Central Avenue Nissan has accused Nissan North America and Nissan Motor Acceptance Co. of violating the New York Franchised Motor Vehicle Dealer Act, in a complaint filed Jan. 26 in U.S. District Court, White Plains, to stop the carmaker from opening a White Plains dealership.
“Good cause to invade Central Avenue’s market area does not exist in this case,” the complaint states.
Nissan regional spokesman Steven Oldham declined to comment on the lawsuit. But the carmaker said in a Jan. 10 letter to Central Avenue Nissan that a new dealership “will enhance the performance of its dealer network and improve its brand presence in the greater White Plains, New York marketplace.”
Central Avenue Nissan is on Central Park Avenue in Northeast Yonkers. It was formed in 2003 and is owned, according to its website, by F. James Rourke and Mark Brennan.
Nissan notified the dealership on Jan. 10 that it intended to allow Jonathan L. Stern to open a dealership at 450-460 Tarrytown Road, Greenburgh ”” 5.9 miles from Central Avenue Nissan ”” to replace a previous Nissan dealership that had operated nearby.
Neither the Nissan letter nor the lawsuit mention that the previous dealership, White Plains Nissan, 500 Tarrytown Road, closed in 2016 during a financial dispute with the automaker.
The proposed dealer is warranted, according to the Nissan letter, by “economic and marketing conditions” and will “benefit the public welfare through greater customer convenience and improve the service to consumers in the local area.”
Central Avenue Nissan says there is no need for a new dealer. Its track record of success exceeds Nissan’s and customers’ expectations, the complaint states.
The proposed dealership would also harm Central Avenue Nissan as automobile dealers are struggling to meet customer demand because of a shortage of computer chips that has limited the supply of new cars.
“As a result, the complaint states, “Central Avenue cannot maintain an adequate inventory of vehicles to meet customer demand.”
The dealer argues that Nissan must demonstrate “good cause,” under New York law, including, for example, population growth and inadequate competition.
But Westchester County’s population has declined slightly, according to the complaint, and Central Avenue Nissan is “more than adequately meeting the needs of the consuming public.”
The complaint also notes that three attempts to open automobile dealerships at the proposed location have failed.
And next door, Gary B. Flom, of Manhattan, had opened White Plains Nissan in 2014 and quickly earned an “F” rating with the Better Business Bureau. The White Plains store, as well as a Mount Kisco dealership owned by Flom, were selling vehicles “out of trust,” according to court records.
Instead of repaying loans to Nissan when vehicles were sold, the dealers were “pocketing the sale proceeds,” according to a federal court ruling in 2018. The judge ordered Flom’s companies to pay Nissan $40.2.
Besides the state franchised dealer law, Central Avenue Nissan accused Nissan of violating the federal Automobile Dealer’s Day in Court Act for allegedly undermining its rights to operate without improper competition; breach of contract; and breach of implied covenant of good faith and fair dealing.
It is asking the court to enjoin Nissan from establishing a dealership at the proposed location or any other location in its market area and to award unspecified damages.
Manhattan attorney Michael Yellin represents Central Avenue Nissan.
