Grant Importing & Distributing Co. v. AMTEC International of NY Corp.

• Court: Appellate Court of Illinois
• Decided: July 24, 2008
• Docket: 1-08-1859 Rel
• Status: Published

Opinion

SECOND DIVISION FILED: July 24, 2008

No. 1-08-1859

GRANT IMPORTING & DISTRIBUTING CO., ) APPEAL FROM THE HAYES BEER DISTRIBUTING COMPANY, L&V ) CIRCUIT COURT OF DISTRIBUTORS, INC., CHICAGO BEVERAGE ) COOK COUNTY SYSTEMS LLC, JOSEPH MULLARKEY ) DISTRIBUTORS, INC., TOWN & COUNTRY ) DISTRIBUTORS, INC., KOZOL BROS., INC., ) FRED W. LOSCH BEVERAGE CO., ) SCHAMBERGER BROS., INC., BURKE ) BEVERAGE, INC., and EUCLID BEVERAGE, ) LTD., ) ) 08 CH 07887 Plaintiffs-Appellants ) ) v. ) ) AMTEC INTERNATIONAL OF NY CORP. and ) EUROPEAN BEER IMPORTS, INC., ) HONORABLE ) JAMES R. EPSTEIN,, Defendants-Appellees. ) JUDGE PRESIDING.

PRESIDING JUSTICE HOFFMAN delivered the opinion of the court:

The plaintiffs, Grant Importing & Distributing Company, Hayes

Beer Distributing Company, L&V Distributors, Inc., Chicago Beverage

Systems LLC, Joseph Mullarkey Distributors, Inc., Town & Country

Distributors, Inc., Kozol Brothers, Inc., Fred W. Losch Beverage

Company, Schamberger Brothers, Inc., Burke Beverage, Inc., and

Euclid Beverage, Ltd., filed the instant appeal pursuant to Supreme

Court Rule 307 (188 Ill. 2d R. 307), seeking the reversal of an No. 1-08-1859

order of the circuit court which denied their motion for a

temporary restraining order (TRO). For the reasons which follow,

we affirm.

In addition to other theories of recovery, the plaintiffs

sought injunctive relief against the defendants, Amtec

International of NY Corp. (Amtec) and European Beer Importers, Inc.

(European), contending that they violated the Beer Industry Fair

Dealing Act (Act) (815 ILCS 720/1 et seq. (West 2006)). In their

second amended complaint, the plaintiffs made the following factual

assertions.

Until approximately December of 2007, Advanced Brands &

Importing, Inc. (Advanced) was the exclusive importer of Zywiec

beer into the greater Chicagoland area. The plaintiffs are duly

licensed "beer wholesalers" as defined by section 1.1(3) of the Act

(815 ILCS 720/1.1(3)(West 2006)), and Advanced granted them the

right to be the exclusive wholesalers of Zywiec beer in their

respective geographic territories in Illinois.

Advanced has recently advised the plaintiffs that the

manufacturer of Zywiec beer refuses to ship the beer to it for

import and distribution in Illinois. In its place, the

manufacturer has granted Amtec, or its wholly owned subsidiary

European, the exclusive right to import and distribute Zywiec beer

into the United States, including the greater Chicagoland area.

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Neither Amtec nor European has agreed to distribute any further

Zywiec beer to the plaintiffs, and they have not provided the

plaintiffs with any reason for the termination of their

distributorships, nor have they afforded the plaintiffs an

opportunity to cure any cause for the terminations. The plaintiffs

sought a TRO enjoining Amtec and European from selling or

distributing Zywiec beer in Illinois until such time as the

plaintiffs’ exclusive distribution rights can be adjudicated.

Amtec responded to the plaintiffs’ motion supported, in part,

by the affidavit of its president, Boguslaw Pajor. According to

Pajor’s affidavit, Zywiec beer was imported into Illinois from 2005

through 2007 by Advanced pursuant to an agreement with Grupa Zwyiec

S.A. (Grupa), the brewer of Zwyiec beer. On December 10, 2007,

Grupa notified Advanced that, effective January 1, 2008, Advanced

would no longer be the importer of Zwyiec beer. Thereafter, Grupa

appointed Amtec as the exclusive importer of Zywiec beer into

Illinois. Amtec, in turn, appointed European the sole distributor

of Zywiec beer in Illinois. Amtec asserted that it did not

terminate the plaintiffs’ rights to distribute Zywiec beer, and

argued that, since it is not a "successor brewer" within the

meaning of section 1.1(6) of the Act (815 ILCS 720/1.1(6)(West

2006)), it has no obligation to honor the plaintiffs’ distribution

agreements with Advanced.

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The circuit court denied the plaintiffs’ motion for a TRO, and

this appeal followed. The plaintiffs argue, as they did before the

trial court, that Amtec and European violated the Act by

terminating, canceling or failing to renew their Zywiec beer

distributorship agreements without notice or good cause and without

providing them with an opportunity to cure the reason for the

terminations and, as a consequence, they were entitled to

injunctive relief pursuant to section 9(3) of the Act (815 ILCS

720/9(3)(West 2006)).

Section 3 of the Act provides that, except for reasons not

relevant to this action, "no brewer or beer wholesaler may cancel,

fail to renew, or otherwise terminate an agreement unless the

brewer or wholesaler furnishes prior notification to the affected

party." 815 ILCS 720/3(West 2006). Section 4 states that "[n]o

brewer or beer wholesaler may cancel, fail to renew or otherwise

terminate an agreement unless the party intending that action has

good cause for the cancellation, failure to renew or termination,

has made good faith efforts to resolve disagreements, and, in any

case in which prior notification is required under Section 3, the

party intending to act has furnished the prior notification and the

affected party has not eliminated the reasons specified in the

notification for cancellation, failure to renew, or termination,

within 90 days after the sending of the notification." 815 ILCS

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720/4(West 2006). In order to determine whether sections 3 and 4

of the Act are applicable to the circumstances present in the

instant case, reference must be made to the Act's definitions of

the terms "agreement," "brewer," and "successor brewer."

The Act defines an "agreement" as "any contract, agreement,

arrangement, operating standards, or amendments to a contract,

agreement, arrangement, or operating standards, the effect of which

is to substantially change or modify the existing contract,

agreement, arrangement, or operating standards, whether expressed

or implied, whether oral or written, for a definite or indefinite

period between a brewer and a wholesaler pursuant to which a

wholesaler has been granted the right to purchase, resell, and

distribute as a wholesaler or master distributer any brand or

brands of beer offered by a brewer." 815 ILCS 720/1.1(2)(West

2006). A "brewer" is defined, in relevant part, as a person who is

engaged in the manufacturer of beer, a master distributer or a

successor brewer. 815 ILCS 720/1.1(4)(West 2006). A "successor

brewer" is "any person who in any way obtains the distribution

rights that a brewer or master distributor once had to manufacture

or distribute a brand or brands of beer whether by merger, purchase

of corporate shares, purchase of assets, or any other arrangement."

815 ILCS 720/1.1(6)(West 2006).

There is no dispute concerning the status of the importing and

5 No. 1-08-1859

distribution arrangements between Grupa and Advanced, its master

distributor, and between Advanced and the plaintiffs as

"agreements" within the meaning of the Act. The issue is whether

the defendants are "brewers" in the context of those agreements

such that they might be held liable for failing to comply with the

requirements of sections 3 and 4 of the Act.

The plaintiffs argue that, by obtaining the right to import

and distribute Zywiec beer that was previously held by Advanced,

Amtec became a successor brewer and was, therefore, obligated to

continue to use the plaintiffs as exclusive wholesalers within

their respective territories. Amtec argues that it is not a

successor brewer within the meaning of the Act because it obtained

its import and distribution rights directly from the manufacturer,

Grupa, and not from or through Advanced. Resolution of the issue

involves the construction of the Act's definition of a "successor

brewer."

The cardinal rule of statutory construction is to ascertain

the intent of the legislature. Murray v. Chicago Youth Center, 224

Ill. 2d 213, 235, 864 N.E.2d 176 (2007). Legislative intent is

best gleaned from the words of the statute itself, and where the

statutory language is clear and unambiguous, it is to be given

effect. General Motors Corp. v. State of Illinois Motor Vehicle

Review Board, 224 Ill. 2d 1, 13, 862 N.E.2d 209 (2007). Issues of

6 No. 1-08-1859

statutory construction are reviewed de novo. Paris v. Feder, 179

Ill. 2d 173, 177-78, 688 N.E.2d 137 (1997).

Initially it might appear that any entity that obtains the

distribution rights previously held by a brewer or master

distributor is a successor brewer within the meaning of the Act.

However, a closer analysis of the statute leads us to conclude that

the manner in which the distribution rights are obtained are

critical to a determination of whether an entity is a successor

brewer. We believe that the statute contemplates that, in order to

qualify as a successor brewer, the distribution rights must have

been obtained through some arrangement with the original holder of

the rights, be it by merger, purchase of corporate shares, purchase

of assets, or otherwise.

If, as the plaintiffs argue, the only circumstance necessary

for an entity to qualify as a successor brewer is that it obtain

the distribution rights previously held by a brewer or master

distributor, the legislature would have had no need to include the

phrase "whether by merger, purchase of corporate shares, purchase

of assets, or any other arrangement." 815 ILCS 720/1.1(6)(West

2006). One of the fundamental principals of statutory construction

is that words and phrases should not be viewed in isolation, but

should be interpreted so that terms are not rendered superfluous.

Land v. Board of Education of the City of Chicago, 202 Ill. 2d 414,

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422, 781 N.E.2d 249 (2002). Additionally, the phrase "or any other

arrangement" appearing at the end of the definition of a successor

brewer (815 ILCS 720/1.1(6)(West 2006)) should be interpreted under

the doctrine of ejusdem generis as describing a transaction similar

to the preceding types of transactions listed in the statute;

namely, a merger, purchase of corporate shares, or purchase of

assets. See City of East St. Louis v. East St. Louis Financial

Advisory Authority, 188 Ill. 2d 474, 484-85, 722 N.E.2d 1129

(1999).

Based upon the foregoing analysis, we believe that, to qualify

as a successor brewer under the Act, a replacement distributor of

beer must have obtained its distribution rights through some

arrangement with the original holder of the rights that is similar

to the type of transaction contemplated by the statute. See

Shestokas Distributing, Inc. v. Hornell Brewing Company, Inc., No.

93-1537, 1993 WL 522179 (7th Cir. Dec. 16, 1993).

It is clear from the matters of record that the defendants did

not obtain their distribution rights from Advanced and, as a

consequence, they do not qualify as either successor brewers or

brewers under the Act. That being the case, the plaintiffs did not

acquire any rights under the Act to injunctive relief against them.

We find, therefore, that the circuit court did not abuse its

discretion in denying the plaintiffs' motion for a TRO.

8 No. 1-08-1859

Affirmed.

SOUTH and KARNEZIS, JJ., concur.