Riverhead car dealer has day in court
Lawyers for a Riverhead car dealer whose franchises were yanked by Chrysler during the carmaker's 2009 bankruptcy said in court Monday the automaker set what they termed unfair requirements for him to be reinstated as a dealer.
Attorneys for Chrysler said that the requirements, including construction of a new building, were uniform among dealers, though there sometimes were exceptions.
In 2009, Mark Calisi lost his franchises to sell Chryslers and Jeeps at his Eagle Auto Mall, where they shared space with Mazdas, Volvos and Kias. A Chevrolet franchise occupies a separate building. Calisi was one of 789 Chrysler dealers nationwide, about 25 percent of the total, who were terminated by Chrysler as it pared its retailer ranks to conform with lower sales due to the recession. Three others on Long Island also were terminated.
Read more: Fiscal cliff impact on LI | 2011 debt ceiling debate | Blog: Inside LI business | Opinion and analysis about the "fiscal cliff"
Features: Top companies & executive compensation | LI economic indicators
Cartoons: Fiscal cliff | Norquist tax pledge
Calisi and 31 other Chrysler dealers sought, and prevailed in, binding arbitration under a new procedure created by Congress, winning the right to be reinstated. But Calisi's deal collapsed when Chrysler demanded he build a new structure to house Chrysler and Jeep vehicles exclusively -- a structure Calisi estimates would have cost $4 million to $5 million.
He and a dealer from upstate in a similar situation jointly sued Chrysler in August 2010, claiming Chrysler's terms for reinstatement was not "customary and usual" as required by Congress in establishing the arbitration proceeding. The dealers seek reinstatement under the same terms as before Chrysler's bankruptcy and also seek unspecified compensatory and punitive damages.
In a nonjury trial Monday before Judge Leonard Wexler in U.S. District Court in Central Islip, arguments from both sides centered on the phrase "customary and usual," with Calisi attorney Allen Press seeking to show that few new dealers awarded franchises during 2009 and 2010 were held to the same facility requirements.
Chrysler dealer development manager John Tangeman testified that the terms were customary, although exceptions sometimes made.
The suit is one of two pending nationally involving Chrysler dealers, according to Calisi's attorneys, and the first to go to trial. Wexler ordered both sides to submit final papers by Jan 4.