Mobil Oil Corp. v. Henriksen Enterprises., Inc.

490 F. Supp. 74, 1980 U.S. Dist. LEXIS 9302
CourtDistrict Court, W.D. Michigan
DecidedFebruary 21, 1980
DocketNo. M 79-117 CA2
StatusPublished

This text of 490 F. Supp. 74 (Mobil Oil Corp. v. Henriksen Enterprises., Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mobil Oil Corp. v. Henriksen Enterprises., Inc., 490 F. Supp. 74, 1980 U.S. Dist. LEXIS 9302 (W.D. Mich. 1980).

Opinion

[76]*76OPINION AND ORDER

BENJAMIN F. GIBSON, District Judge.

This action involves an attempt by Mobil Oil Corporation [hereinafter “Mobil”] to collect an overdue account with the defendant Henriksen Enterprises, Inc. [hereinafter “Henriksen”] and to recover credit card imprinters from Henriksen. Mobil first seeks to set aside a transfer of assets pursuant to a sale from Henriksen to Norman Oil Company [hereinafter “Norman”] as not being in compliance with the Bulk Sales Act. Both Henriksen and Norman have filed counterclaims alleging that Mobil is wrongfully withholding the delivery of gasoline products pursuant to the Wholesale Distributor Agreement. Henriksen further claims that Mobil is wrongfully refusing to permit credit card sales.

This Court is asked to issue a preliminary injunction filed by defendants requiring that Mobil sell gasoline products to Norman. Pursuant to a lease agreement, Henriksen seeks a preliminary injunction which would compel Mobil to permit the credit card sales. Both defendants ask this Court to grant summary judgment seeking to dismiss allegations by Mobil with respect to the Bulk Sales Act.

Mobil has previously supplied Henriksen gasoline products consisting of gasoline, heating oil, and lubricants in accordance with the Wholesale Distributor Agreement. On April 9,1979, Henriksen sold to Norman the bulk distributor portion of its business together with the right to receive gasoline products from Mobil Oil. Paragraph 26 in the Wholesale Distributor Agreement provides as follows: “Any assignment of this contract by Buyer without Sellers written consent shall be void.”

On February 2, 1979, Henriksen notified Mobil of its intention to sell the wholesale distributor portion of its business to Norman. In response to such communication, Mobil sent the following letter dated March 12, 1979:

In response to your letter, this is to advise that Mobil Oil Corporation does not desire to exercise the pre-emptive right under Paragraph 10 of the wholesale distributor agreement between you and Mobil dated November 8, 1978. Mobil hereby waives and releases you from this clause this one time in that this release is limited to the sale to Norman Oil Company, Chatham, Michigan.

It appears that in reliance thereon, Henriksen and Norman entered into the sale. It further appears that contact by Norman with representatives of Mobil tended to indicate that there was approval of the sale and that the gasoline products sold to Henriksen would be in turn sold to Norman. The record reflects that there were in fact purchases of bulk gasoline products from Mobil by Norman in the same manner as such relationship existed with Henriksen. However, it appears that the Wholesale Distributor Agreement, although executed and signed by Norman, was never signed by Mobil. Indeed, such agreement can not now be located.

At the time of the sale of the wholesale portion of Henriksen’s business to Norman, Henriksen owed a substantial sum of money to Mobil. Mobil contends that this obligation should be assumed by Norman since Norman purchased a substantial portion of Henriksen’s business. Mobil further contends that it would have not consented to the assignment if it had known that Norman would not assume the liabilities of Henriksen. Mobil refuses to enter into a wholesale agreement with Norman. As a consequence, a complaint was filed with the Department of Energy seeking assignment of Henriksen’s gasoline allocation. The Department of Energy granted this request and ordered Mobil to continue the gasoline allocation. This order does not include heating oil or lubricants.

PRELIMINARY INJUNCTION

Henriksen and Norman request this Court to issue a preliminary mandatory injunction which would compel Mobil to comply with the terms of the Wholesale Distributor Agreement claiming (1) that Mobil agreed to the sale, (2) that Mobil agreed to enter into a Wholesale Distributor Agree[77]*77ment with Norman, and (3) that Mobil should be estopped from denying such relationship because of reliance by Norman upon representations and conduct by Mobil.

It is without dispute that in order for this Court to issue a preliminary injunction the following requirements must be considered:

(1) whether the plaintiffs have shown a strong or substantial likelihood or probability of success on the merits;
(2) whether the plaintiffs have shown irreparable injury;
(3) whether the issuance of a preliminary injunction [or denial thereof] would cause substantial harm to others; and
(4) whether the public interest would be served by issuing [or denying such] preliminary injunction.

Mason County Medical Association v. Knebel, 563 F.2d 256, 261 (6th Cir. 1977).

Based on the testimony adduced at the hearing and the affidavits on file in this cause, the Court concludes that there is a substantial likelihood that the defendants will show either the existence of a contractual relationship with respect to the distribution of Mobil’s products or conduct by Mobil that would lead a reasonable person to believe that such contract existed. The Court further finds that there is not an adequate remedy at law and that irreparable harm will result if the preliminary injunction is not issued. The Court takes note of the decision of the Department of Energy ordering Mobil to supply gasoline to Norman. This decision gives additional support to the Court’s findings.

The question of adequate remedy at law can be dealt with by reference to the record which shows that any damages suffered by Henriksen if it did not receive the gasoline allocation that would be distributed to it by Norman, would be difficult to measure and would be speculative. The mere fact that damages would be speculative would indicate that there is not an adequate remedy at law. As stated in Rondeau v. Mosinee Paper Corporation, 422 U.S. 49, 95 S.Ct. 2069, 45 L.Ed.2d 12 (1975), irreparable injury is injury for which monetary damages are inadequate or difficult to ascertain. Likewise, in Borman’s, Inc. v. Great Scott Super Markets, Inc., 433 F.Supp. 343 (E.D. Mich.1975), the Court granted preliminary injunctive relief in part because of the difficulty of determining and ascertaining damages. The Court said:

In summary, it is axiomatic that an individual seeking to have a preliminary injunction issued must show that he has or will be subjected to irreparable harm. However, an explicit showing is not required where those damages are impracticable or inadequate to ascertain.

In deciding a motion for a preliminary injunction, the Court must always keep in mind the purpose of such relief.

A court hearing a request for a preliminary order must determine how best to create or preserve a state of affairs such that it will be able, upon conclusion of the full trial, to render a meaningful decision for either party. Only the necessity of judicial intervention for the accomplishment of this purpose justifies imposing upon the defendant the burden of conforming to an order granted after a summary proceeding.

Note, Development in the Law — Injunctions, 78 Harv. L. Rev. 1994, 1056 (1965).

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

Related

Inland Steel Co. v. United States
306 U.S. 153 (Supreme Court, 1939)
United States v. Diebold, Inc.
369 U.S. 654 (Supreme Court, 1962)
Adickes v. S. H. Kress & Co.
398 U.S. 144 (Supreme Court, 1970)
Rondeau v. Mosinee Paper Corp.
422 U.S. 49 (Supreme Court, 1975)
Mason County Medical Association v. Knebel
563 F.2d 256 (Sixth Circuit, 1977)
Borman's, Inc. v. Great Scott Super Markets, Inc.
433 F. Supp. 343 (E.D. Michigan, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
490 F. Supp. 74, 1980 U.S. Dist. LEXIS 9302, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mobil-oil-corp-v-henriksen-enterprises-inc-miwd-1980.