USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 94-1616
FOUR CORNERS SERVICE STATION, INC.,
Plaintiff, Appellant,
v.
MOBIL OIL CORPORATION,
Defendant, Appellee.
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No. 94-1718
FOUR CORNERS SERVICE STATION, INC.,
Plaintiff, Appellee,
v.
MOBIL OIL CORPORATION,
Defendant, Appellant.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Frank H. Freedman, Senior U.S. District Judge]
__________________________
____________________
Before
Cyr, Circuit Judge,
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Bownes, Senior Circuit Judge,
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and Stahl, Circuit Judge.
_____________
____________________
David R. Schaefer, with whom Brenner, Saltzman, Wallman & Goldman
_________________ ____________________________________
was on brief for Four Corners Service Station, Inc.
Paul D. Sanson, with whom Sheila Huddleston, Shipman & Goodwin,
______________ _________________ _________________
and Edward H. Beck, III were on brief for Mobil Oil Corporation.
___________________
________________
March 22, 1995
________________
CYR, Circuit Judge. Four Corners Service Station, Inc.
CYR, Circuit Judge.
_____________
("Four Corners") appeals a district court judgment under the
Petroleum Marketing Practices Act, 15 U.S.C. 2801-2806 (1994)
("PMPA"), disallowing its demands for compensatory damages and
attorney fees against Mobil Oil Corporation ("Mobil") for unlaw-
ful nonrenewal of Four Corners' franchise agreement. Mobil
cross-appeals the PMPA liability judgment entered against it. We
affirm the district court judgment in all respects.
I
I
BACKGROUND
BACKGROUND
Four Corners is a retail gasoline distributor in Three
Rivers, Massachusetts. Since 1926, Four Corners had been party
to a series of renewable franchise agreements ("Agreements") with
Mobil, its exclusive gasoline supplier. The Agreements obligated
Four Corners to purchase a specified minimum gallonage per annum,
and also set maximum gallonage limits or so-called purchase
_______
"caps." These caps permitted Mobil to plan against unpredicted
fluctuations in franchisee demands for gasoline. The caps
increased by ten percent each year to allow for normal franchisee
sales growth.
In March 1987, Four Corners discovered that the soil
beneath its Three Rivers service station was severely contaminat-
ed with gasoline. The Massachusetts Department of Environmental
Quality Engineering ("DEQE") issued a notice of responsibility,
3
citing six underground gasoline storage tanks installed by Four
Corners between 1942 and 1978 as likely sources of the contamina-
tion. Four Corners promptly notified Mobil that the DEQE-ordered
remediation, involving the removal and replacement of the storage
tanks and 250 cubic yards of contaminated soil, would require an
immediate and indefinite closure of the service station, during
which Four Corners would not be able to meet its minimum gal-
lonage purchase obligations under the Agreements. Over the next
several months, Four Corners repeatedly asked Mobil for advice
and information on possible methods for implementing and funding
the required remediation, but to no avail.
Although it promptly completed the required tank
removal, Four Corners encountered problems arranging a cost-
effective method for disposing of the contaminated soil, a
prerequisite to installing replacement tanks and reopening its
service station. The estimated costs of transporting the contam-
inated soil to an out-of-state disposal site ranged between
$70,000 and $100,000, but transporters would not provide "firm"
cost estimates without first reviewing DEQE site reports. DEQE
in turn would not release the site reports until Four Corners
signed a final contract with a transporter. Consequently, Four
Corners eventually decided to "aerate," a natural remediation
method which achieves decontamination on site by exposing the
soil to the open air for extended periods of time.
In December 1987, Mobil notified Four Corners of its
decision not to renew their sixty-year-old franchise agreement,
4
effective in March 1988, due to Four Corners' breach of certain
terms of their Agreements, specifically (1) its failure to meet
the minimum gallonage provision; (2) its dilatory cleanup of the
environmental contamination; and (3) its closure of the service
station for more than seven consecutive days.
In March 1989, Four Corners initiated the present
action in federal district court, alleging that Mobil had wrong-
fully refused to renew the franchise agreement, in violation of
PMPA, 15 U.S.C. 2801-2806, for "reasons beyond [Four Corners']
control." The complaint sought reinstatement of the franchise,
actual and exemplary damages, attorney fees and costs. Id.
___
2805.
In the meantime, Four Corners had opened an expanded
and modernized service station at the same site in late 1988
under new ownership and management which purchased its gaso-
line supplies from British Petroleum until December 1990, and
later from Exxon. In July 1991, Four Corners filed a voluntary
chapter 11 petition.
Following a jury-waived trial, the district court found
that Mobil had violated PMPA by refusing to renew the franchise
based on a breach "beyond the reasonable control of the franchis-
ee." Four Corners Serv. Station, Inc. v. Mobil Oil Corp., No.
_________________________________ _______________
89-30044-FHF (D. Mass. Dec. 2, 1993) ("Four Corners I"). Mobil
______________
did not prove that Four Corners actually caused the soil contami-
nation, that Four Corners had any choice but to close the station
under the mandatory DEQE remediation order, nor that Four Corners
5
unreasonably failed to take the most expeditious approach for
effecting soil decontamination. Id., slip op. at 14-15. The
___
PMPA violation notwithstanding, the district court declined to
grant reinstatement of the franchise and addressed Four Corners'
request for a remedy at law recovery of lost profits for the
projected ten-year residual term of the Mobil franchise. Id. at
___
15.1 The parties were directed to submit supplemental briefs on
the right to recover lost profits. Id. at 16.
___
For the five-year period immediately preceding trial,
Four Corners calculated the profits lost due to Mobil's wrongful
nonrenewal at $356,099; it estimated its future lost profits for
the ensuing five-year period at $171,290. These calculations
were based on the contention that Mobil's greater product
strength in Western Massachusetts would have enabled Four Corners
to sell 30% more Mobil gasoline than it did BP gasoline between
1988 and 1990, and 20% more Mobil gasoline than it did Exxon
gasoline between 1991 and 1993.
The district court rejected Four Corners' "lost prof-
its" calculations. It found no evidence that Mobil would have
permitted Four Corners to exceed the annual purchase caps estab-
lished in the Agreements. Four Corners Serv. Station, Inc. v.
_________________________________
Mobil Oil Corp., No. 89-30044-FHF, slip op. at 5-8 (D. Mass. Mar.
_______________
22, 1994) ("Four Corners II"). Moreover, Four Corners actually
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succeeded in selling more BP and Exxon gasoline following Mobil's
____
____________________
1As the district court found that Mobil had not violated
PMPA willfully, it denied exemplary damages as well. See infra
___ _____
note 3.
6
nonrenewal than it could have sold under the maximum Mobil
gallonage limits fixed by the annual caps. Thus, the court
reasoned, Four Corners experienced an increase in profits, not a
reduction. Id. at 8.2 Because Four Corners proved no actual
___
damages, the court exercised its discretion, under 15 U.S.C.
2805(d)(1)(C), and denied an attorney fee award. On appeal, Four
Corners challenges only the rulings denying compensatory damages
and attorney fees.3 For its part, the Mobil cross-appeal chal-
lenges the district court finding that Mobil violated PMPA.
II
II
DISCUSSION
DISCUSSION
A. Statutory Overview
A. Statutory Overview
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____________________
2The court based its findings on the following evidence:
Actual Sales Potential Franchise
____________
(gallons) Mobil Sales Caps
___________ ____
1989 1,100,892 1,431,159 824,602
1990 1,274,643 1,657,035 907,062
1991 1,083,253 1,299,904 997,767
1992 985,406 1,182,487 1,097,545
1993 (1st 185,335 222,402 301,825
quarter)
3Although the Four Corners' notice of appeal alludes to the
district court rulings denying equitable relief and exemplary
damages, its appellate briefs do not challenge these rulings. See
___
Licari v. Ferruzzi, 22 F.3d 344, 349 (1st Cir. 1994) (claims
______ ________
unaccompanied by adequate argumentation are deemed waived on
appeal). As concerns the former issue, therefore, we must assume
that Four Corners concedes that an award of lost profits for the
projected ten-year residual franchise term, if proven, would have
__ ______
afforded it a full and "adequate" remedy at law. Cf., e.g.,
___ ____
McDonald v. Piedmont Aviation, 793 F. Supp. 75, 78 (S.D.N.Y.
________ _________________
1992) (plaintiff waives entitlement to equitable relief by
failing to appeal earlier court ruling that damages award would
confer an "adequate" remedy in lieu of equitable relief).
7
Congress enacted PMPA to avert the detrimental effects
on the nationwide gasoline distribution system caused by the
unequal bargaining power enjoyed by large oil conglomerates over
their service-station franchisees. See generally Veracka v.
___ _________ _______
Shell Oil Co., 655 F.2d 445, 448 (1st Cir. 1981); S. Rep. No.
______________
731, 95th Cong., 2d Sess. 17-19, reprinted in 1978 U.S.C.C.A.N.
_________ __
873, 875-77. PMPA attempts to level the playing field by re-
stricting the grounds upon which a franchisor can assert a
unilateral termination or nonrenewal of a franchise. Grounds
upon which unilateral termination by a franchisor is permitted
under PMPA include (1) "[a] failure by the franchisee to comply
with any provision of the franchise, which provision is both
reasonable and of material significance," 15 U.S.C.
2802(b)(2)(A); (2) "[a] failure by the franchisee to exert good
faith efforts to carry out the provisions of the franchise," id.
___
2802(b)(2)(B); or (3) "[t]he occurrence of an event which is
__
relevant to the franchise relationship and as a result of which
termination of the franchise or nonrenewal of the franchise
relationship is reasonable," id. 2802(b)(2)(C). The failure of
___
a franchisee to operate the marketing premises for seven
consecutive days may constitute a relevant event under PMPA
2802(b)(2)(C). Id. 2802(c)(9)(A). However, unilateral
___
termination or nonrenewal is not permitted under PMPA if the
failure to comply with the terms of the franchise agreement was
"beyond the reasonable control of the franchisee." Id. 2801-
___
(13). PMPA also allocates and shifts burdens of proof
8
between the parties to the franchise agreement. In a PMPA-based
action for unlawful franchise termination or nonrenewal, the
franchisee bears the initial burden of proving that a termination
or nonrenewal occurred, at which point the burden of proof shifts
to the franchisor to demonstrate that the termination or refusal
to renew was based on a legitimate ground enumerated in PMPA.
Id. 2805(c).
___
B. Liability: "Reasonable Control"
B. Liability: "Reasonable Control"
______________________________
1. Cause of Environmental Contamination
1. Cause of Environmental Contamination
____________________________________
The Mobil cross-appeal asserts two related challenges
to the district court ruling on liability. First, it contends
that there is no record support for the finding that the actual
cause of the soil contamination at the Four Corners service
_____
station remained "unclear." Four Corners I, slip op. at 14.
_______________
Mobil notes that Four Corners was the only gas station in the
vicinity of the contamination; Four Corners had sole responsibil-
____
ity for maintaining the storage tanks and was the sole target of
the DEQE notice of responsibility; Four Corners concededly did
not comply with environmental statutes and regulations requiring
periodic testing of its storage tanks for leakage, see Mass. Gen.
___
L. Ann. ch. 148, 10 (1994); Mass. Regs. Code tit. 527, 5.05,
9.01 to 9.24 (1983); and noticeable "wet spots" were found on the
outer shell of the storage tanks upon excavation. If Four
Corners caused the contamination, Mobil argues, nonrenewal was
not beyond Four Corners' "reasonable control."
9
We review the district court factual finding on "rea-
sonable control" and its subsidiary findings on causation only
for "clear error." See, e.g., Roberts v. Amoco Oil Co., 740 F.2d
___ ____ _______ _____________
602, 608 (8th Cir. 1984) (legislative history of PMPA suggests
that Congress intended to favor franchisees by treating "reason-
ableness" determination as an issue of fact); Serianni v. Gulf
________ ____
Oil Corp., 662 F. Supp. 1020, 1024 (E.D. Pa. 1986); cf. Dedham
_________ ___ ______
Water Co. v. Cumberland Farms Dairy, 972 F.2d 453, 457 (1st Cir.
_________ ______________________
1992) (causation in environmental context is question of fact
subject to "clear error" review). Reversal is warranted only if,
after considering the entire record, we are left with the "defi-
nite and firm conviction that a mistake has been committed."
Interstate Commerce Comm'n v. Holmes Transp., Inc., 983 F.2d
___________________________ _____________________
1122, 1129 (1st Cir. 1993) (quoting Anderson v. City of Bessemer
________ ________________
City, 470 U.S. 564, 573 (1985)); see also Fed. R. Civ. P. 52(a).
____ ___ ____
Significantly, the burden of proof on "reasonable
control" lay with Mobil, not Four Corners. See 15 U.S.C.
_____ ___
2805(c). On appeal, Mobil must point to evidence that fairly
compelled a finding that Four Corners and Four Corners alone
_____
caused the contamination. See Reich v. Cambridgeport Air
___ _____ __________________
Sys., 26 F.3d 1187, 1188 (1st Cir. 1994) ("'Where there are two
____
permissible views of the evidence, the factfinder's choice
between them cannot be clearly erroneous.'") (citations omitted).
Since it has not done so, we find no clear error.
First, DEQE found no holes in the tanks. Nor did the
"wet spots" constitute conclusive evidence of tank leakage, since
10
they could have been caused by contamination emanating outside
the tanks. Four Corners cited a United States Environmental
Protection Agency document which suggests that gasoline spills by
oil transporters during gasoline delivery are among the most
___ ____________
common causes of soil contamination at service stations. See 53
___
Fed. Reg. 37087, 37090, 37133 (1988). Finally, the notice of
responsibility issued by DEQE rested on Four Corners' legal
status as the current owner/operator of the service station
facility for strict liability purposes only. It did not purport
______ _________
to represent a determination that Four Corners caused the con-
tamination.
Likewise, the record evidence does not compel a finding
that Four Corners might have averted the bulk of the soil con-
tamination by more diligent testing of its tanks. Mobil neither
produced evidence as to when the contamination occurred, nor
________ ____
asserted that the environmental "detection" statutes and regula-
tions of the 1980s were retroactive. Further, there was no
evidence which would exclude leakage from other pumping system
components (pumps, hoses, pipes); that is, leakage which could
not have been detected by testing the tanks. Finally, since
there was no evidence that Mobil investigated any of these
matters before it decided not to renew the Four Corners fran-
______
chise, the district court might well have treated this contention
as a post hoc rationalization. See Desfosses v. Wallace Energy,
____ ___ ___ _________ _______________
Inc., 836 F.2d 22, 29 (1st Cir. 1987) (noting that PMPA notifica-
____
tion requirements ensure that franchisor cannot invent after-the-
11
fact justifications for termination or nonrenewal). As Mobil
failed to meet its burden of proof on the factual issues underly-
ing the district court ruling on "reasonable control," the
finding stands.
12
2. "Financial Inability" to Remediate
2. "Financial Inability" to Remediate
_________________________________
Mobil likewise challenges the district court ruling
that Four Corners lacked the financial ability to remediate the
soil contamination. It contends that the ruling was infected by
legal error, in that the court wrongly regarded Four Corners'
financial inability to pay for out-of-state disposal, the costli-
er but more expeditious method of remediation, as a circumstance
beyond the franchisee's reasonable control. If this were true,
Mobil argues, any franchisee who came upon hard times and could
not afford to pay Mobil for its oil purchases would be exempt
from unilateral termination. See, e.g., California Petroleum
___ ____ _____________________
Distribs. v. Chevron U.S.A., 589 F. Supp. 282, 288 (E.D.N.Y.
_________ _______________
1984); Cantrell v. Exxon Co., U.S.A., 574 F. Supp. 313, 317 (M.D.
________ _________________
Tenn. 1983). Even if we were to agree with the reasoning of the
two decisions cited by Mobil, however, the district court simply
did not find that Four Corners' choice of a less expeditious
remediation program was beyond its reasonable control because
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Four Corners could not afford more expeditious measures. Indeed,
Four Corners itself adduced evidence that its then owner, Richard
Tenczar, could have obtained financing for out-of-state disposal
if necessary.
Mobil's contention is a thinly veiled attempt to frame
the present "clear error" challenge, see Roberts, 740 F.2d at
___ _______
608, as an issue of law subject to de novo review. See Cumpiano
__ ____ ___ ________
v. Banco Santander Puerto Rico, 902 F.2d 148, 154 (1st Cir. 1990)
___________________________
("The 'clearly erroneous' rule cannot be evaded by the simple
13
expedient of [the] creative relabelling . . . by dressing factual
disputes in 'legal' costumery."). The central inquiry that of
"reasonableness" must be undertaken in light of all the cir-
___
cumstances. In that vein, we cannot ignore the subsidiary
finding by the district court that Mobil repeatedly ignored Four
Corners' pleas for guidance and assistance on how best to reme-
diate service-station soil contamination. See Four Corners I,
___ _______________
slip op. at 14 ("Mobil offered no assistance that was refused by
Four Corners which would evidence a lack of desire on the part of
Four Corners to remedy the problem as expeditiously as possi-
ble."); cf., e.g., Malone v. Crown Cent. Petroleum Corp., 474 F.
__ ____ ______ ___________________________
Supp. 306, 311 (D. Md. 1979) (upholding franchise termination
where franchisee deliberately failed to heed franchisor's warn-
ings or accept its "good faith" advice about more profitable
marketing strategies). Four Corners was left entirely to its own
devices, in the awkward position of having to determine the most
cost-effective remediation method, which involved balancing
projected future service-station revenue losses occasioned by a
more prolonged closure, against the unconfirmable but
unquestionably higher immediate costs of a more expeditious
remediation. In these circumstances, the district court reason-
ably could find that Four Corners acted in good faith, and that
Mobil's reticence to assist was prompted by its desire to rid
itself of the franchisee requesting its assistance. As there was
no clear error, the liability judgment against Mobil must stand.
14
15
C. Damages
C. Damages
_______
1. The Maximum Gallonage Provision
1. The Maximum Gallonage Provision
_______________________________
Four Corners impugns the district court's reliance on
the annual gallonage caps as the basis for finding that Four
____
Corners lost no profits as a result of the nonrenewal. It argues
that the district court was required to predict whether Mobil
would have waived the caps in each successive year had the
franchise not been wrongfully terminated in 1988. It points out
that a Mobil manager testified that Mobil had an "internal
mechanism" for authorizing such waivers where franchisees have
renovated or expanded service stations in order to increase their
gasoline sales by more than ten percent over the previous year.
Consequently, Four Corners contends, were Mobil to have refused a
waiver in these circumstances its action would have been arbi-
trary and discriminatory, in violation of PMPA.
Normally, the plaintiff must bear the burden of proving
actual damages. See, e.g., Wells Real Estate, Inc. v. Greater
___ ____ ________________________ _______
Lowell Bd. of Realtors, 850 F.2d 803, 816 (1st Cir.) (citing
________________________
cases), cert. denied, 488 U.S. 955 (1988). Four Corners has not
_____ ______
suggested that a different burden allocation obtains under PMPA.
Therefore, we assume that the burden of proof rested with Four
Corners. A challenge to the district court's findings on the
actual amount of damages sustained by a claimant presents a
question of fact, which we review only for "clear error." See,
___
e.g., American Title Ins. Co. v. East West Fin. Corp., 16 F.3d
____ ________________________ _____________________
449, 461 (1st Cir. 1994).
16
The record evidence did not compel a finding that Mobil
would have waived the 1988-91 caps on Four Corners' gasoline
purchases. Judy Schultz, district sales manager for Mobil,
testified that Mobil imposed these contractual caps to protect
itself from the considerable expense which would attend unpre-
dictable or unanticipated increases in franchisee demand for on-
hand gasoline supplies. She further noted that the gallonage
caps automatically increased by ten percent per year. A franchi-
see which wanted a waiver of the cap would need to obtain prior
approval from the general manager for the Mobil region, the
wholesale manager, and the district sales manager. When pressed
by Four Corners, however, Schultz testified that she did not know
of any Mobil franchisee which had actually obtained a waiver.
Even assuming, arguendo, that Four Corners' burden of
________
proof could have been sustained by showing that Mobil had an
established "internal mechanism" for affording relief from the
gallonage caps beyond the automatic ten-percent annual increase,
and that Four Corners itself met the criteria for such a waiver
in the years 1988-91, the Schultz testimony fell well short of
such a showing. It identified no criteria, nor did it indicate
that any such waiver procedure had ever been invoked, either by
____
Mobil or a franchisee. Moreover, Four Corners proffered no
__
independent evidence that any Mobil franchisee, let alone a
___
franchisee in a position comparable to Four Corners', had ever
requested or been granted any such extraordinary waiver. Cf.,
___
e.g., Ewing v. Amoco Oil Co., 823 F.2d 1432, 1438 (10th Cir.
____ _____ ______________
17
1987) (noting existence of factual dispute whether franchisor
offered plaintiff less favorable terms than its other
franchisees); Valentine v. Mobil Oil Corp., 614 F. Supp. 33, 39
_________ ________________
(D. Ariz. 1984) (finding no evidence that franchisor treated
plaintiff differently than franchisor's other franchisees),
aff'd, 789 F.2d 1388 (9th Cir. 1986). Thus, there is no record
_____
evidence even suggesting that the district court finding that
Four Corners would not have been granted a gallonage cap waiver
constituted clear error. See Four Corners II, slip op. at 8.
___ _______________
2. Lost Profits for 1992 and 1993
2. Lost Profits for 1992 and 1993
______________________________
Next, Four Corners contends that it lost profits in
1992, and during the first quarter of 1993, when the gallonage
caps under its wrongfully terminated Mobil franchise first began
to exceed its actual Exxon gasoline sales or its potential Mobil
______
gasoline sales. See supra note 2. For example, in 1992, Four
___ _____
Corners could have sold 112,139 more gallons (viz., the differ-
___
ence between its 1,097,545 gallon Mobil cap and its actual Exxon
sales of 985,406 gallons) even assuming that Mobil refused to
____ ________
waive its cap. Thus, Four Corners claims, it was entitled to
recover these discrete losses, which were proximately caused by
Mobil's wrongful nonrenewal under PMPA.
This claim can succeed only if the measure of compen-
_______
satory damages under PMPA may exceed the level required to make
______ ______
the plaintiff-franchisee whole for whatever injury or loss flowed
_____
from the franchisor's wrongful conduct. But cf., e.g., Linn v.
___ ___ ____ ____
Andover Newton Theological Sch., 874 F.2d 1, 8 (1st Cir. 1989)
________________________________
18
(noting that plaintiff failed to suggest that either the ADEA or
contract law entitled him to be made "more than whole"). Four
Corners points to no authority for this counterintuitive assump-
tion, nor is there anything in PMPA's language or legislative
history to suggest that Congress intended to deviate from the
normal presumption, uniformly applied to numerous other causes of
action arising under federal remedial statutes, that compensatory
____________
damages may not exceed the amount necessary to make the injured
party whole. See, e.g., Midwest Petroleum Co. v. American
_____ ___ ____ ______________________ ________
Petrofina Mktg., Inc., 644 F. Supp. 1067, 1071 (E.D. Mo. 1986)
______________________
(noting PMPA franchisee is not entitled to "double recovery"
where it has otherwise mitigated harmful effects of defendant's
violation); see also Russo v. Texaco Inc., 630 F. Supp. 682, 687
___ ____ _____ ___________
(E.D.N.Y.) (PMPA is a diminution of franchisors' common-law
contract rights, and its remedial provisions should not be unduly
extended beyond statute's express language and purpose), aff'd,
_____
808 F.2d 221 (2d Cir. 1986).
Since Four Corners requested the district court to
presume that its sixty-year-old Mobil franchise would have
remained in force another ten years but for Mobil's wrongful
nonrenewal, the court was required to determine the aggregate net
_________ ___
profits Four Corners would lose during the entire ten-year
______
period. The record evidence reveals that Four Corners actually
realized an overall increase approximating $215,000, in total net
________
profits and interest, as a consequence of having been freed from
the Mobil gallonage caps during the five years immediately
19
preceding trial.4 Thus, the profits allegedly lost in 1992-93
clearly were not recoverable as discrete losses over and above
the incidental profits gained during the entire five-year period.
3. Future Profits
3. Future Profits
______________
Four Corners insists that the district court simply
ignored its claim to $171,290 in future lost profits. See
______ ___
Thompson v. Kerr-McGee Ref. Corp., 660 F.2d 1380, 1388 (10th Cir.
________ _____________________
1981) (future lost profits recoverable under PMPA), cert. denied,
_____ ______
455 U.S. 1019 (1982); cf. Wallace Motor Sales, Inc. v. American
___ _________________________ ________
Motor Sales Corp., 780 F.2d 1049, 1062 (1st Cir. 1985) (automo-
_________________
bile dealership entitled to claim damages for lost profits over
projected life span of franchise). Although Four Corners would
incur these damages in each future year because the gallonage
caps would continue to outstrip Four Corners' actual sales of
Exxon gasoline, or its projected sales of Mobil gasoline, until
1998, this claim too is flawed.
____________________
4Assuming constant retail prices and operating costs, the
following would approximate Four Corners' profits (losses) during
each of the five years immediately preceding trial:
Change in Estima- Interest Total
Net Profits ted Int- on Gain or
as Mobil Sta- erest Profit Loss
tion with Rate
Caps in Force
___________________________________________________________
1988: ($ 1,004) 52% ($ 528) ($ 1,532)
1989: $ 69,571 45% $ 31,306 $100,877
1990: $100,426 34% $ 34,144 $134,570
1991: $ 21,655 22% $ 4,764 $ 26,419
1992: ($ 19,568) 10% ($ 1,956) ($ 21,524)
1993: ($ 22,872) 3% ($ 686) ($ 23,558)
____________________________________________________________
Total $148,208 $ 67,044 $215,252
20
In truth, the district court was fully cognizant of
Four Corners' claim for future profits, as it explicitly acknowl-
edged in its opinion. See Four Corners II, slip op. at 3.
___ ________________
Moreover, the record evidence discloses that there was little
likelihood that Four Corners could have remained in business
until 1998. Furthermore, there were serious deficiencies in its
forecasts of future lost profits. See Levy v. FDIC, 7 F.3d 1054,
___ ____ ____
1056 (1st Cir. 1993) (appellate court is free to affirm on any
ground supported by record).
Four Corners extrapolated its estimates of future lost
____
profits based on its performance during the two years immediately
preceding trial; that is, it assumed that Mobil's refusal to
renew its franchise was alone responsible for the dismal profit
picture during the time Four Corners was in serious financial
straits and selling Exxon gasoline.5 During the first quarter
of 1993 alone, Four Corners lost $47,754, compared with a $107-
,154 net profit in 1990, this notwithstanding the infusion of
_______________
approximately $215,000 in profits and interest income which could
not have been realized but for Mobil's termination of the fran-
chise in 1988. See supra note 4. Thus, Four Corners projected
___ _____
continued future business operations despite such severe losses
____________________
5The chapter 11 filing constituted an event of default under
the Agreements, see Agreement 24(B)(4), and may have afforded
___
Mobil an independent basis for termination or nonrenewal in 1991.
Although it is questionable whether a franchisor could rely on
such an event to cut off PMPA damages if it appeared that the
__
franchisor wrongfully refused to renew prior to the chapter 11
petition, thereby causing the franchisee's financial problems,
_______
Four Corners' greater profits in the years 1988-91 tend to
_______ _______
undercut such a causal connection.
21
as would make its prospects for continued operation until 1998
_____ ____
highly speculative. See Midwest Petroleum Co., 644 F. Supp. at
___ _____________________
1070 ("To warrant a recovery of lost profits, the [franchisee]
must present proof sufficient to bring the issue outside the
realm of conjecture, speculation or opinion unfounded on definite
facts.").
Finally, even if Four Corners had been able to continue
in business until 1998, its claim to $171,000 in future lost
profits would be groundless given the record evidence that it had
already realized an aggregate net increase in profits and inter-
________
est approximating $215,000 during the five-year period immediate-
ly prior to trial. See supra note 4. Accordingly, even if the
___ _____
district court had allowed all speculative lost future profits
claimed, Four Corners still would have realized approximately
$44,000 in aggregate net profits ($215,000 net increased profits,
less $177,000 future profits) during the projected ten-year life
span of the franchise following Mobil's wrongful refusal to
renew.
D. Attorney Fees Under PMPA
D. Attorney Fees Under PMPA
________________________
Lastly, Four Corners challenges the denial of its
request for an attorney fee award against Mobil based on the PMPA
violation. First, it claims that the district court's factual
findings were inadequate under Fed. R. Civ. P. 52. Second, it
says that the district court was somehow constrained to allow a
fee award because Congress meant to encourage prevailing franchi-
sees to vindicate their rights under PMPA.
22
A denial of an attorney fee award is reviewed only for
abuse of discretion. See Catullo v. Metzner, 834 F.2d 1075, 1085
___ _______ _______
(1st Cir. 1987). Under PMPA, see 15 U.S.C. 2805(d)(1)(C), an
___
attorney fee award is discretionary where the plaintiff recovers
neither actual nor exemplary damages. Not only did Four Corners
sustain no provable damages, but the record evidence indicates
that it generated approximately $44,000 more in aggregate net
profits during the projected remaining life span of the Mobil
franchise as a consequence of having been freed from the Mobil
franchise gallonage caps since 1988. Four Corners likewise
failed to win equitable reinstatement of its Mobil franchise.
Cf. Chestnut Hill Gulf, Inc. v. Cumberland Farms, Inc., 749 F.
__ ________________________ _______________________
Supp. 331, 333 (D. Mass. 1990) (plaintiff which obtains equitable
relief under PMPA is entitled to attorney fee award even absent
recovery of actual or exemplary damages).
Without in any sense diminishing Mobil's clear viola-
tion of PMPA, we cannot say that the district court abused its
discretion in denying an attorney fee award on the present
record. Nor do we think that Congress intended to compel attor-
______
ney fee awards under PMPA as an inducement to franchisees to
pursue vindication in these circumstances.
The district court judgment is affirmed. Costs are
The district court judgment is affirmed. Costs are
__________________________________________ _________
awarded to cross-appellee in appeal No. 94-1718.
awarded to cross-appellee in appeal No. 94-1718.
_______________________________________________
23