Lyons v. Mobil Oil Corp.

526 F. Supp. 961, 1981 U.S. Dist. LEXIS 9945
CourtDistrict Court, D. Connecticut
DecidedNovember 12, 1981
DocketCiv. B-81-406
StatusPublished
Cited by10 cases

This text of 526 F. Supp. 961 (Lyons v. Mobil Oil Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lyons v. Mobil Oil Corp., 526 F. Supp. 961, 1981 U.S. Dist. LEXIS 9945 (D. Conn. 1981).

Opinion

OPINION

EGINTON, District Judge.

Plaintiff filed this action against the defendant seeking damages, a declaratory judgment and injunctive relief. The complaint alleges that defendant has terminated the franchise relationship between the parties in violation of the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. (PMPA) and Connecticut General Statutes § 42-133e et seq. The Connecticut statute need not be considered. To the extent it differs from the PMPA, it is expressly preempted. 15 U.S.C. § 2806(a). The matter currently before the court is plaintiff’s motion for a preliminary injunction. This motion has been granted, and the court hereby files its findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52.

FINDINGS OF FACT

1. Plaintiff is an independent service station dealer, doing business as Ludlow Service Station, operating a Mobil service station located at 219 East Avenue, Nor-walk, Connecticut. The defendant, a New York corporation, is a major refiner of petroleum products. Defendant is engaged in the sale and distribution of oil, gasoline and gasoline-related products under the “Mobil” trade name or trademark to franchise retailers in the state of Connecticut. It is a franchisor under the provisions of the PMPA.

2. Plaintiff operates the station pursuant to a service station lease, retail dealer contract and letter of understanding covering a term from October 19, 1979 through October 18,1982. The station was formerly operated by William D. Melillo until his death, following a brief illness, on June 3, 1979.

3. On June 4, 1979, John J. McNally, defendant’s marketing representative for lower Fairfield County, took an inventory of the products at the station, secured the station’s premises by placing locks thereon, made arrangements to remove the gasoline from the station’s underground tanks, and made arrangements to have the station’s utilities placed in defendant’s name.

4. Plaintiff, among others, contacted defendant regarding the possibility of becom *963 ing the dealer at the station. McNally told plaintiff that because of legal problems relating to the station, defendant could not lease the station at that time, but the plaintiff would receive an application form. The problem to which McNally referred concerned the Melillo estate’s claim that the provision in the lease between Melillo and defendant that provided for termination of the lease upon Melillo’s death was invalid by reason of Connecticut General Statutes § 42-133m(b).

5. In early July, 1979, McNally met with plaintiff to discuss plaintiff’s application. Plaintiff was told that although defendant still faced legal problems with the location, it would be seeking a candidate for station operation as soon as there existed “the legal okay to go ahead. . . . ”

6. The Melillo estate instituted suit against defendant on July 17, 1981. Thereafter, on or about July 19 or July 20, 1981, plaintiff met with McNally to discuss plaintiff’s interest in the station. At that time, plaintiff was advised of the suit concerning the station.

7. McNally received plaintiff’s application, along with several letters of recommendation, on or shortly after July 24, 1979. On July 25, plaintiff met with defendant’s representatives to discuss his application. On that date, several candidates for the station operation met with defendant’s representatives. Plaintiff was told at that meeting that the dealer could lose the right to operate the station if the defendant were to lose the suit brought by Melillo’s estate.

8. Plaintiff and four other candidates met with McNally, Steve Brigati and Jack H. Mason, three representatives of the defendant, on August 16, 1979 at the Norwalk Holiday Inn. Plaintiff was told that the litigation involving the station was still pending.

9. On August 17, 1979, McNally contacted the plaintiff to inform him that he would be selected as the dealer candidate. Three days later plaintiff met with McNally to prepare for plaintiff’s enrollment in defendant’s dealer-training school. At that time, plaintiff was informed that he would have to begin his training on August 27. His training lasted for three weeks.

10. There is conflicting testimony concerning whether, on September 11, plaintiff met with Geoffrey Smith, a Mobil staff attorney, to discuss the Melillo situation and the effect that the litigation could have on plaintiff’s operation of the station. Plaintiff testified that such a meeting did not take place at that time and he never at any time met with Smith. Defendant’s representatives testified that there was such a meeting and that plaintiff was fully informed of the possible consequences of the pending litigation. Additionally, defendant claims that plaintiff was shown a draft of a letter of understanding concerning the Melillo situation. He was told, according to defendant, that he would have to sign the letter of understanding before he would be granted the franchise. As is discussed below, resolution of this conflicting testimony is not necessary. For purposes of this ruling only, the court accepts, without deciding, the accuracy of defendant’s version.

11. On October 17, 1979, plaintiff and defendant entered into a franchise agreement. Included in the agreement was the letter of understanding that purports to define an event relevant to the franchise relationship that would make termination reasonable. This event was described as the “successful assertion of the Melillo Estate of its claimed right to dispose of its purported interest in the operation of this service station [or] ... a future determination by Mobil to acknowledge the rights claimed to exist by the Melillo Estate, whether or not successfully asserted in a judicial or administrative action. . . . ” Plaintiff began operating the station on October 26, 1979.

12. Mobil subsequently settled the litigation with the Melillo estate. The estate was paid $75,000 and withdrew the lawsuit. On June 15,1981, plaintiff was notified that this settlement was an event relevant to the franchise relationship that would make termination of the franchise reasonable as purportedly agreed to in the letter of understanding. There is no evidence before the *964 court concerning whether there were any discussions between defendant and Melillo’s estate relating to anything other than the settlement of the claims for money damages. At no time did defendant lose possession of the right to lease the premises or enter into a franchise relationship with plaintiff.

13. The income generated by the station is plaintiff’s sole means of support. Denial of the requested relief would impose substantial hardship upon the plaintiff. The hardship imposed upon defendant by the granting of preliminary injunctive relief, if any, would be negligible compared to the hardship imposed upon the plaintiff by denial of the preliminary injunction.

DISCUSSION

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Bluebook (online)
526 F. Supp. 961, 1981 U.S. Dist. LEXIS 9945, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lyons-v-mobil-oil-corp-ctd-1981.