Ceraso v. Motiva Enterprises, LLC

326 F.3d 303, 2003 WL 1826560
CourtCourt of Appeals for the Second Circuit
DecidedApril 9, 2003
DocketDocket No. 02-7126
StatusPublished
Cited by16 cases

This text of 326 F.3d 303 (Ceraso v. Motiva Enterprises, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ceraso v. Motiva Enterprises, LLC, 326 F.3d 303, 2003 WL 1826560 (2d Cir. 2003).

Opinion

KEARSE, Circuit Judge.

Defendants Motiva Enterprises, LLC, et al. (collectively “Motiva”), appeal from a judgment entered in the United States District Court for the District of Connecticut following a bench trial before Peter C. Dorsey, Judge, in favor of plaintiff Gary Ceraso, franchisee of a Texaco service station, enjoining defendants under the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. § 2801 et seq. (2000), from terminating, failing to renew, or interfering with Ceraso’s Texaco franchise. The district court found that Motiva had failed to show that Ceraso’s operations gave it grounds under the PMPA for termination of the [306]*306franchise. On appeal, Motiva contends that the district court erred in failing to find that Motiva properly terminated the franchise either (a) on the ground that Ceraso violated “image” provisions of the franchise agreements, or (b) on the ground that Ceraso violated local zoning regulations. For the reasons that follow, we find no basis for reversal, and we affirm the judgment.

I. BACKGROUND

Ceraso operates, inter alia, a Texaco gasoline station and an auto repair shop at 350 Jennings Road in Fairfield, Connecticut (“Fairfield” or the “Town”), pursuant to a lease (“Lease”) and a sales agreement (“Sales Agreement”) with Motiva. There is no dispute that Ceraso is a franchisee and Motiva is a franchisor within the meaning of the PMPA. The facts pertinent to the present dispute, largely as found by the district court or as stipulated by the parties, included the following.

A. The Franchise Agreements and Cera-so’s Operations

The Lease authorizes Ceraso, as “Lessee,” to use the property “solely for the retail sale of Texaco-branded motor fuels, petroleum products and services, convenience items, and food and beverage items.” (Lease § 9(a).) Section 9(b) of the Lease states, in pertinent part, that the

Lessee shall not use nor allow the use of the Leased Properties for any unlawful, offensive, hazardous, unsightly or other objectionable purpose, and shall not violate or permit any of its employees or invitees to violate any applicable federal, state, or local law, regulation or ordinance.

(Lease § 9(b) (emphasis added).) Similarly, the Sales Agreement requires the franchisee to comply with various provisions of federal, state, and local law. (See Sales Agreement § 21.)

The Sales Agreement, defining Ceraso as “Purchaser,” also states, inter alia, that “Purchaser’s operations shall be conducted at the Retail Facility in accordance with the standards set forth in the attached ... ‘Minimum Standards’[ ].” (Sales Agreement § 16(b).) The Minimum Standards section states, in pertinent part, that

Purchaser shall continuously maintain the Retail Facility, inside and out, including building, signs, restrooms, driveways, grass, planting areas, storage areas and any automotive equipment, in good, clean, neat, safe, secure, uncluttered, unobstructed, healthful, orderly, painted, operative and first class condition and in accordance with all applicable laws, rules and regulations.

(Sales Agreement, Minimum Standards Section (emphases added).) The Sales Agreement permits Motiva to terminate that agreement or to fail to renew the franchise “[i]f Purchaser, its employees, agents or invitees, violate the covenants of or fail to comply with the provisions of the Minimum Standards Section.” (Sales Agreement § 28(m).)

Ceraso’s business on the leased premises includes the sale of gasoline and related products, the operation of a modest convenience store, the repair of motor vehicles, and the operation of a towing service. From September 1999 through September 2000, Ceraso owned as many as 12 towing or service-related vehicles. From December 1999 through September 2000, he provided towing services for a number of institutional entities.

For his operations, Ceraso had received in February 1992 a special zoning exception permit pursuant to the Zoning Regulations of the Town of Fairfield, Connecticut (“Town Zoning Regulations”). The [307]*307permit requires compliance with § 27.4.8.5 of those regulations (the “Regulation”), which provides, in pertinent part that

no more than five (5) motor vehicles awaiting repair work or having been repaired are to be stored or parked on the lot out-of-doors, unless such motor vehicles are located in an area suitably screened from streets and adjoining property in such a manner as to conceal the area from view to a height of five (5) feet with fences, walls or embankments in combination with other landscaping

Town Zoning Regulations § 27.4.8.5.

B. Criticisms of Ceraso’s 1999-2000 Operations

In December 1999, the Town Zoning Office, having received complaints about the condition of Ceraso’s service station, issued to Ceraso an order to comply with the Fairfield Regulation. That order stated, in part, that Ceraso was in violation of the Regulation for “storing an inordinate number of vehicles on the premises, which creates many safety hazards,” and that in order to establish compliance Ceraso must “reduce the number of unscreened vehicles to five or fewer.” (Attachment to Town Zoning Office Order To Comply, dated December 17, 1999 (“Order To Comply”).)

In March 2000, Robert Ascher, who had just become Motiva’s sales representative for the area that included Ceraso’s station, visited Ceraso’s station and observed 25-35 vehicles parked on the premises. That total did not include cars that were screened or in a repair bay or that appeared to belong to transient customers. Ascher testified at trial that he commented to Ceraso that there were “a lot of cars here” but that he said nothing more as to the appearance of the premises. (Trial Transcript November 6, 2001, vol. II, at 74.) Ascher visited the station two or three more times before August 2000; on each occasion, he observed conditions similar to those of his first visit and suggested to Ceraso that some of the cars be moved.

On August 4, 2000, Ascher conducted an image evaluation of the station, making notes of his observations. He attempted to discuss the conditions with Ceraso, asking why so many cars were present. At some point, Ceraso apparently took umbrage and ordered Ascher to leave the premises. Ascher did not give Ceraso a copy of the evaluation notes.

In the meantime, Fairfield zoning enforcement officer Peter Marsala had observed Ceraso’s premises on several occasions, and the Town Zoning Office eventually sent Ceraso a final warning letter dated September 12, 2000. The letter indicated that if Ceraso faded to bring his operations into compliance with the Regulation, a civil fine would be imposed and his special exception permit would be revoked. A copy of that letter was sent to Motiva, as Ceraso’s franchisor.

Shortly thereafter, in light of the Town’s September 12 letter and Ascher’s August 4 image evaluation, Motiva sent Ceraso a letter, by certified mail, stating, in pertinent part, as follows:

It has come to our attention that the Town of Fairfield, CT has issued an Order to Comply (“Order”) dated 12/17/99 because you have had more than 5 vehicles stored or parked on the lot.

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Gary Ceraso v. Motiva Enterprises, Llc
326 F.3d 303 (Second Circuit, 2003)

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Bluebook (online)
326 F.3d 303, 2003 WL 1826560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ceraso-v-motiva-enterprises-llc-ca2-2003.