Crossroads Ford Truck Sales v. Sterling Truck Corporation

Filed 11/23/10 NO. 4-10-0204

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

CROSSROADS FORD TRUCK SALES, INC., ) Appeal from
Plaintiff-Appellant, ) Circuit Court of
v. ) Sangamon County
STERLING TRUCK CORPORATION; DAIMLER ) No. 09L60
TRUCKS NORTH AMERICA, LLC, d/b/a )
FREIGHTLINER TRUCKS and WESTERN STAR; ) Honorable
and CHRIS PATTERSON, ) Patrick W. Kelley,
Defendants-Appellees. ) Judge Presiding.
________________________________________________________________

JUSTICE TURNER delivered the opinion of the court:

In October 2009, plaintiff, Crossroads Ford Truck

Sales, Inc. (Crossroads), filed a second-amended complaint

against defendants, Sterling Truck Corporation (Sterling),

Daimler Trucks North America, LLC (Daimler Trucks), and Chris

Patterson. In December 2009, defendants filed a motion to

dismiss. In February 2010, the circuit court granted the motion

to dismiss in part.

On appeal, Crossroads argues the circuit court erred in

dismissing portions of its second-amended complaint. We affirm.

I. BACKGROUND

Daimler Trucks is a Delaware limited-liability company

and a wholly owned subsidiary of Daimler AG. Daimler Trucks is

the largest heavy-duty truck manufacturer in North America and

manufactures various brands of trucks including Freightliner,

Western Star, and Sterling. Sterling is a Delaware corporation

licensed to do business in Illinois and a wholly owned subsidiary

of Daimler Trucks. Chris Patterson is the chief executive
officer of Daimler Trucks and president of Sterling. Detroit

Diesel Corporation (Detroit Diesel) is a subsidiary of Daimler AG

and engaged in the business of manufacturing engines and parts

installed in Sterling, Freightliner, and Western Star trucks.

Crossroads is a motor vehicle dealer and has been a

Sterling dealer since 1998. Sterling and Crossroads entered into

a sales and service agreement on August 20, 2005. Under the

agreement, Crossroads was granted the right to purchase Sterling

trucks and vehicle parts. Sterling "reserve[d] the right to

discontinue at any time the manufacture or sale of any or all

Sterling Trucks Products or to change the design or specification

for Sterling Trucks Products without prior notice to [Cross-

roads]." The agreement was to continue in effect until December

31, 2009.

In February 2009, Crossroads filed a complaint against

defendants, alleging, inter alia, violations of the Motor Vehicle

Franchise Act (Franchise Act) (815 ILCS 710/1 through 32 (West

2008)), fraud, and tortious interference with contract. In April

2009, defendants filed a motion to dismiss pursuant to section 2-

615 of the Code of Civil Procedure (Procedure Code) (735 ILCS

5/2-615 (West 2008)). In June 2009, the circuit court ordered

the complaint stricken and granted Crossroads 30 days to file an

amended complaint.

In July 2009, Crossroads filed a first-amended com-

plaint setting forth the same or similar issues. In August 2009,

defendants filed a section 2-615 motion to dismiss. In September

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2009, the circuit court granted the motion in part and allowed

Crossroads to file a second-amended complaint.

In October 2009, Crossroads filed a 14-count second-

amended complaint against defendants. In count I, Crossroads

alleged Sterling violated various sections of the Franchise Act.

Crossroads alleged Patterson notified it in an October 14, 2008,

letter that Daimler Trucks was announcing a "two brand strategy"

with the discontinuation of production of Sterling trucks. The

letter to Sterling dealers stated, in part, as follows:

"The Sterling Trucks Brand and product

line will be discontinued due to overlap with

offerings in the other [Daimler Trucks] prod-

uct lines and low market penetration. Deal-

ers may continue to accept orders for new

Sterling Trucks until January 15, 2009[,]

with requested delivery no later than Fri-

day[,] March 31, 2009. The last day of pro-

duction will be March 26, 2009.

The Sterling dealer network will con-

tinue to perform warranty repairs and mainte-

nance, and continue to supply parts and tech-

nical support to Sterling customers."

To continue as a Sterling service-only dealership, the letter set

forth a transition program that provided, in part, as follows:

"[Daimler Trucks] will offer you the

opportunity to continue on as a Sterling

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 service dealership under a new Sterling Ser-

vice Dealer Agreement. This new Service

Dealer Agreement will replace the existing

Sterling Dealer Sales and Service Agreement.

As part of the transition process you will

receive a formal notice of termination of

your Sales and Service Agreement in the com-

ing weeks.

As an added incentive to stay with

Daimler Trucks as a service dealer, and in

recognition of your past commitment, Sterling

is offering substantial transition payments

to those current Sterling dealers who sign on

to become authorized Sterling Service Deal-

ers."

If Crossroads accepted the offer to participate in the transition

bonus program, it was required to sign a release of liability.

Daimler Trucks offered Crossroads $203,000 as a transition bonus.

If Crossroads chose not to participate in the transi-

tion bonus program and thereby not continue as a service dealer,

it would be offered repurchase assistance. The letter also

provided as follows:

"Following termination of the Sales and

Service Agreement, if you do not otherwise

sell new OEM product with Detroit Diesel

engines, you will not be entitled to a re-

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 newal of your Detroit Diesel Direct Dealer

Agreement, which is currently set to expire

on December 31, 2008."

Also on October 24, 2008, Daimler Trucks filed an

announcement with the Securities and Exchange Commission noting

the discontinuation of the Sterling trucks product line.

"The Sterling Trucks brand will be dis-

continued effective in March 2009. Additions

to the Freightliner and Western Star product

ranges will be made to address market seg-

ments that have been served exclusively by

Sterling offers in the [Daimler Trucks] sta-

ble."

On November 24, 2008, Daimler Trucks sent the following

letter to Crossroads:

"As stated in the October 14, 2008[,]

communications, this letter is your formal

notice that [Sterling] is exercising its

rights pursuant to [s]ection IX.B of your

Sterling Trucks Dealer Sales and Service

Agreement (the 'Dealer Agreement') to discon-

tinue the manufacture of Sterling Truck vehi-

cles.

As we have previously communicated,

[Sterling] will continue to manufacture new

Sterling vehicles until March 2009 and we

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 expect the last day to place an order for a

new Sterling Truck to be built will be Janu-

ary 15, 2009. However, Sterling trucks will

continue to be marketed and sold for so long

as new Sterling vehicles are available.

You have been provided an opportunity to

transition from your Dealer Agreement to a

new Service Agreement. In the event you do

not accept this opportunity, your current

Sales and Service Agreement remains in ef-

fect.

This notice does not constitute a notice

of termination or modification of your Dealer

Agreement, because you may elect to continue

operating under your current Dealer Agree-

ment.

While we believe no formal notice is

required under your state's dealer laws, if

you feel otherwise, please consider this that

notice. Likewise no notice is required to be

sent to your state's licensing department,

but they have also been copied on this letter

to ensure total communication."

Crossroads alleged the October and November 2008

letters amounted to a constructive notice of impending termina-

tion or nonrenewal of its franchise "at an unspecified date in

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the future when Crossroads would be unable to acquire new Ster-

ling trucks." Crossroads alleged this violated the Franchise

Act, including section 4(b) (815 ILCS 710/4(b) (West 2008)),

because Sterling's conduct was in bad faith and caused damages;

section 4(d)(6) (815 ILCS 710/4(d)(6) (West 2008)), because

Sterling caused the termination or nonrenewal of the franchise

without good cause; section 4(d)(1) (815 ILCS 710/4(d)(1) (West

2008)), because Sterling arbitrarily or capriciously modified the

plan of allocation of new Sterling trucks to Crossroads causing

it damages; section 4(d)(6)(A) (815 ILCS 710/4(d)(6)(A) (West

2008)), because Sterling without good cause failed to provide

Crossroads with statutory notice of termination or nonrenewal;

and section 9 (815 ILCS 710/9 (West 2008)), because Sterling has

terminated or failed to renew the franchise without paying fair

and reasonable compensation to Crossroads for the value of the

business and franchise.

Count II alleged Daimler Trucks violated various

sections of the Franchise Act, including sections 4(b), 4(d)(6),

4(d)(1), 4(d)(6)(A), and 9. Count III alleged Patterson violated

section 4(d)(6) of the Franchise Act for terminating the fran-

chise without good cause.

Count IV alleged Daimler Trucks violated section 4(b)

of the Franchise Act by intentionally requiring Crossroads to

invest in Sterling products at a time when Daimler Trucks per-

sonnel knew it planned to discontinue the manufacture of new

Sterling-type trucks under the Sterling brand.

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 Count V alleged Daimler Trucks tortiously interfered

with Crossroads' business relationship with Sterling. Crossroads

alleged its franchise and section 4(d)(6) of the Franchise Act

created a reasonable expectation of a continuing valid business

relationship between it and Sterling that would not be terminated

absent good cause. Count V alleged the October 2008 letter

interfered with and caused the termination and/or nonrenewal of

the franchise with Sterling without good cause resulting in

damages to Crossroads through the loss of the franchise and loss

of business and reputation.

Count VI alleged Daimler Trucks violated sections

4(d)(6), 4(b), and 4(d)(4) of the Franchise Act as a result of

the nonrenewal of Crossroads' Detroit Diesel direct dealer agree-

ment. Crossroads alleged the dealer agreement allowed it to

purchase parts needed in the warranty work and nonwarranty repair

and maintenance of Sterling trucks. On April 1, 2009, Daimler

Trucks sent the following letter to Crossroads:

"Your Detroit Diesel Corporation ('DDC')

Direct Dealer Agreement, originally dated

effective January 1, 2005[,] and subsequently

extended expired on December 31, 2008. Since

that time, DDC has filled orders for DDC

products, and has honored DDC warranty claims

for all Sterling dealers, including those who

did not accept the Sterling Transition Bonus

program.

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 This letter will give notice that as of

April 10, 2009, DDC will not accept any fur-

ther orders, will cancel all pending orders,

and will not accept any claims for warranty

reimbursement for work performed after that

date."

Crossroads alleged Daimler Trucks unlawfully caused the dealer

agreement between Detroit Diesel and Crossroads not to be renewed

as a result of Crossroads' refusal to sign the transition bonus

program and general release.

Count VII alleged Sterling's discontinuation of the

availability of new Sterling vehicles to Crossroads under the

sales and service agreement constituted a termination of its

franchise without good cause and amounted to a material breach

entitling it to damages.

Count VIII alleged Sterling made a proposal to Cross-

roads on June 23, 2009, seeking to extend the termination date of

the sales and service agreement to December 31, 2012. Crossroads

alleged the proposal is an offer to substantially change and

modify the obligations of the sales and service agreement in

violations of sections 4(d)(6), 4(d)(6)(B), and 9 of the Fran-

chise Act. Count IX set forth a similar claim that Daimler

Trucks unlawfully modified the sales and service agreement in

violation of the Franchise Act.

Count X alleged Sterling violated the amended version

of section 4(d)(6)(D) of the Franchise Act that took effect on

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May 22, 2009. 815 ILCS 710/4(d)(6)(D) (West Supp. 2009).

Crossroads alleged it purchased approximately 12 new Sterling

trucks after May 22, 2009, and sold "most" of them. Sterling

maintained that Crossroads' franchise has not been terminated,

but Crossroads claims Sterling's new truck inventory will be

depleted and it will be unable to sell new trucks and the fran-

chise will come to an end. Crossroads alleged the franchise had

been terminated and not renewed without good cause in violation

of sections 4(d)(6), 4(b), 4(d)(1), 4(d)(6)(A), and 9 of the

Franchise Act. Count XI set forth a similar claim against

Daimler Trucks.

Count XII alleged in the alternative that, if termi-

nation or nonrenewal of the franchise after May 22, 2009, was

with good cause, then it was in violation of amended section 9.5

of the Franchise Act (815 ILCS 710/9.5 (West Supp. 2009)).

Crossroads alleged Sterling would terminate or fail to renew the

franchise on terms equally available to other dealers without

paying fair and reasonable compensation to Crossroads for the

value of its business and franchise. Count XIII set forth a

similar claim against Daimler Trucks.

Count XIV alleged Daimler Trucks violated section 6 of

the Franchise Act (815 ILCS 710/6 (West 2008)) by causing the

termination and/or nonrenewal of Crossroads' dealer agreement

with Detroit Diesel that prevented it from purchasing parts to

perform warranty work on Sterling trucks. Crossroads alleged the

nonrenewal of the dealer agreement was without any valid business

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reason and was designed to "economically punish" it in retalia-

tion for its refusal to sign the transition bonus program and

general release.

In December 2009, defendants filed a section 2-615

motion to dismiss the second-amended complaint. In February

2010, the circuit court entered its order dismissing 12 of the 14

counts. In dismissing counts I, II, VIII, and IX with prejudice,

the court found that even if Crossroads adequately alleged an

actual or constructive termination of the contract, such termi-

nation would be with good cause under section 4(d)(6)(D) of the

Franchise Act. The court found both the "discontinuance and

rebranding would be good cause for terminating the contract."

The court also dismissed with prejudice counts III, IV, V, VII,

X, XI, XII, and XIII. The court denied the motion to dismiss as

to counts VI and XIV, finding Crossroads alleged facts showing

Daimler Trucks had a direct interest in the Detroit Diesel

contract and that contract is covered by section 8 of the Fran-

chise Act. 815 ILCS 710/8 (West 2008).

In its order, the circuit court found no just reason to

delay the appeal. 210 Ill. 2d R. 304(a). In March 2010, Cross-

roads filed its notice of interlocutory appeal.

II. ANALYSIS

A. Subject-Matter Jurisdiction

Before responding to Crossroads' argument on appeal as

to the circuit court's partial dismissal of the second-amended

complaint, defendants argue the circuit court and this court as

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well lack subject-matter jurisdiction over the claims founded

under section 4(d)(6) of the Franchise Act (815 ILCS 710/4(d)(6)

(West 2008)). The issue of subject-matter jurisdiction cannot be

waived and may be raised at any time. Belleville Toyota, Inc. v.

Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 333-34, 770

N.E.2d 177, 184 (2002).

Section 4(d)(6) of the Franchise Act prohibits a

manufacturer from doing any of the following three acts without

proper notice:

"[(1)] to cancel or terminate the fran-

chise or selling agreement of a motor vehicle

dealer without good cause ***; [(2)] to fail

or refuse to extend the franchise or selling

agreement of a motor vehicle dealer upon its

expiration without good cause ***; or [(3)]

to offer a renewal, replacement or succeeding

franchise or selling agreement containing

terms and provisions the effect of which is

to substantially change or modify the sales

and service obligations or capital require-

ments of the motor vehicle dealer arbitrarily

and without good cause." 815 ILCS

710/4(d)(6) (West 2008).

Section 4(d)(6) also provides that the manufacturer's proposed

changes will be subject to review for good cause by the Motor

Vehicle Review Board (Review Board). 815 ILCS 710/4(d)(6)(B),

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(4)(d)(6)(C) (West 2008). The manufacturer has the burden of

proof before the Review Board to establish good cause. 815 ILCS

710/4(d)(6)(C) (West 2008).

In Clark Investments, Inc. v. Airstream, Inc., 399 Ill.

App. 3d 209, 213-14, 926 N.E.2d 408, 412-13 (2010), the Third

District reviewed the circuit court's grant of summary judgment

on sections 4(e)(8) and 4(d)(6) of the Franchise Act. The

majority considered the section 4(d)(6) claim and found the

plaintiff could not prevail on the facts. Clark Investments, 399

Ill. App. 3d at 214-15, 926 N.E.2d at 412-13.

In dissent, Presiding Justice Holdridge argued the

cause should have been dismissed for lack of jurisdiction over

the subject matter. Clark Investments, 399 Ill. App. 3d at 215,

926 N.E.2d at 413 (Holdridge, P.J., dissenting). The dissent

noted disputes between a manufacturer and a franchisee over

matters involving the Franchise Act are adjudicated under section

12, "which provides that the franchiser and franchisee must agree

to submit a dispute involving section 4, 5, 6, 7, 9, 10.1 or 11

of the Franchise Act to arbitration or to the Review Board."

Clark Investments, 399 Ill. App. 3d at 216, 926 N.E.2d at 414

(Holdridge, P.J., dissenting), citing 815 ILCS 710/12(a), (b)

(West 2008). Section 12(e) limits direct action to the circuit

court, in part, as follows:

"If the franchiser and the franchisee

have not agreed to submit a dispute to arbi-

tration, and the dispute did not arise under

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 paragraph (6) of subsection (d) or paragraph

(6), (8), (10), or (11) of subsection (e) of

[s]ection 4 of this Act, then a proceeding

for a remedy other than damages may be com-

menced 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 [s]ection

4 of this Act." (Emphasis added.) 815 ILCS

710/12(e) (West 2008).

Presiding Justice Holdridge noted "[t]he Franchise Act

clearly provides that disputes involving section 4 of the Fran-

chise Act 'may' be submitted to arbitration under section 12(a)

or otherwise 'shall' be commenced by the Review Board under

section 12(b)." Clark Investments, 399 Ill. App. 3d at 216, 926

N.E.2d at 414 (Holdridge, P.J., dissenting). He also noted "only

disputes under the Franchise Act not involving section 4(d)(6) or

4(e)(8) may be commenced in the circuit court" and those two

sections specifically state the Review Board is the forum for

adjudicating disputes under those sections. Clark Investments,

399 Ill. App. 3d at 216-17, 926 N.E.2d at 414-15 (Holdridge,

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P.J., dissenting).

Crossroads argues section 13 of the Franchise Act (815

ILCS 710/13 (West 2008)) allows a dealer to file any action in

the circuit court, including an action for damages under section

4(d)(6). Presiding Justice Holdridge noted "[t]he Franchise Act

underwent extensive revision in 1995 after our supreme court

declared former sections 4(e)(8) and 12(c) (815 ILCS 710/4(e)(8),

12(c) (West 1992)), which left good-cause determinations to the

[circuit] court, unconstitutional violations of the doctrine of

separation of powers." Clark Investments, 399 Ill. App. 3d at

217, 926 N.E.2d at 415 (Holdridge, P.J., dissenting), citing

Fields Jeep-Eagle, Inc. v. Chrysler Corp., 163 Ill. 2d 462, 479,

645 N.E.2d 946, 954 (1994). Under the new statute, the Review

Board was created and given the jurisdiction to determine good-

cause issues under section 4(e)(8) and good-faith claims under

section 4(d)(6). Clark Investments, 399 Ill. App. 3d at 217, 926

N.E.2d at 415 (Holdridge, P.J., dissenting).

While noting the majority's belief that section 13 of

the Franchise Act appeared to provide direct access to the

circuit court for a franchisee seeking monetary damages, Presid-

ing Justice Holdridge contended that "to allow a cause of action

in the circuit court where the court would have to address the

question of good cause under sections 4(d)(6) and 4(e)(8) would

ignore the purpose of the 1995 amendments, which created the

Review Board." Clark Investments, 399 Ill. App. 3d at 217-18,

926 N.E.2d at 415 (Holdridge, P.J., dissenting).

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 "The 1995 amendments provided that alle-

gations of violations of sections 4(d)(6) and

4(e)(8) would be resolved by a new venue (the

Review Board). Claims for damages or injunc-

tive relief would have to wait until the

Review Board had made a determination that

sections 4(d)(6) and 4(e)(8) had been vio-

lated. If a court were to determine that a

violation of these sections had occurred, it

would be infringing upon the jurisdiction of

the Review Board." Clark Investments, 399

Ill. App. 3d at 218, 926 N.E.2d at 416

(Holdridge, P.J., dissenting).

See also Fields Jeep-Eagle, 163 Ill. 2d at 477, 645 N.E.2d at 953

(finding "[t]he independent determination of what facts are

pertinent and the assessment of those facts as they bear upon

whether a business should be allowed to operate at a given

location are not functions which courts are generally equipped to

perform or with which they should be burdened"). Presiding

Justice Holdridge believed the circuit court lacked subject-

matter jurisdiction over the claims involving sections 4(d)(6)

and 4(e)(8) and the matter should have been one for arbitration

or the Review Board. Clark Investments, 399 Ill. App. 3d at 218,

926 N.E.2d at 416 (Holdridge, P.J., dissenting).

We agree with the reasoning in Presiding Justice

Holdridge's dissent. Issues as to whether good cause existed to

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cancel or terminate a franchise or the refusal to extend the

franchise are matters best left to the arbitrator or the Review

Board under section 12(d) of the Franchise Act (815 ILCS

710/12(d) (West 2008)) and not the judiciary. See Fields Jeep-

Eagle, 163 Ill. 2d at 478-79, 645 N.E.2d at 954.

In the case sub judice, Crossroads filed a protest

before the Review Board but voluntarily dismissed it. As the

circuit court did not have subject-matter jurisdiction over the

section 4(d)(6) claims, the portions of the order dealing with

those respective claims in the second-amended complaint are void

and will not be addressed in this appeal.

B. Section 2-615 Motion To Dismiss

A motion to dismiss under section 2-615 of the Proce-

dure Code challenges only the legal sufficiency of the complaint.

Pickel v. Springfield Stallions, Inc., 398 Ill. App. 3d 1063,

1066, 926 N.E.2d 877, 881 (2010). In ruling on a section 2-615

motion to dismiss, the question is "whether the allegations of

the complaint, when viewed in a light most favorable to the

plaintiff, are sufficient to state a cause of action upon which

relief can be granted." Canel v. Topinka, 212 Ill. 2d 311, 317,

818 N.E.2d 311, 317 (2004). The trial court should not grant the

motion to dismiss "unless it is clearly apparent that no set of

facts can be proved that would entitle the plaintiff to relief."

Tedrick v. Community Resource Center, Inc., 235 Ill. 2d 155, 161,

920 N.E.2d 220, 223 (2009). We review an order granting a

section 2-615 motion to dismiss de novo. Beacham v. Walker, 231

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Ill. 2d 51, 57, 896 N.E.2d 327, 331 (2008).

1. Counts I and II

Crossroads argues the circuit court erred in dismissing

counts I (Sterling) and II (Daimler Trucks) because rebranding is

actionable under section 4(d)(6) of the Franchise Act. In its

brief, Crossroads contends rebranding of vehicles does not

qualify as "good cause" for terminating or failing to renew a

franchise under section 4(d)(6)(D). However, this issue is not

properly before us because of the lack of subject-matter juris-

diction. Therefore, we will not address it.

Crossroads also argues count I states a valid claim

under section 4(d)(1) of the Franchise Act (815 ILCS 710/4(d)(1)

(West 2008)), which makes it a violation for a manufacturer or

officer or agent thereof "to adopt, change, establish or imple-

ment a plan or system for the allocation and distribution of new

motor vehicles to motor vehicle dealers which is arbitrary or

capricious or to modify an existing plan so as to cause the same

to be arbitrary or capricious." In support of its argument,

Crossroads simply states section 4(d)(1) does not have a good-

cause element and thus count I stated a valid claim.

In looking at count I, Crossroads alleged Sterling

violated section 4(d)(1) because it arbitrarily and capriciously

modified the previously existing plan of allocation of new

Sterling trucks to Crossroads. Crossroads alleged the

"two brand strategy *** changed, established

or implemented a system for the allocation

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 and distribution of Sterling[-]type trucks

that were previously labeled under both the

Sterling brand and either Freightliner or

Western Star brands and caused the

Sterling[-]type trucks to be manufactured and

labeled only as Freightliner or Western Star

brands in the future without allocating any

such trucks to Crossroads."

To survive a section 2-615 motion to dismiss, the

plaintiff "must allege specific facts supporting each element of

the cause of the action, and 'the court will not admit conclu-

sions of law and conclusory allegations not supported by specific

facts.'" Callaghan v. Village of Clarendon Hills, 401 Ill. App.

3d 287, 300, 929 N.E.2d 61, 75 (2010), quoting Visvardis v. Eric

P. Ferleger, P.C., 375 Ill. App. 3d 719, 724, 873 N.E.2d 436, 441

(2007).

Here, Crossroads' conclusory allegations in count I

that Sterling violated section 4(d)(1) by arbitrarily and capri-

ciously modifying the plan of allocating vehicles fail to state a

cause of action. Crossroads' nearly identical allegations on

section 4(d)(1) against Daimler Trucks in count II also fail to

state a cause of action. Because Crossroads does not set forth

an argument pertaining to section 9 under these two counts, we

will not address whether the allegations in the second-amended

complaint state a cause of action under that section.

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 2. Count III

Crossroads argues the circuit court erred in dismissing

count III against Chris Patterson, the chief executive officer of

Daimler Trucks and president of Sterling. Crossroads claimed he

was liable for terminating its franchise without good cause in

violation of section 4(d)(6) of the Franchise Act. Because we

have no subject-matter jurisdiction over the section 4(d)(6)

claim here, we will not address it.

3. Counts VIII and IX

Crossroads argues counts VIII (Sterling) and IX (Daim-

ler Trucks) alleged a section 4(d)(6) violation based on defen-

dants' June 23, 2009, e-mail offer to renew its franchise for an

additional three years with the modification that Crossroads

would not be able to sell trucks. Because we have no subject-

matter jurisdiction over the section 4(d)(6) claim here, we will

not address it.

Crossroads also argues counts VIII and IX alleged a

violation of section 9 of the Franchise Act (815 ILCS 710/9(a)

(West 2008)), which states as follows:

"Anything to the contrary notwithstand-

ing, it shall be unlawful for the manufac-

turer, wholesaler, distributor or franchiser

without good cause, to fail to renew a fran-

chise on terms then equally available to all

its motor vehicle dealers, or to terminate a

franchise or restrict the transfer of a fran-

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 chise until the franchisee shall receive fair

and reasonable compensation for the value of

the business and business premises."

"Illinois is a fact-pleading jurisdic-

tion, and a plaintiff must allege facts suf-

ficient to bring his claim within the cause

of action asserted. [Citation.] Conclusions

of fact or law unsupported by any allegation

of specific facts on which these conclusions

rest are insufficient to withstand a motion

to dismiss." Kaczka v. Retirement Board of

the Policemen's Annuity & Benefit Fund, 398

Ill. App. 3d 702, 707, 923 N.E.2d 1282, 1287

(2010).

In count VIII of its second-amended complaint, Cross-

roads alleged Sterling failed to renew its franchise on terms

equally available to other Sterling dealers because those dealers

have Detroit Diesel direct dealer agreements without paying it

fair and reasonable compensation. In count IX, Crossroads

alleged Daimler Trucks failed to renew its franchise on terms

equally available to Daimler Trucks, Freightliner, and Western

Star dealers without paying it fair and reasonable compensation.

The allegations in counts VIII and IX are nothing more

than conclusions without specific facts in support. The exhibits

mentioned in Crossroads' brief on this issue fail to shine a

light on the conclusory allegations. Thus, Crossroads failed to

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state a cause of action under section 9 of the Franchise Act in

counts VIII and IX.

4. Counts X and XI

Crossroads argues counts X (Sterling) and XI (Daimler

Trucks) stated a valid cause of action under the recent amend-

ments to the Franchise Act. Counts X and XI alleged a section

4(d)(6) termination occurring after May 22, 2009. Effective May

22, 2009, the General Assembly repealed the following language in

section 4(d)(6)(D):

"Good cause shall exist to cancel, ter-

minate, or fail to offer a renewal or re-

placement franchise or selling agreement to

all franchisees of a line make if the manu-

facturer permanently discontinues the manu-

facture or assembly of motor vehicles of such

line make." 815 ILCS 710/4(d)(6)(D) (West

2008) (repealed by Pub. Act 96-11, §5, eff.

May 22, 2009 (2009 Ill. Legis. Serv. 118, 122

(West))).

Crossroads argues since the good-cause language in

section 4(d)(6)(D) was repealed May 22, 2009, the termination of

the franchise after May 22, 2009, was without good cause under

that section. Because we have no subject-matter jurisdiction

over the section 4(d)(6) claim here, and since Crossroads does

not argue the change in the Franchise Act somehow grants us

jurisdiction, we will not address it. The remaining allegations

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on sections previously addressed also fail to state a cause of

action.

5. Counts XII and XIII

Counts XII (Sterling) and XIII (Daimler Trucks) alleged

the termination or nonrenewal of the franchise occurring after

May 22, 2009, even with good cause, entitled Crossroads to

damages under section 9.5(a) of the Franchise Act (815 ILCS

710/9.5(a) (West Supp. 2009)). Section 9.5(a) provides, in part,

as follows:

"Anything to the contrary notwithstand-

ing, if a manufacturer, wholesaler, distribu-

tor, or franchiser, with good cause, (i)

fails to renew a franchise on terms then

equally available to all of its motor vehicle

dealers, (ii) terminates a franchise, or

(iii) restricts the transfer of a franchise,

the manufacturer, wholesaler, distributor or

franchiser shall pay to the franchisee all of

the following ***." 815 ILCS 710/9.5(a)

(West Supp. 2009).

Crossroads alleged it purchased 12 new Sterling trucks

after May 22, 2009, pursuant to the terms of the sales and

service agreement with Sterling. Crossroads claimed its fran-

chise would terminate when it runs out of Sterling trucks and is

unable to purchase new trucks. In the alternative, Crossroads

alleged the termination or nonrenewal would not be on terms

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equally available to other dealers.

We find Crossroads has failed to state a cause of

action under section 9.5. The sales and service agreement

remains in effect and has not been terminated, and Sterling

offered an extension of the agreement until December 31, 2012.

Crossroads' alternative claim that the future termination or

failure to renew will not be on terms equally available to other

dealers is conclusory in nature and does not state sufficient

facts to state a cause of action.

6. Count IV

Crossroads argues count IV against Daimler Trucks

stated a valid claim for a violation of section 4(b) of the

Franchise Act and fraud in the inducement. Section 4(b) states

as follows:

"It shall be deemed a violation for any

manufacturer, factory branch, factory repre-

sentative, distributor or wholesaler, dis-

tributor branch, distributor representative

or motor vehicle dealer to engage in any

action with respect to a franchise which is

arbitrary, in bad faith or unconscionable and

which causes damage to any of the parties or

to the public." 815 ILCS 710/4(b) (West

2008).

In count IV, Crossroads alleged Daimler Trucks, prior

to October 14, 2008, caused it to invest money in Sterling

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products when at the time Patterson and others intentionally

failed to disclose the material fact that Daimler Trucks would be

discontinuing the manufacture of trucks under the Sterling brand.

Crossroads alleged the June 24, 2008, annual operating-require-

ments addendum contractually obligated it to purchase an inven-

tory of Sterling vehicles, parts, tools, and equipment. Count IV

alleged Daimler Trucks' conduct was arbitrary and in bad faith

and in violation of section 4(b) of the Franchise Act.

"In order to state a cause of action for

fraud, the plaintiff must establish the mis-

representation of a material fact which was

made for the purpose of inducing the other

party to act; that the party making the

statement knew or believed it to be false;

that the party to whom the statement was made

had a right to rely upon it and did so; and

that reliance led to the party's injury."

Penzell v. Taylor, 219 Ill. App. 3d 680, 686,

579 N.E.2d 956, 960 (1991).

In count IV, Crossroads failed to allege a misrepresen-

tation of a present fact on the part of defendants that induced

it to act. Instead, Crossroads alleged Daimler Trucks failed to

disclose it was planning to cease the manufacture of Sterling-

brand trucks. However, "[t]here is no duty to speak absent a

fiduciary or other legal relationship between the parties."

Neptuno Treuhand-Und Ver-wal-tungs-gesell-schaft MBH v. Arbor,

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295 Ill. App. 3d 567, 573, 692 N.E.2d 812, 817 (1998). Cross-

roads did not allege a fiduciary or other legal relationship

existed between it and defendants. Crossroads failed to state a

cause of action based on fraud.

Crossroads also failed to state a cause of action under

section 4(b) of the Franchise Act. Crossroads alleged Daimler

Trucks' conduct was arbitrary and in bad faith. However, given

that defendants told Crossroads the sales and service agreement

would continue, it cannot be arbitrary or an act of bad faith to

require Crossroads to comply with its contractual obligations.

7. Count V

Crossroads argues count V against Daimler Trucks states

a valid claim of tortious interference with contract. Count V

alleged Daimler Trucks tortiously interfered with Crossroads'

business relationship with Sterling causing Sterling to breach

the franchise contract by terminating or not renewing the fran-

chise without good cause in violation of section 4(d)(6) of the

Franchise Act. Because we have no subject-matter jurisdiction

over the section 4(d)(6) claim here, we will not address it.

8. Count VII

Crossroads argues its breach-of-contract claim against

Sterling in count VII should be reinstated. Count VII alleged

the failure to manufacture and produce new motor vehicles

amounted to a termination of its franchise without good cause in

violation of section 4(d)(6) of the Franchise Act. Because we

have no subject-matter jurisdiction over the section 4(d)(6)

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claim here, we will not address it.

III. CONCLUSION

For the reasons stated, we affirm the circuit court's

judgment.

Affirmed.

KNECHT and APPLETON, JJ., concur.

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