J.J. Brooksbank Co. v. Budget Rent-a-Car Corp.

In 1962, J.J. Brooksbank Co. (Brooksbank) (plaintiff) entered into a licensing agreement with Budget Rent-a-Car Corp. (Budget) (defendant). Brooksbank operated a Budget franchise and received free referrals from Budget of customers in Chicago, New York, and Los Angeles. Budget provided these free referrals to Brooksbank through its telephone reservation system. The free referrals from these geographic areas constituted one third of Budget’s overall customer base. Over time, Budget experienced technical difficulties with its telephone reservation system and eventually upgraded to a centralized computer registration system in 1970. Throughout Budget’s process of upgrading to the computer registration system, Brooksbank insisted that it should receive, without charge, all reservations from any Budget office in any location pursuant to the 1962 licensing agreement. In contrast, Budget insisted that its obligation to provide free reservations was limited solely to its outdated telephone registration system and was not applicable to the more sophisticated computerized system. Budget argued that after 1970, it was no longer obligated to provide any free referrals to Brooksbank. Brooksbank brought a declaratory judgment action in Minnesota state court seeking a determination of the extent of Budget’s obligations under the 1962 licensing agreement. The trial court held that Brooksbank was entitled to a ten percent reduction in the cost of receiving referrals from Budget’s computerized reservation service. Brooksbank appealed.