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| [ Introduced ] | [ Enrolled ] | [ House Amendment 001 ] |
92_HB2564eng HB2564 Engrossed LRB9207432WHtmB 1 AN ACT concerning business transactions. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Motor Vehicle Franchise Act is amended by 5 changing Sections 12, 13, 18, and 29 as follows: 6 (815 ILCS 710/12) (from Ch. 121 1/2, par. 762) 7 Sec. 12. Arbitration; administrative proceedings; civil 8 actions; determining good cause. 9 (a) The franchiser and franchisee may agree to submit a 10 dispute involving Section 4, 5, 6, 7, 9, 10.1, or 11 11cancellation, modification, termination, or refusal to extend12or renew an existing franchise or selling agreement, or13refusal to honor succession to ownership or refusal to allow14a sale or transfer, or the granting of an additional15franchise of the same line make or the relocating of an16existing motor vehicle dealership within or into a relevant17market area where the same line make is then represented, or18the proposed arrangement to establish any additional motor19vehicle dealership or other facility limited to the sale of20factory repurchase vehicles or late model vehicles,to 21 arbitration. Any such proceeding shall be conducted under the 22 provisions of the Uniform Arbitration Act by a 3 member panel 23 composed of one member appointed by the franchisee and one 24 member appointed by the franchiser who together shall choose 25 the third member. 26 An arbitration proceeding hereunder for a remedy under 27 paragraph (6) of subsection (d) or paragraph (6), (8), (10) 28 or (11) of subsection (e) of Section 4 of this Act shall be 29 commenced by written notice to the franchiser by the 30 objecting franchisee within 30 days from the date the dealer 31 received notice to cancel, terminate, modify or not extend or HB2564 Engrossed -2- LRB9207432WHtmB 1 renew an existing franchise or selling agreement or refusal 2 to honor succession to ownership or refusal to honor a sale 3 or transfer or to grant or enter into the additional 4 franchise or selling agreement, or to relocate an existing 5 motor vehicle dealer; or within 60 days of the date the 6 franchisee received notice in writing by the franchiser of 7 its determination under any provision of Section 4 (other 8 than paragraph (6) of subsection (d) or paragraph (6), (8), 9 (10) or (11) of subsection (e) of Section 4), 5, 6, 7, 9, 10 10.1, or 11 of this Act; however, if notice of the provision 11 under which the determination has been made is not given by 12 the franchiser, then the proceeding shall be commenced as 13 provided by Section 14 of this Act. 14 The franchiser and the franchisee shall appoint their 15 respective arbitrators and they shall select the third 16 arbitrator within 14 days of receipt of such notice by the 17 franchiser. The arbitrators shall commence hearings within 18 60 days after all the arbitrators have been appointed and a 19 decision shall be rendered within 30 days after completion of 20 the hearing. 21 During the pendency of the arbitration, any party may 22 apply to a court of competent jurisdiction which shall have 23 power to modify or stay the effective date of a proposed 24 additional franchise or selling agreement, or the effective 25 date of a proposed motor vehicle dealership relocation or the 26 effective date of a cancellation, termination or modification 27 or refusal to honor succession or refusal to allow a sale or 28 transfer or extend the expiration date of a franchise or 29 selling agreement pending a final determination of the issues 30 raised in the arbitration hearing upon such terms as the 31 court may determine. Any such modification or stay shall not 32 be effective for more than 60 days unless extended by the 33 court for good cause or unless the arbitration hearing is 34 then in progress. HB2564 Engrossed -3- LRB9207432WHtmB 1 (b) If the franchiser and the franchisee have not agreed 2 to submit a dispute,involving Section 4, 5, 6, 7, 9, 10.1, 3 or 11 of this Act to arbitration under subsection (a), then a 4 proceeding before the Motor Vehicle Review Board as 5 prescribed by subsection (c) or (d) of Section 12 and Section 6 29 of this Act for a remedy other than damages under 7 paragraph (6) of subsection (d) or paragraph (6), (8), (10), 8 or (11) of subsection (e) of Section 4 of this Act shall be 9 commenced upon receipt by the Motor Vehicle Review Board of a 10 timely notice of protest or within 60 days of the date the 11 franchisee received notice in writing by the franchiser of 12 its determination under any provision of those Sections other 13 than paragraph (6) of subsection (d) or paragraph (6), (8), 14 (10), or (11) of subsection (e) of Section 4 of this Act; 15 however, if notice of the provision under which the 16 determination has been made is not given by the franchiser, 17 then the proceeding shall be commenced as provided by Section 18 14 of this Act.cancellation, modification, termination, or19refusal to extend or renew an existing franchise or selling20agreement or refusal to honor succession to ownership or21refusal to allow a sale or transfer or the granting of an22additional franchise of the same line make or the relocating23of an existing motor vehicle dealership, or the proposed24arrangement to establish any additional motor vehicle25dealership or other facility limited to the sale of factory26repurchase vehicles or late model vehicles, to arbitration27under (a), a proceeding for a remedy other than damages shall28be commenced upon receipt of a timely notice of protest under29paragraph (6) of subsection (d) or paragraph (6), (8), or30(10) of subsection (e) of Section 4 of this Act, before the31Motor Vehicle Review Board as prescribed by Sections 12 and3229 of this Act.33 During the pendency of a proceeding under this Section, a 34 party may apply to a court of competent jurisdiction that HB2564 Engrossed -4- LRB9207432WHtmB 1 shall have power to modify or stay the effective date of a 2 proposed additional franchise or selling agreement, or the 3 effective date of a proposed motor vehicle dealership 4 relocation, or the effective date of a cancellation, 5 termination, or modification, or extend the expiration date 6 of a franchise or selling agreement or refusal to honor 7 succession to ownership or refusal to approve a sale or 8 transfer pending a final determination of the issues raised 9 in the hearing upon such terms as the court may determine. 10 Any modification or stay shall not be effective for more than 11 60 days unless extended by the court for good cause or unless 12 the hearing is then in progress. 13 (c) In proceedings under (a) or (b), when determining 14 whether good cause has been established for granting such 15 proposed additional franchise or selling agreement, or for 16 relocating an existing motor vehicle dealership, the 17 arbitrators or Board shall consider all relevant 18 circumstances in accordance with subsection (v) of Section 2 19 of this Act, including but not limited to: 20 (1) whether the establishment of such additional 21 franchise or the relocation of such motor vehicle 22 dealership is warranted by economic and marketing 23 conditions including anticipated future changes; 24 (2) the retail sales and service business 25 transacted by the objecting motor vehicle dealer or 26 dealers and other motor vehicle dealers of the same line 27 make with a place of business in the relevant market area 28 to be served by the additional franchise or the relocated 29 motor vehicle dealership during the 5 year period 30 immediately preceding such notice as compared to the 31 business available to them; 32 (3) the investment necessarily made and obligations 33 incurred by the objecting motor vehicle dealer or dealers 34 and other motor vehicle dealers of the same line make HB2564 Engrossed -5- LRB9207432WHtmB 1 with a place of business in the relevant market area to 2 be served by the additional franchise or the relocated 3 motor vehicle dealership to perform their obligations 4 under existing franchises or selling agreements; and, the 5 manufacturer shall give reasonable credit for sales of 6 factory repurchase vehicles purchased by the objecting 7 motor vehicle dealer or dealers and other motor vehicle 8 dealers of the same line make with the place of business 9 in the relevant market area to be served by the 10 additional franchise or the relocated motor vehicle 11 dealership, or the additional motor vehicle dealership or 12 other facility limited to the sale of factory repurchase 13 or late model vehicles, at manufacturer authorized or 14 sponsored auctions in determining performance of 15 obligations under existing franchises or selling 16 agreements relating to total new vehicle sales; 17 (4) the permanency of the investment of the 18 objecting motor vehicle dealer or dealers and other motor 19 vehicle dealers of the same line make with a place of 20 business in the relevant market area to be served by the 21 additional franchise or the relocated motor vehicle 22 dealership; 23 (5) whether it is beneficial or injurious to the 24 public welfare for an additional franchise or relocated 25 motor vehicle dealership to be established; 26 (6) whether the objecting motor vehicle dealer or 27 dealers and other motor vehicle dealers of the same line 28 make with a place of business in the relevant market area 29 to be served by the additional franchisee or relocated 30 motor vehicle dealership are providing adequate 31 competition and convenient consumer care for the motor 32 vehicles of the same line make owned or operated in the 33 area to be served by the additional franchise or 34 relocated motor vehicle dealership; HB2564 Engrossed -6- LRB9207432WHtmB 1 (7) whether the objecting motor vehicle dealer or 2 dealers and other motor vehicle dealers of the same line 3 make with a place of business in the relevant market area 4 to be served by the additional franchisee or the 5 relocated motor vehicle dealership have adequate motor 6 vehicle sales and service facilities, equipment, vehicle 7 parts and qualified personnel to reasonably provide for 8 the needs of the customer; provided, however, that good 9 cause shall not be shown solely by a desire for further 10 market penetration; 11 (8) whether the establishment of an additional 12 franchise or the relocation of a motor vehicle dealership 13 would be in the public interest; 14 (9) whether there has been a material breach by a 15 motor vehicle dealer of the existing franchise agreement 16 which creates a substantially detrimental effect upon the 17 distribution of the franchiser's motor vehicles in the 18 affected motor vehicle dealer's relevant market area or 19 fraudulent claims for warranty work, insolvency or 20 inability to pay debts as they mature; 21 (10) the effect of an additional franchise or 22 relocated motor vehicle dealership upon the existing 23 motor vehicle dealers of the same line make in the 24 relevant market area to be served by the additional 25 franchisee or relocated motor vehicle dealership; and 26 (11) whether the manufacturer has given reasonable 27 credit to the objecting motor vehicle dealer or dealers 28 and other motor vehicle dealers of the same line make 29 with a place of business in the relevant market area to 30 be served by the additional franchise or relocated motor 31 vehicle dealership or additional motor vehicle dealership 32 or other facility limited to the sale of factory 33 repurchase or late model vehicles, for retail sales of 34 factory repurchase vehicles purchased by the motor HB2564 Engrossed -7- LRB9207432WHtmB 1 vehicle dealer or dealers at manufacturer authorized or 2 sponsored auctions. 3 (d) In proceedings under subsection (a) or (b), when 4 determining whether good cause has been established for 5 cancelling, terminating, refusing to extend or renew, or 6 changing or modifying the obligations of the motor vehicle 7 dealer as a condition to offering a renewal, replacement, or 8 succeeding franchise or selling agreement, the arbitrators or 9 Board shall consider all relevant circumstances in accordance 10 with subsection (v) of Section 2 of this Act, including but 11 not limited to: 12 (1) The amount of retail sales transacted by the 13 franchisee during a 5-year period immediately before the 14 date of the notice of proposed action as compared to the 15 business available to the franchisee. 16 (2) The investment necessarily made and obligations 17 incurred by the franchisee to perform its part of the 18 franchise. 19 (3) The permanency of the franchisee's investment. 20 (4) Whether it is injurious to the public interest 21 for the franchise to be cancelled or terminated or not 22 extended or modified, or the business of the franchise 23 disrupted. 24 (5) Whether the franchisee has adequate motor 25 vehicle sales and service facilities, equipment, vehicle 26 parts, and service personnel to reasonably provide for 27 the need of the customers for the same line make of motor 28 vehicles handled by the franchisee. 29 (6) Whether the franchisee fails to fulfill the 30 warranty obligations of the manufacturer required to be 31 performed by the franchisee. 32 (7) The extent and materiality of the franchisee's 33 failure to comply with the terms of the franchise and the 34 reasonableness and fairness of those terms. HB2564 Engrossed -8- LRB9207432WHtmB 1 (8) Whether the owners of the franchise had actual 2 knowledge of the facts and circumstances upon which 3 cancellation or termination, failure to extend or renew, 4 or changing or modification of the obligations of the 5 franchisee as a condition to offering a renewal, 6 replacement, or succeeding franchise or selling 7 agreement. 8 (e) If the franchiser and the franchisee have not agreed 9 to submit a dispute to arbitration, and the dispute did not 10 arise under paragraph (6) of subsection (d) or paragraph (6), 11 (8),or(10), or (11) of subsection (e) of Section 4 of this 12 Act, then a proceeding for a remedy other than damages may 13shallbe commenced by the objecting franchisee in the 14 circuit court of the county in which the objecting franchisee 15 has its principal place of business, within 60 days of the 16 date the franchisee received notice in writing by the 17 franchiser of its determination under any provision of this 18 Act other than paragraph (6) of subsection (d) or paragraph 19 (6), (8), (10), or (11) of subsection (e) of Section 4 of 20 this Act; however, if notice of the provision under which the 21 determination has been made is not given by the franchiser, 22 then the proceeding shall be commenced as provided by Section 23 14 of this Act.the aforesaid Sections, or as otherwise24prescribed by Section 13 of this Act.25 (f) The changes to this Section made by this amendatory 26 Act of the 92nd General Assembly (i) apply only to causes of 27 action accruing on or after its effective date and (ii) are 28 intended to provide only an additional venue for dispute 29 resolution without changing any substantive rights under this 30 Act. 31 (Source: P.A. 89-145, eff. 7-14-95.) 32 (815 ILCS 710/13) (from Ch. 121 1/2, par. 763) 33 Sec. 13. Damages; equitable relief. Any franchisee or HB2564 Engrossed -9- LRB9207432WHtmB 1 motor vehicle dealer who suffers any loss of money or 2 property, real or personal, as a result of the use or 3 employment by a manufacturer, wholesaler, distributor, 4 distributor branch or division, factory branch or division, 5 wholesale branch or division, or any agent, servant or 6 employee thereof, of an unfair method of competition or an 7 unfair or deceptive act or practice declared unlawful by this 8 Act, or any action in violation of this Act, may bring an 9 action for damages and equitable relief, including injunctive 10 relief, in the circuit court of the county in which the 11 objecting franchisee has its principal place of business or, 12 if the parties have so agreed, in arbitration. If the 13 misconduct is willful or wanton, treble damages may be 14 awarded.Where the misconduct is willful or wanton, the court15may award treble damages.A motor vehicle dealer, if it has 16 not suffered any loss of money or property, may obtain 17 permanent equitable relief if it can be shown that the unfair 18 act or practice may have the effect of causing such loss of 19 money or property. Where the franchisee or dealer 20 substantially prevails the court or arbitration panel or 21 Motor Vehicle Review Board shall award attorney's fees and 22 assess costs, including expert witness fees and other 23 expenses incurred by the dealer in the litigation, so long as 24 such fees and costs are reasonable, against the opposing 25 party. Moreover, for the purposes of the award of attorney's 26 fees, expert witness fees, and costs whenever the franchisee 27 or dealer is seeking injunctive or other relief, the 28 franchisee or dealer may be considered to have prevailed when 29 a judgment is entered in its favor, when a final 30 administrative decision is entered in its favor and affirmed, 31 if subject to judicial review, when a consent order is 32 entered into, or when the manufacturer, distributor, 33 wholesaler, distributor branch or division, factory branch or 34 division, wholesale branch or division, or any officer, agent HB2564 Engrossed -10- LRB9207432WHtmB 1 or other representative thereof ceases the conduct, act or 2 practice which is alleged to be in violation of any Section 3 of this Act. 4 The changes to this Section made by this amendatory Act 5 of the 92nd General Assembly (i) apply only to causes of 6 action accruing on or after its effective date and (ii) are 7 intended to provide only an additional venue for dispute 8 resolution without changing any substantive rights under this 9 Act. 10 (Source: P.A. 91-485, eff. 1-1-00; 91-533, eff. 8-13-99.) 11 (815 ILCS 710/18) 12 Sec. 18. Board; powers. The Board shall have the 13 following powers: 14 (a) To conduct hearings, by or through its duly 15 authorized administrative hearing officer, on protests filed 16 under Sections 4, 5, 6, 7, 9, 10.1, 11, and 12 of this Act. 17 (b) To make reasonable regulations that are necessary to 18 carry out and effect its official duties and such further 19 rules as necessary relating to the time, place, and manner of 20 conducting hearings as provided for in this Act. 21 (c) To advise the Secretary of State upon appointments. 22 (d) To advise the Secretary of State on legislation 23 proposed to amend this Act or any related Act. 24 The changes to this Section made by this amendatory Act 25 of the 92nd General Assembly (i) apply only to causes of 26 action accruing on or after its effective date and (ii) are 27 intended to provide only an additional venue for dispute 28 resolution without changing any substantive rights under this 29 Act. 30 (Source: P.A. 89-145, eff. 7-14-95; 89-433, eff. 12-15-95.) 31 (815 ILCS 710/29) 32 Sec. 29. Procedures for hearing on protest. Upon HB2564 Engrossed -11- LRB9207432WHtmB 1 receipt of a timely notice of protest filed with the Motor 2 Vehicle Review Board underparagraph (6) of subsection (d) or3paragraph (6), (8), or (10) of subsection (e) ofSection 4, 4 5, 6, 7, 9, 10.1, 11, orand Section12 of this Act, the 5 Motor Vehicle Review Board shall enter an order fixing a date 6 (within 60 days of the date of the order), time, the place of 7 a hearing and send by certified mail, return receipt 8 requested, a copy of the order to the manufacturer and the 9 objecting dealer or dealers. Subject to Section 10-20 of the 10 Illinois Administrative Procedure Act, the Board shall 11 designate a hearing officer who shall conduct the hearing. 12 All administrative hearing officers shall be attorneys 13 licensed to practice law in this State. 14 At the time and place fixed in the Board's order, the 15 Board or its duly authorized agent, the hearing officer, 16 shall proceed to hear the protest, and all parties to the 17 protest shall be afforded an opportunity to present in person 18 or by counsel, statements, testimony, evidence, and argument 19 as may be pertinent to the issues. The hearing officer may 20 continue the hearing date by agreement of the parties, or 21 upon a finding of good cause, but in no event shall the 22 hearing be rescheduled more than 90 days after the Board's 23 initial order. 24 Upon any hearing, the Board or its duly authorized agent, 25 the hearing officer, may administer oaths to witnesses and 26 issue subpoenas for the attendance of witnesses or other 27 persons and the production of relevant documents, records, 28 and other evidence and may require examination thereon. For 29 purposes of discovery, the Board or its designated hearing 30 officer may, if deemed appropriate and proper under the 31 circumstances, authorize the parties to engage in such 32 discovery procedures as are provided for in civil actions in 33 Section 2-1003 of the Code of Civil Procedure. Discovery 34 shall be completed no later than 15 days prior to HB2564 Engrossed -12- LRB9207432WHtmB 1 commencement of the proceeding or hearing. Enforcement of 2 discovery procedures shall be as provided in the regulations. 3 Subpoenas issued shall be served in the same manner as 4 subpoenas issued out of the circuit courts. The fees of 5 subpoenaed witnesses under this Act for attendance and travel 6 shall be the same as fees of witnesses before the circuit 7 courts of this State, such fees to be paid when the witness 8 is excused from further attendance, provided the witness is 9 subpoenaed at the instance of the Board or an agent 10 authorized by the Board; and payment of fees shall be made 11 and audited in the same manner as other expenses of the 12 Board. Whenever a subpoena is issued at the request of a 13 party to a proceeding, complainant, or respondent, as the 14 case may be, the Board may require that the cost of service 15 of the subpoena and the fee of same shall be borne by the 16 party at whose instance the witness is summoned, and the 17 Board shall have power, in its discretion, to require a 18 deposit to cover the cost of service and witness fees and the 19 payment of the legal witness fee and mileage to the witness 20 served with the subpoena. In any protest before the Board, 21 the Board or its designated hearing officer may order a 22 mandatory settlement conference. The failure of a party to 23 appear, to be prepared, or to have authority to settle the 24 matter may result in any or all of the following: 25 (a) The Board or its designated hearing officer may 26 suspend all proceedings before the Board in the matter until 27 compliance. 28 (b) The Board or its designated hearing officer may 29 dismiss the proceedings or any part thereof before the Board 30 with or without prejudice. 31 (c) The Board or its designated hearing officer may 32 require all of the Board's costs to be paid by the party at 33 fault. 34 Any circuit court of this State, upon application of the HB2564 Engrossed -13- LRB9207432WHtmB 1 Board, or an officer or agent designated by the Board for the 2 purpose of conducting any hearing, may, in its discretion, 3 compel the attendance of witnesses, the production of books, 4 papers, accounts, or documents, and giving of testimony 5 before the Board or before any officer or agent designated 6 for the purpose of conducting the hearing. Failure to obey 7 the order may be punished by the circuit court as contempt. 8 A party may conduct cross-examination required for a full 9 and fair disclosure of the facts. Within 20 days of the date 10 of the hearing, the hearing officer shall issue his or her 11 proposed decision to the Board and shall, by certified mail, 12 return receipt requested, serve the proposed decision upon 13 the parties, with an opportunity afforded to each party to 14 file exceptions and present a brief to the Board within 10 15 days of their receipt of the proposed decision. The proposed 16 decision shall contain a statement of the reasons for the 17 decision and each issue of fact or law necessary to the 18 proposed decision. The Board shall then issue its final 19 order which, if applicable, shall include the award of 20 attorney's fees, expert witness fees, and an assessment of 21 costs, including other expenses incurred in the litigation, 22 if permitted under this Act, so long as such fees and costs 23 are reasonable. 24 In a hearing on a protest filed under paragraph (6) of 25 subsection (d) or paragraph (6), (8),or(10), or (11) of 26 Section 4 or Section 12 of this Act, the manufacturer shall 27 have the burden of proof to establish that there is good 28 cause for the franchiser to: grant or establish an 29 additional franchise or relocate an existing franchise; 30 cancel, terminate, refuse to extend or renew a franchise or 31 selling agreement; or change or modify the obligations of the 32 motor vehicle dealer as a condition to offering a renewal, 33 replacement, or succeeding franchise or selling agreement or 34 refuse to honor succession to ownership or refuse to approve HB2564 Engrossed -14- LRB9207432WHtmB 1 a proposed transfer or sale. The determination whether good 2 cause exists shall be made under Section 12 of this Act. 3 The Board shall record the testimony and preserve a 4 record of all proceedings at the hearing by proper means of 5 recordation. The notice required to be given by the 6 manufacturer and notice of protest by the dealer or other 7 party, the notice of hearing, and all other documents in the 8 nature of pleadings, motions, and rulings, all evidence, 9 offers of proof, objections, and rulings thereon, the 10 transcript of testimony, the report of findings or proposed 11 decision of the hearing officer, and the orders of the Board 12 shall constitute the record of the proceedings. The Board 13 shall furnish a transcript of the record to any person 14 interested in the hearing upon payment of the actual cost 15 thereof. 16 The changes to this Section made by this amendatory Act 17 of the 92nd General Assembly (i) apply only to causes of 18 action accruing on or after its effective date and (ii) are 19 intended to provide only an additional venue for dispute 20 resolution without changing any substantive rights under this 21 Act. 22 (Source: P.A. 91-485, eff. 1-1-00.)