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Stellantis Financial Services has secured a default judgment worth more than $5.4 million against Iowa-based Sky Auto Mall, bringing a months-long dealership financing dispute closer to an end.
Stellantis accused Sky Auto Mall of using the same vehicles to obtain financing from more than one lender, a practice commonly known in auto retail as “double flooring.” Stellantis filed suit in March against the dealership and owners Igor, Yelena and Alex Tovstanovsky.
According to Car Dealership Guy, Stellantis alleged that Sky Auto Mall borrowed against vehicles through multiple lenders, including Ford, while moving vehicles between its Newhall and Center Point locations. The company claimed the transfers helped conceal duplicate financing.
Court Awards Stellantis More Than $5.4 Million
The latest ruling was not the result of a trial. Sky Auto Mall failed to respond to the lawsuit, allowing the court to enter judgment by default.
Car Dealership Guy reported that Stellantis Financial Services was awarded $4,819,550.42 in principal, along with $750,265.83 in interest and fees. After a $69,869.80 offset, the total comes to just under $5.5 million. The ruling was entered Aug. 24 in Linn County District Court.
KCRG also reported that the dealership never answered the lawsuit and that the court granted judgment in Stellantis’ favor. Earlier in the case, Stellantis claimed Sky Auto Mall owed more than $12 million.
What Stellantis Alleged
Floorplan financing is common in the dealership business. A lender supplies money so a dealer can stock vehicles, and that loan is paid back when the vehicle is sold.
Stellantis alleged Sky Auto Mall went beyond that normal arrangement by obtaining more than one loan on the same vehicles. Court filings cited by KCRG also said the dealership of keeping separate financial records and transferring vehicles between its stores to hide the duplicate loans.
The dispute quickly spilled beyond the courtroom. Sky Auto Mall laid off 76 employees across its two locations in March. Later that month, a Linn County judge gave Stellantis the right to recover vehicles, and sheriff’s deputies began removing inventory from the dealership.
KCRG reported that Stellantis attorneys also told the court the owners had filed for bankruptcy.
A Costly Ending
The default judgment does not mean the fraud allegations were tested before a jury. It does, however, give Stellantis Financial Services a court award after months of legal action over the dealership’s inventory financing.
For dealers, the case is another reminder that floorplan loans depend on accurate inventory records, clean titles, and repayment of the money tied to each vehicle. Once those records fall apart, the consequences can move quickly from a lending dispute to seized inventory, closed stores, layoffs, and millions of dollars in court judgments.
Sources: Car Dealership Guy & KCRG
Robert S. Miller