In Texas, 85 rejected Chrysler and General Motors dealers are suing the federal government, charging they lost their businesses without adequate compensation when the U.S. Treasury Dept. maneuvered the two auto makers into downsizing their dealer networks in 2009.

In a New York-based group action earlier this year, 75 terminated Chrysler dealers sued the U.S. government for the alleged unconstitutional taking of their dealerships without just compensation.

At least 10 dealer names have been added since then. Even more are expected to join, predicts Leonard Bellavia, lead attorney for the plaintiffs. Counter motions are going back and forth between the dealers and the government, like chess moves in a tense match. In October, lawyers filed new motions in the U.S. Court of Federal Claims, which hears cases against the federal government.

As government lawyers seek to dismiss the case, Bellavia looks to add plaintiffs.

“The lure of this case is that it goes to the heart of what every entrepreneur in this country pursues, the American dream,” he tells WardsAuto. “Yet, 789 Chrysler dealers, all symbols of American entrepreneurship, had their businesses taken away” as part of the auto maker’s post-bankruptcy reorganization.

Numerous high-profile dealers have joined the two largest suits against the government. For example, rejected dealers Jack Fitzgerald, co-leader of Committee to Restore Dealer Rights in Maryland, and Patrick Painter, a state representative in Utah, are part of the New York suit.

As more dealers sign on, the amount of damages sought increases. It is at $200 million now, up from $120 million earlier.

More is at stake in the Texas class-action case. “We are seeking the full value of the terminated dealerships and the lost profits and damages for those dealers that were reinstated,” says lead plaintiff attorney Richard Faulkner, estimating claims will run as high as $4 billion. “The numbers continue to change as we are still adding dealers.”

That federal suit was initiated by the former owners of the defunct Colonial Motors, a GM store in Branchburg, MS, and Finnin Motors, a Chrysler-Jeep dealership in Dubuque, IA.

The class action says unnecessary government economic regulation propelled the dealer franchise terminations.

“This case is important because it’s the only way the terminated dealers can recover the value of their terminated dealerships,” Faulkner says. “If the dealers don’t compel the government to pay for taking their property, they will never obtain anything.”

The case could end up at the highest court in the land, he tells WardsAuto. “The unique nature of what the government did to take dealers’ businesses almost ensures that this case will go to the Supreme Court.

“The government has never behaved this way before,” Faulkner says. “The auto task force decided that it would cost too much to eliminate dealers and pay them for their property, so it manipulated the loans and bankruptcy process. The dealers were accordingly terminated – and with extreme prejudice.”

The federal task force headed by Steven Rattner insisted the massive dealership cuts were necessary to save Chrysler and GM.

Rattner has told WardsAuto the task force tried to make sure all parties involved made sacrifices. But the panel regarded dealers collectively as a single constituency.

A subsequent report from an independent investigator for the government’s Troubled Asset Relief Program said the task force overstated the importance of the wholesale dealership terminations in the effort to save the two troubled auto makers.

Potential damages awarded each dealership would be separately calculated, says Harry Zanville, a lawyer in the Texas case.

Aggrieved dealers include those who won in arbitration hearings last year but were “product-starved” and had to close or suffered damages, as well as dealers who won arbitration but didn’t reestablish relations with the auto makers because of conditions and costs imposed, he says.

Chrysler terminated dealers immediately, GM gradually over the course of several months.
Bellavia and his legal team chose not to sue GM because its “wind-down” approach was less rash, he says. “Still, what happened to these business owners is one of the greatest atrocities in American history.”

Bellavia is a dealer’s son who worked at his father’s business to cover his law-school education. “As a product of an auto-dealership family, this case means a great deal to me,” he says.

Attorney Leonard A. Bellavia has dedicated his career to fighting for the rights of US automobile dealers and franchise owners.  Now, he wants to take that fight to the US Treasury Department – who Bellavia believes participated in legal misconduct by ordering the closing of 789 Chrysler Dealerships as part of the Chrysler Bankruptcy in 2009.  The 27 GM dealers who did not sign wind-down agreements are also eligible to participate in this lawsuit.

To file this lawsuit and move this fight forward, Bellavia needs a threshold number of dealers to participate. He’s almost there. But, the law firm still needs more dealers to join the fight.

Buoyed by recent headlines about a potential probe of the US Government’s role in setting criteria that resulted in the loss of franchises by GM and Chrysler dealers, Bellavia is reaching out far and wide to auto dealers.

“If the Executive Branch of the US Government exceeded its authority by mandating that dealers be closed, then the Government should be held accountable by the dealers” Bellavia said.

This is the United States of America, noted Bellavia, and people have property rights that should not be violated.  Dealers need to stand up and seek retribution for the severe economic loss the US Government may have caused them and Bellavia Gentile & Associates has developed a model that makes this feasible.

“We are trying to reach as many former Chrysler and eligible GM Dealers as possible to let them know of this opportunity.  Using the learning curve of our law firm – which represented the highest number of Chrysler dealers in arbitration hearings (according to our information) – and calling upon my personal knowledge gained by cross examining key people at Chrysler – including Bob Nardelli, Jim Press, Peter Grady and John Tangeman – these dealers have a solid chance of getting just compensation for the loss of their dealerships” said Leonard A. Bellavia, Esq.

Former Chrysler and eligible GM Dealers who want more information about joining this lawsuit can email Leonard Bellavia at LBellavia@DealerLaw.com or call the firm at 516.873.3000.

First there were widespread dealership closings by General Motors Co. and Chrysler Group LLC as part of their post-bankruptcy reorganization plans.

Then there were dealership-auto maker arbitration hearings ordered by the U.S. Congress after many dealers complained about the shutdowns.

Now come post-arbitration lawsuits by dealers in federal and state courts. They mainly target Chrysler, but one class-action suit is going after the U.S. government for allegedly spurring the dealership closings.

In rural Atoka, OK, co-owners Jack Haigh and Bob Sullins of Crossroads Superstore are suing Chrysler as part of a “mass-action” lawsuit.

Crossroads, which had sold both GM and Chrysler products, joins forces with three other dealers.

They are: Mark Calisi of Eagle Auto Mall Corp. in Riverhead, NY; Charlie Morris of Terry Chrysler-Jeep, of Burnt Hills, NY; and Jim Bickford of Westminster Dodge, Dorchester, MA.

They are among the few Chrysler dealers that won arbitration rulings against the auto maker that prevailed in 108 of 140 cases.

“It’s a hollow victory,” lead attorney Leonard Bellavia of New York says of Chrysler dealers’ arbitration wins.

Dealers who prevailed still must improve their facilities at Chrysler’s behest, win back customers or spend even more money in litigation, he notes.

After their arbitration wins, several dealerships such as Crossroads received “unreasonable and unconscionable” letters of intent (LOIs) that prevent their ability to resume business operations, according to their legal filings.

“I do not know of one dealer who won arbitration or that was offered reinstatement who is back to selling new vehicles with Chrysler,” says Crossroads’ Haigh.

But he says he does know “plenty of dealers that Chrysler gave (or gifted) franchises to who have new Chryslers on the ground and are selling and servicing without the LOI mess that we got.”

Haigh and his co-plaintiffs seek reinstatement, compensation for lost income and damages.
The Crossroads owners say they joined the East Coast suit because they wanted to leverage costs and thought a federal court in New York. The case will be heard in New York Eastern District Court in Long Island. But it might not stay there.

“Chrysler is making a motion to transfer the case to Michigan to consolidate it with the case it has brought against several Michigan dealers,” Bellavia says.

Haigh is disappointed because he thinks he might have done better with Chevrolet store negotiations, but instead opted to settle a wind-down agreement with GM.

At the time, he says Chrysler representatives were telling him it would help Crossroads’ chances if it weren’t dualed with GM.

Haigh now says settling with GM was a rash decision and the dealership could have been better off with GM, even though Chrysler truck sales typically outperform Chevrolet in his market.

“Chrysler told us it would be far better for us not to have the GM dealership in order to better serve Chrysler. So we put all our eggs in the basket with Chrysler,” says Haigh.

Crossroads’ owners won in arbitration and got the disputed Chrysler LOI. Like a number of dealers, they didn’t sign it, claiming some requirements – including giving Chrysler complete withdrawal rights if a nearby store protests – are unfair and different from stores that weren’t
closed.

By September, about nine dealers nationally sued Chrysler in state and federal courts. Chrysler won’t confirm the number of lawsuits.

One attorney estimates Chrysler could be spending at least $1 million a month in legal fees.
“It would be inappropriate to discuss matters now in litigation,” Chrysler spokesman Mike Palese says in a statement.

He reiterates Chrysler’s ongoing claim that dealers selected for termination were carefully considered, taking into account its Genesis plan of consolidating brands at a single sales point.

“Placing all four brands under one roof in modern facilities has already resulted in enhanced profitability for the Genesis dealerships,” he says.

“It is well documented that due to Chrysler’s optimized network, existing dealers are already enjoying increased profitability and are making significant investments in their dealerships,” Palese says.

The dealers’ federal lawsuit is to get their dealerships back, Sullins says. “We’re trying to get reinstated with the same agreement everyone had before.”

The federal suit in New York could take more than a year, Bellavia estimates. Chrysler will be represented by WilmerHale, a Boston firm.

Gilbert Dannehower, owner of Deland Dodge in central Florida, was the first dealer to win in arbitration against Chrysler. Still, he’s pressing his case forward and suing to get Chrysler to comply with the arbitrator’s award.

He couldn’t accept the steep investment in facilities required by the LOI, says his attorney, Mark Ornstein.

The lawyer says it is unreasonable to expect a dealer, financially strapped after being shut down for a year, to come up with $1 million for facility improvements.

Dannehower also refused to sign the Chrysler LOI after winning in arbitration because he was put off by the language allowing Chrysler to deny him merely if other Chrysler dealers object to what he considers his arbitrated right to sell vehicles.

Yanking Daannehower’s franchise was unfounded in the first place, Ornstein says. “He was the No.1 auto retailer in DeLand at the time of termination. He was an acknowledged stellar performer.”

The arbitrator, a retired judge, went out of her way to mention it in her award, he notes.

“The dealer terminations were 20,000-ft. decisions made in the heat of bankruptcy,” Ornstein says. “Congress, when giving the dealers a right to arbitrate, allowed dealers to tell their individual stories.

“My clients are anxious and willing to let bygones be bygones and get back in the business of selling vehicles.”

Why isn’t GM facing the same LOI legal challenges as Chrysler?

“GM is not imposing unreasonable requirements on dealers,” Bellavia says. “They have not required that new facilities be built and certain rights be waived if another nearby dealer complains. They restored many of their dealers without arbitration.”

Dealers battling to get their dealerships back “are the fighters that Chrysler needs to better its retail network,” Haigh says.

Meanwhile, several dealers filed a federal class-action suit against the U.S., claiming the federal government forced Chrysler and GM to terminate the franchises of thousands of auto dealers, lawyers for the dealers say.

Colonial Motors, a former GM dealer in Mississippi, and Finnin Motors, a former Chrysler dealer in Iowa, filed suit on behalf of a nationwide class of more than a 1,000 dealers, saying unnecessary government economic regulation caused the dealer-franchise terminations.

They are seeking to be fully paid for property damages, says Dallas attorney Richard Faulkner.

“Without need and, on a theory, the federal government demanded that GM and Chrysler immediately terminate a huge number of car dealers or be denied obtaining billions of dollars of TARP (Troubled Asset Relief Program) money,” Faulkner says.

A subsequent government report by the Special Inspector General for the Troubled Asset Relief Program indicated the widespread dealership closings were not vital to the two auto makers’ survival and unnecessarily resulted in thousands of nationwide job losses in the depth of the recession.

Chrysler Group LLC won a large majority of cases appearing before arbitrators in American Arbitration Assn. hearings.

But in a number of dealer wins, arbitrators looked beyond Chrysler and General Motors Co.’s post-bankruptcy business cases for restructuring their dealer networks.

Considerations of the public interest weighed heavily when an arbitrator in Eagle Auto Mall’s termination appeal against Chrysler Group found for the dealer, Mark Calisi.

He won back his Chrysler Jeep dealership in Riverhead, NY, after losing it last year as part of Chrysler’s sweeping dealership restructuring plan.

Calisi also operates Chevrolet, Kia, Mazda and Volvo new-car dealerships in Long Island.

A victorious Calisi tells Ward’s the arbitrator believed “it was in the best interest of the public to have a Chrysler store right on the main strip of Long Island’s” eastern end where there was no Chrysler presence.

Arbitrator Larry Biblo said in his decision, “The best thing for Chrysler and the public is to get Chrysler back to financial stability as soon as possible. This urgency, in the end, was the deciding factor in this case.”

GM has had fewer arbitration cases after agreeing to reinstate more than 660 dealers.

But in a major GM arbitration matter, an arbitrator found for Lou LaRiche Chevrolet, a 40-year store that is the only Chevrolet dealership in Plymouth, MI.

Scott LaRiche, executive manager, believes LaRiche was the first dealership in the U.S. to win against GM.

“At first we thought it was a mistake,” he says of receiving the “wind-down” notice indicating the dealership’s days were numbered. “We were well above the criteria set for wind-down dealers.”

In 2008, as other dealers reeled from the worsening economy, the dealership was 97 in sales out of 4,600 Chevrolet dealers nationwide.

Arbitrator Peter Kupelian ruled LaRiche had the resources and past track record to succeed in the upscale to middle-class market it serves.

The arbitrator took into account the dealership’s profitability, especially between 2007 and 2009, when the economic crisis was deepening.

Last year, Chrysler closed 789 dealerships, effective immediately, reducing its dealer count to about 2,400, or 25{f15fad3b04d89020a05738ee85256797e9759bd19fdd229b29bad9398df16913}.

GM announced it was reducing its 6,000-dealer network by about 2,400 dealerships in what it called a “wind down” intended to give affected dealers time to close their stores.

Reacting to the massive dealership closings, the U.S. Congress passed legislation allowing dealers to opt for arbitration hearings.

A recent government report on the termination process says some dealers lost their franchises even though they ran financially healthy businesses.

The report also indicated there was no evidence that massive dealership cuts, prodded by a federal government automotive task force, were vital to the survival of GM and Chrysler.

Further, the report says the dealership closings resulted in thousands of job losses during a recession.

Even in 2009, in wind-down status, the LaRiche Chevy store was 179th in sales among Chevrolet dealers nationwide, LaRiche says.

The store stayed open by getting new products from other dealers. “We were very tenacious,” LaRiche says. “We never gave up hope.”

Motivating him to fight was seeing everything his father, Lou, had worked for in 40 years taken away from him.

Leonard Bellavia, Calisi’s attorney in the Chrysler case, says, “The arbitrator saw that it’s not about personalities, but about selling cars and trucks. He (Calisi) is a good dealer and needs to recover fast. It’s in the best interest of the public and Chrysler to get them selling Chryslers again.”

Bellavia had successfully asked a U.S. Bankruptcy judge to unseal internal Chrysler e-mails for use in arbitration cases involving Calisi and another Chrysler dealer, Jim Tarbox of North Kingstown, RI.

Bellavia said the e-mails between Chrysler field representatives and executives criticized the dealers personally, implying the stores were closed for reasons other than performance.

In the 2009 e-mails, the two dealers were called “litigious,” “combative” and “belligerent.”

“It wasn’t a performance issue,” Calisi says.

The stinging emails were introduced as evidence in his and Tarbox’s arbitrations. “The defense in these cases is grounded in common sense,” Bellavia says.

“Why did we win?” says Calisi. “Great performance and we were well capitalized.”

He is glad to be back in business as a Chrysler dealer. Now, he says, “Chrysler needs to hit the ground running and start selling cars.”

Tarbox took a Chrysler buyout. Without naming the amount of the settlement, Bellavia says it was “substantial enough” to allow Tarbox to start a new business, possibly a new dealership representing another auto maker.

Another Bellavia client, Westminster Dodge in Boston, won its arbitration case in a July 19 decision.

With Westminster, a mainstay area dealership since the 1930s, Chrysler claimed the dealership was in a bad location.

“It was about 50 feet from a showplace Toyota dealership,” Bellavia says. “How in good faith can you argue that’s a bad location?”

The dealership had a “symbolic presence” to people in the area. “We were the only Chrysler representative in the city of Boston. There’s been no one representing Chrysler since we were dismissed,” says Bob Bickford, co-owner of the family store that sold used vehicles after Chrysler yanked its new-car franchise.

The mood at Westminster was jubilant after the arbitrator’s ruling, but the family has had a long time on the sidelines.

“We’ve had about 15 months to sit and absorb it,” Bob Bickford says of the initial closure. “But our customer base has been in our corner and very positive.”

Co-dealer Jim Bickford says “We knew we had a strong case with our location and history.”

Despite a high win ratio on its side, Chrysler has expressed disappointment in many of the cases won by dealers.

In the Calisi case, Chrysler says: “This decision undermines the federal Bankruptcy Court Order that affirmed the rationalization process used to reject the dealership agreements.”

Chrysler says “decisions to select dealers for the company’s ‘right-sized’ dealer network were carefully considered.”

GM is not commenting on the Lou LaRiche case or others in arbitration, citing dealer confidentiality.

GM sent letters to 661 dealers of the roughly 1,100 dealers who filed arbitration claims, indicating they will be reinstated.

Both Chrysler and GM say they expect the final arbitration proceedings to wrap up by the end of July. Decisions sometimes take several weeks to come down.

Dealers winning in arbitration say their next big hurdle is winning back customers who may have strayed.

“We’re excited to be part of the new GM,” Scott LaRiche says. “But I still feel horrible for those dealers who lost and never should have.”

Dealers claim they received ‘unreasonable’ letters of intent

WASHINGTON — Chrysler Group was sued today by four rejected dealerships, which claim that they received “unreasonable and unconscionable” letters of intent after prevailing in arbitration.

The lawsuit raises to nine the number of plaintiffs making such a claim against the automaker.

The joint suit filed in U.S. District Court in Long Island, N.Y., objects to several Chrysler conditions for reinstatement, including one that would let the company withdraw its letter of intent if a nearby dealer protests the reinstatement within 30 days.

The suit seeks reinstatement, compensation for lost income and punitive damages for Chrysler’s “bad faith and/or reckless indifference” for the dealers’ legal rights.

Chrysler said today its letters of intent are legal.

“The company has complied fully with the letter and intent of the federal dealer arbitration statute,” Chrysler spokesman Michael Palese said. The company has not been served with the latest suit, he said.

The four dealerships that filed today’s suit are Eagle Auto Mall Corp., of Riverhead, N.Y., owned by Mark Calisi; Terry Chrysler-Jeep, of Burnt Hills, N.Y., owned by Charlie Morris; Crossroads Superstore, of Atoka, Okla., owned by Robert Sullins; and Westminster Dodge, of Dorchester, Mass., owned by Jim Bickford.

All were shut down by Chrysler last year as part of its bankruptcy restructuring, then won their arbitrations with the company this spring.

The lawyer for the dealerships, Leonard Bellavia, of Mineola, N.Y., said several other dealerships may join the suit in the next week or two.

The federal law setting up the arbitration process required that Chrysler issue a “customary and usual” letter of intent to any dealer who prevailed in arbitration.

At least 83 Chrysler dealerships have received letters of intent from the company during the arbitration process, but only 29 have signed them, Palese has said.

The five other dealerships that previously sued Chrysler over their letters of intent are:

Livonia Chrysler Jeep Inc., of Farmington Hills, Mich.; Star Chrysler-Jeep, of Glendale, Calif.; Causeway Jeep, of Manahawkin, N.J.; Deland Dodge, of Deland, Fla.; and Century Motor Corp., of Wentzville, Mo.

As the clock winds down, Chrysler Group LLC still is winning in a large majority of cases appearing before arbitrators in American Arbitration Assn. hearings.

The scoreboard: Chrysler 71, dealers 31. Chrysler says seven decisions are pending. Final numbers are expected by the end of July.

But in a number of dealer wins, arbitrators looked beyond Chrysler and General Motors Co.’s post-bankruptcy business cases for restructuring their dealer networks.

Considerations of the public interest weighed heavily when an arbitrator in Eagle Auto Mall’s termination appeal against Chrysler Group found for the dealer, Mark Calisi.

He won back his Chrysler Jeep dealership in Riverhead, NY, after losing it last year as part of Chrysler’s sweeping dealership restructuring plan.

Calisi also operates Chevrolet, Kia, Mazda and Volvo new-car dealerships in Long Island.

A victorious Calisi tells Ward’s the arbitrator believed “it was in the best interest of the public to have a Chrysler store right on the main strip of Long Island’s” eastern end where there was no Chrysler presence.

Arbitrator Larry Biblo said in his decision, “The best thing for Chrysler and the public is to get Chrysler back to financial stability as soon as possible. This urgency, in the end, was the deciding factor in this case.”

GM has had fewer arbitration cases after agreeing to reinstate more than 660 dealers.

But in a major GM arbitration matter, an arbitrator found for Lou LaRiche Chevrolet, a 40-year store that is the only Chevrolet dealership in Plymouth, MI.

Scott LaRiche, executive manager, believes LaRiche was the first dealership in the country to win against GM. “At first we thought it was a mistake,” he says of receiving the reprieve.

“It’s hard to speculate about why we prevailed,” he says, surmising that the dealership’s strong “numbers” helped. In 2008, as other dealers reeled from the worsening economy, the dealership was 97 in sales out of 4,600 Chevrolet dealers nationwide.

Arbitrator Peter Kupelian ruled LaRiche had the resources and past track record to succeed in the upscale to middle-class market it serves.

The arbitrator took into account the dealership’s profitability, especially between 2007 and 2009, when the economic crisis was deepening.

Last year, Chrysler closed 789 dealerships, effective immediately, reducing its dealer count to about 2,400, or 25{f15fad3b04d89020a05738ee85256797e9759bd19fdd229b29bad9398df16913}.

GM announced it was reducing its 6,000-dealer network by about 2,400 dealerships in what it called a “wind down” intended to give affected dealers time to close their stores.

Reacting to the massive dealership closings, the U.S. Congress passed legislation allowing dealers to opt for arbitration hearings.

A recent government report on the termination process says some dealers lost their franchises even though they ran financially healthy businesses.

The report also indicated there was no evidence that massive dealership cuts, prodded by a federal government automotive task force, were vital to the survival of GM and Chrysler.

Further, the report says the dealership closings resulted in thousands of job losses during a recession.

Even in 2009, in wind-down status, the LaRiche Chevy store was 179th in sales among Chevrolet dealers nationwide, LaRiche says.

The store stayed open by getting new products from other dealers. “We were very tenacious,” LaRiche says. “We never gave up hope.”

Motivating him to fight was seeing everything his father, Lou, had worked for in 40 years taken away from him.

Leonard Bellavia, Calisi’s attorney in the Chrysler case, says, “The arbitrator saw that it’s not about personalities, but about selling cars and trucks. He (Calisi) is a good dealer and needs to recover fast. It’s in the best interest of the public and Chrysler to get them selling Chryslers again.”

Bellavia had successfully asked a U.S. Bankruptcy judge to unseal internal Chrysler e-mails for use in arbitration cases involving Calisi and another Chrysler dealer, Jim Tarbox of North Kingstown, RI.

Bellavia said the e-mails between Chrysler field representatives and executives criticized the dealers personally, implying the stores were closed for reasons other than performance.

In the 2009 e-mails, the two dealers were called “litigious,” “combative” and “belligerent.”

“It wasn’t a performance issue,” Calisi says.

The stinging emails were introduced as evidence in his and Tarbox’s arbitrations. “The defense in these cases is grounded in common sense,” Bellavia says.

“Why did we win?” says Calisi. “Great performance and we were well capitalized.”

He is glad to be back in business as a Chrysler dealer. Now, he says, “Chrysler needs to hit the ground running and start selling cars.”

Tarbox took a Chrysler buyout. Without naming the amount of the settlement, Bellavia says it was “substantial enough” to allow Tarbox to start a new business, possibly a new dealership representing another auto maker.

Another Bellavia client, Westminster Dodge in Boston, won its arbitration case in a July 19 decision.

With Westminster, a mainstay area dealership since the 1930s, Chrysler claimed the dealership was in a bad location.

“It was about 50 feet from a showplace Toyota dealership,” Bellavia says. “How in good faith can you argue that’s a bad location?”

The dealership had a “symbolic presence” to people in the area. “We were the only Chrysler representative in the city of Boston. There’s been no one representing Chrysler since we were dismissed,” says Bob Bickford, co-owner of the family store that sold used vehicles after Chrysler yanked its new-car franchise.

The mood at Westminster was jubilant after the arbitrator’s ruling, but the family has had a long time on the sidelines.

“We’ve had about 15 months to sit and absorb it,” Bob Bickford says of the initial closure. “But our customer base has been in our corner and very positive.”

Co-dealer Jim Bickford says “We knew we had a strong case with our location and history.”

Despite a high win ratio on its side, Chrysler has expressed disappointment in many of the cases won by dealers.

In the Calisi case, Chrysler says: “This decision undermines the federal Bankruptcy Court Order that affirmed the rationalization process used to reject the dealership agreements.”

Chrysler says “decisions to select dealers for the company’s ‘right-sized’ dealer network were carefully considered.”

GM is not commenting on the Lou LaRiche case or others in arbitration, citing dealer confidentiality.

GM sent letters to 661 dealers of the roughly 1,100 dealers who filed arbitration claims, indicating they will be reinstated.

Both Chrysler and GM say they expect the final arbitration proceedings to wrap up by the end of July. Decisions sometimes take several weeks to come down.

Dealers winning in arbitration say their next big hurdle is winning back customers who may have strayed.

“We’re excited to be part of the new GM,” Scott LaRiche says. “But I still feel horrible for those dealers who lost and never should have.”

Westminster Motors in Dorchester, which lost its status as a Chrysler dealer last year, won an arbitration ruling yesterday that restored its ability to sell new Dodge cars and trucks — making it one of only a handful of Chrysler dealerships to reverse a shut-down order.

The dealership had been selling used cars since last summer, when its agreement with Chrysler was terminated. Jim Bickford, a principal at the dealership, said he plans to start selling new Dodges within 60 days under the old name, Westminster Dodge.

A decision to shut down Westminster would have left the Boston area without a Chrysler dealer, said Leonard Bellavia, lead counsel for Westminster Dodge.

David L. Evans, the arbitrator, criticized Chrysler’s plan to service the Boston area by selling new Dodge vehicles only at a Quirk dealership in Braintree, which would also sell Jeeps and Chryslers.

“While Braintree may be only 6 to 9 miles away,’’ Evans wrote, “the excursion can be an ordeal.’’

He also praised Westminster Dodge’s record, writing that it is a “proven performer’’ in “a desirable, underserved location.’’

Thirty of 789 Chrysler dealerships ordered to shut down in May 2009 have won arbitration cases, a Chrysler spokesman said.

Chrysler Group LLC decided to close a quarter of its dealerships in an effort to reorganize after filing for bankruptcy protection. The government arranged for the Italian automaker Fiat, which currently has a 20 percent ownership stake in the company, to manage Chrysler.

After seeking bankruptcy protection, Chrysler was required to shut down dealerships to secure financing from the government, which loaned the automaker about $14 billion.

About half of the dealers entered arbitration; 7 percent have won. Most have settled, withdrawn their cases, had the cases dismissed, or lost.

“While difficult, the actions to reduce Chrysler’s dealer network were a necessary part of its viability,’’ Chrysler spokesman Michael Palese wrote in an e-mail.

Bickford said he is ecstatic. When he received a termination letter, “I was obviously devastated, because it’s something we’ve worked for all our lives.’’

“ . . . You get a letter in the mail that says, ‘We’re taking your dealership away and giving it to someone else,’ ’’ Bickford said. “Take one person’s property and give it to another one. It’s just morally wrong, you know.’’

He said his dealership was profitable in 2008 and at the beginning of 2009. But he lost money selling only used cars. “I need a new car franchise to survive,’’ he said.

Bickford said he hopes to rehire most of the employees who were let go last year. His dealership, which used to employ 46 workers, now has 28.

The arbitration decision is the first such victory for a former Chrysler dealer in Massachusetts. Chrysler has won three arbitration cases in Massachusetts, three others have been settled, and another was withdrawn.

Robert O’Koniewski, executive vice president at the Massachusetts State Automobile Dealers Association, said the decision was a win for the free market.

“If a dealership is going to survive or sink, that should be dictated by the forces of the marketplace,’’ he said.

General Motors, which filed for bankruptcy protection in 2009, also shut dealerships. GM ordered about 2,000 to close; about 35 were in Massachusetts. GM could not be reached for comment.

Last year, Chrysler Group Llc, mired in bankruptcy proceedings, terminated 789 dealerships across the country, saying it had too many for its diminished market share.

Among the terminated was one of Long Island’s largest Chrysler dealers, Eagle Auto Mall in Riverhead. Eagle was one of about 200 dumped Chrysler dealers that began to fight the auto giant in an arbitration to regain their Chrysler franchises.

Until last week, only 14 dealers nationwide had bested Chrysler in the proceedings.

Last week, Eagle Auto learned it had become the 15th to win its hearing, and it expects to begin selling Jeeps and Chryslers again within 60 days, Eagle Auto owner Mark Calisi said. Eagle Auto was also the only Long Island Chrysler dealer to regain its franchise. The others reached financial settlements with Chrysler.

“We got phone calls from all over the country,” Calisi said, referring to calls he got from people upset with Chrysler’s actions. “They wanted to make a statement.”

Chrysler said in a statement it was “disappointed” with the arbitrator’s decision, but it noted it had won 44 cases and that fewer than 30 remain to be arbitrated.

“Chrysler Group is looking forward to moving beyond the arbitration process and completing our dealer network plans,” the company said.

Leonard Bellavia, of the Mineola-based Bellavia Gentile & Associates law firm, which represented Eagle Auto and many other terminated dealerships across the country, said that in preparing for the arbitration, he had uncovered e-mails from top Chrysler executives.

Eagle Auto was officially told it was being terminated because it also sold Mazdas, Volvos and Kias, which Chrysler said was “contrary to its business model,” Bellavia said.

But the e-mails, Bellavia said, told a different story.

They said Calisi was “difficult to deal with,” Bellavia said. “He would blow the whistle on them” about auto prices and other issues, Bellavia said.

Chrysler would not comment on the e-mails.

Bellavia presented them to arbitrator Larry Biblo during a two-day hearing at a Westchester County hotel. Last week, Biblo wrote that Eagle Auto’s franchise “will be renewed.”

Calisi said the termination had its consequence on his business: It lost $18 million in revenue in the last year.

Chrysler Group LLC continues to win the vast majority of dealer arbitration cases coming before the American Arbitration Assn.

The scoreboard: As of July 9, with 73 cases completed, arbitrators decided for Chrysler in 54 cases and in19 for dealers.

More than 125 of the 418 filed arbitration cases have been dismissed, withdrawn or abandoned, says Chrysler. Less than 10 cases remain to be arbitrated by a deadline that officially is this week, but is expected to take longer than that.

The U.S. Congress ordered the arbitration after Chrysler and General Motors Co. terminated thousands of dealers as part of post-bankruptcy reorganization plans.

Chrysler says it is working to meet the statutory requirement to provide dealers who win in arbitration with a Letter of Intent within seven business days. The federal statute provides for reinstatement for dealers who win in arbitration.

“But that (reinstatement term) applies to GM because their dealers were not rejected technically,” a Chrysler spokesman says.

Chrysler immediately terminated dealers. GM, in not renewing franchises, did a so-called wind down extending to next October. GM also called back several hundred dealers on the eve of the arbitration hearings.

Chrysler says in a statement: “The company is complying with the federal statute by issuing a customary and usual Letter of Intent to dealers that prevail in arbitration and is looking forward to discussions with prevailing dealers.

“These discussions are – and will remain – private business matters.”

But attorney Leonard Bellavia of Mineola, NY, explains Section 747 is a federal reinstatement statute for GM and Chrysler dealers who were either rejected (Chrysler) or wound down (GM) in their respective bankruptcies.

“The only distinction is that in the GM case its dealers were told if they signed a ‘wind down’ agreement, which gave them up to 18 months to close along with a modest stipend, it could avoid the same immediate rejection that occurred in the Chrysler bankruptcy case,” he says.

The decisions to select dealers for the new Chrysler dealer network were carefully considered as part of Chrysler’s Genesis project, its dealer consolidation plan, the auto maker says.

“Placing all four brands under one roof in modern facilities has already resulted in enhanced profitability for the Genesis dealerships,” Chrysler says. “The decisions of a great majority of the arbitrators reflect the belief that the company’s dealer-network decisions were not only appropriate, but essential to its future success.”

Bellavia argued for dealers in their arbitration hearings that the Genesis project has been a “failure” and is “not a sensible business plan.”

His firm has handled 38 dealer arbitration cases, mostly against Chrysler. The GM cases, he says, largely were settled outside of arbitration hearings. “There’s more evidence every month showing that Genesis is not working,” he says.

Why is Chrysler prevailing in most arbitration cases? “Some dealers didn’t have attorneys specializing in automotive issues,” Bellavia says. “And Chrysler has deeper pockets than dealers do.”

At GM, it’s a different story, at least as far as its wind-down dealers are concerned. GM says that last March it offered LOIs to 666 dealers to return to the fold. Of these, 600 were reinstated, spokesman Dave Roman says. Others in the arbitration process dropped out or settled otherwise, he adds.

Once GM dealers meet the LOI terms, they will be able to start ordering new vehicles, Roman says.

Some have reported the returning number as high as 900, but GM officials say that’s misleading.

In March, Mark Reuss, GM president-North America, said the number of dealers would fall between 4,100 and 5,300. But he was “rounding off” the numbers, Roman says.

Then in mid-May, Reuss told the Associated Press GM would end up with “about 5,000 dealers,” meaning about 900 of dealers who were initially on the termination list were being brought back.

In a late-June investors meeting, GM told investors it will have about 4,500 U.S. dealers within a few months, down from 6,150 before bankruptcy.

Although GM had dropped four brands, it increased sales, Reuss said at that meeting. “We increased sales going from 6,150 dealers pre-bankruptcy to 4,500 dealers. These dealers will be the best dealers and the best network in the industry.”

He spoke of spending a lot of time on the dealer-alignment strategy.

“This (dealer network) is our competitive advantage and not easily copied over time,” Reuss told investors.

Getting the “dealer footprint right” has been a challenge inside the company, he said. The next step is “to get trust back and end arbitration. It’s been a tough process, tough on some of our people.”

GM’s large dealer network “used to be one of our main, massive strengths,” Reuss said at a recent media event. “I still think that’s true. It can be true with the right dealers.”

Whatever the final count, “the fact is we will end up with somewhere between 4,100 and 5,300 dealers when the arbitration process concludes later this summer,” GM spokeswoman Ryndee Carney says.

GM had more than 300 arbitration cases in early May, and less than 100 are scheduled for completion by July 14.

However, GM officials, citing “dealer confidentiality,” are not giving details out such as dealer names and cases “until we’re finished.”

Officially, arbitration cases have to be heard by July 14.“It will likely take a little longer than that for all of the decisions to be rendered. We expect to complete the process later this summer,” Carney says.

In bankruptcy court last year, Chrysler and GM said they had too many dealers to be competitive, because their networks were constructed when domestics had a much bigger share of the U.S. market.

They needed to whittle down to compete against the Toyota Motor Sales U.S.A. Inc. and American Honda Motor Co. Inc. and Hondas with scaled down networks.

As a result of court-ordered restructuring last year, Chrysler and GM initially said they would shed some 2,800 dealerships as part of their reorganizations.

That’s all history. As returning Chrysler Jeep dealer Mark Calisi of Eagle Auto Mall in Riverhead, NY, puts it: “Chrysler needs to hit the ground running and start selling cars.”