AUTO AUCTION OWNER SUES STATE PANEL; `SCARE TACTICS' USED AT DEALERS' MEETING, HE SAYS

The owner of Cape Girardeau Auto Auction Inc., Stan Lowery, said a letter the Missouri Motor Vehicle Commission intends to send local car dealers warning them not to do business through public auctions is an attempt to put him out of business.

At a meeting Monday of the Missouri Dealers Association, Terry Wilsford, an investigator for the Motor Vehicle Commission, said the commission will send letters warning car dealers of the consequences of selling vehicles from a site other than their lots. Wilsford also said dealers could be liable for uninspected cars sold at auctions and could be sued by disgruntled purchasers.

Lowery said that under Missouri law auction houses always have been able to sell uninspected vehicles. He said he has sold uninspected vehicles openly since he started the auction company in 1995.

"If it is against the law, why haven't they closed me down?" he asked. "I'm a law-abiding citizen. If they can bring a law to me saying this is how it is, I'll abide by it."

Lowery said there is no law that allows purchasers to sue for three times the purchased price if the vehicle doesn't pass inspection, as meeting organizer Wayne Morton told the dealers group Monday. "That's just a scare tactic," Lowery said.

Lowery said that historic, or antique, cars are not exempt from the inspection law.

Section 307.380 of Missouri's Revised Statutes says every vehicle is required to be inspected at the seller's expense immediately prior to sale. The statute specifies that doesn't apply to vehicles sold at public auction. A footnote to the section says selling a vehicle "as is" does not alleviate the seller's need to comply with the safety inspection.

Lowery filed suit in Cape Girardeau County Sept. 16, accusing Motor Vehicle Commission Director Gregory C. Mitchell, Wilsford and Norm Schroeder, executive director of the Missouri Independent Automobile Dealers Association, of harassment and attempting to interfere with his business.

When reached by phone Tuesday, Morton said the information provided at Monday's meeting was accurate.

"I don't think Stanley is being targeted by the dealers in the area," Morton said. "The dealers in the Cape area did probably make an inquiry. What they said was, `This is being done over at the auto auction by dealers. How come we can't do it on our lot?'"

Mitchell could not be reached to comment.

Lowery said the argument doesn't stem from safety issues but from competition. Morton owns I-55 Auto Auction in St. Louis. Lowery's suit says Butch Burrow, who is mentioned but not as a defendant, is owner of Dixie Auto Auction in Malden.

"That's my competition 80 miles to the north and 80 miles to the south," Lowery said. The difference is, both of those auction houses are dealer-to-dealer businesses where the public cannot participate, said Lowery.

Rex Kelly, owner of Kelly Brothers Auction in Kansas City, said his public auction house has been targeted by the Motor Vehicle Commission since July.

He said dealer-to-dealer auctions are trying to force public auctions out of business because they undermine dealers' abilities to sell cars at retail prices.

"It is a shame when they try to take away the public's right to buy cars at the same price the dealers do," Kelly said.

Cape Girardeau Auction came under the commission's scrutiny in July when Wilsford attended one of the auctions, Lowery said. Lowery said Wilsford assured him that his operation was above board and then requested a list of the auction's dealers.

Lowery said he supplied Wilsford with the names of 25 of 800 local dealers who regularly work with the auto auction.

Lowery said Wilsford then wrote those 25 businesses warning them of potential problems in dealing with public auctions and naming the Cape Girardeau Auto Auction specifically.

Wilsford's letter said dealers cannot sell vehicles at any location other than their premises. The letter, dated July 15 and signed by Wilsford, said future violations may result in disciplinary proceedings against the dealership's license.

Wilsford's argument in the letter was that when a car dealer sells a vehicle through an auction it is only a method of delivery to the public. That means that all the requirements dealers are under when selling a car off their lots, including safety inspections, still apply to the dealer.

The letter said: "The auctioneer or auction service is exempt from these provisions, not the dealer. A dealer must still comply with the laws required to maintain their dealer license, regardless of whether they are an auction or not."

On Sept. 6, Mitchell sent a letter to Lowery saying his company was approved to continue auctioning cars provided by dealers. As long as the auction house continued to provide at least 51 percent of the local dealers an opportunity to participate in auctions, and could provide documentation proving it had solicited their participation, it was operating legally, the letter said.

Lowery said there never has been a violation filed against his business. But the letters, and threats of letters to the dealers that make up more than 70 percent of his selling customers, have cut in half the number of vehicles sold at Cape Girardeau Auction, he said.

The Missouri Motor Vehicle Commission is a seven-member board formed in 1988 that is responsible for the licensing and regulation of approximately 5,000 dealers and manufacturers in the state.