Newton Tractor Sales, Inc. v. Kubota Tractor Corporation

906 N.E.2d 520 (2009)

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Nature of the Case

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Facts

P owned and operated a dealership that sold farm equipment. P began negotiations to purchase another nearby dealership, Vandalia Tractor & Equipment, Inc. (VTE). P decided it could not buy VTE without having a local partner with which to run the dealership. One of VTE's salesmen, Mike Cripe, agreed to partner with P. The negotiations between P and VTE culminated in an asset purchase agreement signed by both parties on July 10, 2003. Section 8.11, allowed P to cancel the asset purchase agreement if it was unable to obtain authority to sell New Holland, Agco, or D products. If any one of those manufacturers denied P a license to sell its products, P could rescind the agreement. VTE was an authorized dealer for Kubota. VTE was also authorized to sell other lines of equipment. As part of purchasing VTE, P became the authorized dealer for several lines of equipment previously sold at VTE's dealership. The authority to sell D products was not included in the asset purchase agreement. D required P to submit an application to D's local representative, Michael Jacobson (D). On June 19, 2003, P submitted its application to Jacobson along with financial statements. That application had not been approved at the time P and VTE entered into the asset purchase agreement. P alleges that VTE would not sign the termination agreement if P were not going to become the authorized D dealer. P alleges Jacobson (D) responded by saying, 'They [P] will be the dealer.' P claims that in reliance on this statement by Jacobson (D), it allowed VTE to sign the termination agreement. VTE confirmed that it would not have signed the termination agreement if P was not going to be the authorized D dealer. P claims to have further relied on Jacobson's (D) statements by selling D products under VTE's dealership number and performing $28,500 in warranty work on D equipment. D's corporate office denied P's application. P filed a complaint against Ds on three counts--promissory estoppel (count I), common law fraud (count II), and negligent misrepresentation (count III). Ds moved for summary judgment for each of the three counts. The circuit court granted summary judgment in favor of Ds in part because promissory estoppel was not a recognized cause of action under Illinois law. P appealed. The appellate court held that a promissory estoppel claim may be brought only as a defense, and not as a cause of action. P appealed.