Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


February 23, 1993


The opinion of the court was delivered by: McDADE, District Judge.


Before the Court is a Report and Recommendation that Defendants' Motion to Dismiss Plaintiff's Amended Complaint be Denied. Defendant has filed an objection to the Recommendation; therefore, pursuant to 28 U.S.C. § 636(b)(1), the Court will conduct a de novo review of those portions of the recommendation to which objections were made.

To sustain a dismissal of allegations under Fed.R.Civ.P. 12(b)(6), the Court must take all well-pleaded allegations as true and construe the Complaint in the light most favorable to the Plaintiff to determine whether Plaintiff is entitled to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). "The issue is not whether Plaintiff will prevail but whether the [Plaintiff] is entitled to offer evidence to support the claim." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

Plaintiff is an Illinois corporation with its principal place of business in Rock Island, Illinois. Plaintiff promotes, sells, and distributes spirits, beer, and wine to taverns, restaurants, and retail liquor outlets throughout western Illinois. Defendant is an Indiana corporation with its principal place of business in New York. Defendant imports and produces spirits and wines for distribution and sale throughout the United States. (Amended Complaint, p. 1). The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1332 because the parties are of diverse citizenship, and the amount in controversy is alleged to exceed $50,000.00. Venue is proper in this district and division because a substantial part of the events giving rise to the claim are alleged to have occurred in this district and division.

Since 1965, Plaintiff has distributed Defendant's products, earning substantial income and profits from its efforts on Defendant's behalf. The relationship between the parties has been governed by a series of oral and written agreements pursuant to which Plaintiff was granted distribution rights for Defendant's spirits. (Id. at 2).

On February 1, 1988, the parties entered into a written distribution agreement which provided, in part, as follows:

  This Agreement shall expire on January 31, 1989.
  If Company does not intend to renew this Agreement
  or enter into another agreement with Distributor
  upon the expiration hereof, or upon the expiration
  of any renewal agreement. Company shall give
  Distributor at least thirty (30) days advance
  written notice on such intention, and this
  Agreement shall expire at the end of said thirty
  (30) day notice period. If Company fails to give
  said notice, then this Agreement shall continue in
  full force and effect on a month-to-month basis
  until such time as said notice is given and for
  thirty (30) days thereafter, at which time this
  Agreement shall expire.

(Amended Complaint, Ex. A, p. 23).

On February 4, 1989, Defendant notified Plaintiff that the agreement would remain in full force and effect from month to month until a written notice of termination was given. Notice would be given at least 30 days prior to termination of the agreement. (Amended Complaint, Ex. B).

During the following years, Plaintiff operated its business according to Defendant's policies and requirements. In 1991, Plaintiff sold Defendant's spirits with a value of more than $1,100,000.00 wholesale to its customers. The sales constituted a significant portion of Plaintiff's sales and profits. (Amended Complaint p. 3).

On January 3, 1992, Defendant notified Plaintiff by letter that it was terminating Plaintiff's distribution rights 30 days from receipt of the letter. The letter stated that the action was taken "in furtherance of [Defendant's] overall consolidation of its distribution network." (Amended complaint, Ex. C). Following termination, the distributorship was given to another distributor, and Plaintiff initiated this lawsuit.

Plaintiff's Amended Complaint is in four counts. Counts I and II allege causes of action under the Illinois Franchise Disclosure Act, Ill.Rev.Stat., ch. 121 1/2, para. 1701 et seq. These counts allege unlawful termination of a franchise agreement. Counts III and IV are Illinois common-law counts alleging breach of implied covenant of good faith and intentional interference with business relationships resulting from the termination of the distribution agreement.

In its Motion to Dismiss, Defendant argued that Counts I and II fail because the written agreement has not been breached and that the Illinois Franchise Act does not apply to this case. Defendant further argued that Counts III and ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.