Riverhead Chrysler dealer loses in court
A federal judge has dismissed arguments by a former Riverhead Chrysler dealer that the carmaker treated him unfairly as he sought to reestablish his franchises lost during the recession.
The ruling, made late last month in federal district court in Central Islip, makes it more likely the Jeep and Chrysler franchises won't be reinstated, although the dealer plans to appeal and is weighing his options.
Mark Calisi, owner of the Eagle Auto Mall, along with a dealer from upstate, had sued Chrysler Group Llc in their efforts to restore franchises. They argued that Chrysler Group's demand that they build a stand-alone showroom for their vehicles was not "customary and usual" as required by federal law.
The law in question set up an arbitration process for hundreds of Chrysler and General Motors dealers to win back franchises lost during the economic downturn and bankruptcy-law reorganizations of both carmakers. Calisi successfully arbitrated his case but balked at meeting Chrysler's building requirements.
From the late 1990s until 2009, Calisi had been selling Jeeps and Chryslers in the same building on Route 58 as Mazdas, Volvos and Kias. He said it would cost between $4 million and $5 million to construct a stand-alone showroom meeting all of Chrysler's requirements.
Chrysler argued in a trial Dec. 3 before Judge Leonard Wexler that its requirements for the dealers were customary.
In a ruling dated Jan. 24, Wexler said 135 "letters of intent" from Chrysler to other prospective dealers provided "overwhelming evidence" that the conditions offered to the plaintiffs were "customary and usual."
Calisi and his attorney had sought to show that requirements in letters of intent often were waived. He said his attorney has filed a notice of appeal.
Calisi said Tuesday he's weighing the costs involved in setting up the dealership as Chrysler is requiring against what he believes is an uncertain future for Chrysler. "The taxpayers bailed out Chrysler twice," he said. "I don't think they have an appetite to bail them out a third time."