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The deal closed on a Friday. The selling dealer went to Naples. The buyer took the keys on Monday, and by Wednesday was staring at a floor plan audit showing twenty units short, a used-car inventory valued two hundred thousand dollars below the closing schedule, and a working-capital adjustment the seller’s accountant had, in the buyer’s view, quietly gerrymandered. The buyer calls us. So does the seller, a week later, demanding the earn-out the buyer now refuses to pay.

This pattern repeats across Illinois dealership deals. Our earlier post on the five critical clauses every Illinois dealer needs in a buy-sell agreement addressed what the agreement itself must contain. The next battleground is the one that opens after the agreement is signed. Post-closing disputes between dealer principals are where deals go to die, and they fall into three familiar buckets: working-capital adjustments, indemnification claims, and earn-outs.

Working-capital adjustments are the first and most common flashpoint. Nearly every dealership asset purchase agreement includes a true-up mechanism tied to a target net working capital figure, measured as of closing and adjusted within 60 or 90 days. The seller’s preliminary closing statement anchors the seller’s position. The buyer then issues a dispute notice identifying line-item disagreements. If the parties cannot negotiate those, the agreement usually routes the remaining items to an independent accounting firm sitting as arbitrator. The fights cluster around a short list of items. New-vehicle inventory valued at dealer cost versus MSRP less holdback. Aged used units written down or not. Contracts in transit counted as receivables. Warranty receivables from the manufacturer treated as accounts receivable. Parts inventory counted at cost or marked down for obsolescence. In our experience, the buyer who does not send a manager to physically count inventory the night before closing is the buyer who pays too much. The seller who does not require the accountant to sign off on the closing-date balance sheet before wiring the funds is the seller who litigates for the next eighteen months.

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The phone call comes on a Sunday afternoon. The F&I director has resigned, effective immediately. On Monday, she starts at the crosstown competitor. By the following week, three F&I products the dealer offered her team are discounted next door, customers are calling to cancel service contracts, and the general manager notices her laptop was “imaged” the week before she left. The dealer principal wants to know two things. Can he stop her? And can he recover what she took?

Illinois law gives dealers real tools here, but the rules changed in 2022, and the rules for dealership employees are not intuitive. A careless cease and desist letter, or worse, a lawsuit filed on the old assumptions, can convert a winning case into a fee-shifting loss.

Start with the non-compete itself. Since January 1, 2022, the Illinois Freedom to Work Act, 820 ILCS 90/1 et seq., governs the enforceability of restrictive covenants for Illinois employees. The statute prohibits non-competes against employees earning $75,000 or less annually, and prohibits customer and coworker non-solicitation covenants against employees earning $45,000 or less annually, with threshold increases scheduled through 2037. The Act also requires that the employer advise the employee in writing to consult with an attorney before entering into the covenant, and requires that the employee receive the agreement at least 14 calendar days before commencement of employment or have at least 14 calendar days to review it. An agreement that does not satisfy the salary threshold, the attorney-consultation advisement, and the review period is unenforceable. The Act authorizes a prevailing employee to recover attorney fees. A dealer who sues on a covenant that does not meet the statutory floor risks paying the other side’s legal bills.

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The allocation spreadsheet arrives on a Monday morning. Two crosstown competitors received the inventory the dealer ordered months ago. The factory’s stair-step bonus program pays a per-unit kicker the dealer cannot possibly hit because the dealer cannot get the cars to sell. Then the region manager calls to explain that the dealer’s “minimum sales responsibility” number is slipping, and unless volume climbs, the incentives the dealer does receive will be clawed back.

Illinois dealers should not accept this as the cost of doing business. The Illinois Motor Vehicle Franchise Act does not tolerate arbitrary allocation, price discrimination across dealers, or the use of new-vehicle sales performance as a lever to cut a dealer out of used-vehicle and certified pre-owned programs. The statute is specific. The remedies are serious. And in our experience, the dealers who document these practices in real time are the dealers who get paid.

The central Illinois statute on allocation is 815 ILCS 710/4(d)(1), which prohibits a manufacturer, distributor, or wholesaler from adopting or implementing “a plan or system for the allocation and distribution of new motor vehicles to motor vehicle dealers which is arbitrary or capricious.” 815 ILCS 710/4(d)(1). The statute goes further. Under 815 ILCS 710/4(d)(2), a dealer may submit a written request and compel the manufacturer to disclose “the basis upon which new motor vehicles of the same line make are allocated or distributed to motor vehicle dealers in the State and the basis upon which the current allocation or distribution is being made or will be made to such motor vehicle dealer.” 815 ILCS 710/4(d)(2). Factories hate that request. They are required to answer it.

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When a manufacturer announces a new point or a relocation, the first reaction inside most dealerships is frustration. The second is resignation. The factory says the market can support another store. The decision must already be made. There is no point in fighting it. That reaction is exactly what gets dealers hurt. In Illinois, a proposed additional same-line franchise or a relocation into the relevant market area of an existing dealer is not supposed to be a fait accompli.

The Illinois Motor Vehicle Franchise Act gives dealers a real protest process, and that process has teeth. If a manufacturer wants to grant an additional franchise in the relevant market area of an existing same-line dealer, or relocate an existing dealership within or into that market area, the manufacturer must send notice by certified mail at least 60 days before taking the proposed action. The notice is supposed to state the specific grounds for the proposal, and the dealer has only 30 days from receipt to file a written protest. Those deadlines are unforgiving. A strong case can become a lost case if the store treats the notice like ordinary correspondence.

If the protest is timely filed, the matter does not remain in the manufacturer’s hands. The Act requires a hearing schedule, and the manufacturer bears the burden of proving good cause to allow the additional franchise or relocation. Just as importantly, the manufacturer may not grant the additional franchise or complete the relocation before the hearing process is over and the manufacturer has prevailed. That point gets lost in the panic. A timely protest is not just symbolic. It can stop the move from becoming operational while the dispute is still being decided.

That shifts the leverage in a meaningful way. The dealer does not have to prove that the sky will fall if another point opens. The manufacturer has to prove that the proposed move is justified under the statutory standards. Illinois law directs the Board or arbitrators to consider a detailed list of factors, not just the manufacturer’s business preference. Those factors include whether economic and marketing conditions warrant the move, the retail sales and service business already being transacted in the market over the prior five years compared with the business available, the investments already made by existing dealers, the permanency of those investments, whether the public welfare would be helped or harmed, whether existing dealers are already providing adequate competition and convenient consumer care, whether those dealers have adequate facilities, parts, and qualified personnel, and the effect the new point or relocation would have on existing same-line dealers.

One statutory phrase is especially important. Illinois says good cause is not shown solely by a desire for further market penetration. That matters because “we want more penetration” is often the manufacturer’s real theme, even when the written notice uses more polished language. If existing dealers are serving customers well, carrying the capital burden, staffing the service department, and covering the market responsibly, a raw desire to sell more metal by putting another roof nearby is not supposed to end the analysis.

In practice, these protests are won or lost with facts. Dealers should immediately assemble a package that tells the market story better than the factory’s notice does. That usually means five years of sales and service history, facility investment records, staffing levels, parts and service capacity, appointment lead times, customer draw patterns, and evidence of the store’s permanency in the market. It may also mean showing the risks the factory’s plan creates: weakened fixed-operations absorption, unnecessary duplication of facilities, reduced investment incentives, and harm to service convenience if the move destabilizes the stores already serving the area. Continue reading ›

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The debit memo usually arrives after the money has already been booked. A warranty claim that looked closed suddenly comes back to life. An incentive payment from months ago is now being “reviewed.” The factory’s spreadsheet says the store owes money, so accounting assumes the store owes money. That reaction is understandable. It is also often too quick. In Illinois, warranty and incentive chargebacks are governed by statute, and the process matters every bit as much as the manufacturer’s conclusion.

Dealers should start with the basic timing rules. Under the Illinois Motor Vehicle Franchise Act, a warranty claim submitted by a franchised dealer must be approved or disapproved within 30 days after submission in the manner and on the forms the manufacturer reasonably prescribes. Approved claims must be paid within 30 days after approval. If the manufacturer does not specifically disapprove the claim in writing or by electronic transmission within that 30-day period, the claim is deemed approved and payment must follow within 30 days. That is a powerful starting point, because it means the manufacturer is not supposed to sit on claims indefinitely and then rewrite history after the fact.

The disapproval rules matter too. When a claim is disapproved, the dealer is entitled to written notice stating the specific grounds for the disapproval. The dealer then has 30 days to correct and resubmit the claim. In practice, that means a vague after-the-fact accusation is not enough. Dealers should be asking basic questions immediately. When was the claim submitted? When was it disapproved? What exactly was the stated reason? Was the objection timely? Was the store given a real chance to cure? Those are not technicalities. They are often the difference between a legitimate adjustment and an overreach.

Manufacturers do have audit rights, but those rights are not open-ended. The statute allows the manufacturer to require reasonable documentation and to audit warranty claims within one year from the date the claim was paid or the credit was issued. For other incentive and reimbursement programs, the audit and chargeback window is also one year after the claim was paid or the credit was issued. That should change how dealers evaluate old debits. If the factory is reaching back beyond the statutory window, the conversation is already different.

The Illinois statute is also more protective than many dealers realize when it comes to warranty repair orders themselves. The Act states that no debit reduction or chargeback of any item on a warranty repair order may be made absent a finding of fraud or illegal actions by the dealer. At the same time, the manufacturer retains the ability to audit claims and to charge back false or unsubstantiated claims within the statutory period. The practical takeaway is not that every audit disappears. The takeaway is that a chargeback should not be treated as self-proving. Dealers should separate truly false claims from documentation disputes, coding disagreements, or hindsight second-guessing about repair-order detail.

That distinction becomes even more important because manufacturers sometimes use audits as a backdoor cost-control device. Illinois law addresses that problem directly in several ways. It requires compensation for diagnostic work and warranty labor at no less than the dealer’s retail customer rate for like work. It requires payment for time spent communicating with a technical assistance center, engineering group, or other outside manufacturer source when that communication is necessary to perform a warranty repair. It bars manufacturers from imposing cost-recovery fees or surcharges on franchised dealers for payments made under the warranty-compensation section. In other words, the statute does not just talk about what the manufacturer may recover. It also talks about what the dealer must be paid. Continue reading ›

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A facility demand from the factory usually arrives dressed up as a business plan. The renderings look polished. The timeline looks urgent. The number looks painful. Sometimes the message is explicit. Rebuild the showroom. Replace the signs. Rework the service drive. Carve out exclusive space. Use our vendor. Do it now or your renewal will become a problem. Dealers hear that kind of message and often conclude the fight is over before it starts.

That is a mistake. Illinois law does not turn every manufacturer preference into a legal obligation. Some facility demands are legitimate. Some are commercially sensible. But some are leverage plays designed to extract capital on the theory that the dealer is too busy running the store to challenge the premise. In our experience, the dealers who pause, pull the documents, and evaluate the statutory timeline usually negotiate from a much stronger position than the dealers who assume the factory has already won.

The first question is whether the demand is really a condition of renewal or continuation of the franchise. Under the Illinois Motor Vehicle Franchise Act, if a manufacturer intends to change substantially or modify a dealer’s sales and service obligations or capital requirements as a condition to extending or renewing the existing franchise, the manufacturer has to follow a process. That process matters. It is not just paperwork. It is where leverage starts.

The statute requires the manufacturer to send a certified notice at least 60 days before the franchise expires. The notice is supposed to state the specific grounds for the proposed action, and the dealer has only 30 days from receipt to file a protest. If the dealer timely protests, the manufacturer carries the burden of proving good cause, and the manufacturer cannot force the new obligations into place before the hearing process is finished. Depending on the parties’ agreement, the dispute may proceed through arbitration or through the Motor Vehicle Review Board. Either way, the calendar matters. A “friendly” facility conversation can harden into a deadline-driven legal dispute very quickly.

That is why dealers should be careful about informal pressure. The factory representative may present the demand as collaborative. The email may say the program is “expected” rather than “required.” The dealer may be told there is still time to “work it out.” Then the renewal papers show up with a new capital requirement baked in. At that point, the store is no longer negotiating about branding. It is defending the franchise itself. The legal issue is not whether the manufacturer would prefer a shinier building. The issue is whether the manufacturer can prove a lawful basis to impose the obligation on the schedule it has chosen. Continue reading ›

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Clients call us when they are in a sticky situation. That is usually not the first time something went wrong. The problem has been building. The partner stopped being transparent. The manager started siphoning business. The competitor started poaching customers. The contract got ignored. Then one day it becomes urgent. There is a hearing coming. There is a TRO on the table. There is a demand letter that cannot be ignored. The business owner suddenly needs answers that are both fast and correct.

In those moments, the lawyer who understands how judges think has a real advantage.

Before joining DiTommaso Lubin, P.C., James V. DiTommaso served as a judicial extern to Justice Thomas E. Hoffman of the Illinois Appellate Court, First District, Sixth Division. During that externship, he assisted in drafting opinions and bench memorandums. That experience is not just a resume line. It is a perspective shift. It teaches you what arguments actually move the needle inside chambers and what arguments sound good only to the lawyer making them.

Here is the reality most clients do not see. Judges are not looking for drama. They are looking for a principled reason to rule. They want clarity. They want credibility. They want to understand what the law allows them to do, and they want to do it without creating a mess.

When you have worked inside the appellate process, you learn quickly that the record is the case.

A business dispute can feel like a thousand moving pieces. But the court is going to rule based on what is properly presented, properly supported, and properly framed. That is why James’s externship experience matters in everyday business litigation. It pushes the case toward what courts value: organized facts, clean legal theories, and a timeline that makes sense.

A judge’s view of a contract dispute is not “who is angry.” It is “what does the contract say, what was performed, what was breached, and what remedy is available.” A judge’s view of a fiduciary duty case is not “who feels betrayed.” It is “who owed duties, what conduct crossed the line, what damages resulted, and what evidence proves it.”

That is the difference between storytelling and proof.

James applies that discipline to the cases he litigates. When a client is facing an emergency situation, the goal is not to file something fast and hope. The goal is to file something strong and specific. A motion for emergency injunctive relief only works if the facts are tight, the law is clear, and the harm is real. Judges can smell exaggeration. They see it every day.

The same is true in partner disputes and business ownership divorces. One side often tries to freeze out the other side by controlling information. That is not just unfair. It is a litigation tactic. The best response is not to yell about fairness. The best response is to use the legal tools available and build a record that shows the court what is happening in concrete terms.

A lawyer with appellate experience understands how orders are written and why that matters. The wording of an injunction can decide the next six months of the case. The language of a discovery order can determine whether you actually get the documents you need or you spend months arguing about loopholes. The framing of an issue can decide whether you win a key motion or you lose momentum. Continue reading ›

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Most business owners will never see the inside of an appellate courtroom, and that is a good thing. Appeals are expensive, time consuming, and usually happen after a case has already chewed up months or years. But the mindset of an appellate lawyer, the discipline of precision and the obsession with the record, can make the difference in the trial court long before any appeal is filed.

James V. DiTommaso did not become a lawyer because it sounded easy. On his attorney profile, he puts it plainly: he chose to become a lawyer because he wanted to be like his dad, the person people call when they are in a sticky situation. That is also why his litigation style is direct. When a client needs help, they do not need a lecture. They need a plan.

James has lived appellate pressure in a way very few attorneys ever experience. He argued a case before the Illinois Supreme Court, an experience that changes how you approach every case afterward. It happened in Yakich v. Aulds, a direct appeal that put a constitutional question in front of the state’s highest court. The case centered on Section 513 of the Illinois Marriage and Dissolution of Marriage Act, the statute dealing with a parent’s contribution to a non minor child’s educational expenses. The circuit court declared the statute unconstitutional as applied. The Illinois Supreme Court ultimately vacated that judgment and sent the matter back, emphasizing that lower courts are bound by Illinois Supreme Court precedent and do not have authority to overrule it.

The case was also a rare moment in Illinois legal history because it involved father and son lawyers appearing as counsel on both sides of the matter before the Supreme Court. That does not happen in routine litigation. It happens in cases that are serious, well briefed, and hard fought.

There are two ways to look at the Supreme Court’s result. One is academic. The other is practical.

The academic lesson is about stare decisis. In plain English, trial courts cannot decide they no longer like a Supreme Court case and ignore it. The practical lesson is more important for business litigation clients. When you are fighting in court, you have to know what the controlling law is today, not what you wish it was, and you have to build your strategy around it.

That is what appellate experience teaches.

In the Illinois Supreme Court, there is no room for vague arguments or sloppy storytelling. The questions come fast. The justices want to know where something is in the record. They want to know what rule controls. They want to know what the legal consequence is if they agree with you. There is nowhere to hide behind rhetoric. It is precision under pressure.

That same discipline applies to business disputes.

When a partnership fight breaks out, the “facts” are rarely clean. People remember meetings differently. Text messages are interpreted differently. Financial records can be spun. The side that wins is usually the side that turns chaos into clarity. That requires building a record that is defensible, documenting the story early, and anticipating what a judge will need to rule in your favor.

James approaches business litigation the way an appellate court reads it. What did we prove. What did we preserve. What did we make easy for the judge to adopt in a written order. That is not just a style choice. It is strategy.

Yakich v. Aulds also shows something else. High stakes litigation can be personal, but it is never only personal. The case involved a real family dispute, but the legal issue had broader implications because it challenged a statute that affects people across Illinois. In business disputes, it is the same. Your case feels unique, but the judge is thinking about rules, precedent, and the ripple effects of any order. Continue reading ›

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A lot of lawyers say they are “trial lawyers.” Then the case gets real. The judge sets deadlines. The other side files a motion that actually matters. A key witness gets cold feet. The documents tell a story your client does not like. That is the moment when you find out whether your lawyer is built for the courtroom or built for paperwork.

James V. DiTommaso is built for the courtroom.

James earned his J.D. from Chicago-Kent College of Law, and if you know Chicago-Kent, you know what that means. Chicago-Kent is not known for producing lawyers who hide behind the comfort of endless letters and endless “let’s see what happens” litigation. Chicago-Kent is known for its trial advocacy culture. The school’s trial program has been a national leader for decades, and its trial teams have competed and won at the highest level, including National Trial Competition championships in 1988, 2007, 2008, and 2015. That kind of environment changes how a lawyer thinks. It teaches you that credibility is everything, preparation beats improvisation, and the courtroom is not a place to “try something” for the first time.

That mindset is exactly what business owners need when the dispute is not theoretical and the money is not monopoly money.

Business disputes are personal even when the legal issues are corporate. A partnership fight can destroy a company faster than any competitor. A fraud case can shake a client’s confidence in everyone around them. A dealership dispute can trigger lender panic and manufacturer scrutiny. In those moments, you do not want a lawyer who is learning on your time. You want someone who treats litigation like it is a profession, not a hobby.

Chicago-Kent teaches that litigation is a craft.

James’s background at Chicago-Kent was not just a diploma on a wall. He earned a Business Law Certificate, and he was on the Dean’s List. He also served on the Executive Board for the Chicago-Kent Justinian Society. That combination matters because it is the intersection of two worlds that most lawyers do not blend well. Trial focused thinking and business focused judgment. Clients need both.

Here is the problem we see over and over again. A business owner wants an aggressive litigator. But the owner also needs practical advice that does not burn the company down while the lawsuit is pending. Too many attorneys pick one lane. They either posture, fight, and turn every issue into a war, or they hesitate, negotiate too long, and let the other side take advantage of the delay. James’s style is different. The approach is disciplined. The case is built methodically. The pressure is applied strategically. The goal is to win, but to win in a way that protects the client’s business and leverage.

Trial advocacy is not about being loud.

A strong trial lawyer is calm under fire because they know what matters and what does not. They know the difference between a motion that is theatre and a motion that changes the outcome. They know how to pin down facts early so the other side cannot rewrite history later. They know how to turn a messy dispute into a clear story a judge can understand and a jury can repeat.

That is what trial training gives you. Not swagger. Structure.

James brings that structure to the cases he handles at DiTommaso Lubin, P.C. Whether it is a business ownership divorce, a breach of fiduciary duty claim, a non compete dispute, a defamation case, or a high stakes commercial lawsuit, the plan is the same. Build the record. Control the narrative. Force the other side to commit to positions early. Expose contradictions. Then use that work to either settle on strong terms or take the case through trial.

If you have never been through litigation, here is something you should know. The most important work happens long before anyone says “your honor” in a courtroom. It happens when your lawyer is choosing the claims and defenses that actually fit the facts. It happens when your lawyer is preparing you for the deposition you are not excited about. It happens when your lawyer is reading the financial records with the mindset of a cross examiner. It happens when your lawyer is deciding whether to file for emergency relief because the business cannot survive delay. Continue reading ›

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Most dealership groups are built by partners. One person has the operational instincts, another has the capital, another brings relationships, and the business grows. That partnership model works until it does not. When the relationship fractures, the dealership cannot hit pause. Cars still have to be sold. Service lanes still have to run. The factory still expects performance. Every day of internal conflict quietly drains value.

We call these cases business divorces because the pattern is familiar. Trust breaks down. Financial transparency disappears. Meetings turn into ambushes. The majority starts treating the minority like an employee instead of an owner. Then the real damage starts: money moves through related entities, opportunities are steered to other stores, and the partner who helped build the business is told to take a discounted buyout or be frozen out.

Valuation deadlocks and why dealerships are harder than most businesses to price. A dealership is not a simple earnings multiple. You are dealing with multiple profit centers: new vehicle, used vehicle, finance and insurance, parts, service, and often separate real estate and management companies. Blue sky is real, but it has to be grounded in facts, not ego. We see partners deadlock over basic issues like whether rent paid to a related real estate company should be normalized, whether “management fees” are legitimate or a profit siphon, how to value used vehicle inventory, and how to treat manufacturer incentive programs that fluctuate year to year. Without a defined valuation process, the loudest voice often wins, and that is how disputes become lawsuits.

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