Belleville Toyota, Inc. v. Toyota Motor Sales, USA, Inc.
Decision Date | 30 August 2000 |
Docket Number | No. 5-98-0016.,5-98-0016. |
Citation | 250 Ill.Dec. 469,316 Ill.App.3d 227,738 N.E.2d 938 |
Parties | BELLEVILLE TOYOTA, INC., Plaintiff-Appellee, v. TOYOTA MOTOR SALES, U.S.A., INC., and Toyota Motor Distributors, Inc., Defendants-Appellants. |
Court | United States Appellate Court of Illinois |
Thomas M. Crisham, Quinlan & Crisham, Ltd., Chicago, for Appellants.
Thomas Q. Keefe, Thomas Q. Keefe, P.C., Belleville, Richard A. Mueller, Bruce D. Ryder, Edwin G. Harvey, Dudley W. Von Holt, Thompson Coburn, St. Louis, MO, for Appellee.
This case involves a claim by a Toyota dealership against the defendants, Toyota Motor Sales, U.S.A., the authorized importer of new Toyota vehicles into the United States, and Toyota Motor Distributors, the wholesale distributor of those vehicles (collectively, defendants). Since 1973, the plaintiff, Belleville Toyota, Inc., doing business as Bill Newbold Toyota (plaintiff), has been selling Toyotas in Belleville, Illinois. In 1989 plaintiff filed a lawsuit against defendants for an injunction to prevent the opening of a new Toyota dealership in nearby Collinsville, Illinois. The 1989 action was voluntarily dismissed, but on January 30, 1991, plaintiff filed an amended complaint for defendants' breach of 1975 and 1980 dealer agreements. The amended complaint claimed that defendants did not allocate to plaintiff all of the vehicles it should have. On July 20, 1992, plaintiff filed a second amended complaint in which it claimed that defendants' allocation of vehicles violated section 4(d) of the Motor Vehicle Franchise Act (the Act) (815 ILCS 710/4(d) (West 1998)). Plaintiff's claim of the misallocation of vehicles by defendants was the thrust of the evidence produced in a jury trial, which resulted in a verdict for plaintiff in 1997 and a special-interrogatory response that defendants' conduct was willful and wanton. After the jury's verdict, the trial judge trebled the damages pursuant to the provisions of the Act. Defendants perfected a timely appeal and raise the following claims for review:
Defendants claim that they are entitled to a judgment n.o.v. or a new trial because they complied with all the terms of the contracts. The disputed contractual terms involved in this case relate to the defendants' method for the allocation of vehicles. Plaintiff contended that defendants breached either or both of the following sections of the contracts. If there was no shortage of vehicles, then the following 1980 contract language applied:
The 1986-1988 dealer agreements contain different language for the nonshortage situation:
"DISTRIBUTOR agrees to use its best efforts to provide Toyota Products to DEALER in such quantities and types as may be required by DEALER to fulfill its obligations with respect to the sale and serving of Toyota Products under this Agreement, subject to available supply from IMPORTER, DISTRIBUTORS, marketing requirements, and any change or discontinuance with respect to any Toyota Product."
Plaintiff contends that the above provisions required defendants to furnish all the cars that plaintiff ordered. Defendants adamantly argue that no such duty can be gleaned from the language of any of the agreements, especially from the language of the 1986-1988 agreements. Although we might agree with defendants' interpretation of the agreements on this point, we do not need to rule on this issue in view of our resolution of the contractual requirements for times in which there was a shortage of available vehicles.
Plaintiff certainly does not concede that defendants' position is correct on the order provision, but it does contend on appeal, as it did at the trial, that the main thrust of its action is that there was a shortage of vehicles during the period involved and that defendants did not allocate vehicles as they were supposed to during this period of shortage. The contractual provisions that governed vehicle allocation during times of shortage are as follows:
Defendants contended throughout the trial, from the time of their opening statement and through their closing argument, that there was absolutely no evidence of a shortage of Toyota vehicles during the 1980s. This position was simply not supported by the evidence.
Plaintiff's principals, Bill and Kent Newbold, testified that there was a shortage for two reasons:
Other dealers supported the plaintiffs on these points. In addition, when pushed on cross-examination, representatives of defendants conceded that if the word "shortage" was defined as an excess of demand for cars over the number of cars available, then indeed there was a shortage of vehicles. Therefore, although the presence or absence of a shortage of vehicles was a contested fact issue, there was certainly sufficient evidence presented to establish a shortage.
Once evidence of a shortage was presented, the allocation language quoted above became material, and this language, particularly that contained in the 1980 dealer agreement, was the primary focus of most of the testimony in the case. The allocation methods at issue used both computer programs to determine the appropriate number of vehicles to be allocated to dealers under normal circumstances of shortage and a discretionary source called the regional managers pool, which gave regional managers discretion over approximately 10% of the vehicles within a region. Plaintiff was in defendants' Chicago region.
Plaintiff attacked both of defendants' allocation methods. First, plaintiff contended and presented evidence to support its contention that defendants' allocation of vehicles was by neither the method set out in the dealer agreements-the "last-period-of-adequate-supply" method-nor the method that defendants' representatives told the plaintiffs it was using-the "turn-and-earn" method-but was instead a third method called the "balanced-day-supply" method. Defendants' witnesses admitted that its actual allocation method was not the one that it told dealers it used. In addition, plaintiff presented a Toyota internal memorandum, authored by the general manager of defendants' Chicago region, which stated the following:
Second, plaintiff contended that defendants' Chicago regional managers did not stay within the 10% discretionary range when distributing cars from the regional manager's pool but that they routinely went beyond that range and that they did it without written approval, which was in violation of defendants' own requirements. Plaintiff contended that these activities resulted in its receiving significantly fewer vehicles than it was entitled to and that, in view of the excess demand for Toyotas during this period, plaintiff could have easily sold those additional vehicles that it should have received.
Plaintiff called two experts, Robert Benson and Dr. Ostlund, to support its claim. Benson testified that his examination of defendants' computer program for the allocation of vehicles revealed that it had a great many parameters built into it that gave defendants a...
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