Cole v. Circle R. Convenience Stores, Inc.

620 F. Supp. 886, 1985 U.S. Dist. LEXIS 16334
Procedural entryThis page is a short order in Cole v. Circle R. Convenience Stores, Inc.. Read the opinion of the Court — 602 F. Supp. 1108
District Court, M.D. Louisiana·Decided August 30, 1985·No. Civ. A. No. 84-903-B·Published

Opinion

POLOZOLA, District Judge.

On January 30, 1985, the Court issued a minute entry converting the motion of the defendants, Circle R. Convenience Stores, Inc., J.C. Roberts Oil Company, Inc., James C. Roberts, Jr. and Mrs. Sylvia Roberts, to dismiss to a motion for summary judgment.1 In the same order the Court ordered the plaintiffs, Billy Cole and Mrs. Sherry Cole to amend their complaint with regard to their claims filed under the Racketeering Influenced and Corrupt Organization Act (“RICO”), 18 U.S.C. §§ 1961-1964, within 15 days. The motion of the defendants to dismiss the RICO claims for failure to state a claim upon which relief can be granted was stayed pending a decision by the plaintiffs to amend the complaint.

I. The Petroleum Marketing Practices Act

Under the Petroleum Marketing Practices Act (“PMPA”) a franchisor may neither terminate nor fail to renew a franchise unless there has been compliance with specified conditions and then only for the specific grounds permitted by the Act. See Billy Cole v. Circle R. Convenience Stores, Inc., 602 F.Supp. 1108 (M.D.La.1985). Furthermore, a franchisee may bring a civil action against a franchisor for alleged violations of the Act. See 15 U.S.C. § 2805(a).

The defendants contend that they are entitled to a motion for summary judgment on the PMPA claims because the plaintiffs are not franchisees within the meaning of PMPA. A franchisee is a “re-tailor or distributor (as the case may be) who is authorized or permitted, under a franchise, to use a trademark in connection with the sale, consignment or distribution of a motor fuel.” 15 U.S.C. § 2801(4). According to defendants, the plaintiff fails to come within this definition for two reasons: (1) the plaintiff is neither a retailer2 nor a distributor3; and (2) the agreement did not authorize the plaintiffs to use a refiner’s trademark.

The defendants’ contention that the plaintiff is not a retailer within the meaning of PMPA is without merit.4 This contention is based upon the premise that the Gasoline Supply Agreement, entered into on August 10, 19815 is an agreement whereby gasoline was merely “consigned” to the plaintiff and not sold to him. Therefore, according to the defendants, since the plaintiff was merely a “consignee” of the gasoline and not a purchaser, he cannot be [888]*888a retailer because one must “purchase” gasoline to be classified as such.6

The Court finds that there was a contract of sale whereby the plaintiff purchased gasoline from the defendants. Louisiana Civil Code article 2439 identifies three prerequisites for the perfection of a contract of sale: (1) the thing sold, (2) the price and (3) the consent. Benglis Sash & Door Co. v. Leonards, 387 So.2d 1171 (La.1980) and In re Evangeline Refining Co., Inc., 37 B.R. 450 (W.D.La.1984). The Gasoline Supply Agreement is a written agreement manifesting the consent of the parties to the sale of a thing [gasoline and automotive supplies] at a price which was to be determined as provided in Sections 3A and 3B. The fact that the price was not more specifically stated does not preclude the perfection of the contract of sale. Ball Marketing, Inc. v. Sooner Refining Co., 422 So.2d 582 (La.App. 3rd Cir.1982). The Louisiana Supreme Court has stated that “the parties can consent to buy and to sell a certain thing for a reasonable price, and when they do, the contract of sale has been perfected. The essential thing is that there be a meeting of the minds (as opposed to a disagreement) as to price.” See Benglis Sash & Door Co. v. Leonards, 387 So.2d at 1172. However, since the gasoline, which is the object of the contract, had not been individualized at the time of the signing of the Gasoline Supply Agreement, there is an obstacle to the general principle stated in article 1909 of the Louisiana Civil Code that would have made the plaintiff the owner of the gasoline upon mere consent.7 The Louisiana courts have held that a contractual object becomes sufficiently individualized when it has been “appropriated to the contract.” See, e.g., State v. Shields, 110 La. 547, 34 So. 673 (1903). To determine when an “appropriation” has oc-eurred, the Louisiana Supreme Court has set forth the following guidelines:

... in the absence of a more specific agreement on the subject, ... such appropriation takes place only when the goods as ordered are delivered to public carriers at the place from which they are to be shipped, consigned to the person by whom the order is given, at which time and place, therefore, the sale is perfected and the title passes.

George D. Witt Shoe Co. v. J.A. Seegars & Co., 112 La. 145, 47 So. 444, 446 (1908). Therefore, in this case, once the gasoline had been identified or segregated from the mass and designated as the thing being sold, i.e. “appropriated to the contract”, the sale was perfected with regard to that quantity of gasoline. In re Evangeline Refining Co., 37 B.R. 450 and Succession of Welsh, 111 La. 801, 35 So. 913 (1904). See also 2 Litvinoff, Obligations § 40 (1975).

The defendants have submitted affidavits in support of their contention that they did not sell gasoline and plaintiffs did not purchase it. In these affidavits, affiants state that they have compared their gasoline supply contract with the one at issue in this case8 or have reviewed the contract at issue in this ease9 and have concluded that “gasoline was consigned to Billy Cole and title remained the property of J.C. Roberts Oil Co., Inc.”10 Without deciding whether these affidavits meet Federal Rule of Civil Procedure 56(e)’s mandate that they “set forth such facts as would be admissible in evidence”, the Court is unable to accept defendants’ contention that the Gasoline Supply Agreement was a contract of consignment and as such cannot be considered a sale. In general, a consignment contract is considered “the consignment of goods to another (consignee) for sale under agreement that consignee will pay consign- [889]*889or for any goods sold and will return any unsold goods.” Black’s Law Dictionary, 5th Edition, West Publishing Co. (1979). Under Louisiana law, the courts refer to the above described consignments as sales and have stated that “the fact alone that the goods were sold on consignment does not preclude these dealings from being an open account.” (Emphasis added.) United Distributors, Inc. v. Redfern, 449 So.2d 580 (La.App. 1st Cir.1984). See also Goldberg v. Borenstein, 59 So.2d 172 (Orl.La.App.1952). In addition, the Court must assume and conclude that these affidavits are attempts to vary the terms of the Gasoline Supply Agreement by implying that although the agreement uses terms such as seller, purchaser, etc., there was really no intent to transfer ownership of the gasoline and the title to the gasoline remains with J.C. Roberts Oil Co.

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Cole v. Circle R. Convenience Stores, Inc., 620 F. Supp. 886, 1985 U.S. Dist. LEXIS 16334 (M.D. La. 1985).

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