Leon Thompson v. Kerr-Mcgee Refining Corporation

660 F.2d 1380
CourtCourt of Appeals for the Tenth Circuit
DecidedOctober 26, 1981
Docket79-2311
StatusPublished
Cited by84 cases

This text of 660 F.2d 1380 (Leon Thompson v. Kerr-Mcgee Refining Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leon Thompson v. Kerr-Mcgee Refining Corporation, 660 F.2d 1380 (10th Cir. 1981).

Opinion

TEMPLAR, Senior District Judge.

This case involves the interpretation and application of the Petroleum Marketing Practices Act (the Act), 15 U.S.C. § 2801 et seq. Kerr-McGee appeals from a jury verdict awarding Leon Thompson, the plaintiff below, $18,500 damages for loss of income resulting from the unlawful nonrenewal of his franchise relationship with Kerr-McGee.

As a preliminary matter, we consider some of the circumstances under which a district judge may grant a motion to vacate under Rule 60(b), F.R.Civ.P. We then consider whether the franchisee has a right to a jury trial of causes of action arising under the Act, what the implications should be of a district court’s decision not to grant the preliminary injunction provided in the Act, and whether the notice and summary statement provisions require strict compliance. Finally, we determine whether there was sufficient evidence to support a verdict for the franchisee.

BACKGROUND

Leon Thompson, the plaintiff and appellee, had operated a Kerr-McGee service station in Oklahoma City since 1968 under a combination station lease and motor fuel consignment agreement. In 1976, a suit filed by Thompson and other dealers against Kerr-McGee was settled. As part of that settlement, Thompson received a two-year lease, under which rent payments were based on his sales. This lease, by its terms, would expire on August 31, 1978.

*1383 In February 1977, Kerr-McGee began offering a new package to its déalers. Instead of their rent being based on their sales, the dealers could choose to pay a flat monthly rent plus their entire electric bill. For its part, Kerr-McGee said that dealers choosing this plan would receive a two-cent per gallon discount on motor fuels. All the dealers in the Oklahoma City district signed the new agreement except Thompson, who, on January 22, 1978, signed a statement that he was electing not to modify his lease.

On July 28, 1978, Thompson received a letter from Kerr-McGee which read in pertinent part:

In the event that you do not indicate your acceptance of the lease and motor fuel consignment by August 15, 1978, this letter is our notice to you that we will not renew your present lease and related agreements which expire August 31, 1978, because of the failure to agree on new terms, as provided in Section 102(b)(3) of the Petroleum Marketing Practices Act.

A letter, hand-delivered on August 23, 1978, gave notice of unconditional nonrenewal. Thompson continued to operate the station, pursuant to a court order, until September 21, 1978.

STATUTORY SCHEME

15 U.S.C. § 2802(b)(1) provides:

Any franchisor may terminate any franchise (entered into or renewed on or after June 19, 1978) or may fail to renew any franchise relationship, if—

(A) the notification requirements of section 2804 of this title are met; and

(B) such termination is based upon a ground described in paragraph (2) or such nonrenewal is based upon a ground described in paragraph (2) or (3).

The notification requirements of Section 2804 1 provide that the notice shall be in *1384 writing, shall be posted by certified mail or personally delivered to the franchisee, and shall contain a statement of intention not to renew the franchise together with the reasons for nonrenewal, the effective date of the nonrenewal, and a summary statement to be prepared by the Secretary of Energy. 15 U.S.C. § 2804(c). The summary statement is to contain a concise summary of the Act and a statement of responsibilities, remedies, and relief available. 15 U.S.C. § 2804(dXl). The summary statement is to be furnished within five days after its publication in the Federal Register. 15 U.S.C. § 2804(dX2). The notification must be given no less than ninety days prior to the nonrenewal, except that in cases where notice cannot be reasonably given that much in advance, the notice must be given on the earliest date on which notice is practicable. 15 U.S.C. § 2804(b).

Section 2802 provides that one ground for nonrenewal is the failure of the franchisor and franchisee to agree to changes in or additions to the provisions of the franchise, provided that the changes or additions are made in good faith and in the normal course of business and the purpose of the .changes or additions is not to prevent the renewal of the franchise relationship. 15 U.S.C. § 2802(bX3)(A). 2

Section 2805 provides for a civil enforcement mechanism in the district courts. The court has the power to grant equitable relief, including preliminary injunctions, to the franchisee. 15 U.S.C. § 2805(b). The franchisee has the burden of proving the nonrenewal; the franchisor then has the burden of going forward with evidence that the nonrenewal was for a permissible reason and that the notice requirements were satisfied. 15 U.S.C. § 2805(c). If successful, the franchisee shall be awarded actual damages, expenses, and attorney’s fees; he may also be awarded exemplary damages. 15 U.S.C. § 2805(d).

I

Thompson filed his complaint on August 31, 1978. The following day, the action was removed to federal court. On October 10, 1978, Thompson’s attorney withdrew, and the court, by minute order, gave Thompson twenty days during which to obtain new counsel. Twenty-four days later, on November 3, Kerr-McGee filed a motion to dismiss for failure to comply with that order. An ex parte hearing was held on that same day and the motion was granted.

On December 19, 1978, Thompson filed a motion to vacate under Rule 60. The court granted this motion on the ground of excusable neglect. See, Rule 60(b)(1), F.R.Civ.P. 3 *1385 Thompson had taken the file to James Mitchell, another attorney. Mitchell had told Thompson that he was hopeful of negotiating a settlement with Kerr-McGee in which event it would be unnecessary to obtain an attorney of record. On November 6, after negotiations had apparently failed, he informed Thompson that he would be unable to represent him because of other commitments.

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Bluebook (online)
660 F.2d 1380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leon-thompson-v-kerr-mcgee-refining-corporation-ca10-1981.