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TO-AM EQUIP. CO. v. MITSUBISHI CATERPILLAR FORKLIF

October 16, 1995

TO-AM EQUIPMENT COMPANY, INC., Plaintiff,
v.
MITSUBISHI CATERPILLAR FORKLIFT AMERICA, et al., Defendants.



The opinion of the court was delivered by: ASPEN

 MARVIN E. ASPEN, Chief Judge:

 Plaintiff To-Am Equipment Company brings this diversity action against Mitsubishi Corporation, Mitsubishi Caterpillar Forklift America (MCFA), Mitsubishi Distribution, Inc. (MDI), and several corporate directors, officers, and employees of MCFA and MDI. *fn1" To-Am, a former franchisee of MCFA and MDI, alleges that the defendants violated provisions of the Franchise Disclosure Act of 1974, Ill. Rev. Stat. ch. 121 1/2, PP 701-40 (1985), and the Franchise Disclosure Act of 1987, 815 ILCS 705/1-44 (1993 & Supp. 1995). In addition, the plaintiff alleges that the defendants breached the franchise agreement that granted To-Am a franchise. MCFA asserts a counterclaim against To-Am and its president, Richard Todd, alleging that To-Am has failed to pay MCFA for equipment that To-Am ordered and received. Presently before this court are motions to dismiss filed by two groups of defendants, and MCFA's motion for summary judgment on its counterclaim. For the reasons set forth below, we grant the motions to dismiss as to certain defendants, deny the motions to dismiss as to other defendants, and grant MCFA's motion for summary judgment on the counterclaim.

 I. Background

 To-Am is a forklift dealership which sells, leases, and services forklifts from its Frankfort, Illinois location. MDI sold forklifts to dealerships such as To-Am; MCFA is a successor corporation of MDI. In or around 1986, *fn2" To-Am and MDI entered into a Distributor Sales and Service Agreement (the "Agreement"), which designated To-Am as a distributor of MDI forklifts in specified Illinois and Indiana counties.

 To-Am alleges that on February 2, 1994, MCFA, as MDI's successor corporation, notified To-Am that the agreement was terminated as of April 3, 1994. According to the plaintiff, the termination came just as To-Am was on the cusp of finally reaping the rewards of years of market development. The plaintiff further asserts that MCFA sold To-Am's distribution region to a competing forklift dealership.

 To-Am filed this action in January 1995. In its first amended complaint, To-Am named seventeen defendants. We have granted several voluntary dismissals of parties and claims, *fn3" but fifteen defendants and numerous claims remain. First, although presented as one count of the complaint, Count I crowds together claims against two discrete sets of defendants. To-Am alleges that MCFA: (1) offered and sold the forklift franchise to the plaintiff without first registering to sell franchises with the Attorney General, in violation of Ill. Rev. Stat. ch. 121 1/2, P 704(1); (2) offered and sold the franchise to the plaintiff without first providing a copy of a disclosure statement, in violation of Ill. Rev. Stat. ch. 121 1/2, P 704(2); (3) terminated the franchise without good cause, in violation of Ill. Rev. Stat. ch. 121 1/2, P 704.3(a) "and/or" 815 ILCS 705/19(a); and (4) unreasonably and materially discriminated against the plaintiff and in favor of other franchisees by terminating the franchise, in violation of Ill. Rev. Stat. ch. 121 1/2, P 704.2 "and/or" 815 ILCS 705/18. First Amended Compl. at P 8(a)-(d).

 In addition, Count I also alleges that the following defendants are jointly and severally liable for MCFA's acts: (1) Mitsubishi Corporation, controlling parent corporation of MDI; (2) Shimpei Hashimoto, President of MDI; (3) Toshimitsu Ishikawa, Secretary of MDI; (4) Tetsu Okuno, President of MCFA; (5) Lloyd Knapp, Secretary and Director of MCFA; (6) Richard Wagner, Vice President and General Manager of MCFA "and/or" MDI; (7) Pat Reilly, Product Marketing Manager of MCFA; (8) Robert Gilbride, District Sales Manager of MCFA; (9) Toshio Handa, Director of MCFA; (10) Larry Wuench, Director of MCFA; (11) Ryoji Odaka, Director of MCFA; (12) S. Toishi, Director of MDI; (13) Haruo Matsumoto, Director of MDI; (14) Asao Hirayama, Vice President, Treasurer, and General Manager of MDI. First Amended Compl. at P 14(a)-(o).

 In Count II, To-Am asserts that MCFA breached the franchise agreement by failing to repurchase equipment that To-Am purchased from MCFA prior to the franchise's termination, and that is currently in To-Am's possession. According to To-Am, the equipment is worth approximately $ 49,000.

 In addition to denying liability on To-Am's claims, MCFA brings a counterclaim against To-Am and its president, Richard Todd. MCFA alleges that To-Am has failed to pay for equipment sent to To-Am pursuant to purchase orders that the dealership submitted to MCFA. According to MCFA, the outstanding balance is $ 76,276.51. Furthermore, MCFA claims that Todd executed a personal guaranty for To-Am's debts on August 10, 1992, and that Todd has breached the guaranty by refusing to pay the outstanding invoices.

 II. Motions to Dismiss: MCFA Defendants, Mitsubishi Corporation, and MDI Defendants

 A. Standard for Reviewing Motions to Dismiss

 A motion to dismiss should not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); see also Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 644 (7th Cir. 1995); Ellsworth v. City of Racine, 774 F.2d 182, 184 (7th Cir. 1985), cert. denied, 475 U.S. 1047, 89 L. Ed. 2d 574, 106 S. Ct. 1265 (1986). We take as true the well-pleaded factual allegations of the complaint and view them, as well as reasonable inferences drawn from them, in the ...


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