Aoude v. Mobil Oil Corp.

Opinion

USCA1 Opinion

May 24, 1995          [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

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        No. 94-2096

                                     NABIH AOUDE,

                                Plaintiff, Appellant,

                                          v.

                                MOBIL OIL CORPORATION,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Richard G. Stearns, U.S. District Judge]
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                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
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                           Campbell, Senior Circuit Judge,
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                              and Stahl, Circuit Judge.
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                                 ____________________

            Jeffrey A. Gorlick with  whom Law Offices of Robert E. Weiner  was
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        on brief for appellant.
            Edward C.  Duckers with  whom Lowell  R. Stern,  Hogan &  Hartson,
            __________________            ________________   ________________
        Thomas J.  Sartory and  Goulston  & Storrs,  P.C.  were on  brief  for
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        appellee.

                                 ____________________

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Per  Curiam.    This   case  arises  because  Mobil  Oil
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            Corporation   sought  to  terminate   the  franchise  of  its

            distributor Nabih Aoude.   Aoude  had for a  number of  years

            operated Aoude Mobil as a retail gasoline station in  Medway,

            Massachusetts; the  agreement between Aoude and Mobil forbade

            Aoude  from using Mobil's name in connection with the sale of

            any other brand  of gasoline.   On February  28, 1992,  Mobil

            proposed to terminate Aoude's franchise for violation of this

            restriction and  Aoude  immediately filed  suit  in  district

            court.   After  staying the  termination, the  district court

            granted summary  judgment  in favor  of  Mobil.   On  Aoude's

            appeal we consider the propriety of summary judgment de novo,
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            drawing  all   reasonable  inferences  in  favor   of  Aoude.

            Maldonado-Denis v. Castillo-Rodriquez, 23  F.3d 576, 581 (1st
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            Cir. 1994).

                 Under  the Petroleum Marketing  Practices Act, 15 U.S.C.

                2801  et  seq.,  Mobil  was  entitled  to  terminate  the
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            franchise for "willful"  mislabeling or misbranding  of motor

            fuel.   15 U.S.C.   2802(c)(10).   Based on the record before

            it,  the district court  ruled that it  was beyond reasonable

            dispute that on  February 6, 1992, somewhere  between 200 and

            300 gallons of non-Mobil  gasoline were diverted from another

            nearby  station  (controlled  by  Aoude and  managed  by  his

            brother) and deposited in  one of the tanks at  Aoude's Mobil

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station.  The gasoline  in the tank was  subsequently offered

            for sale through Mobil-labeled facilities.

                 On   this  appeal,   Aoude   purports  to   dispute  the

            determination that the 200 plus gallons were deposited in the

            Aoude Mobil station tank,  but this claim is frivolous.   The

            driver  who   delivered  the  gasoline   gave  uncontradicted

            testimony that  he had  deposited the  gasoline in the  Aoude

            Mobil tank.    This direct  testimony  was supported  by  two

            eyewitnesses, who saw the  truck parked at the Mobil  Station

            apparently unloading,  and by Aoude's  own tank measurements,

            which  showed that  on February  7 one  of his  tanks had  an

            unexplained  surplus of  about  275 gallons.    Based on  the

            evidence,  no  reasonable juror  could  doubt  that 200  plus

            gallons  were delivered to Aoude, stored in one of his tanks,

            and ultimately sold to the public.1

                 It  is also irrelevant under the law that samples of the

            gasoline, collected  by Mobil  representatives on the  day of

            the  misdelivery,  showed  no insufficient  concentration  of

            Mobil additives:  it would not be a defense to misbranding or

            mislabeling  that the  non-Mobil  gasoline  delivered by  the

            truck was too small  an amount to dilute seriously  the Mobil

            gasoline in the tank.  "Misbranding occurs when a  franchisee

                                
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                 1Given  the uncontradicted  testimony that  the gasoline
            was  deposited  in  Aoude's tank,  we  do  not  think that  a
            material  factual dispute is created by  some confusion as to
            which  of Aoude's several tanks  was thus filled.   Aoude has
            _____
            offered nothing else to contradict the driver's testimony.

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passes  off  other gasoline  as that  of the  franchisor's by

            dispensing the gasoline through pumps and at stations bearing

            the  franchisor's   logo."     Dandy  Oil,  Inc.   v.  Knight
                                           _________________       ______

            Enterprises,  Inc., 654  F.  Supp. 1265,  1270 (E.D.  Mich.),
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            appeal dismissed, 830 F.2d 193 (6th Cir. 1987).
            ______ _________

                 Aoude's  only  serious  claim  on  appeal  is  that  the

            requirement of  willfulness in the statute  presents an issue

            of material fact in this case.  Although this requirement has

            not been widely parsed, both  Aoude and Mobil cite us to  the

            Ninth Circuit's  decision in Retsieg Corp.  v. ARCO Petroleum
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            Prods., 870 F.2d 1495 (9th Cir. 1988), as reflecting a proper
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            standard.  There, the  Ninth Circuit said that to  be willful

            the  dealer's act  must be done  "either with  an intentional

            disregard of,  or plain indifference to,  the requirements of

            the franchise  agreement."  Id. at 1498.   This appears to us
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            to be a plausible gloss of the statute and, in the absence of

            any  developed argument  for a  different legal  standard, we

            follow this aspect of Retsieg in this case.
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                 There  is no  reason  to describe  the somewhat  unusual

            events surrounding  the diversion of the  gasoline to Aoude's

            Mobil station because the  district court rested its judgment

            of willfulness  on events occurring after the  delivery.  The
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            district  court determined  that  Aoude was  given notice  on

            February 6 that  he likely  had received a  delivery of  non-

            Mobil gas; that this was confirmed by his own measurements on

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February 7; and that his failure either to halt sales or make

            a  serious  investigation of  the  matter  amounted to  plain

            indifference  to   his  obligation  to  avoid   the  sale  of

            misbranded gasoline.

                 What  the record shows is  that on February  6 Mobil was

            tipped  off by  a  telephone call  from  an Aoude  competitor

            (located  across  the street  from  Aoude's  station) that  a

            delivery had been made  to Aoude Mobil from a  non-Mobil tank

            truck.   Representatives from Mobil visited  Aoude later that

            same day and  told him that  they had information  indicating

            that he had  received the improper delivery.   Although Aoude

            offered  some evidence that he  had told an  employee to make

            some inquiries that  same day, he  did little to  investigate

            the  matter seriously or to halt sales when, on the following

            day, his own measurements confirmed that a significant amount

            of  unaccounted for  gasoline  was contained  in his  station

            tank.   He could easily  have investigated since  he knew the

            name  of  the  company that  had  dispatched  the  tanker and

            apparently knew that it had made its main delivery at his own

            non-Mobil station down the road.

                 Although Aoude  says that willfulness is  not normally a

            matter  to  be  resolved  on  summary  judgment,  we  have no

            difficulty  concluding  that  his  objective   behavior  from

            February 7 onward--given  what he was admittedly  told by the

            Mobil  representatives  and  what  he learned  from  his  own

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measurements--constituted    plain   indifference    to   his

            obligations.     Aoude   further  objects   that  the   Mobil

            representatives told  him only that  non-Mobil gasoline "may"

            have been  deposited in his tank; but  Aoude was also told by

            his own employee  that the  non-Mobil truck had  been at  his

            station,  and  his  own  measurements on  the  following  day

            confirmed that such a delivery had occurred.

                 Under these  circumstances, we need not  rely upon other

            evidence suggesting that Aoude had earlier engaged in selling

            non-Mobil gasoline from the same Mobil station.  Accordingly,

            there  is no  need to  resolve the  question raised  by Aoude

            whether such evidence was presented  to the district court in

            an  admissible  form  and   whether  any  such  objection  to

            admissibility has been waived.

                 Affirmed.    
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