[ Home ] [ ILCS ] [ Search ] [ Bottom ]
[ Other General Assemblies ]
Public Act 92-0272
HB2564 Enrolled LRB9207432WHtmB
AN ACT concerning business transactions.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Motor Vehicle Franchise Act is amended by
changing Sections 12, 13, 18, and 29 as follows:
(815 ILCS 710/12) (from Ch. 121 1/2, par. 762)
Sec. 12. Arbitration; administrative proceedings; civil
actions; determining good cause.
(a) The franchiser and franchisee may agree to submit a
dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11
cancellation, modification, termination, or refusal to extend
or renew an existing franchise or selling agreement, or
refusal to honor succession to ownership or refusal to allow
a sale or transfer, or the granting of an additional
franchise of the same line make or the relocating of an
existing motor vehicle dealership within or into a relevant
market area where the same line make is then represented, or
the proposed arrangement to establish any additional motor
vehicle dealership or other facility limited to the sale of
factory repurchase vehicles or late model vehicles, to
arbitration. Any such proceeding shall be conducted under the
provisions of the Uniform Arbitration Act by a 3 member panel
composed of one member appointed by the franchisee and one
member appointed by the franchiser who together shall choose
the third member.
An arbitration proceeding hereunder for a remedy under
paragraph (6) of subsection (d) or paragraph (6), (8), (10)
or (11) of subsection (e) of Section 4 of this Act shall be
commenced by written notice to the franchiser by the
objecting franchisee within 30 days from the date the dealer
received notice to cancel, terminate, modify or not extend or
renew an existing franchise or selling agreement or refusal
to honor succession to ownership or refusal to honor a sale
or transfer or to grant or enter into the additional
franchise or selling agreement, or to relocate an existing
motor vehicle dealer; or within 60 days of the date the
franchisee received notice in writing by the franchiser of
its determination under any provision of Section 4 (other
than paragraph (6) of subsection (d) or paragraph (6), (8),
(10) or (11) of subsection (e) of Section 4), 5, 6, 7, 9,
10.1, or 11 of this Act; however, if notice of the provision
under which the determination has been made is not given by
the franchiser, then the proceeding shall be commenced as
provided by Section 14 of this Act.
The franchiser and the franchisee shall appoint their
respective arbitrators and they shall select the third
arbitrator within 14 days of receipt of such notice by the
franchiser. The arbitrators shall commence hearings within
60 days after all the arbitrators have been appointed and a
decision shall be rendered within 30 days after completion of
the hearing.
During the pendency of the arbitration, any party may
apply to a court of competent jurisdiction which shall have
power to modify or stay the effective date of a proposed
additional franchise or selling agreement, or the effective
date of a proposed motor vehicle dealership relocation or the
effective date of a cancellation, termination or modification
or refusal to honor succession or refusal to allow a sale or
transfer or extend the expiration date of a franchise or
selling agreement pending a final determination of the issues
raised in the arbitration hearing upon such terms as the
court may determine. Any such modification or stay shall not
be effective for more than 60 days unless extended by the
court for good cause or unless the arbitration hearing is
then in progress.
(b) If the franchiser and the franchisee have not agreed
to submit a dispute, involving Section 4, 5, 6, 7, 9, 10.1,
or 11 of this Act to arbitration under subsection (a), then a
proceeding before the Motor Vehicle Review Board as
prescribed by subsection (c) or (d) of Section 12 and Section
29 of this Act for a remedy other than damages under
paragraph (6) of subsection (d) or paragraph (6), (8), (10),
or (11) of subsection (e) of Section 4 of this Act shall be
commenced upon receipt by the Motor Vehicle Review Board of a
timely notice of protest or within 60 days of the date the
franchisee received notice in writing by the franchiser of
its determination under any provision of those Sections other
than paragraph (6) of subsection (d) or paragraph (6), (8),
(10), or (11) of subsection (e) of Section 4 of this Act;
however, if notice of the provision under which the
determination has been made is not given by the franchiser,
then the proceeding shall be commenced as provided by Section
14 of this Act. cancellation, modification, termination, or
refusal to extend or renew an existing franchise or selling
agreement or refusal to honor succession to ownership or
refusal to allow a sale or transfer or the granting of an
additional franchise of the same line make or the relocating
of an existing motor vehicle dealership, or the proposed
arrangement to establish any additional motor vehicle
dealership or other facility limited to the sale of factory
repurchase vehicles or late model vehicles, to arbitration
under (a), a proceeding for a remedy other than damages shall
be commenced upon receipt of a timely notice of protest under
paragraph (6) of subsection (d) or paragraph (6), (8), or
(10) of subsection (e) of Section 4 of this Act, before the
Motor Vehicle Review Board as prescribed by Sections 12 and
29 of this Act.
During the pendency of a proceeding under this Section, a
party may apply to a court of competent jurisdiction that
shall have power to modify or stay the effective date of a
proposed additional franchise or selling agreement, or the
effective date of a proposed motor vehicle dealership
relocation, or the effective date of a cancellation,
termination, or modification, or extend the expiration date
of a franchise or selling agreement or refusal to honor
succession to ownership or refusal to approve a sale or
transfer pending a final determination of the issues raised
in the hearing upon such terms as the court may determine.
Any modification or stay shall not be effective for more than
60 days unless extended by the court for good cause or unless
the hearing is then in progress.
(c) In proceedings under (a) or (b), when determining
whether good cause has been established for granting such
proposed additional franchise or selling agreement, or for
relocating an existing motor vehicle dealership, the
arbitrators or Board shall consider all relevant
circumstances in accordance with subsection (v) of Section 2
of this Act, including but not limited to:
(1) whether the establishment of such additional
franchise or the relocation of such motor vehicle
dealership is warranted by economic and marketing
conditions including anticipated future changes;
(2) the retail sales and service business
transacted by the objecting motor vehicle dealer or
dealers and other motor vehicle dealers of the same line
make with a place of business in the relevant market area
to be served by the additional franchise or the relocated
motor vehicle dealership during the 5 year period
immediately preceding such notice as compared to the
business available to them;
(3) the investment necessarily made and obligations
incurred by the objecting motor vehicle dealer or dealers
and other motor vehicle dealers of the same line make
with a place of business in the relevant market area to
be served by the additional franchise or the relocated
motor vehicle dealership to perform their obligations
under existing franchises or selling agreements; and, the
manufacturer shall give reasonable credit for sales of
factory repurchase vehicles purchased by the objecting
motor vehicle dealer or dealers and other motor vehicle
dealers of the same line make with the place of business
in the relevant market area to be served by the
additional franchise or the relocated motor vehicle
dealership, or the additional motor vehicle dealership or
other facility limited to the sale of factory repurchase
or late model vehicles, at manufacturer authorized or
sponsored auctions in determining performance of
obligations under existing franchises or selling
agreements relating to total new vehicle sales;
(4) the permanency of the investment of the
objecting motor vehicle dealer or dealers and other motor
vehicle dealers of the same line make with a place of
business in the relevant market area to be served by the
additional franchise or the relocated motor vehicle
dealership;
(5) whether it is beneficial or injurious to the
public welfare for an additional franchise or relocated
motor vehicle dealership to be established;
(6) whether the objecting motor vehicle dealer or
dealers and other motor vehicle dealers of the same line
make with a place of business in the relevant market area
to be served by the additional franchisee or relocated
motor vehicle dealership are providing adequate
competition and convenient consumer care for the motor
vehicles of the same line make owned or operated in the
area to be served by the additional franchise or
relocated motor vehicle dealership;
(7) whether the objecting motor vehicle dealer or
dealers and other motor vehicle dealers of the same line
make with a place of business in the relevant market area
to be served by the additional franchisee or the
relocated motor vehicle dealership have adequate motor
vehicle sales and service facilities, equipment, vehicle
parts and qualified personnel to reasonably provide for
the needs of the customer; provided, however, that good
cause shall not be shown solely by a desire for further
market penetration;
(8) whether the establishment of an additional
franchise or the relocation of a motor vehicle dealership
would be in the public interest;
(9) whether there has been a material breach by a
motor vehicle dealer of the existing franchise agreement
which creates a substantially detrimental effect upon the
distribution of the franchiser's motor vehicles in the
affected motor vehicle dealer's relevant market area or
fraudulent claims for warranty work, insolvency or
inability to pay debts as they mature;
(10) the effect of an additional franchise or
relocated motor vehicle dealership upon the existing
motor vehicle dealers of the same line make in the
relevant market area to be served by the additional
franchisee or relocated motor vehicle dealership; and
(11) whether the manufacturer has given reasonable
credit to the objecting motor vehicle dealer or dealers
and other motor vehicle dealers of the same line make
with a place of business in the relevant market area to
be served by the additional franchise or relocated motor
vehicle dealership or additional motor vehicle dealership
or other facility limited to the sale of factory
repurchase or late model vehicles, for retail sales of
factory repurchase vehicles purchased by the motor
vehicle dealer or dealers at manufacturer authorized or
sponsored auctions.
(d) In proceedings under subsection (a) or (b), when
determining whether good cause has been established for
cancelling, terminating, refusing to extend or renew, or
changing or modifying the obligations of the motor vehicle
dealer as a condition to offering a renewal, replacement, or
succeeding franchise or selling agreement, the arbitrators or
Board shall consider all relevant circumstances in accordance
with subsection (v) of Section 2 of this Act, including but
not limited to:
(1) The amount of retail sales transacted by the
franchisee during a 5-year period immediately before the
date of the notice of proposed action as compared to the
business available to the franchisee.
(2) The investment necessarily made and obligations
incurred by the franchisee to perform its part of the
franchise.
(3) The permanency of the franchisee's investment.
(4) Whether it is injurious to the public interest
for the franchise to be cancelled or terminated or not
extended or modified, or the business of the franchise
disrupted.
(5) Whether the franchisee has adequate motor
vehicle sales and service facilities, equipment, vehicle
parts, and service personnel to reasonably provide for
the need of the customers for the same line make of motor
vehicles handled by the franchisee.
(6) Whether the franchisee fails to fulfill the
warranty obligations of the manufacturer required to be
performed by the franchisee.
(7) The extent and materiality of the franchisee's
failure to comply with the terms of the franchise and the
reasonableness and fairness of those terms.
(8) Whether the owners of the franchise had actual
knowledge of the facts and circumstances upon which
cancellation or termination, failure to extend or renew,
or changing or modification of the obligations of the
franchisee as a condition to offering a renewal,
replacement, or succeeding franchise or selling
agreement.
(e) If the franchiser and the franchisee have not agreed
to submit a dispute to arbitration, and the dispute did not
arise under paragraph (6) of subsection (d) or paragraph (6),
(8), or (10), or (11) of subsection (e) of Section 4 of this
Act, then a proceeding for a remedy other than damages may
shall be commenced by the objecting franchisee in the
circuit court of the county in which the objecting franchisee
has its principal place of business, within 60 days of the
date the franchisee received notice in writing by the
franchiser of its determination under any provision of this
Act other than paragraph (6) of subsection (d) or paragraph
(6), (8), (10), or (11) of subsection (e) of Section 4 of
this Act; however, if notice of the provision under which the
determination has been made is not given by the franchiser,
then the proceeding shall be commenced as provided by Section
14 of this Act. the aforesaid Sections, or as otherwise
prescribed by Section 13 of this Act.
(f) The changes to this Section made by this amendatory
Act of the 92nd General Assembly (i) apply only to causes of
action accruing on or after its effective date and (ii) are
intended to provide only an additional venue for dispute
resolution without changing any substantive rights under this
Act.
(Source: P.A. 89-145, eff. 7-14-95.)
(815 ILCS 710/13) (from Ch. 121 1/2, par. 763)
Sec. 13. Damages; equitable relief. Any franchisee or
motor vehicle dealer who suffers any loss of money or
property, real or personal, as a result of the use or
employment by a manufacturer, wholesaler, distributor,
distributor branch or division, factory branch or division,
wholesale branch or division, or any agent, servant or
employee thereof, of an unfair method of competition or an
unfair or deceptive act or practice declared unlawful by this
Act, or any action in violation of this Act, may bring an
action for damages and equitable relief, including injunctive
relief, in the circuit court of the county in which the
objecting franchisee has its principal place of business or,
if the parties have so agreed, in arbitration. If the
misconduct is willful or wanton, treble damages may be
awarded. Where the misconduct is willful or wanton, the court
may award treble damages. A motor vehicle dealer, if it has
not suffered any loss of money or property, may obtain
permanent equitable relief if it can be shown that the unfair
act or practice may have the effect of causing such loss of
money or property. Where the franchisee or dealer
substantially prevails the court or arbitration panel or
Motor Vehicle Review Board shall award attorney's fees and
assess costs, including expert witness fees and other
expenses incurred by the dealer in the litigation, so long as
such fees and costs are reasonable, against the opposing
party. Moreover, for the purposes of the award of attorney's
fees, expert witness fees, and costs whenever the franchisee
or dealer is seeking injunctive or other relief, the
franchisee or dealer may be considered to have prevailed when
a judgment is entered in its favor, when a final
administrative decision is entered in its favor and affirmed,
if subject to judicial review, when a consent order is
entered into, or when the manufacturer, distributor,
wholesaler, distributor branch or division, factory branch or
division, wholesale branch or division, or any officer, agent
or other representative thereof ceases the conduct, act or
practice which is alleged to be in violation of any Section
of this Act.
The changes to this Section made by this amendatory Act
of the 92nd General Assembly (i) apply only to causes of
action accruing on or after its effective date and (ii) are
intended to provide only an additional venue for dispute
resolution without changing any substantive rights under this
Act.
(Source: P.A. 91-485, eff. 1-1-00; 91-533, eff. 8-13-99.)
(815 ILCS 710/18)
Sec. 18. Board; powers. The Board shall have the
following powers:
(a) To conduct hearings, by or through its duly
authorized administrative hearing officer, on protests filed
under Sections 4, 5, 6, 7, 9, 10.1, 11, and 12 of this Act.
(b) To make reasonable regulations that are necessary to
carry out and effect its official duties and such further
rules as necessary relating to the time, place, and manner of
conducting hearings as provided for in this Act.
(c) To advise the Secretary of State upon appointments.
(d) To advise the Secretary of State on legislation
proposed to amend this Act or any related Act.
The changes to this Section made by this amendatory Act
of the 92nd General Assembly (i) apply only to causes of
action accruing on or after its effective date and (ii) are
intended to provide only an additional venue for dispute
resolution without changing any substantive rights under this
Act.
(Source: P.A. 89-145, eff. 7-14-95; 89-433, eff. 12-15-95.)
(815 ILCS 710/29)
Sec. 29. Procedures for hearing on protest. Upon
receipt of a timely notice of protest filed with the Motor
Vehicle Review Board under paragraph (6) of subsection (d) or
paragraph (6), (8), or (10) of subsection (e) of Section 4,
5, 6, 7, 9, 10.1, 11, or and Section 12 of this Act, the
Motor Vehicle Review Board shall enter an order fixing a date
(within 60 days of the date of the order), time, the place of
a hearing and send by certified mail, return receipt
requested, a copy of the order to the manufacturer and the
objecting dealer or dealers. Subject to Section 10-20 of the
Illinois Administrative Procedure Act, the Board shall
designate a hearing officer who shall conduct the hearing.
All administrative hearing officers shall be attorneys
licensed to practice law in this State.
At the time and place fixed in the Board's order, the
Board or its duly authorized agent, the hearing officer,
shall proceed to hear the protest, and all parties to the
protest shall be afforded an opportunity to present in person
or by counsel, statements, testimony, evidence, and argument
as may be pertinent to the issues. The hearing officer may
continue the hearing date by agreement of the parties, or
upon a finding of good cause, but in no event shall the
hearing be rescheduled more than 90 days after the Board's
initial order.
Upon any hearing, the Board or its duly authorized agent,
the hearing officer, may administer oaths to witnesses and
issue subpoenas for the attendance of witnesses or other
persons and the production of relevant documents, records,
and other evidence and may require examination thereon. For
purposes of discovery, the Board or its designated hearing
officer may, if deemed appropriate and proper under the
circumstances, authorize the parties to engage in such
discovery procedures as are provided for in civil actions in
Section 2-1003 of the Code of Civil Procedure. Discovery
shall be completed no later than 15 days prior to
commencement of the proceeding or hearing. Enforcement of
discovery procedures shall be as provided in the regulations.
Subpoenas issued shall be served in the same manner as
subpoenas issued out of the circuit courts. The fees of
subpoenaed witnesses under this Act for attendance and travel
shall be the same as fees of witnesses before the circuit
courts of this State, such fees to be paid when the witness
is excused from further attendance, provided the witness is
subpoenaed at the instance of the Board or an agent
authorized by the Board; and payment of fees shall be made
and audited in the same manner as other expenses of the
Board. Whenever a subpoena is issued at the request of a
party to a proceeding, complainant, or respondent, as the
case may be, the Board may require that the cost of service
of the subpoena and the fee of same shall be borne by the
party at whose instance the witness is summoned, and the
Board shall have power, in its discretion, to require a
deposit to cover the cost of service and witness fees and the
payment of the legal witness fee and mileage to the witness
served with the subpoena. In any protest before the Board,
the Board or its designated hearing officer may order a
mandatory settlement conference. The failure of a party to
appear, to be prepared, or to have authority to settle the
matter may result in any or all of the following:
(a) The Board or its designated hearing officer may
suspend all proceedings before the Board in the matter until
compliance.
(b) The Board or its designated hearing officer may
dismiss the proceedings or any part thereof before the Board
with or without prejudice.
(c) The Board or its designated hearing officer may
require all of the Board's costs to be paid by the party at
fault.
Any circuit court of this State, upon application of the
Board, or an officer or agent designated by the Board for the
purpose of conducting any hearing, may, in its discretion,
compel the attendance of witnesses, the production of books,
papers, accounts, or documents, and giving of testimony
before the Board or before any officer or agent designated
for the purpose of conducting the hearing. Failure to obey
the order may be punished by the circuit court as contempt.
A party may conduct cross-examination required for a full
and fair disclosure of the facts. Within 20 days of the date
of the hearing, the hearing officer shall issue his or her
proposed decision to the Board and shall, by certified mail,
return receipt requested, serve the proposed decision upon
the parties, with an opportunity afforded to each party to
file exceptions and present a brief to the Board within 10
days of their receipt of the proposed decision. The proposed
decision shall contain a statement of the reasons for the
decision and each issue of fact or law necessary to the
proposed decision. The Board shall then issue its final
order which, if applicable, shall include the award of
attorney's fees, expert witness fees, and an assessment of
costs, including other expenses incurred in the litigation,
if permitted under this Act, so long as such fees and costs
are reasonable.
In a hearing on a protest filed under paragraph (6) of
subsection (d) or paragraph (6), (8), or (10), or (11) of
Section 4 or Section 12 of this Act, the manufacturer shall
have the burden of proof to establish that there is good
cause for the franchiser to: grant or establish an
additional franchise or relocate an existing franchise;
cancel, terminate, refuse to extend or renew a franchise or
selling agreement; or change or modify the obligations of the
motor vehicle dealer as a condition to offering a renewal,
replacement, or succeeding franchise or selling agreement or
refuse to honor succession to ownership or refuse to approve
a proposed transfer or sale. The determination whether good
cause exists shall be made under Section 12 of this Act.
The Board shall record the testimony and preserve a
record of all proceedings at the hearing by proper means of
recordation. The notice required to be given by the
manufacturer and notice of protest by the dealer or other
party, the notice of hearing, and all other documents in the
nature of pleadings, motions, and rulings, all evidence,
offers of proof, objections, and rulings thereon, the
transcript of testimony, the report of findings or proposed
decision of the hearing officer, and the orders of the Board
shall constitute the record of the proceedings. The Board
shall furnish a transcript of the record to any person
interested in the hearing upon payment of the actual cost
thereof.
The changes to this Section made by this amendatory Act
of the 92nd General Assembly (i) apply only to causes of
action accruing on or after its effective date and (ii) are
intended to provide only an additional venue for dispute
resolution without changing any substantive rights under this
Act.
(Source: P.A. 91-485, eff. 1-1-00.)
Passed in the General Assembly May 15, 2001.
Approved August 07, 2001.
[ Top ]