DaimlerChrysler Corp. has settled a federal lawsuit filed by 27 New York Chrysler group dealerships that had accused the company of underpaying them for parts used for warranty repairs.
Terms were not disclosed.
New York franchise law requires automakers to repay dealerships at retail rates for parts used in warranty repairs. But the dealerships said in their suit that DaimlerChrysler maintained a reimbursement rate "of dealer net cost plus 40 percent."
DaimlerChrysler's suggested retail price for parts is the dealership's cost plus 67 percent, the suit added.
Plaintiffs' lawyer Len Bellavia of Mineola, N.Y., says the settlement includes a payment to the dealerships to compensate them for the alleged shortfall in reimbursement. He would not reveal the amount.
DaimlerChrysler spokesman Mike Palese says the company pays its dealerships "fairly and reasonably" for warranty work.
"There was a dispute and we resolved it," Palese says.
The Chrysler dealerships filed their suit in 2001 in U.S. District Court in New York.
Bellavia has filed similar lawsuits in New York on behalf of General Motors and Ford Motor Co. dealerships.
"DaimlerChrysler should be commended," Bellavia says. "The settlement worked for everybody."
You may e-mail Donna Harris at