Four Corners Service Station, Inc. v. Mobil Oil Corp.

51 F.3d 306, 1995 WL 114401
CourtCourt of Appeals for the First Circuit
DecidedMarch 22, 1995
Docket94-1616, 94-1718
StatusPublished
Cited by19 cases

This text of 51 F.3d 306 (Four Corners Service Station, Inc. v. Mobil Oil Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Four Corners Service Station, Inc. v. Mobil Oil Corp., 51 F.3d 306, 1995 WL 114401 (1st Cir. 1995).

Opinion

CYR, Circuit Judge.

Four Corners Service Station, Inc. (“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 unlawful 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

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 contaminated with gasoline. The Massachusetts Department of Environmental Quality Engineering (“DEQE”) issued a notice of responsibility, citing six underground gasoline storage tanks installed by Four Comers between 1942 and 1978 as likely sources of the contamination. 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 gallonage purchase obligations under the Agreements. Over the next several months, Four Corners repeatedly asked Mobil for advice and information on possible *309 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 contaminated 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, 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 wrongfully 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 gasoline 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 franchisee.” Four Corners Serv. Station, Inc. v. Mobil Oil Corp., No. 89-30044-FHF, 1993 WL 767121 (D.Mass. Dec. 2, 1993) {“Four Comers II”). Mobil did not prove that Four Corners actually caused the soil contamination, that Four Corners had any choice but to close the station under the mandatory DEQE remediation order, nor that Four Corners 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 nonre-newal at $356,099; it estimated its future lost profits for the ensuing five-year period at $Í71,290. 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 profits” calculations. It found no evidence that Mobil would have permitted Four Corners to exceed the annual purchase caps established in the Agreements. Four Corners Serv. Station, Inc. v. Mobil Oil Corp., No. 89-30044-FHF, slip op. at 5-8, 1994 WL 780708 (D.Mass. Mar. 22, 1994) (“Four Comers II”). Moreover, Four Corners actually succeeded in selling more BP and Exxon gasoline following Mobil’s nonre-newal than it could have sold under the maximum Mobil gallonage limits fixed by the *310 annual caps. Thus, the court reasoned, Four Corners experienced an increase in profits, not a reduction. Id. at 8. 2 Because Four Comers 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 challenges the district court finding that Mobil violated PMPA.

II

DISCUSSION

A. Statutory Overview

Free access — add to your briefcase to read the full text and ask questions with AI

Related

TOTAL PETROLEUM PUERTO RICO CORP. v. Colón-Colón
577 F. Supp. 2d 537 (D. Puerto Rico, 2008)
Marcoux v. Shell Oil Products Co. LLC
524 F.3d 33 (First Circuit, 2008)
Rawoof v. Texor Petroleum Co., Inc.
521 F.3d 750 (Seventh Circuit, 2008)
Mills v. Merrimack New Hampshire Police Department
130 F. App'x 481 (First Circuit, 2005)
Cooper v. US Dept of Veterans
71 F. App'x 73 (First Circuit, 2003)
Boyd v. Camardo
65 F. App'x 326 (First Circuit, 2003)
Gary Ceraso v. Motiva Enterprises, Llc
326 F.3d 303 (Second Circuit, 2003)
Ceraso v. Motiva Enterprises, LLC
326 F.3d 303 (Second Circuit, 2003)
Sadlowski v. Benoit
62 F. App'x 3 (First Circuit, 2003)
C.K. Smith & Co. v. Motiva Enterprises LLC
269 F.3d 70 (First Circuit, 2001)
Visiting Nurse v. Bullen
First Circuit, 1996
Crooker v. Variale
69 F.3d 531 (First Circuit, 1995)
Shell v. K.E.M.
First Circuit, 1995

Cite This Page — Counsel Stack

Bluebook (online)
51 F.3d 306, 1995 WL 114401, Counsel Stack Legal Research, https://law.counselstack.com/opinion/four-corners-service-station-inc-v-mobil-oil-corp-ca1-1995.