New England Petroleum v. Knox

• Court: District Court, D. New Hampshire
• Decided: January 21, 1994
• Docket: CV-92-438-B
• Status: Published

Opinion

New England Petroleum v . Knox CV-92-438-B 01/21/94 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

New England Petroleum Distributors, Inc. v. Civil N o . 92-438-B

Bruce Knox, William Ferns and Ferns Energy

O R D E R

New England Petroleum Distributors, Inc. ("NEPD") entered

into a contract with Bruce Knox in 1989, pursuant to which Knox

agreed to purchase and sell specified quantities of Sunoco

gasoline. In this action, NEPD alleges that William Ferns and his company, Ferns Energy, interfered with that contract. In

order to prove its claim, NEPD must establish that: (1) it had a

contract with Knox, (2) defendants knew of the contract, (3)

defendants induced Knox to breach the contract, and (4) NEPD

suffered damages as a result of the breach. See Emery v .

Merrimack Valley Wood Products, Inc., 701 F.2d 985, 988 (1st Cir.

1983); see also Montrone v . Maxfield, 122 N.H. 7 2 4 , 726, 449 A.2d

1216, 1217 (1982). Defendants move for summary judgment on the

grounds that NEPD has failed to produce sufficient evidence to permit a reasonable finder of fact to conclude that the second

2 and third elements of NEPD's claims have been proved. For the

reasons that follow, I grant the motion as to Ferns, but deny it

as to Ferns Energy.

FACTS

NEPD and Ferns Energy are competitors in the business of

supplying gasoline to independently owned gas stations in New

Hampshire. NEPD distributes Sunoco gasoline and Ferns Energy

distributes gasoline for several companies, including Texaco.

In November 1982, NEPD entered into a long-term supply

contract with Bruce Knox, the owner of a gas station located in

Conway, New Hampshire. The contract provided for an initial term

of six years and automatic yearly renewal thereafter unless

either party terminated the contract. In May 1989, Knox entered into a second supply contract with NEPD for an additional ten-

year term. Pursuant to the new contract, NEPD loaned Knox

$25,000 to make improvements to his station. NEPD also replaced

Knox's older pumps with new blending pumps, installed a perimeter

sign for the advertisement of gasoline prices and provided Knox

with paint to paint his garage roof Sunoco blue.

Ferns Energy began its efforts to sign Knox to a supply

contract in 1989. In the spring of that year, Knox had several

3 discussions with Andy Penaskovic, a gasoline sales manager for

Ferns Energy. Knox also met briefly with Ferns. After being

assured by Knox that his contract with NEPD had ended, Penaskovic

signed Knox to a supply contract with Ferns Energy in March 1989.

However, before the contract went into effect, Knox repudiated

it. Penaskovic visited Knox's station periodically thereafter to

determine whether he had changed his mind about doing business

with Ferns Energy. During one such visit in March 1992, Knox

told Penaskovic to draw up a contract. Knox later signed a

supply contract with Ferns Energy to sell Texaco gasoline. As a

result, on April 2 2 , 1992, Ferns Energy replaced the pumps and

canopy at Knox's station and removed the Sunoco sign.

On April 2 4 , 1992, Paul Welch, the President of NEPD,

telephoned Ferns to complain that Ferns Energy was interfering

with NEPD's contract with Knox. Ferns told Welch that he thought that Knox had completed his contract with NEPD. Welch informed

Ferns that Knox had signed a supply contract with NEPD in 1989

that was still in effect. He also told Ferns that NEPD had

advanced Knox a large sum of money under the contract.

Both Penaskovic and Ferns claim that they first learned of

NEPD's second supply contract when Welch informed Ferns of the

contract during the April 2 4 , 1992 telephone conversation. By

4 that time, they contend, it was too late to do anything about the

situation because Ferns Energy had already committed itself to a

supply contract with Knox. Penaskovic claims that he never asked

Knox about his contract with NEPD again after Knox told him in

1989 that the contract had expired. He further claims that he

did not notice that Knox had made improvements to his station

after 1989. Accordingly, Ferns Energy argues that Penaskovic had

no reason to suspect that Knox had entered into a new supply

contract with NEPD in 1989.

DISCUSSION1 NEPD has produced virtually no evidence to counter Ferns'

1 In ruling on this motion for summary judgment, I am guided by the following standards. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The burden is upon the moving party to establish the lack of a genuine, material, factual issue, Finn v . Consolidated Rail Corp., 782 F.2d 1 3 , 15 (1st Cir. 1986), and the court must view the record in the light most favorable to the non-movant, according the non-movant all beneficial inferences discernable from the evidence, Oliver v . Digital Equipment Corp., 846 F.2d 103, 105 (1st Cir. 1988). If a motion for summary judgment is properly supported, the burden shifts to the non- movant to show that a genuine issue exists. Donovan v . Agnew, 712 F.2d 1509, 1516 (1st Cir. 1983).

5 testimony that he had no knowledge of Knox's contract with NEPD

when he authorized Penaskovic to sign a supply contract with Knox

in 1992. While it is generally inappropriate to grant summary

judgment where the issue on which the motion is based concerns a

defendant's mental state, this is not so where "the non-moving

party rests merely upon conclusory allegations, improbable

inferences, and unsupported speculation." LeBlanc v . Great

American Insurance Co., 6 F.3d 836, 842 (1st Cir. 1993) (quoting

Medina-Munoz v . R.J. Reynolds Tobacco Co., 896 F.2d 5 , 8 (1st

Cir. 1990)). In this case, NEPD relies on pure speculation to

support its claim that Ferns had prior knowledge of Knox's

contract with NEPD. Accordingly, I grant the motion insofar as

it applies to Ferns.

NEPD's claim against Ferns Energy is marginally stronger

than its claim against Ferns. NEPD has produced evidence that Knox made substantial improvements to the station in 1989 and

that Penaskovic would be bound to notice such improvements during

his periodic visits to Knox's station. Moreover, given the

nature of the improvements and Penaskovic's knowledge of the fact

that Knox expected his supplier to loan him the money needed to

make such improvements, NEPD has produced substantial

circumstantial evidence calling into question Penaskovic's claim

6 that he was unaware of Knox's contract with NEPD. Construing

this evidence in the light most favorable to NEPD, I am not

prepared to conclude that the record is so deficient that no

reasonable finder of fact could find that Penaskovic knew of

contract between Knox and NEPD. Similarly, given Penaskovic's

repeated visits to Knox's station to attempt to solicit his

business, NEPD has produced enough evidence suggesting that

Penaskovic induced Knox to breach his contract with NEPD to

permit the claim against Ferns Energy to proceed to trial.

Accordingly, I deny the motion for summary judgment as it applies

to Ferns Energy.

SO ORDERED.

Paul Barbadoro United States District Judge

January 2 1 , 1994

cc: John F. Teague, Esq. Peter Cowan, Esq. John D. Clifford, IV, Esq. David Broughel, Esq. Timothy Vaughan, Esq.