Metro Detroit Chrysler Jeep dealership suing Chrysler

Article by Christian Andrei, on August 26, 2010

Citing a loss of rights under franchise law, a lawsuit was filed by a Metro Detroit Chrysler Jeep dealership that was reinstated after arbitration proceedings with Chrysler Group LLC last month.

The suit was filed in the US District Court in Detroit against Chrysler and a nearby Dodge Chrysler Jeep store (originally just a Dodge dealer).

Livonia Chrysler Jeep Inc., which is operated by the Holiday Automotive Group, asks for $75,000 in economic damages plus an injunction and unspecified punitive damages against Chrysler.

Livonia Chrysler Jeep, owned by Colleen McDonald, alleges that Chrysler's letter of intent sent on Aug. 12 does not return the sales and service agreement that Chrysler gave to Crestwood Dodge Chrysler Jeep in Garden City, Mich., after terminating Livonia's franchise agreement last year. In July, the McDonald dealership had won an arbitration appeal.

Soon after Chrysler terminated McDonald's Chrysler Jeep franchise, the Chrysler Jeep franchise was granted to Crestwood Dodge.

In Livonia Chrysler Jeep's reinstatement, there is a provision that the letter of intent is void if Crestwood or another existing dealer "protests the addition of (Livonia Chrysler) into the dealership network and the protest is successful."

The lawsuit cites violations of the federal law that permitted dealers to seek arbitration as well as the Michigan Motor Vehicle Dealers, Distributors and Manufacturers Act.

The lawsuit states that the law requires Chrysler to reinstate Livonia Chrysler to have the same position it had before the franchise agreement was terminated. It also said that before the franchise was terminated and awarded to Crestwood by Chrysler, Crestwood did not own a Chrysler Jeep franchise in Garden City.

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