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OLYMPIC CHEVROLET, INC. v. GMC

March 28, 1997

OLYMPIC CHEVROLET, INC., Plaintiff,
v.
GENERAL MOTORS CORPORATION, Defendant.



The opinion of the court was delivered by: BUCKLO

 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 Christopoulos, 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. *fn1"

 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 (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 (1992).

 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., 1995 U.S. App. LEXIS 35405, 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 "we 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. The defendant adopted a discriminatory policy of vehicle distribution, which preferred new dealerships and disfavored the plaintiff, an established concern. The distribution system severely disadvantaged the plaintiff in terms of the most popular models. Affirming the jury's finding of liability under the Automobile Dealers Day in Court Act, the court concluded that "the jury could reasonably have inferred that [the defendant's] allocation system was designed to compel" the plaintiff to terminate the franchise relationship. Id. at 960.

 In contrast to Fox Motors, there is no evidence that, after it lost the lawsuit, GM/Chevrolet continued to prompt Olympic to move to Elmwood Park. Surely, if the defendant had done so, Olympic's personnel could have proffered written or testified about oral communications to that effect. In addition, GM/Chevrolet closed the Elmwood Park location in November 1994. Unlike the plaintiff in Fox Motors, Olympic presents no evidence that GM/Chevrolet treated other dealerships differently. Indeed, there is evidence to the contrary from GM/Chevrolet and from Olympic.

 Contractual Claims

 Under Illinois law, *fn3" the plaintiff proves a breach of contract by establishing 1) a valid and enforceable contract; 2) performance of contractual duties by the plaintiff; 3) a breach of contractual duties by the defendant; and 4) resulting damages to the plaintiff. Hickox v. Bell, 195 Ill. App. 3d 976, 552 N.E.2d 1133, 1143, 142 Ill. Dec. 392 (1990). Olympic's variously phrased contractual claims--specific performance (Count I), declaratory judgment (Count IV), and breach of contract (Count V)--essentially complain that GM/Chevrolet breached its duty under the Dealer Agreement to supply Olympic with vehicles. Olympic believes that it is entitled to a "reasonable" quantity and mix of vehicles. It argues that a jury must determine what this mix is. GM/Chevrolet's position is that the Dealer Agreement vests it with absolute discretion as to which vehicles to supply and how many.

 The primary objective in construing a contract is to "give effect to the parties' intent." Home Ins. Co. v. Chicago & Nw. Transp. Co., 56 F.3d 763, 767 (7th Cir. 1995). It is for the court to determine whether the contract terms are ambiguous. Meyer v. Marilyn Miglin, Inc., 273 Ill. App. 3d 882, 652 N.E.2d 1233, 1238, 210 Ill. Dec. 257 (1995). "If the contract terms are unambiguous, the parties' intent must be ascertained exclusively from the express language of the contract." Id. "[A] contract must be interpreted as ...


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