Appeal Ruling Allows Dealer in Import Cars to Shield Records

Terry York Imports, whose dealership license to sell Mercedes-Benz cars was revoked after it refused to let the Department of Motor Vehicles inspect its records, has won a reversal from the California Court of Appeal.

The court held in a Dec. 30 decision that the Encino dealership’s refusal to allow the inspection was not grounds to withdraw the license because the department has no blanket authority to inspect sales records.

Alan Mateer, the DMV’s chief attorney, said Friday that the department will appeal to the California Supreme Court. He said previous rulings indicate that the department has the right to examine such records.

“We’d like very much to bring this thing to a resolution,” Mateer said, “so it’s clear to the industry and clear to DMV what the rights of dealerships and the authorities of the department are.”

Other than having its reputation cleared, Terry York Imports will be unaffected by the Court of Appeal decision, said its attorney, Sheldon Cohen. He said the dealership no longer sells the cars.

The license was revoked April 24, 1986, after the DMV sought to examine such documents as Mercedes-Benz sales contracts and mileage statements. The dealership at the time was a “gray-market” seller: It sold the cars without a franchise from the manufacturer.

Gray-market cars that meet safety and environmental standards can legally be sold. But DMV investigators were seeking to curb sales of cars that did not meet the requirements. No allegation of wrongdoing was made against Terry York Imports.

The gray market “is going away,” Mateer said Friday, because the dollar’s devaluation has made imports more costly and because California law bars the import of new cars that do not meet state standards. A few problems remain with imports of cars more than 2 years old, he said.