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Belleville Toyota, Inc. v. Toyota Motor Sales

August 30, 2000


Appeal from the Circuit Court of St. Clair County. No. 94-L-13 Honorable James M. Radcliffe, III, Judge, presiding.

The opinion of the court was delivered by: Justice Chapman

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:

1. Defendants are entitled to a judgment notwithstanding the verdict or, alternatively, a new trial on plaintiff's breach- of-contract claim because defendants complied with the terms of the contracts.

2. Plaintiff released any claims it had prior to September 6, 1988, because it entered into a dealer agreement on that date that contained a general release.

3. Plaintiff failed to prove proximate cause or damages with respect to any of its claims.

4. Plaintiff is not entitled to recover under the Act for several reasons.

5. The claims are barred by the statutes of limitation.

6. The court erred in denying defendants' instructions on the statutes of limitation.

7. Defendants are entitled to a new trial because the jury's verdicts are irreconcilably inconsistent.

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:

"Dealer shall submit orders for TOYOTA products to DISTRIBUTOR upon order forms supplied by DISTRIBUTOR. DISTRIBUTOR may accept such orders in whole or in part by notice in writing to DEALER or by actual delivery to DEALER.

DISTRIBUTOR agrees to provide TOYOTA products to DEALER in such quantities and types as are ordered by DEALER, subject to available supply from IMPORTER and subject to change or discontinuance at any time with respect to any TOYOTA product."

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:

"1980 Dealer Agreement-DISTRIBUTOR and DEALER recognize that TOYOTA motor vehicles may not be available in sufficient supply from time to time because of production limitations or other factors. Where such shortage is expected to exist for a significant period, it is understood and agreed that such vehicles will be allocated by DISTRIBUTOR to DEALER principally on the basis of sales performance during the most recent representative period of adequate supply ***."

1986-1988 Dealer Agreements. Where such a shortage is determined by DISTRIBUTOR to exist, DISTRIBUTOR will endeavor to allocate the affected Toyota Product(s) among its dealers in a fair and equitable manner, which it shall determine in its sole discretion." (Emphasis added.)

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:

1. The oil crisis of the 1970s created a demand for small, fuel-efficient cars that American manufacturers were not as well prepared to fill as were foreign manufacturers, including Toyota.

2. In 1981 the Voluntary Restraint Agreement entered into between the Japanese and the United States governments restricted the number of Toyota vehicles that could be imported into the United States.

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 ...

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