Olympic Chevrolet, Inc. v. General Motors Corp.

959 F. Supp. 918, 1997 U.S. Dist. LEXIS 3999, 1997 WL 151678
CourtDistrict Court, N.D. Illinois
DecidedMarch 28, 1997
Docket95 C 1532
StatusPublished
Cited by9 cases

This text of 959 F. Supp. 918 (Olympic Chevrolet, Inc. v. General Motors Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Olympic Chevrolet, Inc. v. General Motors Corp., 959 F. Supp. 918, 1997 U.S. Dist. LEXIS 3999, 1997 WL 151678 (N.D. Ill. 1997).

Opinion

*920 MEMORANDUM OPINION AND ORDER

BUCKLU, District Judge.

The plaintiff, Olympic Chevrolet, Inc. (“Olympic”), has sued the defendant, General Motors Corporation (“GM/Chevrolet”), under a variety of theories. GM/Chevrolet has moved for summary judgment. For the following reasons, the motion is granted.

I.

GM/Chevrolet manufactures Chevrolet motor vehicles and sells them to independent dealers like Olympic. On January 3, 1992, GM/Chevrolet and Olympic signed a Dealer Sales and Service Agreement (“Dealer Agreement”). Unhappy with the vehicles it has received from GM/Chevrolet under the Agreement, Olympic brought the present suit. Olympic seeks specific performance (Count I) and declaratory judgment (Count IV), and claims breach of the Dealer Agreement (Count V) and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (“Illinois Consumer Fraud Act”) (Count VI), 815 ILCS 505/1 et seq. (1993), the Illinois Motor Vehicle Franchise Act (“Illinois Franchise Act”) (Counts II and III), 815 ILCS 710/4 et seq. (Supp.1996), and the federal Automobile Dealers Day in Court Act. 15 U.S.C. § 1221 et seq. GM/Chevrolet has moved for summary judgment.

II.

Illinois Consumer Fraud Act

In Count VI, Olympic claims that GM/Chevrolet violated the Illinois Consumer Fraud Act. 815 ILCS 505/1 et seq. Olympic argues that it entered into the Dealer Agreement because of various misrepresentations by GM/Chevrolet. Specifically, Olympic points to the following statements allegedly made by William Stacy, GM/Chevrolet’s Chicago Zone Manager, to Michael Christopou-los, Olympic’s president, in the course of conversations prior to Olympic’s filing the application to become a GM/Chevrolet dealer: (1) Olympic’s initial inventory would be at least 120 new vehicles, (2) GM/Chevrolet would provide sufficient vehicles for Olympic to maintain 120 new vehicles on the ground, (3) Olympic would be able eventually to develop an inventory of 200 vehicles, and (4) Olympic’s planning potential, i.e., how much the dealership was expected to sell annually, was between 800 and 1000 vehicles. 1

It is undisputed that after these conversations, Mr. Christopoulos submitted his dealer application to GM/Chevrolet. GM/Chevrolet rejected the application in February 1991, in part because the parties disagreed about the dealership’s location. GM/Chevrolet deemed Mr. Christopoulos’ proposed location to be too close to another GM/Chevrolet dealer, and Mr. Christopoulos refused to consider moving the dealership to a different location within three to four years. When GM/Chevrolet refused to rethink its decision, Mr. Christopoulos filed suit in state court. GM/Chevrolet lost and subsequently signed the Dealer Agreement on January 3, 1992.

Under the Illinois Consumer Fraud Act, Olympic must prove (1) a misrepresentation or concealment (2) of a material fact, (3) made with the intent to induce reliance and (4) in a course of conduct involving trade or commerce. Mackinac v. Arcadia Nat’l Life Ins. Co., 271 Ill.App.3d 138, 648 N.E.2d 237, 239, 207 Ill.Dec. 781, 783 (1995). Intent to induce reliance can be shown by circumstantial evidence. Totz v. Continental Du Page Acura, 236 Ill.App.3d 891, 602 N.E.2d 1374, 1382, 177 Ill.Dec. 202, 210 (1992).

Olympic argues that GM/Chevrolet intended that Olympic rely upon Mr. Stacy’s statements. Had the parties signed the Dealer Agreement immediately after the negotiations between Messrs. Stacy and Christopoulos, a factfinder might conclude that Mr. Stacy’s statements were intended to *921 induce Olympic to enter into the dealership relationship in reliance on the representations. Here, however, after Mr. Stacy made the statements, GM/Chevrolet vigorously resisted granting the franchise to Mr. Christo-poulos and signed the Dealer Agreement only after a court order forced it to do so. A reasonable factfinder could not conclude that GM/Chevrolet intended Olympic to rely on Mr. Stacy’s statements when GM/Chevrolet clearly did not want to begin a franchise relationship with Olympic. Thus, GM/Chevrolet is entitled to summary judgment on the Illinois Consumer Fraud Act Count.

Automobile Dealers Day in Court Act

In Count VII, Olympic alleges that GM/Chevrolet violated the Automobile Dealers Day in Court Act. 15 U.S.C. § 1221 et seq. The Act allows automobile dealers to sue a manufacturer for failing to act in good faith. Ed Houser Enters. v. General Motors Corp., 595 F.2d. 366, 369 (7th Cir.1978). Lack of good faith under the Act means “coercion, intimidation, and threats thereof.” Id. at 369. Manipulation of the dealer’s inventory may constitute coercion when the facts suggest an intent to drive the dealer out of business. Hall v. Ford Motor Co., No. 94-3885, 1995 WL 619972, at **2 (6th Cir. Oct. 20, 1995) (citing, inter alia, Junikki Imports, Inc. v. Toyota Motor Co., 335 F.Supp. 593, 595 (N.D.Ill.1971)); see also Ed Houser Enters., 595 F.2d at 371 (“absent facts showing coercion, discriminatory allocation [of vehicles among different dealerships] is not per se cognizable under the Act”).

Olympic argues that GM/Chevrolet’s failure to supply it with vehicles was coercion because it sought to drive Olympic out of business or to force it to move. GM/Chevrolet counters that Olympic has not raised a genuine issue of material fact as to such motivation. It is undisputed that GM/Chevrolet preferred to locate Mr. Christopoulos’ dealership in Elmwood Park, Illinois, rather than Chicago. GM/Chevrolet rejected Mr. Christopoulos’ dealership application because he refused to consider relocating the dealership to Elmwood Park in a few years. GM/Chevrolet fought and lost a lawsuit to resist Mr. Christopoulos’ efforts to establish Olympic in Chicago. On April 8, 1992, GM/Chevrolet’s General Sales Manager, R.W. Starr, penned an internal memorandum in which he stated that “[w]e need to make sure that our legal people understand where we are going on this. If we are going to continue to let this guy[, Mr. Christopoulos,] push us, we are in deep trouble. We need to stop it and we need to stop it now.”

Fox Motors, Inc. v. Mazda Distribs. (Gulf), Inc., 806 F.2d 953 (10th Cir.1986), is instructive. In that case, the. defendant had an express policy of eliminating established but financially troubled franchises. The defendant made several attempts to convince the plaintiff to terminate the franchise agreement voluntarily.

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Bluebook (online)
959 F. Supp. 918, 1997 U.S. Dist. LEXIS 3999, 1997 WL 151678, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olympic-chevrolet-inc-v-general-motors-corp-ilnd-1997.