A federal judge has refused a request by a Barrington-based
dealer of luxury automobiles to give it the win in the dealership’s ongoing
dispute with General Motors over the automaker’s attempt to block the
relocation of its Cadillac dealership to Motor Werks’ new auto mall.
Motor Werks, which sought to move its standalone Cadillac
dealership in Barrington to a newly renovated auto mall, accused GM of
violating the Illinois Motor Vehicle Franchise Act by blocking the move, using
as reasoning the auto mall is too close to its competitors.
Motor Werks Cadillac dealership at the South Barrington Road auto mall opened
in 1989, moving to its current Barrington location, 206 N. Cook St., in 2000.
It asked GM for permission to return to the mall in 2013, saying the renovated
space “would substantially increase service capacity while simultaneously
satisfying (GM’s) image standards.” Earlier court documents reference a 2012
dealer agreement between the two parties giving GM “final decision in light of
dealer network planning considerations.”
After GM refused to allow the move, Motor Werks filed its
complaint against GM in Cook County Circuit Court in December 2013. GM removed
the case to federal court in Chicago in January 2014.
Judge Manish S. Shah, in a memorandum opinion and order
issued March 14, denied motion for summary judgment on two counts of Motor
Werks’ first amended complaint, which sought damages and a declaration GM
violated the IMVFA.
“Motor Werks’ interpretation and application of the statute
to this dispute has evolved over the course of this litigation,” Shah wrote.
In an earlier motion for summary judgment, Motor Werks said GM
had violated the law by failing to offer Motor Werks consideration to comply
with exclusivity requirements set forth in its dealer agreement. But it also identified
GM’s non-dualing policy — which discourages dealers from selling or
servicing non-GM products —as the source of the exclusivity clause.
GM, however, said it only rejected the relocation request and
never asked Motor Werks to enter any agreement as a relocation condition. In
Shah’s view, GM’s approach did not show how the IMFVA section Motor Werks cited
applied to the transaction.
Referencing earlier summary judgment briefs, Shah wrote that
“when Motor Werks renewed its agreement with GM in 2012, it necessarily agreed that
its ability to relocate its Cadillac dealership was conditioned on the
exclusivity of the new facility.” GM did not make exclusivity a direct
condition of relocation approval because it didn’t try to renegotiate the 2012
dealer agreement as part of the 2013 relocation request.
In Motor Werks’ second motion for summary judgment, it raised
“a new argument that is oddly similar to GM’s original argument” in that it
agreed the parties were not changing the terms of the 2012 agreement, Shah
said. Instead, Motor Werks was arguing “the statute prohibits exclusive use
agreements unless the agreement is new and specific to relocation.”
Shah, however, said that no matter how the IMVFA is
positioned, “the undisputed record establishes that Motor Werks accepted the
Dealer Agreement and the non-dualing policy.” He could not find support for
Motor Werks’ assertion that GM was obligated to disregard the 2012 agreement
— only that it could not impose new exclusivity provisions as a condition
of allowing the relocation.
GM also presented evidence about how Motor Werks would
assemble a new relocation proposal, amid concerns its trademarks would be
damaged, but Shah said there is no evidence how Motor Werks will proceed and as
such would not consider GM’s concerns about potential Lanham Act violations at
Motor Werks is represented in the action by attorneys with
the firms of Bass Sox Mercer, of Tallahassee, Fla., and Hardt Stern &
Kayne, of Riverwoods.
GM is represented by the firms of Kozacky Weitzel McGrath
P.C., of Chicago, and Jones Day, with offices in Columbus, Ohio, and Chicago.