Nasreen v. Capital Petroleum Group, LLC

District Court, District of Columbia·Decided March 31, 2023·No. Civil Action No. 2020-1867·Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

KHONDKER NASREEN, Plaintiff,

v. Civil Action No. 20-1867 (TJK)

CAPITOL PETROLEUM GROUP, LLC et al., Defendants.

MEMORANDUM OPINION

Plaintiff operates a gas station under a franchise with Defendant Anacostia Realty, LLC.

Anacostia leases the gas station to Plaintiff and provides her with gasoline. Defendant Capitol Petroleum Group, LLC helps Anacostia provide those services. A few years ago, Anacostia ac- cused Plaintiff of failing to meet her contractual obligations, and it tried to terminate their franchise agreement. Plaintiff then sued, claiming that Defendants have breached the parties’ contracts and applicable statutes—specifically, the Petroleum Market Practices Act and, in Anacostia’s case, the Robinson-Patman Act. She also presses an unjust-enrichment theory against both Defendants. Defendants now move for summary judgment. Because Plaintiff has not produced evidence sup- porting her claims, the Court will grant that motion in full. I. Background Anacostia owns the gas station Plaintiff operates and wholesales the gasoline she retails.

ECF No. 69-1 ¶¶ 3, 7. Capitol issues invoices for Anacostia and notifies Plaintiff of transactions between Plaintiff and Anacostia. See ECF No. 60-4 at 5; ECF No. 68-3 at 5; ECF No. 69-1 ¶ 10. As relevant to this dispute, the parties’ relationship comprises two contracts, which the Court calls the lease and the supply agreement. This section begins by introducing (A) the lease and (B) the

supply agreement, then explains (C) the payment scheme under the parties’ franchise and (D) how their relationship deteriorated, and concludes by (E) summarizing the procedural history of this case.

A. The Lease Under the lease, ECF No. 60-4 at 29–51, Anacostia is the lessor of an Exxon-branded gas station in northwest Washington, D.C. ECF No. 69-1 ¶¶ 1, 7, 9. Although the lease would have otherwise expired during this case, the parties have agreed to continue it while the case is pending. Id. ¶ 24; ECF No. 14 at 1–2. Plaintiff and her husband operate the station alongside an on-site convenience store. ECF No. 69-1 ¶ 4; ECF No. 68-3 at 60. Eyob Mamo signed the lease on An- acostia’s behalf, designating himself as Anacostia’s “President.” ECF No. 60-4 at 45, 51.

The lease says Plaintiff must pay rent on the first of each month. ECF No. 69-1 ¶ 26. But Anacostia has allowed her to pay rent in arrears in four equal monthly payments. Id. ¶ 46. The lease permits Anacostia to take those payments by debiting Plaintiff’s bank account via electronic funds transfers (“EFTs”). ECF No. 60-4 at 31. Because Anacostia chose to take payments that way, the lease says Plaintiff must “maintain at all times funds in [her] account sufficient to make payments to [Anacostia] at the time of the EFT transaction.” Id.; see also ECF No. 68-3 at 5; ECF No. 69-1 ¶¶ 27, 45.

The lease also reserved for Anacostia the right to use the station for “other business uses.”

ECF No. 69-1 ¶ 93. That provision is limited to uses that do not “materially interfere” with Plain- tiff’s “authorized uses” of the premises. Id.; see also ECF No. 60-4 at 34. Anacostia also enjoys the “exclusive right” to any income derived from qualifying “other business uses.” See ECF No. 60-4 at 34; ECF No. 69-1 ¶ 93.

Based on that provision, Anacostia leased the station’s canopy roof to Verizon Wireless to install and operate an antenna. ECF No. 69-1 ¶ 92. None of Plaintiff’s business operations happen

above or on top of the canopy. Id. ¶ 94.

B. The Supply Agreement Under the supply agreement, Plaintiff must buy gasoline from Anacostia. See ECF No. 60-4 at 53–71. Like the lease, the supply agreement provided for a fixed term, but the parties have agreed to keep it effective while this case is pending. See id. at 53; ECF No. 14 at 1–2. Mamo again signed the supply agreement as “President” of Anacostia. ECF No. 60-4 at 69, 71.

The supply agreement sets the price and quantity terms for gasoline sales between Plaintiff and Anacostia. On the former point, it uses an “open price term.” ECF No. 69-1 ¶ 30. That is, the “price per gallon to be paid by [Plaintiff] shall be [Anacostia]’s price in effect at the time loading commences for dealers of the same class and in the same trade area as [Plaintiff].” ECF No. 60-4 at 71. Like her rent payments, Plaintiff paid for gasoline by EFTs. ECF No. 69-1 ¶ 35. So the supply agreement, like the lease, required Plaintiff to maintain a bank-account balance suf- ficient to cover the payments. Id. ¶¶ 36–37; ECF No. 60-4 at 54.

As for the quantity term, the supply agreement set annual minimum quantities for Plaintiff to buy. ECF No. 60-4 at 70. Specifically, it directed Plaintiff to buy at least 600,000 gallons of gasoline in the first contract year, 625,000 gallons in the second, and 650,000 gallons in the third. Id.; ECF No. 69-1 ¶ 34. The parties included those requirements because, under an earlier, similar agreement, Plaintiff’s purchases “declined steadily and dramatically.” ECF No. 69-1 ¶¶ 64, 67–69. So when the parties negotiated the renewal of their franchise, Plaintiff proposed—and Anacostia accepted—the above quantity restrictions. Id. ¶¶ 64–65. The parties designated those restrictions as “essential prerequisite[s]” for the supply agreement. Id. ¶¶ 71, 73.

C. Payments Under the Franchise To implement the lease and supply agreement, Anacostia maintains an account for Plain-

tiff, which the parties call her “ANA Account.” ECF No. 69-1 ¶¶ 38–39. The ANA Account

records the transactions between Plaintiff and Anacostia. See id. The account is debited for the amounts Plaintiff owes Anacostia for rent and gasoline purchases, and it is credited for amounts that Anacostia owes Plaintiff. See id. The credits consist mostly of reimbursements for retail sales of gasoline by credit or debit card. Id. ¶ 40. When a customer pays by card, the payment is routed first to ExxonMobil. Id. ¶ 41. ExxonMobil takes a processing fee and forwards the remainder to Anacostia. Id. Anacostia, in turn, credits Plaintiff’s ANA Account in that amount. Id. ¶ 42.

Thus, each day, Plaintiff’s ANA Account records some combination of credits and debits.

ECF No. 69-1 ¶ 44. At the end of the day, those amounts are added together to produce either a net credit or net debit. See id. Anacostia withdraws that figure from (if it is a net debit) or deposits that figure into (if it is a net credit) Plaintiff’s bank account. See id.

D. Attempted Termination of the Franchise Anacostia accused Plaintiff of breaching the contract in two ways. The first relates to the parties’ payment scheme. Plaintiff sometimes had insufficient funds in her bank account to cover Anacostia’s attempts to withdraw funds when her daily ANA Account balance was a net debit. ECF No. 69-1 ¶¶ 50–56. Because of those deficiencies, her bank dishonored (or “bounced”) EFTs. See id. ¶ 50. That happened twice in March 2020, id. ¶¶ 51–52, and five more times between April 2020 and January 2022, id. ¶¶ 53–56. The amounts of the bounced EFTs ranged from about $6,000 to $18,000. See id. ¶¶ 51–55.

Second, Plaintiff did not meet the supply agreement’s minimum-gasoline-purchase amounts. She bought 402,554 gallons in the first year, 284,135 gallons in the second year, and 347,097 gallons in the third year, falling, respectively, below the required 600,000, 625,000, and 650,000 gallons. Id. ¶¶ 75–77.

Defendants identified those issues in a purported termination notice. On April 6, 2020, they told Plaintiff they would terminate the franchise on July 8, 2020. ECF No. 60-4 at 93–94; but

see ECF No. 14 (staying that termination during this case). They cited the two bounced EFTs from March 2020. ECF No. 60-4 at 93–94; ECF No. 69-1 ¶ 81.1 And they cited Plaintiff’s failure to purchase enough gasoline. ECF No. 60-4 at 93–94; ECF No. 69-1 ¶ 83.

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