Court Opinion

ID: 9520512
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:41:30.610943+00
Date Added: 2024-06-11T12:46:21.166050
License: Public Domain

JUSTICE FREEMAN, dissenting: The issue raised in this case is simply a question as to how the limitation period contained in the Motor Vehicle Franchise Act (Franchise Act) (815 ILCS 710/14 (West 1992)) is to be construed. We are asked to determine whether that limitation period may be tolled by continuing acts of capricious allocation or continuing illegal modifications of dealer agreements. The trial judge in this case mistakenly believed that the period could be tolled in that manner. Unfortunately, that erroneous ruling affected, detrimentally, the manner in which the parties tried the case. In light of that fact, I do not believe that defendants have changed their position on appeal, nor do I believe that plaintiff abandoned its fraudulent concealment position. In my view, the errors made by the circuit court necessitate a remand for a new trial in its entirety, and not just for damages, as the court today concludes. I therefore respectfully dissent. Factual Background The dispute at issue in this case grew from a single-count complaint for injunctive relief filed by plaintiff against defendants on August 8, 1989. Plaintiff is a Toyota dealership, and defendants are Toyota distributors. Plaintiff sought, pursuant to the Franchise Act, to enjoin defendants from allowing a competing dealership to open in nearby Collinsville. Plaintiff amended its complaint in January 1991 to include a breach of contract claim for damages in addition to the injunctive relief previously sought. Plaintiff alleged that, on or about February 12, 1975, it entered into a written Toyota “Dealer Sales and Services Agreement” with a predecessor to defendants. According to plaintiff, the 1975 agreement established plaintiffs right to sell and service motor vehicles in addition to related parts and accessories. The agreement also included an allocation provision for the distribution of vehicles to the dealership. At some time during the fall of 1978 or the winter of 1979, defendants came into existence and assumed liability of the predecessor. Plaintiff claimed that from at least January 22, 1979, through June 1, 1986, the dealership agreement between defendants and plaintiff contained the same “unit allocation” provision as set forth in the 1975 agreement. Plaintiff alleged that defendants breached their agreement with, and their representations and promises to, plaintiff in that they failed to provide and/or allocate Toyota products to plaintiff either in the quantities required under the allocation provision or as defendants orally represented and promised to plaintiff. After the original count for injunctive relief was voluntarily dismissed with prejudice, defendants moved to dismiss the remaining breach of contract claim, arguing that it was time-barred. Defendants asserted that the action was governed by the Uniform Commercial Code (UCC) (810 ILCS 5/2 — 725 (West 1992)) because a dealership contract such as the one at issue is a contract for the sale of goods. As such, the four-year statute of limitations contained in the UCC acted to bar the claim. The circuit court had not ruled on defendants’ motion to dismiss before plaintiff filed yet another amended complaint. This complaint contained three counts. The first count was for breach of contract and essentially mirrored the count contained in the first amended complaint. Plaintiff alleged that from January 29, 1979, through June 1, 1986, defendants failed to provide or allocate Toyota products to plaintiff in such quantities as required under the allocation provision of the parties’ agreement. Moreover, plaintiff alleged that defendants fraudulently concealed their actions from plaintiff and plaintiff did not discover those actions until approximately the fall of 1990. In count II, plaintiff alleged that defendants interfered with plaintiffs prospective economic advantage. In count III, plaintiff alleged that defendants violated section 4 of the Franchise Act. According to plaintiff, from January 22, 1979, through June 1, 1986, defendants’ allocation of motor vehicles to plaintiff was arbitrary, capricious, in bad faith, and unconscionable, all in violation of the Franchise Act. In addition, plaintiff alleged that defendants concealed their arbitrary and capricious allocation system from plaintiff’s knowledge so that plaintiff was unable to discover its entitlement to bring the cause of action until the fall of 1990. On the same day that it filed its second amended complaint, plaintiff filed a response to defendants’ outstanding motion to dismiss the amended complaint. In that response, plaintiff maintained that the UCC did not apply to its claim of breach of contract. The circuit court eventually ruled as a matter of law that the breach of contract claim was not governed by the UCC; rather, the 10-year statute of limitations was applicable. The circuit court also found that the amended complaint related back to the first complaint filed in August 1989. Defendants thereafter filed a second motion to dismiss, in which they reiterated their contention that the four-year limitation contained in the UCC applied to the breach of contract claim. Thus, defendants contended that even if the claim did relate back to the filing date of the original complaint (August 8, 1989), plaintiff was foreclosed from asserting breaches that occurred prior to August 8, 1985. In addition, defendants argued that the question of fraudulent concealment was irrelevant because under the UCC, lack of knowledge does not serve to toll the limitation period. As to count III, which alleged Franchise Act violations, defendants argued that section 14 of the Act contains a four-year limitation period which begins to run after the cause of action accrues. According to count III of the complaint, the last allocation alleged by plaintiff occurred on or before June 1, 1986. Because plaintiff first asserted the claim more than four years after June 1, 1986 (July 20, 1992), the claim was barred in its entirety. Defendants also claimed that plaintiff failed to allege any facts showing fraudulent concealment. For these reasons, defendants argued that plaintiff was not entitled to relief under the Franchise Act. In response, plaintiff repeated its contention that the breach of contract claim was governed by the 10-year statute of limitations. As to the Franchise Act violation, plaintiff contended that the claim was not time-barred due to the fact that defendants’ conduct consisted of a continuing violation. Plaintiff contended that, under that doctrine, the limitations period began to run upon the cessation of the conduct. As a result, the claim was not time-barred. In the alternative, plaintiff argued that defendants’ fraudulent conduct tolled the four-year limitation period because defendants’ actions prevented plaintiff from discovering the violations until 1990. In ruling on the motion, the circuit court first found that all the claims related back to the date the original complaint was filed, August 9, 1989. Moreover, the court found that plaintiff had alleged a continuing course of conduct and as matter of law “any Statute of Limitations period runs from the date of the cessation of said continuous conduct.” As a result, the claims were not time-barred. This analysis applied to all claims, including those brought under the Franchise Act. Analysis The foregoing procedural history of this dispute reveals that defendants have long maintained that (i) plaintiff’s Franchise Act claim is time-barred and (ii) plaintiffs breach of contract claim was governed by the statute of limitations contained in the UCC. These contentions were repeatedly rejected by the trial judge. The record also reveals that plaintiff alleged fraudulent concealment in its complaint and establishes that plaintiff knew of its statutory duty of pleading, at least at one point in the early stages of the litigation. Indeed, the trial judge’s ruling that the continuing violation doctrine applied to the violations at issue caused plaintiff to abandon its effort to show how defendants had fraudulently concealed the violations of the Franchise Act until 1990. Notwithstanding the above, the court today implies that defendants have changed their position on appeal and thus have waived their argument. See 199 Ill. 2d at 333. I do not believe that defendants’ position before this court is contrary to their position at trial. Defendants maintain here, as they did below, that plaintiff brought this action too late to recover statutory damages under the Franchise Act and too late to recover for any alleged breach of the dealership agreements under the UCC. In fact, the court agrees with defendants to an extent, in holding that the trial judge erred in calculating the limitations period in both respects. Thus, there is simply no reason to discuss principles of waiver here nor is there anything about defendants’ argument that “implicates the subject matter jurisdiction of the circuit court.” 199 Ill. 2d at 333. We granted leave to appeal in this case in order to decide whether the continuing violation doctrine could be applied to actions brought under the Franchise Act. The question concerns whether the language of section 14 of the Franchise Act is consistent with the policy considerations which underscore the continuing violation doctrine. I believe that the question is a fairly narrow one, the resolution of which does not require the court to expound on the issue of subject matter jurisdiction. In addition to my belief that the court’s discussion (see 199 Ill. 2d at 333-41) on jurisdiction is unnecessary, I also believe that it is wrong. The questions regarding jurisdiction were answered in this court’s opinion in In re M.M., 156 Ill. 2d 53 (1993). Today’s opinion, at the very least, calls into question 30 years of this court’s long-standing precedent and, at most, flatly overrules that precedent. This is done despite the fact there is not any discernible conflict or confusion amongst the lower courts as to this matter nor is there any other reason which would warrant this court to ignore stare decisis in the manner that it does. See Heimgaertner v. Benjamin Electric Manufacturing Co., 6 Ill. 2d 152 (1955) (recognizing that doctrine of stare decisis may be overturned only by a showing of good cause). Leaving aside the discussion about jurisdiction, I strongly disagree with the court’s holding that the provisions in section 14 of the Franchise Act do not constitute an element of the cause of action to be pled and proved by the plaintiff, but act rather as an “ordinary statute of limitations.” 199 Ill. 2d at 344.1 remind my colleagues in the majority that this court just recently reaffirmed the notion that the General Assembly is free to impose limitations and conditions on the availability of relief under the statutory causes of actions that it creates. In re Marriage of Kates, 198 Ill. 2d 156 (2001). Given that the Franchise Act provides automobile dealerships with a statutory cause of action against arbitrary and unfair allocations made by distributors — a claim unavailable under our common law — it is not unreasonable that the legislature chose to impose time requirements on the availability of this legislatively created relief. See, e.g., Varelis v. Northwestern Memorial Hospital, 167 Ill. 2d 449, 454 (1995) (and cases cited therein). The court today appears to take the position that the changes that were wrought by the 1964 amendments to the 1870 Illinois Constitution did away with the legislature’s right to impose preconditions to the statutory causes of actions that it creates. I disagree. Those changes did not in any way affect the legislature’s power to impose such limits or preconditions. See M.M., 156 Ill. 2d at 75 (Miller, C.J., concurring, joined by Bilandic, J.) We, as the highest court, have no right to transform an element of the plaintiffs case into an affirmative defense to be pled and proved by the defendant. Notwithstanding this court’s long-standing recognition of the legislature’s ability to impose limits or preconditions upon the right to relief under a statutory cause of action, I do not believe that the plain language of the Franchise Act, as the court holds, compels the conclusion that the four-year limitation period is an ordinary statute of limitation. The wording of the statute is similar to language found in other legislatively created remedies. See, e.g., 235 ILCS 5/6 — 21 (West 2000); 740 ILCS 180/2 (West 2000). This court has construed the provisions in these statutes as elements of the plaintiff’s case. Lowrey v. Malkowski, 20 Ill. 2d 280 (1960); Wilson v. Tromly, 404 Ill. 307 (1949). I believe that the same result should obtain here. In addition, statutes of limitations that the legislature intends to be raised as affirmative defenses are ordinarily placed by the General Assembly in the Code of Civil Procedure. See 735 ILCS 5/13 — 201 et seq. (West 2000). Had the legislature intended for section 14 of the Franchise Act to serve as an affirmative defense, it would have added it to the limitations section of the Code of Civil Procedure, particularly in light of the fact that this court has historically given a limitation period contained in a statutory remedy a construction that places the burden on the plaintiff. Section 14 of the Franchise Act allows an aggrieved party to toll the four-year limitation if it can establish that the alleged violations were concealed from the aggrieved party’s knowledge. In this case, plaintiff’s complaint alleged such conduct. However, the trial court’s ruling that the section 14 limitation period was tolled by the continuing violation doctrine made the fraudulent concealment element of plaintiffs claim irrelevant, and plaintiff, not surprisingly, presented no proof on the subject at trial. Nevertheless, the trial court allowed recovery even though the statute’s requirement with respect to concealment was not met. Thus, the question that must be resolved here is whether the trial court was correct in tolling the four-year limitation period due to the continuing violation doctrine. Defendants claim the court erred because it eliminated the concept of knowledge from the case. Plaintiff, on the other hand, argues that the doctrine is applicable here under the facts of the case. The General Assembly enacted the Franchise Act in 1979 as part of its police power in order to promote, inter alia, service to consumers generally. 815 ILCS 710/1.1 (West 1992). Under section 4(d) of the Franchise Act, a motor vehicle distributor cannot “adopt, change, establish or implement a plan or system for the allocation and distribution of new motor vehicles to motor vehicle dealers which is arbitrary or capricious or *** modify an existing plan so as to cause the same to be arbitrary or capricious.” 815 ILCS 710/4(d)(l) (West 1992). Section 14 provides that “actions arising out of any provision of this Act shall be commenced within 4 years next after the cause of action accrues; provided, however, that if a person hable hereunder conceals the cause of action from the knowledge of the person entitled to bring it, the period prior to the discovery of his cause of action by the person entitled shall be excluded in determining the time limited for the commencement of the action.” 815 ILCS 710/14 (West 1992). Thus, an aggrieved party has four years after the cause of action accrues to bring suit under the Franchise Act, unless the violation was concealed. v In my view, the statutory language makes clear that knowledge of the violation is essential to the time limitation contained in the Franchise Act. That the sole exception to the four-year limitation period is for concealment underscores the legislature’s desire that an action be brought as soon as the person entitled to bring it has knowledge of the violation. An exception based on a theory of continuing violations takes the concept of knowledge out of the equation, as this case aptly demonstrates. “Where the language of a statute is clear and unambiguous, a court must give it effect as written, without ‘reading into it exceptions, limitations or conditions that the legislature did not express.’ ” Garza v. Navistar International Transportation Corp., 172 Ill. 2d 373, 378 (1996), quoting Solich v. George & Anna Portes Cancer Prevention Center of Chicago, Inc., 158 Ill. 2d 76, 83 (1994). Moreover, had the legislature intended for continuing violations to serve as an exception to the four-year limitation period, it would have explicitly made it a part of the language of section 14. Our General Assembly has provided for such an exception to the limitation periods contained in several statutory causes of action. See, e.g., 225 ILCS 425/9.5 (West 2000) (“[a] continuing violation will be deemed to have occurred on the date when the circumstances first existed which gave rise to the alleged continuing violation”); 225 ILCS 457/120 (West 2000) (“[a] continuing violation will be deemed to have occurred on the date when the circumstances last existed that gave rise to the alleged continuing violation”). The absence of such language in section 14 reflects the General Assembly’s specific rejection of the doctrine as a basis for tolling the limitation period in Franchise Act cases. For these reasons, I agree with my colleagues in the majority that the trial court erred in applying the continuing violation doctrine to this case. 199 Ill. 2d at 349. However, I do hot agree with their ultimate conclusion regarding the disposition of this case, as I explain below. As I read the court’s opinion, each improper allocation by defendants served as a specific violation of the Franchise Act. See 199 Ill. 2d at 349 (stating that “each allocation constituted a separate violation of section 4 of the Act, [with] each violation supporting a separate cause of action”). If this is so, I am confused by the court’s holding that because “each allocation would have supported a separate cause of action, plaintiff may recover damages for the four-year period prior to the filing of its complaint.” 199 Ill. 2d at 349. Specifically, I question why my colleagues are limiting plaintiffs recovery to the four-year period prior to the filing of plaintiffs complaint. If each allocation of Toyota products by defendants constituted a separate violation of the Franchise Act, plaintiff had, under the statute, four years from the date of each improper allocation to bring suit under the Franchise Act, unless it could show fraudulent concealment. Each four-year “clock” began to run on the date of the alleged improper allocations. However, under section 14, each “clock” could be tolled if it could be shown that the person liable for the conduct “concealed] the cause of action from the knowledge of the person entitled to bring it.” 815 ILCS 710/14 (West 1992). Plaintiff alleged in its second amended complaint that, from January 29, 1979, through June 1, 1986, defendants’ allocation of motor vehicles to plaintiff was arbitrary, capricious, in bad faith, and unconscionable, all in violation of the Franchise Act. In addition, plaintiff alleged that defendants concealed their arbitrary and capricious allocation system from plaintiff’s knowledge so that plaintiff was unable to discover its entitlement to bring the cause of action until the fall of 1990. If, as the court holds, each allocation of Toyota’s products served to constitute a separate cause of action, i.e., the accrual of a cause of action, then under section 14, plaintiff had four years from the date of each allocation to file suit, unless prevented from doing so by fraudulent concealment. Thus, it is possible that plaintiff can pursue recovery for alleged improper allocations prior to 1985. I fail to see why any potential recovery should be limited to the four-year period prior to the filing of plaintiffs original complaint. The court’s remedy here is inconsistent with its premise that each allocation serves as a separate cause of action. I believe that the trial judge’s erroneous application of the continuing violation doctrine served to complicate this litigation. As noted, plaintiff, in its second amended complaint, alleged that, because of defendants’ fraudulent concealment, it did not learn that it was entitled to bring any statutory cause of action until the fall of 1990. After defendants challenged the timeliness of the action, the circuit court ruled that plaintiff’s cause of action under the Franchise Act was timely filed as a matter of law. In so ruling, the circuit court applied the continuing violation doctrine to this case with the result being that plaintiff’s knowledge of the violations was irrelevant. Thus, plaintiff had no reason to pursue its theory of fraudulent concealment at trial. Therefore, the erroneous ruling, in my view, prevented plaintiff from proving that defendants’ fraudulent actions tolled the four-year limitation period for alleged violations preceding 1985. I therefore cannot agree with the court’s conclusion that plaintiff “did not pursue” the theory of fraudulent concealment and abandoned it at trial. 199 Ill. 2d at 377 n.2. In the wake of the trial judge’s application of the continuing violation doctrine to this case, any pursuit of fraudulent concealment on plaintiff’s part was simply unnecessary. Due to the adverse effects of the trial judge’s ruling, defendants were also harmed because they were unable to have the jury determine the question of when, if ever, plaintiff knew of the allegedly improper allocations. My review of the trial testimony reveals that there was some discrepancy as to when plaintiff, through its representatives, knew of the improprieties with respect to the allocations, which presents a question of fact that can only be resolved by the jury. For these reasons, I am of the view that the trial judge’s erroneous pretrial rulings had an adverse effect on the litigation as a whole and that the correct approach here would be to remand the matter so that the case can be retried within the framework of the proper limitations periods. This ensures that both parties are allowed to present their theories of the case to the jury. Parenthetically, I would note that in litigation such as this, an interlocutory appeal might have been of some assistance to both the trial judge and the litigants in preventing the remand ordered today. I note that the record contains an attempt by defendants for Rule 308 certification, a procedure which, had it been allowed, might have lessened the obfuscation which surrounded the construction of the statute of limitations at issue. Suffice it to say, the circuit court’s incorrect ruling that the continuing violation rule applied to this case caused much confusion as to proving when precisely these alleged violations occurred. It resulted in an absence of proof concerning plaintiff’s knowledge of the alleged violations and defendants’ alleged fraudulent concealment of thenfi This view is only reinforced by this court’s holding that the circuit court also erred in finding the four-year UCC statute of limitations inapplicable to this action. 199 Ill. 2d at 355. Time and knowledge were no longer issues in the trial that followed these rulings. After reviewing the record carefully, I cannot agree that a new trial on damages is all that is necessary to rectify these errors. As Justice Bilandic once noted while a member of our appellate court, “[ajfter a shirt or blouse is incorrectly buttoned, the solution is to unbutton it completely and start all over.” Morrey v. Kinetic Services, Inc., 133 Ill. App. 3d 1002, 1005 (1985). The same must be said for the case at bar. JUSTICE McMORROW joins in this dissent.