Northwest RV Sales in Salem under investigation again

SALEM, Ore. -- The Oregon Department of Justice has reopened an investigation into Northwest RV Sales Inc., a spokeswoman for the department confirmed Wednesday.

The state's justice arm investigated Northwest RV last year and the president of the Salem-based dealership, Russell Johnson, signed official documents saying he would follow Oregon law on consignment deals.

The latest development comes as Northwest RV faces financial trouble. The Statesman Journal reported last week the dealer at 6492 Portland Road NE has made a move not unlike filing for bankruptcy protection.

In October of this year, Northwest RV lost its state dealer certificate following complaints about its failure to pay for consigned goods in a timely manner. Oregon law requires these kinds of deals be paid out within 10 days.

Other consignment owners have since told the Statesman Journal that Northwest RV has failed to pay consignment deals worth thousands of dollars.

The Department of Justice has received a flood of complaints against the business in recent weeks.

On Wednesday, a total of 29 complaints had been filed with the Department of Justice, 20 of which had been filed after the state revoked the company's certificate last month.

Kristina Edmunson, the Department of Justice spokeswoman, declined to comment further on the matter.

Separately, a husband and wife are suing Northwest RV Sales Inc. to rescind their contract for a motor home they bought last November. The couple claims the dealer failed to tell them about a crash that the motor home they bought had been in, among other allegations.

They are seeking at least $120,000 if the company doesn't reverse the contract, according to Mark Comstock, a lawyer for Richard and Maureen Beal, the plaintiffs.

Ryan Johnson, son of Northwest RV president Russell Johnson, has said his father is sick and would not have let the business falter were he in better health. On Wednesday, he said he could not speak to the court case.

The Beals claim they bought a 2005 motor home from Northwest RV for $95,000 last November, court documents show. The couple says in court documents that a representative with Northwest RV told them the motor home had been stored out of the weather, that it was water-tight and that it was road worthy.

The two also claim Northwest RV never told them about a crash the vehicle had been in before the company sold the rig.

Court documents show the Beals claim the company willfully violated the Oregon Unlawful Trade Practices Act — a rule in place for the protection of customers. Among other business malpractices, the act prohibits misrepresenting a product.

The Department of Justice has been notified of the potential violation, court documents show.

The Beals are also claiming elder financial abuse, since they are both over age 65.

Northwest RV, along with its bond company and a Washington-based credit union, are named as defendants in the complaint filed late last month.

Northwest RV holds a $40,000 surety bond with Travelers Casualty and Surety Company of America in Hartford, Conn.

Travelers Casualty and Surety could not immediately be reached for comment. Washington State Employees Credit Union, another defendant listed in the case, could not immediately be reached for comment.

The Statesman Journal previously reported Northwest RV is undergoing what's called an assignment for the benefit of creditors, or an "ABC." That means an attorney has taken on the company's assets to sell them off and pay creditors, though there is no sure figure that the creditors will receive.

Send questions, comments or news tips to jbach@statesmanjournal.com or 503-399-6714. Follow him on Twitter @JonathanMBach.


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