An auto repair shop that claims a Mercedes-Benz dealership demanded kickbacks for customer referrals is suing the automaker and car dealer for $11.5 million.
The previous owner of the dealership, Estate Motors, had sponsored North State as an authorized Mercedes repair shop for 13 years.
North State said it invested hundreds of thousands of dollars on the training and equipment required by Mercedes.
The repair shop did more than $1.1 million a year in Mercedes repairs from 2014 to 2016, according to the lawsuit filed by company President Gregory Coccaro.
Mercedes completed a required two-year audit in early 2017, the complaint states, and deemed North State 100 percent compliant.
Then Estate Motors sold the Goldens Bridge dealership to Tom Maoli, owner of Celebrity Motor Car Co., a group of luxury car dealerships in northern New Jersey.
North State and Celebrity representatives met in May to discuss their arrangement. Celebrity’s service manager and body shop coordinator, according to the lawsuit, said North State does excellent work.
But they allegedly asked how much North State was willing to pay to continue as a sponsored Mercedes repair shop.
North State accused Celebrity representatives of demanding a kickback on every car referred to the shop, requiring the shop to use the dealer’s repair estimates and telling the shop to pay the dealer the entire markup on parts.
They allegedly said repairs would be put out to bids, including to shops not certified by Mercedes, and the lowest bid would get the job.
North State representatives, the lawsuit states, responded that kickbacks are illegal and that giving customers a certificate of repairs on an estimate made by someone else is illegal.
They claimed that the Celebrity representatives declared, “these are the new rules,” and said they had no choice but to terminate its sponsorship.
A dealer spokesman, Larry Weiner, said Celebrity denies the allegations and is negotiating with North State to resolve the matter amicably.
North State asked a Mercedes-Benz official in Atlanta to reinstate the repair shop. The letter asked the official to “not condone these strong-arm tactics” and to make sure that certified shops are “not penalized for refusing to break the law.”
Mercedes did not re-authorize North State.
The lawsuit also names S&L Collision Center in Hawthorne, which it claims acceded to Celebrity’s demands.
Attempts to reach Mercedes and S&L Collision officials for a response were unsuccessful.