Buyers Blowing Gaskets Over Dealer?s Legal Mess

RUSSELLVILLE — Back in 1999, the worst problem facing James Edward Turner Jr. and his Russellville used car dealership was failing to pay two weekly newspapers for advertising.

Then things got worse. Much worse.

Turner stands at the center of multiple lawsuits ranging from simple lemon-law claims to charges that he hasn’t made payments to his bankers in months. To add to his woes, Turner, 58, was charged on Sept. 21 with two felony counts of writing hot checks to customers.

And the criminal charges could get worse.

Russellville Police Chief Ron Stobaugh said his department is investigating more than 20 complaints of fraud in connection with Turner’s selling and financing of used cars.

“We are still having people come in and filing complaints with us about vehicles they had purchased but did not get the titles,” Stobaugh said.

He said he doesn’t know when the investigation will be completed and referred the newspaper to the prosecuting attorney.

Turner could not be reached for comment, and the phone at Turner Motohas been disconnected. Turner’s attorney, James Wyatt of Little Rock, did not return messages left by Arkansas Business.

The biggest and most complex case against Turner and his company has was settled Nov. 20 by the Bank of Dardanelle, which agreed to a judgement of $563,761.

The bank’s attorney, John D. Van Kleef, had filed suit in Pope County Circuit Court against Turner and more than 40 Turner customers who are driving cars the bank claims as collateral on the defaulted loan.

The case was so complicated that Circuit Court Judge Dennis Sutterfield persuaded the state Administrative Office of the Courts to appoint a special judge lest this one case bog down the justice system for the entire county.

“This case involves more than 60 separate parties and at least 32 attorneys of record to date,” Sutterfield wrote in an Aug. 14 letter to courts office.

“It is probable that there will be at least 20 additional parties added to this case before the pleadings close. A conservative estimate is that it would take at least two months of actual court time to clear all pending claims therein.”

The Bank of Dardanelle wasn’t the only financial institution not receiving money from the used car company. Four other banks — Bank of America, Firstar Bank, Chambers Bank and Simmons First Bank of Russellville — said Turner Motor and Turner defaulted on loans totaling more than $1.1 million.

Bank of Dardanelle

Turner, who had been a client of the Bank of Dardanelle since 1996, had a $1 million line of credit, Tom Ed Bullock, the bank’s vice president and loan officer, said in a deposition for the case. Turner used the line of credit to purchase about 70 automobiles for sale on his car lot.

The loans were secured by the cars themselves, Bullock said, and the bank had filed liens for each of the vehicles with the Department of Finance and Administration.

Although Turner was selling vehicles through the first half of 2001, Turner’s last payment to the Bank of Dardanelle was in January, Bullock said.

The bank claimed Turner received $406,875 from the sale of the vehicles but didn’t turn any money over to the bank.

One of the defendants in the Bank of Dardanelle’s lawsuit was Thongla Nanthalansy of Russellville. In a countersuit filed against Turner, Nanthalansy explained that he bought a 1998 Infiniti for $23,800 from Turner Motor on March 17. He also bought the extended warranty for $390, according to his complaint.

In exchange for buying the vehicle, Turner Motor agreed to pay off a loan on Nanthalansy’s trade-in vehicle, the lawsuit said. He financed the vehicle through Bank of America and completed a loan application at Turner’s car lot. Nanthalansy said he never received a copy of it or any other loan documents.

Nor did Turner give Nanthalansy a certificate of title, so he was unable to register the vehicle, which he was required to do so within 30 days.

Sixty days after the sale, Turner “issued a false, fraudulent bill of sale dated May 18, 2001, so that it would appear the vehicle was purchased on that date,” Nanthalansy’s suit said. “Turner eventually supplied Nanthalansy with a used car dealer license plate to place on his vehicle.”

The Bank of Dardanelle’s lawsuit said Turner’s actions and conduct constituted deceit upon the bank. The bank asked for the loan amount and $1 million in punitive damages.

In addition, the bank said E. Carolyn Turner, James Edward Turner’s wife and Turner Motor’s bookkeeper; J. Eric Turner, the general manager of the car lot; and Charles Tilley, sales manager, were in on the scheme. Money they collected should have been sent to the Bank of Dardanelle, the bank said. Instead, they diverted the money for their own use, the bank said.

Bank v. Bank

The Bank of Dardanelle is also suing Bank of America for $1 million in punitive damages.

The Bank of Dardanelle said Bank of America had an agreement with Turner and Turner Motor Co. that would pay him a fee for each loan procured for customers on behalf of the bank.

Bank of America sent Turner the proceeds from the loans, which instead should have been turned over to the Bank of Dardanelle to pay off the liens, the Bank of Dardanelle said.

Instead, Turner “converted such funds for his own use or benefit,” the Bank of Dardanelle said.

The Bank of Dardanelle said Bank of America should be responsible for Turner’s actions since he was an agent for the bank. The Bank of Dardanelle said it is entitled to recover the $178,755 it lost as part of the arrangement.

But Bank of America said it was also a victim in the deal and has filed a lawsuit against Turner and the Bank of Dardanelle.

Turner Motor Co. represented to the Bank of America that it had clear title to the 15 vehicles it financed, the bank said in its lawsuit.

“Bank of Dardanelle held and refused to turn over to customers of Bank of America (and others) who had purchased the vehicles from Turner in the spring of 2001 the titles to their vehicles,” Bank of America said in its lawsuit.

Turner also didn’t inform Bank of America or the buyers of the vehicles that Bank of Dardanelle had claimed a lien and held the titles to the vehicles and would not release them, Bank of America said.

Bank of America also accused the Dardanelle bank of encouraging Bank of America customers to stop making their monthly payments, which caused it “immediate and continuing financial harm.”

All of the counterclaims and third-party lawsuits against Turner and the used car dealership related to the The Bank of Dardanelle case is what prompted Sutterfield to say the case needs to go forward as quickly as possible.

“In my 19 years of being an attorney, I have never personally seen a case directly affecting as many people as this one,” Sutterfield said.

Retired Chancellor John Lineberger of Fayetteville was appointed to the case.

Bad to Worse

Turner Motor Co.’s dismal financial situation started to come into focus in the end of 1999.

Two weekly papers, El Classifieds and the River Valley Weekly both sued Turner Motor Co. for not paying for advertising. El Classifieds received a judgment against the company for $1,250, and the River Valley Weekly received a $3,880 judgment.

At the end of 2000, and with each passing week in 2001, things seemed to get worse for Turner and Turner Motor Co. Lawsuits began piling up in Pope County Circuit Court.

On Aug. 27, Bank of America filed a lawsuit to foreclose on the Turner Motor lot at 3205 E. Main St. in Russellville. The bank said it loaned James Turner and Carolyn Turner $700,000 on Aug. 8, 1997, for use in their business. The bank claims the Turners defaulted and still owe $626,124.

The bank didn’t say when the last payment was made.

Bank of America also is suing Firstar Bank and Chambers Bank to make sure it is first in line to get the money from the lot.

Firstar Bank said the Turners owed it $172,688 as of Aug. 14, for a $291,426 loan on which they defaulted, according to Firstar’s lawsuit.

Chambers Bank also sued the Turners for defaulting on a $219,300 loan it received on Nov. 10, 1998. The bank said it is owed $212,235 plus $14,583 in interest.

On Sept. 26, Simmons First Bank of Russellville filed suit against Turner, his wife and Turner Motor for defaulting on a number of loans worth $145,000.

On Nov. 5, the Turners asked for continuances in the Bank of America, Firstar and Chambers cases because their attorney, F.N. “Buddy” Troxell of Conway was shot to death at his home on Oct. 25. His slaying was not related to the Turner case.

And there are those hot-check charges.

On June 3, Gilbert Cornwell said Turner sold a vehicle for him, according to the criminal information sheet filed in Pope County Circuit Court.

Turner mailed Cornwell a check for $12,000, but the check was returned for insufficient funds, the information sheet said. Turner told Cornwell “there was a mixup at the bank,” and wrote him another check. The second check didn’t clear either.

Later in June, Chris Sharp said he sold Turner a 1999 Dodge truck for $16,609. Turner paid him with a check that bounced, the report said.

On Sept. 21, Turner was charged with two Class B felony counts of writing hot checks, which carry a maximum penalty of 20 years in prison and a $15,000 fine.

Customers also have taken their beefs with Turner Motor Co. to court.

On May 15, Don Ferguson filed a lawsuit against the company over a vehicle he bought from the used car lot on Oct. 20, 2000. Part of the agreement for the sale of the vehicle was that Turner Motor would pay the outstanding balance on his 1998 Dodge Ram pickup truck with Chase Manhattan Bank. But Chase Manhattan said it wasn’t paid in full.

When Ferguson asked Turner about the payment, Turner said a money order had been sent and it was paid, Ferguson said.

Ferguson said his credit was damaged and sued Turner and his company for $50,000.