My Accidental Practice Area Representing Out-of-State Dealers against Floorplanning Companies

The vast majority of my practice involves representing consumers bringing claims under consumer protection statutes like he Fair Debt Collection Practices Act, Fair Credit Reporting Act, Credit Services Organizations Act, Telephone Consumer Privacy Act, and more.  Recently, as it so happens I have been contacted by multiple individuals who have needed help because were alleged to have signed personal guarantees on behalf of car dealers on Floorplanning contracts, and I have built up some experience in this area. As a member of the National Association of Consumer Advocates, I have pledged not to represent corporations against consumers, but I have no problem representing businesses and individual proprietors in cases where a business is on the other side.

A floorplanning company provides financing to auto dealers for their inventory, taking a lien on the vehicles and releasing the liens as the vehicles are sold. The financing of the lot of cars is called a "floorplan".  As it so happens, two of the most important floorplanning companies in the United States are based immediately to the north of my homebase in Indianapolis, Indiana, in the northern suburbs of Hamilton County. These copanies are Automotive Serices Corporation (AFC) and Nextgear Capital, Inc. (Nextgeer). The floorplan contracts issued by these companies often have provisions that suits are to be brought in Hamilton County, Indiana. This gives the companies the ability to sue dealers and personal guarantors from all over the country in Noblesville, Indiana.

If you are a dealer or a personal  guarantor of a dealership that gets sued by ASC in Indiana, you should be aware that even if you or your dealership legitimately owes money to the floorplanner, you may still find it in your interest to hire a lawyer to contest the suit. For one thing, there may be the opportunity to settle short or to get favorable payment plans.  Another thing is that the lawsuit against you may include a claim that payments owed to the dealer were fraudulently diverted.  Fraud is hard to prove when contested, but it is easy for them to get a default judgment for fraud.  If they get a judgment for fraud, you likely will not be able to discharge that judgment in bankruptcy.

The bottom line is that if you are sued by ASC or Nextgear in Indiana, you should strongly consider hiring an attorney to defend you. For a retainer less than the amount owed on one car, you may be able to protect yourself from much higher liability.

Note that if you are an Indiana dealer sued by ASC or Nextgear, I will probably not personally represent you, I will probably refer you to another attorney; however if you are from out-of-Indiana I can provide you affordable options for defense of floorplanning suits.