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Crossroads Ford Truck Sales, Inc. v. Sterling Truck Corp.

June 30, 2003

CROSSROADS FORD TRUCK SALES, INC., A DELAWARE CORPORATION, PLAINTIFF-APPELLANT,
v.
STERLING TRUCK CORPORATION, A DELAWARE CORPORATION, DEFENDANT-APPELLEE.



Appeal from Circuit Court of Sangamon County No. 01MR643 Honorable Donald M. Cadigan, Judge Presiding.

The opinion of the court was delivered by: Justice Appleton

UNPUBLISHED

Plaintiff, Crossroads Ford Truck Sales, Inc., has a franchise from defendant, Sterling Truck Corporation, to sell trucks and parts manufactured by defendant. In the franchise agreement (the agreement), plaintiff promises to have an adequate inventory of trucks and parts (by buying the trucks and parts from defendant) and enough technicians and tools to service the trucks. The agreement states that each year, defendant will send plaintiff an "annual operating requirements addendum" "specifying certain operational requirements for [plaintiff's] satisfaction of its commitments in [the] agreement." The agreement requires plaintiff to sign and comply with the annual addenda and states that breach of any provision of the agreement is cause for terminating the franchise.

Plaintiff sought a declaratory judgment that the "HN80 Dealer Annual Operating Requirements Addendum" for 2001 (the 2001 addendum), as well as the requirement that plaintiff sign and comply with future annual operating requirements addenda, violated the Motor Vehicle Franchise Act (Act) (815 ILCS 710/1 through 32 (West 2000)). Plaintiff sought an injunction against any further such violations. The parties filed cross-motions for a judgment on the pleadings. The trial court denied plaintiff's motion and granted defendant's motion.

Plaintiff appeals both rulings, arguing that the addenda are (1) "coercive" or an "attempt to coerce" within the meaning of section 4(c) of the Act (See 815 ILCS 710/4(c) (West 2000)), (2) "unreasonably restrictive" within the meaning of section 7 (815 ILCS 710/7 (West 2000)), (3) "arbitrary" and "unconscionable" within the meaning of section 4(b) (815 ILCS 710/4(b) (West 2000)), and (4) unilateral modifications of the agreement. We hold that the denial of plaintiff's motion for a judgment on the pleadings is an interlocutory order and, therefore, not appealable. See Fabian v. Norman, 138 Ill. App. 3d 507, 509, 486 N.E.2d 335, 337-38 (1985). We further hold that the 2001 addendum and the provision for issuing future addenda do not offend the Act. The 2001 addendum is not a unilateral modification; it is actually part of the agreement that plaintiff signed. Plaintiff does not contend that the addenda issued after 2001 are substantively unreasonable. Therefore, we hold that defendant did not unilaterally modify the agreement, and we affirm the trial court's judgment.

I. BACKGROUND

Plaintiff is a dealer in medium- and heavy-duty trucks. Defendant, formerly known as HN80 Corporation, is a manufacturer of trucks and parts, which it distributes through a network of dealers with whom it has entered into franchise agreements.

In September 2001, the parties executed the agreement, entitled "HN80 Corporation Dealer Sales and Service Agreement." In the agreement, defendant appoints plaintiff as an "independent authorized dealer for HN80 [p]roducts" and gives plaintiff the "right[s] to purchase" defendant's products "for resale" within a specified geographical "[a]rea of [r]esponsibility" and to "display and use" defendant's "trademarks and service marks."

Defendant's responsibilities, under the agreement, are to provide plaintiff "a fair and equitable share of [defendant's] production of HN80 [p]roducts" and to "make available sales and service support *** in the form of advertising, sales promotion and sales campaign materials, sales and service training programs ***, and service and parts manuals."

Plaintiff's contractual responsibilities fall under three headings:

"A. Sales

[Plaintiff] shall conscientiously and diligently promote the sales of HN80 [p]roducts and obtain and maintain a reasonable share of the market for such products in [plaintiff's] [a]rea of [r]esponsibility. [Plaintiff] shall *** employ adequate, trained, and competent personnel, and maintain a suitable inventory of HN80 [p]roducts as may be necessary to fulfill [plaintiff's] obligations under this [a]greement.

B. Service

[Plaintiff] shall provide in its [a]rea of [r]esponsibility prompt, reliable[,] and effective service to all owners and purchasers of HN80 [p]roducts. *** In accordance with the [defendant's] standards, [plaintiff] shall establish and maintain complete service facilities, including adequate parts inventory, and employ competent, trained personnel as may be necessary to fulfill [plaintiff's] responsibilities under this [a]greement.

C. Dealer Annual Operating Requirements Without limiting [defendant's] or [plaintiff's] obligations under this [a]greement, [plaintiff] has signed the [']HN80 Dealer Annual Operating Requirements Addendum.['] [Plaintiff] shall sign a revised [']HN80 Dealer Annual Operating Requirements Addendum['] each year. [Plaintiff] agrees to operate its dealership in accordance with and in fulfillment of the requirements of the [']HN80 Dealer Annual Operating Requirements Addendum,['] which specifies certain operational requirements for [plaintiff's] satisfaction of its commitments made in this [a]greement. Failure of [plaintiff] to sign the revised [']Dealer Annual Operating Requirements Addendum['] shall not relieve [plaintiff] of any of its obligations under this [a]greement."

In paragraph VII, entitled "Additional Provisions," the agreement provides:

"[Defendant's] [']Standard Provisions['] for this [']HN80 Dealer Sales and Service Agreement['] *** [and] the [']HN80 Annual Operating Requirements Addendum['] *** are made a part of this [a]greement as though they were fully set forth herein, and any other *** addenda are likewise made a part of this [a]greement when executed ***."

Paragraph X of the "Standard Provisions," entitled "Promotion and Sale of HN80 Products," reiterates plaintiff's commitments to "carry in stock an adequate inventory of unsold new HN80 [v]ehicles" and "carry an inventory of parts in accordance with [defendant's] minimum inventory requirements." "HN80 [p]roducts" means "HN80 [v]ehicles and [p]arts." "HN80 [v]ehicles" means "the new trucks *** which [defendant], in its sole discretion, offers for sale to [plaintiff]." "Parts" means "parts sold by [defendant]."

In paragraph XIII of the "Standard Provisions," entitled, "Dealership Facilities, Personnel, Locations, and Identification," plaintiff "commits to *** keep competent personnel in sufficient numbers to enable [plaintiff] to meet its *** service and ...


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