Crossroads Ford Truck v. Sterling Truck

959 N.E.2d 1133, 355 Ill. Dec. 400
CourtIllinois Supreme Court
DecidedDecember 1, 2011
Docket111611
StatusPublished
Cited by15 cases

This text of 959 N.E.2d 1133 (Crossroads Ford Truck v. Sterling Truck) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crossroads Ford Truck v. Sterling Truck, 959 N.E.2d 1133, 355 Ill. Dec. 400 (Ill. 2011).

Opinion

959 N.E.2d 1133 (2011)
355 Ill. Dec. 400

CROSSROADS FORD TRUCK SALES, INC., Appellant,
v.
STERLING TRUCK CORPORATION et al., Appellees.

No. 111611.

Supreme Court of Illinois.

December 1, 2011.

*1136 Gary L. Smith, of Loewenstein, Hagen & Smith, P.C., of Springfield, for appellant.

Martin J. Bishop and Jonathan W. Garlough, of Foley & Lardner LLP, of Chicago, and Jon P. Christiansen, of Milwaukee, Wisconsin, for appellees.

Dennis M. O'Keefe, of Lake Forest, for amicus curiae Chicago Automobile Trade Association.

Lawrence R. Doll, of Springfield, for amicus curiae Illinois Automobile Dealers Association.

OPINION

Justice GARMAN delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Crossroads Ford Truck Sales, Inc., filed a 14-count second amended complaint against defendants Sterling Truck Corporation, Daimler Trucks North America, LLC, and Chris Patterson. The claims alleged various violations of the Motor Vehicle Franchise Act (Act) (815 ILCS 710/1 et seq. (West 2010)) and claims of breach of contract, tortious interference with contract, and fraud. The circuit court of Sangamon County dismissed with prejudice all but two of the counts in plaintiff's second amended complaint pursuant to defendants' motion to dismiss.

¶ 2 On appeal, the appellate court affirmed the decision of the circuit court. 406 Ill.App.3d 325, 348 Ill.Dec. 38, 943 N.E.2d 646. The appellate court also held that the circuit court lacked subject matter jurisdiction to hear several counts and portions of counts brought under section 4(d)(6) of the Act, because those counts should have been brought before the Motor Vehicle Review Board (MVRB). 406 Ill.App.3d at 335, 348 Ill.Dec. 38, 943 N.E.2d 646. Plaintiff filed a petition for leave to appeal pursuant to Supreme Court Rule 315 (Ill. S.Ct. R. 315 (eff. Feb. 26, 2010)), which we allowed. We also allowed the Illinois Automobile Dealers Association to file a brief as amicus curiae pursuant to Supreme Court Rule 345. Ill. S.Ct. R. 345 (eff. Sept. 20, 2010).

¶ 3 For the reasons that follow, we affirm the judgment of the appellate court.

¶ 4 BACKGROUND

¶ 5 Factual History

¶ 6 Defendant Daimler Trucks is a wholly owned subsidiary of Daimler AG. Daimler Trucks is the largest heavy duty truck manufacturer in North America. Defendant Sterling Truck Corporation is a subsidiary of Daimler Trucks and manufactures the Sterling line of trucks. Defendant Chris Patterson is the chief executive officer of Daimler Trucks and president of Sterling. Plaintiff is a motor vehicle dealer and has held a Sterling truck franchise since 1998. Defendant Sterling and plaintiff are parties to a Sales and Service Agreement (SSA) which grants plaintiff the right to purchase from Sterling products such as Sterling trucks and parts. Plaintiff can also service Sterling vehicles.

¶ 7 On October 14, 2008, Patterson notified all Sterling dealers, including plaintiff, that Daimler Trucks was discontinuing the *1137 Sterling line of trucks to focus on a "two brand strategy," with March 26, 2009, as the last day of production, and January 15, 2009, as the last day for accepting dealer orders. The letter offered plaintiff the opportunity to continue on as a Sterling service dealership under a new service dealer agreement, which would replace the SSA. Plaintiff was to receive official notice of termination of its SSA in the coming weeks. Plaintiff was warned that, following the termination of the SSA, if it did not sign the general release and agree to terminate its Sterling franchise, Daimler Trucks would not renew plaintiff's Detroit Diesel Direct Dealer Agreement after December 31, 2008.[1]

¶ 8 Also on October 14, 2008, Daimler Trucks filed an announcement with the Securities and Exchange Commission announcing the discontinuation of the Sterling truck brand effective March 2009 and that additions would be made to the Freightliner and Western Star product lines to address market segments that had been served exclusively by the Sterling line. On November 24, 2008, Daimler Trucks sent plaintiff a letter giving notice that Sterling Trucks was exercising its rights pursuant to the SSA to discontinue the manufacture of Sterling vehicles. The letter again offered plaintiff the opportunity to transition to a new service agreement, but if it elected not to, the old SSA would remain in effect. The letter stated that it "did not constitute notice of termination or modification" of the SSA, because plaintiff could elect to continue operating under the current SSA. The letter stated Daimler Trucks did not believe formal notice was required under Illinois's dealer laws, but if plaintiff felt otherwise, plaintiff was to "consider this that [formal] notice." On April 10, 2009, Daimler Trucks terminated plaintiff's Detroit Diesel Direct Dealer Agreement by written notice, which plaintiff alleges prevented it from obtaining Detroit Diesel parts at wholesale and performing warranty work on trucks with Detroit Diesel engines.

¶ 9 Procedural History

¶ 10 Plaintiff's Complaint to the Motor Vehicle Review Board

¶ 11 On November 12, 2008, plaintiff filed a "Notice of Protest" with the MVRB, alleging that Patterson's letter of October 14, 2008, "effectively terminated the SSA between Sterling Trucks and Crossroads." Plaintiff alleges, among other claims, that this was done without good cause in violation of section 4(d)(6) of the Act, which requires a manufacturer to have good cause when terminating a franchise agreement. Plaintiff sought the award of fair market value damages for its franchise prior to the time defendants made the decision to terminate. In the alternative, plaintiff requested that the MVRB prohibit defendants from terminating the franchise, require defendants to purchase plaintiff's existing stock inventory and parts inventory at cost, compensate plaintiff for the loss of investment in Sterling products and inventory, and require defendants to reimburse plaintiff for attorney fees and costs. Plaintiff voluntarily dismissed its protest without prejudice on February 3, 2009.

¶ 12 Circuit Court Proceedings

¶ 13 Plaintiff initiated legal action with the filing of its complaint in the circuit court of Sangamon County on February 26, 2009. A 14-count second amended *1138 complaint, which is the complaint at issue in this opinion, was filed in the circuit court on October 20, 2009. Plaintiff alleged that defendants committed various torts and violations of the Act. Count I was directed against Sterling Truck and alleged that the notice of termination or nonrenewal of plaintiff's franchise violated: section 4(b) of the Act, in that it was done in bad faith; section 4(d)(6), in that Sterling caused the termination or nonrenewal without good cause as defined by the Act; section 4(d)(1), in that Sterling arbitrarily and capriciously modified the previously existing plan of allocation of new Sterling trucks to plaintiff; section 4(d)(6)(A), in that Sterling without good cause failed to provide plaintiff with statutory notice of termination or nonrenewal; and section 9, in that, without good cause, Sterling terminated the franchise without paying fair and reasonable compensation to plaintiff for the value of plaintiff's business and franchise. Plaintiff sought damages in excess of $50,000 for the violations contained in count I.

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Cite This Page — Counsel Stack

Bluebook (online)
959 N.E.2d 1133, 355 Ill. Dec. 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crossroads-ford-truck-v-sterling-truck-ill-2011.