CARLE PLACE, NY — A luxury car dealership headquartered in Roslyn has been accused in a new lawsuit of operating a “pervasive deceptive scheme” that defrauded vehicle owners who used the dealer’s body shop for accident repairs.
The suit, a purported class action, said customers paid Rallye Collision Center for labor that was not performed, received estimates for parts that were not replaced and received refurbished parts instead of new parts that the shop claimed were essential for proper repairs. The collision center is located in Carle Place. As a result, customers unwittingly drove away in unsafe cars that lost value, the lawsuit said. Rallye was also accused in court documents of paying off insurance adjusters to submit deceptive repair estimates.
Attorney Jeffrery Bown, of New York-based Leeds Brown Law P.C, who filed the case, said potential damages could total hundreds of millions of dollars.
The suit was filed Monday in State Supreme Court on behalf of North Shore resident Salvatore Stile, an international shipping executive who said he has been a Rallye customer for decades. The suit names Rallye Motors Co., Rallye Motors Holding LLC and Rallye President and CEO Juliana Terian, as defendants.
Rallye, established in 1958, markets itself as the nation’s fifth-largest auto dealer and the only auto dealer group representing four top-selling luxury brands — Mercedes-Benz, BMW, Lexus and Acura — on Long Island. Rallye Collision Center advertises that “great care will be taken to use only genuine replacement parts, factory specific paints, and exacting auto body repair methods” to ensure that their customer’s vehicle is “as good as new.”
In the suit, Stile said his 2015 Mercedes Benz S550 was repaired at Rallye after a rear-end collision in 2016 at a cost of more than $20,000, largely paid by his insurer. He said he later found he paid for labor that was never performed, and that parts weren’t replaced. While his original estimate of $20,808.15 included $14,260 for parts and $4,270 for labor, Stile’s invoice listed only $4,142 for parts — 71 percent below the estimate — and labor charges of $10,107 — 137 percent above the estimate. Rallye reduced the amount of new parts they claimed was needed for repairs, yet increased the more profitable labor costs, Stile said. Ultimately, he paid a deductible in the amount of $1,000 and his insurance carrier paid $19,808.15 for the exact same total of $20,808.15.
“Plaintiff and members of the putative class did not receive the high-quality service and parts they were promised and in fact failed to receive all material information about the repairs performed by Rallye, the nature of those transaction, and defendants’ improper financial relationships with insurance adjusters,” the suit said, noting that customers were unaware of the true nature of the work performed.
The suit details the cases of 17 additional unnamed customers with claims of, among other things, unjust enrichment, false advertising, breach of warranty and violations of New York’s general business and motor vehicle laws. The suit seeks an injunction that would end the alleged deceptive practices, in addition to unspecified damages and attorney’s fees.
The suit also claims that Stile and other class members were further harmed financially by the alleged deceptions: they said the values of their cars declined, decreasing their ability to resell or trade the vehicles, and, as a result of inflated insurance claims, they were charged higher premiums and higher deductibles for insurance coverage.
Brown said his firm began investigating Rallye’s practices about a year ago after being alerted to them by a whistleblower, who intends to file a whistleblower suit within 60 days. Brown said he attempted to bring the alleged scheme to the attention of Rallye’s owners and its attorneys but received no response.
A Rallye Motors spokeswoman declined to comment on the lawsuit when contacted by Patch.