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Auto Dealer Files Suit Against Chrysler Regarding Reinstatement Letter

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On: Wed, Aug 11, 2010 at 4:58PM | By: Sherry Christiansen

Auto Dealer Files Suit Against Chrysler Regarding Reinstatement Letter

A New Jersey Chrysler dealer has become one of three total dealers in the U.S. to file a lawsuit against Chrysler Group after winning a recent arbitration case, but objecting to the company’s reinstatement terms. According to Automotive News, the dealership, Causeway Jeep in Manahawkin N.J., requested that the Chrysler Group be court ordered to ”issue a letter of intent that would restore the dealership to its position before the franchise was terminated during the company's bankruptcy.”

Chrysler has instead issued a letter of intent intended “solely to defeat Causeway's reinstatement and to render the arbitration moot,” said the suit filed for the dealership by Eric Chase, attorney. According to the complaint that was filedin federal court in Newark against the company, the reinstatement criteria is “part of Chrysler's larger scheme to impede or defeat as many dealers who prevailed in arbitration as it can in the United States.”

Michael Palese, spokesperson for Chrysle, stated that the company has not yet had an opportunity to review the suit. “However, the company has complied fully with the letter and intent of the federal dealer arbitration statute by issuing a customary and usual letter of intent to all dealers that prevailed in arbitration,” he relayed in an email. According to Palase, 87 Chrysler dealerships received letters of intent from the Company as a result of arbitration, but only 29 dealerships have signed them.

Century Motor Corp in Missouri and Deland Dodge Dealership in Florida are the other two dealerships involved in filing law suits against Chrysler. According to Automotive News; “All three suits have objected in part to a condition that would let the company withdraw its letter of intent if a nearby dealer protests the reinstatement for 30 days.”

In a July 14th decision, the judgment condemned Chrysler’s Genesis plan to consolidate all four brands in every dealership. One arbitrator stated, “the company's use of Genesis to close Causeway Jeep does not make sense to me, and for what it is worth, appears to be an example of the corporate inflexibility that may have contributed to Chrysler's predicament today.


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