going to let you out of the contract."
Johnston threatened to identify the Firebird as repossessed, which would
have blemished Tuman's credit report. A bad credit rating can affect a
soldier's security clearance.
An argument between Tuman and Beau Johnston in April 2006 led the dealership
to call police. Tuman was cited for disorderly conduct and released.
Ultimately, the Johnstons say, Tuman agreed to let them keep the trade-in
vehicles in return for a voided sale that would not damage his credit
rating. Heath Johnston says Tuman never signed the agreement. Tuman was not
available for comment.
Tuman returned to Fort Huachuca last year after a tour of duty in Iraq. Soon
thereafter, Phil Maxey, a civilian lawyer on the base's Armed Forces
Disciplinary Control Board, proposed that the dealership pay Tuman $6,000
for his trade-ins and "cause any adverse entries to his credit report to be
favorably corrected." In return, Tuman would drop his complaint to the
board.
Beau Johnston calls Maxey's offer "an extortion game." But he says the
Johnstons probably will pay Tuman the $6,000 if the bankruptcy court that is
hearing their case approves. Maxey declined to comment.
Civilian complaints
The dealership must address other issues. The Arizona Department of
Financial Institutions has cited Ideal Automotive for making finance deals
without a license over the past two years. The Johnstons say they forgot to
renew the license but have now filed the proper forms.
Jack Hudock, a spokesman for the state department, says the Johnstons could
face fines of $5,000 a day for each violation. The case is pending.
Last month, the state Transportation Department cited Wildcat Mitsubishi for
violating a previous order to stop issuing temporary license plates. Five
times, the department said, the dealership had issued temporary plates with
the wrong vehicle identification numbers.
The dealership could be fined $3,000 for violating the order, says
Transportation Department spokeswoman Cydney DeModica. The department has
not decided whether to assess the penalty, she says.
Tom Collier, president of the Better Business Bureau of Southern Arizona,
says other consumer complaints against the dealerships include refusing to
return a deposit after a customer decided not to buy a car, selling a
customer's trade-in before a purchase was completed and claiming falsely
that aftermarket parts in a used car sold by Wildcat Mitsubishi were covered
by a warranty.
One of the complaints came from Andrea Gragg, 26, a server at a Sierra Vista
restaurant. Last year, Gragg bought a used Dodge Durango from Ideal
Automotive. The dealership allowed her to take the truck before financing
was approved. After Gragg's poor credit disqualified her from financing, she
returned the Durango.
But instead of refunding Gragg's $750 deposit, she says, the dealership
pressed her to buy a used Plymouth Neon. Again, she says, she drove away in
the car before she was financed.
When the dealership later quoted her a 28 percent interest rate on her loan,
she brought the car back. Beau Johnston refused to return her deposit, she
says.
"He said he hasn't given down payments back in as many years as he has owned
Ideal, and he wasn't about to start," Gragg says. Only after she complained
to the Better Business Bureau, she says, did the dealership refund her
deposit.
Heath Johnston denies that the dealerships engage in strong-arm sales
tactics. When financing problems arise, he says, "nine times out of 10, we
make appropriate adjustments," such as reducing the sales price or offering
larger trade-in allowances.
Dealer feud
One of the Johnstons' most bizarre altercations involving Fort Huachuca came
in late 2003, when Heath Johnston was charged with aggravated assault after
he rammed a car outside a Sierra Vista bar.
According to the Arizona Daily Star, the soldier who owned the car was
grazed as he jumped out of the way, and Johnston dragged the car 50 feet.
Johnston got four years' probation in the incident.
Johnston says he mistakenly hit the car in a "scramble" after a brawl inside
the bar with employees of Lawley Automotive, which operates five new-vehicle
dealerships here. The soldier was not involved in the brawl, the newspaper
reported.
Next month, Fort Huachuca's disciplinary board will consider lifting the ban
against the dealerships. The Better Business Bureau's Collier says the
Johnstons have agreed to submit complaints by soldiers and civilians against
Ideal Automotive to binding arbitration by the bureau.
Collier says he last met with Rick and Beau Johnston in April. Since then,
he says, the Johnstons have not sought to meet with him. He observes wryly:
"One of the things I'm supposed to be doing with them is scheduling customer
service classes."
SIERRA VISTA, Ariz. — In her decade as spokeswoman for Fort Huachuca, Tanja
Linton says, the Army base here has declared some rowdy bars off-limits to
soldiers.
But this spring, base officers ordered military personnel not to do business
with two auto dealerships here and one in nearby Tucson, all owned and run
by Rick Johnston and his two sons.
Linton says the base felt the need to "protect" its soldiers — as many as 80
percent of whom are sent to Iraq or Afghanistan — from abuse by the
dealerships.
"We were concerned that our service members are being taken advantage of,"
she told Automotive News. Linton and others cite complaints that the
dealerships cheated or at least misled soldier customers and threatened them
with arrest or a tarnished credit history when they complained. Linton says
many soldiers who complained asked not to be identified out of "fear of
retribution" by the dealerships.
The dealerships — Wildcat Mitsubishi in Tucson and Ideal Automotive, which
operates Mitsubishi and Suzuki stores here in Sierra Vista — also are under
civilian scrutiny. The state of Arizona is investigating the dealerships'
practices, after the local Better Business Bureau fielded 30 complaints
about them over the past three years.
In an interview here, dealer Rick Johnston, 59, and his sons, Heath, 37, and
Beau, 34, who manage the dealerships, concede mistakes.
They admit selling vehicles with improperly recorded identification
numbers — a clerical error, Beau Johnston says. And they acknowledge
financing some deals without a needed state license — a bureaucratic mix-up,
Rick Johnston claims.
But Rick Johnston insists: "We're not bad people. We're just a family trying
to make a living."
The three dealerships sold about 2,000 new cars and trucks last year. The
Johnstons say bad publicity and other effects of the military ban could cut
that business in half.
Last month, Rick Johnston's company filed for bankruptcy, looking for
breathing space to reorganize. In a court filing, the company reported owing
its 20 largest unsecured creditors more than $2.1 million.
A soldier's story
Heath Johnston challenges officers at Fort Huachuca to "come up with one
instance where we are hurting the morale and welfare of their soldiers." The
Johnstons defend their conduct in their dealings with soldier James Tuman.
In February 2006, Tuman bought a used 1995 Pontiac Firebird from Ideal
Automotive. He soon returned the car to the dealership, claiming it had
mechanical problems.
Tuman tried to cancel the purchase, financed by a $10,760 loan he had taken
from Ideal Automotive, and buy a car at a competing dealership. But the
Johnstons refused to return his trade-ins, a 1994 Isuzu Rodeo and a
motorcycle.
"We told him he could switch to another car on our lot," Heath Johnston
says. "But we're not going to let you out of the contract."
Johnston threatened to identify the Firebird as repossessed, which would
have blemished Tuman's credit report. A bad credit rating can affect a
soldier's security clearance.
An argument between Tuman and Beau Johnston in April 2006 led the dealership
to call police. Tuman was cited for disorderly conduct and released.
Ultimately, the Johnstons say, Tuman agreed to let them keep the trade-in
vehicles in return for a voided sale that would not damage his credit
rating. Heath Johnston says Tuman never signed the agreement. Tuman was not
available for comment.
Tuman returned to Fort Huachuca last year after a tour of duty in Iraq. Soon
thereafter, Phil Maxey, a civilian lawyer on the base's Armed Forces
Disciplinary Control Board, proposed that the dealership pay Tuman $6,000
for his trade-ins and "cause any adverse entries to his credit report to be
favorably corrected." In return, Tuman would drop his complaint to the
board.
Beau Johnston calls Maxey's offer "an extortion game." But he says the
Johnstons probably will pay Tuman the $6,000 if the bankruptcy court that is
hearing their case approves. Maxey declined to comment.
Civilian complaints
The dealership must address other issues. The Arizona Department of
Financial Institutions has cited Ideal Automotive for making finance deals
without a license over the past two years. The Johnstons say they forgot to
renew the license but have now filed the proper forms.
Jack Hudock, a spokesman for the state department, says the Johnstons could
face fines of $5,000 a day for each violation. The case is pending.
Last month, the state Transportation Department cited Wildcat Mitsubishi for
violating a previous order to stop issuing temporary license plates. Five
times, the department said, the dealership had issued temporary plates with
the wrong vehicle identification numbers.
The dealership could be fined $3,000 for violating the order, says
Transportation Department spokeswoman Cydney DeModica. The department has
not decided whether to assess the penalty, she says.
Tom Collier, president of the Better Business Bureau of Southern Arizona,
says other consumer complaints against the dealerships include refusing to
return a deposit after a customer decided not to buy a car, selling a
customer's trade-in before a purchase was completed and claiming falsely
that aftermarket parts in a used car sold by Wildcat Mitsubishi were covered
by a warranty.
One of the complaints came from Andrea Gragg, 26, a server at a Sierra Vista
restaurant. Last year, Gragg bought a used Dodge Durango from Ideal
Automotive. The dealership allowed her to take the truck before financing
was approved. After Gragg's poor credit disqualified her from financing, she
returned the Durango.
But instead of refunding Gragg's $750 deposit, she says, the dealership
pressed her to buy a used Plymouth Neon. Again, she says, she drove away in
the car before she was financed.
When the dealership later quoted her a 28 percent interest rate on her loan,
she brought the car back. Beau Johnston refused to return her deposit, she
says.
"He said he hasn't given down payments back in as many years as he has owned
Ideal, and he wasn't about to start," Gragg says. Only after she complained
to the Better Business Bureau, she says, did the dealership refund her
deposit.
Heath Johnston denies that the dealerships engage in strong-arm sales
tactics. When financing problems arise, he says, "nine times out of 10, we
make appropriate adjustments," such as reducing the sales price or offering
larger trade-in allowances.
Dealer feud
One of the Johnstons' most bizarre altercations involving Fort Huachuca came
in late 2003, when Heath Johnston was charged with aggravated assault after
he rammed a car outside a Sierra Vista bar.
According to the Arizona Daily Star, the soldier who owned the car was
grazed as he jumped out of the way, and Johnston dragged the car 50 feet.
Johnston got four years' probation in the incident.
Johnston says he mistakenly hit the car in a "scramble" after a brawl inside
the bar with employees of Lawley Automotive, which operates five new-vehicle
dealerships here. The soldier was not involved in the brawl, the newspaper
reported.
Next month, Fort Huachuca's disciplinary board will consider lifting the ban
against the dealerships. The Better Business Bureau's Collier says the
Johnstons have agreed to submit complaints by soldiers and civilians against
Ideal Automotive to binding arbitration by the bureau.
Collier says he last met with Rick and Beau Johnston in April. Since then,
he says, the Johnstons have not sought to meet with him. He observes wryly:
"One of the things I'm supposed to be doing with them is scheduling customer
service classes."