Essex v. Getty Oil Co.

661 S.W.2d 544, 1983 Mo. App. LEXIS 3699
CourtMissouri Court of Appeals
DecidedAugust 30, 1983
DocketWD 33749
StatusPublished
Cited by41 cases

This text of 661 S.W.2d 544 (Essex v. Getty Oil Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Essex v. Getty Oil Co., 661 S.W.2d 544, 1983 Mo. App. LEXIS 3699 (Mo. Ct. App. 1983).

Opinions

CLARK, Judge.

Plaintiffs-Appellants Essex had jury verdicts on a multi-count petition for $23,-300.00 actual damages and $2,150,000.00 punitive damages. On the post-trial motions of defendant-respondent Skelly, the trial court entered judgment n.o.v. for defendant and, in the alternative, ordered a new trial. We affirm in part, reverse in part and remand for further proceedings.

Plaintiffs pleaded two causes of action in four counts, the first three counts based on fraudulent misrepresentations and the fourth count for unfair competition. All claims grew out of agreements whereby plaintiffs had leased automobile service stations from Skelly to operate at two locations in Independence. For convenience, the facts are separately summarized as to each location. In stating the facts, evidence and inferences favorable to the jury’s verdicts are accepted as true and contrary evidence and inferences are disregarded. Grant Renne & Sons, Inc. v. J.E. Dunn Construction Company, 633 S.W.2d 166, 168 (Mo.App.1982).

I.

THE 23RD STREET STATION

In 1968, Arlo Essex1 was a successful service station operator in the Independence area having acquired a following of customers through the conduct of that business for more than ten years. Essex was approached in 1968 by one Jerry Meadors, a territorial representative for Skelly, to seek Essex out as a lease operator for a Skelly station then under construction. (Referred to hereafter as the 23rd Street Station). After discussions lasting several months, Essex agreed to terminate his existing lease of an Apeo station and enter into a lease with Skelly for the 23rd Street station. Before the transaction was completed, Mea-dors was replaced as Skelly territorial representative by one Gary Leabo. The lease arrangement was actually finalized December 1, 1969 between Essex and Leabo.

During the course of negotiations, Essex expressed concern to Meadors and Leabo about a clause in the proposed Skelly lease giving either party the option to cancel the lease on 30 days notice. Essex was reluctant to leave his successful operation under Apeo without security that Skelly would [548]*548not arbitrarily exercise the cancellation privilege. Both Meadors and Leabo assured Essex the language in the lease was merely a formality and if Essex ran a good operation, he could remain in the location until he decided to retire.

According to Leabo, at the Skelly training program for territorial representatives, he and others were instructed to overcome resistance prospective lessees might express about the cancellation clause by saying that the clause would not be used to terminate a lease unless good cause by reason of unsatisfactory performance of the lessee gave actual grounds to seek another station operator. Essex operated the 23rd Street Station to the apparent satisfaction of Skelly until April, 1973 when he was contacted by one McKinney, the successor representative to Leabo. McKinney informed Essex that Skelly was assuming control of the station and was terminating Essex’s lease the next day. No charge of unsatisfactory operation of the station was made against Essex and, as subsequent events demonstrated, the reason for the termination was a decision by Skelly to convert the station into a self-service operation under the name of a Skelly subsidiary, Surfco.

Essex refused to vacate the station on one day’s notice and refused to sign a mutual termination agreement tendered to him by Skelly a few days later. On April 30, 1973 Skelly delivered to Essex a formal termination notice in accordance with the lease provision requiring Essex to vacate in 30 days. Essex complied. As evidence of damage, Essex offered proof of the expense required for him to relocate his business and the loss he sustained on an inventory of Skelly products which Skelly refused to repurchase.

THE SPRING AND MAPLE STREET STATION

In the summer of 1971 while Essex was still operating the 23rd Street Station, Lea-bo initiated a discussion about operation of a Skelly station at Spring and Maple Streets. (Referred to hereafter as the Spring and Maple Station). The existing building and improvements had been in place many years and were in poor condition, but Leabo told Essex a new station was to be constructed on the site that Fall or in the early part of 1972. Leabo displayed blueprints of the new structure. Because of the contemplated new construction, Essex understood no repairs would be made to the old structure.

Upon the promise a new station would be built, Essex assumed operation of the Spring and Maple station by an agreement signed September 26, 1971, adding it to his lease of the 23rd Street Station. Despite continuing assurances to Essex by Skelly representatives during the next four years, however, no new construction was commenced at the Spring and Maple location. Undisclosed to Essex was a decision made by Skelly in May, 1972 to suspend all new filling station construction. Eventually, in 1976, Essex bought the location from Skelly and renovated it himself.

During the period from 1971 to 1976, Essex encountered difficulty with the Spring and Maple station associated with the lack of repair. Only two of the four gasoline pumps operated, the roof leaked, the underground storage tanks had water seepage and the blender pumps dispensed an improper gasoline mixture. In addition, heating costs were unnecessarily high and the external appearance was unsatisfactory lacking commercial appeal. Damages claimed by Essex consisted of loss of profits and loss of customers attributable to the condition of the Spring and Maple station and the failure of Skelly to replace the structure as represented to Essex when the lease was negotiated.

The first three counts of plaintiff’s petition claimed damages recoverable on the ground of fraudulent misrepresentations made by Skelly agents Meadors and Leabo, first as to the import of the lease cancellation clause and second, as to Skelly’s plans for erecting a new service station at Spring and Maple. The theory underlying Counts I, II and III was the same, only the facts varied as to each count.

[549]*549Count IV claimed damages by reason of unfair competition on the part of Skelly when it assumed operation of the 23rd Street Station under the Surfco subsidiary and entered into competition with Essex for customers in the area. The factual basis for the claim included the supply of products to Surfco at lower prices than Skelly charged Essex, the appearance of the Surf-co station as a regular Skelly station offering self-service and the sale of an inferior and cheaper grade of gasoline branded “regular” in competition with the regular gasoline sold by Essex.

II.

The several causes of action and the related points raised on appeal subdivide readily between the theories of fraudulent misrepresentation and of unfair competition and they will be so treated in the subsequent discussion. The sequence of counts will be followed and appropriately noted. Also in the order taken up will be first, the entry of judgment n.o.v. on the respective counts and second, as to Counts I, II and III, the alternative orders of the trial court granting Skelly new trials as to those counts.

FRAUDULENT MISREPRESENTATION

COUNT I.

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Bluebook (online)
661 S.W.2d 544, 1983 Mo. App. LEXIS 3699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/essex-v-getty-oil-co-moctapp-1983.