Chrysler and Eagle Auto Mall may head to court


Automotive News | October 8, 2012 - 3:22 pm EST

Attorneys for Eagle Auto Mall, Terry Morris Chrysler-Jeep and Chrysler Group are scheduled to meet Thursday, Oct. 11, in a final pre-trial conference to hammer out a settlement or set a court date in a lawsuit that stems from when the dealerships were rejected during Chrysler’s bankruptcy.

U.S. District Judge Leonard D. Wexler on Sept. 28 denied Chrysler’s motion for a summary judgment and ordered the pre-trial conference.

“We’re always hopeful the parties can come to an agreement; if not, my clients are prepared to proceed to trial,” said Len Bellavia, an attorney representing Eagle Auto Mall and Terry Morris Chrysler-Jeep, both in New York state.

Bellavia declined to comment on the specifics of the case or his trial strategy.

In 2009, as part of its bankruptcy process, Chrysler took away franchise rights from both dealerships’ owners. Later, they won their franchise rights back in arbitration.

But Chrysler’s letter of intent to the dealers required conditions that were not asked of other potential franchisees, Bellavia said. Bellavia’s clients were required to build new facilities and only then could they sell and service Chrysler products. In other cases, dealers were permitted to sell and service Chrysler vehicles immediately without facility upgrades, he said.

Chrysler “reasserts its position that the company arbitrated in good faith and in full compliance with federal and state laws in issuing its customary and usual letter of intent to successful arbitrating dealers,” wrote Michael Palese, a Chrysler spokesman, in an e-mail.

Palese added: “We remain confident in our position and anticipate that we will prevail in this matter.”

Eagle Auto Mall in Riverhead, N.Y., is owned by Mark Calisi. He sued Chrysler in August 2010 saying the automaker failed to follow the directives of binding arbitration that called for Chrysler to provide Eagle Auto Mall with a "customary and usual" preliminary deal to renew the dealership.

Eagle Auto Mall and Terry Morris Chrysler-Jeep in Burnt Hills, N.Y., were two of 789 U.S. dealerships whose owners lost their Chrysler franchises as part of the automaker’s bankruptcy process.

Since then about 60 have been reinstated or are pending.

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