Chrysler, 2 rejected dealers head to court
The owners of former New York dealerships Eagle Auto Mall and Terry Morris Chrysler-Jeep will face off against Chrysler Group in court on Dec. 3 in suits stemming from allegedly wrongful franchise terminations.
Lawyers for the parties met Thursday for a pretrial conference and spoke privately about the possibility of a settlement in lawsuits tied to terminations during Chrysler's 2009 bankruptcy, said Len Bellavia, a lawyer representing Eagle Auto Mall and Terry Morris Chrysler-Jeep, both in New York state.
Bellavia declined to comment further but said U.S. District Judge Leonard D. Wexler set the case for a December bench trial.
On Sept. 28, Wexler denied Chrysler's motion for a summary judgment and ordered Thursday’s pretrial conference.
Bellavia said the judge indicated the bench trial in U.S. District Court in Central Islip, N.Y., will last about two days.
In 2009, as part of its reorganization, Chrysler stripped franchise rights from both dealerships' owners. They later won their franchise rights back in arbitration.
But Chrysler's letter of intent to the dealers contained conditions that were not required of other potential franchisees, Bellavia said. Eagle Auto Mall and Terry Morris Chrysler-Jeep would have been required to build new facilities, and only then could they sell and service Chrysler products.
In other such cases, dealers were permitted to sell and service Chrysler vehicles immediately, without facility upgrades, he said.
The trial will determine whether Chrysler’s letters of intent issued to the dealerships were the same as letters of intent issued to other potential franchisees.
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," Michael Palese, a Chrysler spokesman, said 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, who declined to comment. Terry Morris Chrysler-Jeep in Burnt Hills, N.Y, is owned by Charlie Morris.
They sued Chrysler in August 2010 and allege 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 were two of 789 U.S. Chrysler franchises terminated as part of Chrysler's bankruptcy.
Since then about 60 have been reinstated or have cases that are pending.
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