Clark Inv.S Inc v. Airstream Inc

• Court: Appellate Court of Illinois
• Writing for the Court: CARTER delivered the opinion of the court
• Citation: Clark Inv., Inc v. Airstream, Inc., 399 Ill.App.3d 209, 926 N.E.2d 408, 339 Ill.Dec. 176 (Ill. App. 2010)
• Decision Date: 23 March 2010
• Docket Number: No. 3-09-0260.,3-09-0260.
• Parties: CLARK INVESTMENTS, INC., an Illinois Corporation, d/b/a R and R RV Sales, Plaintiff-Appellant,v.AIRSTREAM, INC., a Nevada Corporation, Defendant-Appellee.

399 Ill.App.3d 209

926 N.E.2d 408

339 Ill.Dec. 176

CLARK INVESTMENTS, INC., an Illinois Corporation, d/b/a R and R RV Sales, Plaintiff-Appellant,v.AIRSTREAM, INC., a Nevada Corporation, Defendant-Appellee.

No. 3-09-0260.

Appellate Court of Illinois Third District.

March 23, 2010.

Robert M. Riffle (argued), Lane G. Alster, Elias, Meginnes, Riffle & Seghetti, P.C., Peoria, for Clark Investments, Inc.

P. Russell Perdew (argued), Hugh S. Balsam, Locke Lord Bissell & Liddell LLP, chicago, for Airstream.

Justice CARTER delivered the opinion of the court:

Plaintiff, Clark Investments, Inc., d/b/a R&R RV Sales (R&R), filed a complaint seeking money damages against defendant, Airstream, Inc. (Airstream), alleging that Airstream had violated the Illinois Motor Vehicle Franchise Act (815 ILCS 710/1 et seq. (West 2008)) (Franchise Act) and the Illinois Franchise Disclosure Act (815 ILCS 705/1 et seq. (West 2008)) (Disclosure Act) in its business dealings with R&R. Airstream filed a motion for summary judgment as to both statutory claims, and the trial court granted the motion. R&R appeals, arguing that the trial court erred in granting summary judgment for Airstream on R&R's Franchise Act claim. We affirm the trial court's ruling.

FACTS

The material facts involved in this case are not in dispute. Airstream, a Nevada corporation, was a manufacturer of recreational vehicles (RVs), including motor homes, vans, and trailers. R&R was a dealer that sold RVs and was located in Illinois in Iroquois County. In May of 2000, Airstream and R&R entered into a contract (the first contract), which authorized R&R to sell one of Airstream's products. Of relevance to this appeal the first contract provided that: (1) R&R would be allowed to sell Airstream's Class A motor homes (the largest and most expensive type of motor homes) ¹; (2) R&R would have the State of Illinois as its exclusive sales territory; (3) R&R would maintain certain inventory requirements; (4) R&R would have as its sales goals to sell 8 units the first year and 12 units the second year; and (5) the first contract would expire on July 31, 2002.²

In July of 2002, about two weeks before the first contract was due to expire, Airstream sent R&R a replacement contract (the second contract). For the most part, the second contract was similar to the first. However, there were some noteworthy changes. The second contract provided that: (1) the agreement would not have an expiration date and would continue until the parties ended their relationship; (2) no sales goals were listed for R&R and (3) no exclusive sales territory was listed for R&R. R&R did not accept the second contract as it was written. Rather, R&R made some changes to the second contract, signed it, and forwarded it to Airstream for approval. Most notably, R&R added language to the second contract to again give it the State of Illinois as its exclusive sales territory. Airstream rejected the changes that R&R had made and notified R&R by letter that it generally did not agree to such a large territorial provision. Due to the exclusion of any defined exclusive sales territory, R&R refused to sign the second contract.

The first contract expired by its own terms at the end of July of 2002. From that point until March of 2003, there was no written agreement between Airstream and R&R. However, R&R continued to sell Airstream products and Airstream continued to provide R&R with the same support as it had under the first contract. During that period, the parties continued negotiating in an attempt to reach an agreement.

In March of 2003, faced with the possibility of losing its ability to sell Airstream products, R&R entered into a new written contract (the third contract) with Airstream. The third contract was backdated to August of 2002. As with the second contract, for the most part, the provisions of the third contract were similar to the provisions of the first contract. However, the following provisions were changed: (1) the provision in the third contract listing R&R's exclusive sales territory was left blank so that the third contract did not provide R&R with an exclusive sales territory; (2) R&R's inventory requirements were reduced; (3) no sales goals were listed for R&R and (4) R&R was allowed to sell an additional Airstream product, trailers. Although the third contract did not specifically provide as such, at some point, R&R was also allowed to sell a third type of Airstream product, vans (Class B motor homes).

At some point thereafter prior to July of 2006, R&R learned that Airstream had entered into an agreement with another dealer to locate an Airstream franchise in Bolingbrook, Illinois, about 90 miles from R&R's franchise location. Pursuant to its contract with Airstream, the Bolingbrook dealer was authorized to sell Airstream trailers and vans but not Airstream Class A motor homes. R&R subsequently filed the instant complaint seeking money damages, including treble damages, “pursuant to section 13 of the [Franchise] Act.” Section 13 of the Franchise Act allows “[a]ny franchisee or motor vehicle dealer who suffers any loss of money or property, real or personal, as a result of the use or employment by a manufacturer, wholesaler, distributor, * * * or any agent, servant or employee thereof, of an unfair method of competition or an unfair or deceptive act or practice declared unlawful by this Act, or any action in violation of this Act,” to “bring an action for damages and equitable relief, including injunctive relief, in the circuit court of the county in which the objecting franchisee has its principal place of business or, if the parties have so agreed, in arbitration.” 815 ILCS 710/13 (West 2008); Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill.2d 325, 343, 264 Ill.Dec. 283, 770 N.E.2d 177, 189 (2002). Under section 13 of the Franchise Act if the violator's misconduct is willful or wanton, treble damages may be awarded. 815 ILCS 710/13 (West 2008). Airstream filed a motion for summary judgment. R&R filed a response opposing summary judgment, and Airstream filed a reply to that response.

Attached to the summary judgment pleadings were various depositions, affidavits, and financial documents (the supporting documents). In addition to the above factual information, the supporting documents established that: (1) the sales goals listed for R&R in the first contract were not requirements and were, in fact, nothing more than goals; (2) during the first contract, R&R did not meet its sales goals, did not keep the required amount of inventory, and, at one point, had a problem with its financing; (3) R&R did not suffer any damage as result of the changes in sales goals or inventory from the first contract to the third contract; and (4) R&R benefitted from its ability to sell additional types of Airstream products and its sales of Airstream products went significantly higher as a result thereof.

A hearing was held on Airstream's motion for summary judgment. After hearing the arguments of the attorneys, the trial court took the matter under advisement. The trial court later issued a written ruling granting summary judgment for Airstream as to R&R's Franchise Act claim and as to R&R's Disclosure Act claim. R&R appealed the grant of summary judgment, but only as to its Franchise Act claim.

ANALYSIS

On appeal, R&R argues that the trial court erred in granting summary judgment for Airstream on R&R's Franchise Act claim. R&R asserts that proper application of the Franchise Act, as well as the existence of substantial issues of material fact, should have prevented the entry of summary judgement for Airstream. Airstream argues that the trial court's ruling was proper and should be affirmed. Airstream asserts that since the undisputed facts showed that Airstream did not violate the Franchise Act, Airstream was entitled to a grant of summary judgment.

The purpose of summary judgment is not to try a question of fact, but to determine if one exists. Adams v. Northern Illinois Gas Co., 211 Ill.2d 32, 42-43, 284 Ill.Dec. 302, 809 N.E.2d 1248, 1256 (2004). Summary judgment should be granted only where the pleadings, depositions, admissions, and affidavits on file, when viewed in the light most favorable to the nonmoving party, show that there is no genuine issue as to any material fact and that the moving party is clearly entitled to a judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2008); Adams, 211 Ill.2d at 43, 284 Ill.Dec. 302, 809 N.E.2d at 1256. A trial court's grant of summary judgment is subject to de novo review on appeal. Adams, 211 Ill.2d at 43, 284 Ill.Dec. 302, 809 N.E.2d at 1256. The construction of a statute is an appropriate matter for summary judgment and is also subject to a de novo standard of review on appeal. See Village of Chatham v. County of Sangamon, 216 Ill.2d 402, 433, 297 Ill.Dec. 249, 837 N.E.2d 29, 47-48 (2005).

In support of its argument, R&R asserts first that Airstream violated section 4(e)(8) of the Franchise Act when it located another dealer within R&R's relevant market area. Section 4(e)(8) of the Franchise Act prohibits a manufacturer from granting “an additional franchise in the relevant market area of an existing franchise of the same line make” or from relocating “an existing motor vehicle dealership within or into a relevant market area of an existing franchise of the same line make” without providing the required statutory notice to the existing franchise so that the existing franchise has an opportunity to file a protest before the proposed change takes place. See 815 ILCS 710/4(e)(8) (West 2008). For a franchise located in a county with a population of less than 300,000 persons, “relevant market area” is defined in the Franchise Act as “the area within a radius of 15 miles from the principal location of said franchise or dealership; or the area of responsibility as defined in the franchise agreement, whichever is greater.” 815 ILCS 710/2(q) (W...