Two New York state dealers will take on Chrysler Group in federal court to determine whether terms of their franchise reinstatements were unduly harsh.
On Dec. 3, lawyers for the owners of former New York dealerships Eagle Auto Mall and Terry Morris Chrysler-Jeep and Chrysler will meet in Central Islip, N.Y., before U.S. District Judge Leonard Wexler for what is expected to be a two-day trial.
In a pretrial conference last week, lawyers for the parties spoke privately about the possibility of a settlement, said Len Bellavia, a lawyer representing the two dealerships.
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.
In 2009, as part of its reorganization, Chrysler stripped franchise rights from both dealerships' owners. Both later won their franchise rights back in arbitration.
But Chrysler's letter of intent to reinstate 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 resume sales and service of Chrysler products.
In other such reinstatement cases, Bellavia said, dealers were permitted to sell and service Chrysler vehicles immediately, without requirements to renovate the dealerships.
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, wrote in an e-mail.
The two dealerships were among 789 U.S. Chrysler stores terminated as part of Chrysler's bankruptcy. About 60 have since been reinstated or have cases that are pending.