Chrysler Realty Corp. has agreed to pay Safeway Inc. $1.1 million to settle a lawsuit resulting from a dispute over land owned by Safeway, leased by Chrysler and occupied by a Chrysler dealership.
Dana Coventry, director of Chrysler Realty Corp., declined to comment on the details of the lawsuit but said, 'Chrysler Realty did what it had to do to protect its distribution network.'
Chrysler Realty handles dealership properties and facilities for DaimlerChrysler's dealer network.
Safeway, the supermarket chain based in Pleasanton, Calif., filed suit against Chrysler in Alameda County Municipal Court in Pleasanton on Jan. 21.
The lawsuit alleged that Safeway gave Chrysler written notice on May 29, 1998, that it was terminating the lease on Nov. 30, 1998, meaning Chrysler and sublessee Stoneridge Chrysler-Plymouth-Jeep were to vacate the land by that date.
The property is next to Safeway's corporate headquarters. Chrysler did not vacate the land because the dealer's new facility was not complete.
Safeway's attorney, William Hill of Donahue, Gallagher, Woods & Woods in Oakland, Calif., said the settlement gives Chrysler until mid-August to vacate the premises.
Safeway spokeswoman Debra Lambert said details of the settlement are confidential.
Lambert said Safeway plans to expand its corporate headquarters onto the site this fall. It is one of three adjacent parcels of land totaling 3.6 acres purchased by Safeway, she said.
Dealer Eric Strickland, who subleased the land from Chrysler, said he is building a dealership one-quarter mile northeast of its current location and should be in the new store by August.
Strickland retails about 750 new vehicles annually. He declined to comment on the lawsuit.
According to the lawsuit, Chrysler entered into the lease in June 1991.
At that time the property was owned by Vorelco Inc., and the lease was to run until May 31, 1996.
Then Volkswagen of America Inc. became the landlord, and on March 1, 1996, Chrysler and VW amended the lease to run through Dec. 31, 1996.
In April 1996, Safeway became the owner of the property. Chrysler and Safeway agreed to extend the terms of the lease to Dec. 31, 2000.
However, the lease stipulated that Safeway had the right to terminate the lease at any time after May 31, 1996, provided that it gave Chrysler 180 days' notice.
Safeway said it provided that written notice to Chrysler on May 29, 1998.