Giles

I. Background

William and Linda Giles (“the Gileses”) own and operate two car dealerships, Yerington Ford and Giles Chevrolet, located in Yerington, Nevada. Each dealership had a “floor- plan financing” agreement with GMAC. 9568 GILES v. GMAC Under a floorplan financing agreement, GMAC finances a dealership’s wholesale purchase of vehicles; the dealership displays the vehicles and makes monthly interest payments to GMAC; and the dealership repays GMAC the portion of the loan attributable to an individual vehicle when that vehicle is sold or leased. As part of a floorplan financing agreement, GMAC enters into a “wholesale security agreement” under which GMAC’s loan is secured by the dealership’s entire inventory of vehicles. GMAC has the right under the agree- ment to inspect the vehicles and the dealership’s books and records at any time. If the dealership fails to pay off the por- tion of the loan attributable to an individual vehicle “faithfully and promptly” after the vehicle is sold or leased, GMAC has the right to take possession of all vehicles remaining in inven- tory “without demand or further notice and without legal pro- cess.”

In 1992, shortly…