Smoot v. Mobil Oil Corp.

722 F. Supp. 849, 1989 U.S. Dist. LEXIS 11739, 1989 WL 117713
CourtDistrict Court, D. Massachusetts
DecidedAugust 28, 1989
DocketCiv. A. 89-476-WF
StatusPublished
Cited by10 cases

This text of 722 F. Supp. 849 (Smoot v. Mobil Oil Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smoot v. Mobil Oil Corp., 722 F. Supp. 849, 1989 U.S. Dist. LEXIS 11739, 1989 WL 117713 (D. Mass. 1989).

Opinion

MEMORANDUM AND ORDER

WOLF, District Judge.

I. Summary

This action arises from defendant Mobil Oil Corporation’s attempt to terminate Joseph Smoot’s franchise at 783 Blue Hill Ave., Dorchester, Massachusetts (the “Franklin Park station”). Plaintiff seeks injunctive relief under the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. §§ 2801-2841, to prevent defendant from terminating the Franklin Park station franchise, as well as damages arising from defendant’s actions.

Defendant has requested an injunction ordering plaintiff to vacate the Franklin Park station, and filed a motion to dismiss Smoot’s claims.

In addition, Gertrude Young, who claimed to have loaned money to Smoot, moved to intervene as of right pursuant to Fed.R.Civ.P. 24(a).

The court held conferences with the parties on April 7 and June 12, 1989. All discovery in the case was completed before the hearing on the pending motions on June 28, 1989. At the June 28 hearing, the parties were given the opportunity to sub *852 mit additional materials for the court’s consideration. They have- done so.

Because the parties each presented all available evidence in connection with the motion to dismiss, it is most appropriate to treat that request as one for summary judgment. See Fed.R.Civ.P. 12(b). After consideration of the parties’ contentions and the evidence presented, the court concludes that Mobil is entitled to summary judgment. Accordingly, Smoot will be given until October 7, 1989 to vacate the Franklin Park station.

II. Facts

Except as otherwise indicated, the following facts are undisputed.

On or about February 19, 1985, Smoot began operating the Franklin Park station pursuant to a series of retail dealer contracts and leases with Mobil. These agreements required Smoot to maintain an adequate inventory of Mobil products and to use his “best efforts” to sell Mobil products. Lease ¶ 7, Defendant’s Appendix, Tab D; Retail Dealer Contract ¶ 14(B)(2), Defendant’s Appendix Tab C. During the first three years of Smoot's franchise, he apparently operated a successful business. His gasoline sales were high and his related snack shop convenience store was profitable. Deposition of Joseph Smoot, Jr. at 64-65 (May 17, 1989). In 1987, for exam-pie, the gross profit for the Franklin Park station was $237,946. Smoot Dep., Exhibit 4.

Despite its profitable operation, the Franklin Park franchise was undercapital-ized. Smoot Dep. at 264-65. Nevertheless, Smoot used the profits from the Franklin Park station to finance the acquisition of a second Mobil franchise at 1556 Blue Hill Avenue, Mattapan, Massachusetts (the “Mattapan station”), which he began to operate in June, 1988. Smoot Dep. at 193-98. In addition, in February, 1987, Smoot purchased commercial real estate at 302-06 Norfolk Street, Dorchester, Massachusetts that resulted in significant expenses and a negative monthly cash flow. Smoot Dep. at 207-13.

Immediately after Smoot’s purchase of the Mattapan station, gasoline sales there began to plummet. Mattapan Station, Five Year Gallonage History, Defendant’s Appendix, Exhibit K. After several months of subsidizing the Mattapan station with revenue from the Franklin Park station, Smoot had exhausted his cash reserves. He was then unable to pay for adequate supplies of gas at either station, and was at times without gas to sell at each station. Smoot Dep. at 197-99. Smoot acknowledges that he was out of gas at both stations on a number of occasions in the second half of 1988 and in early 1989. 1

*853 On October 24 and November 22, 1988, Mobil sent letters to Smoot advising him of its growing concern over his failure to purchase and sell Mobil products and to keep both stations open as required by the lease and dealer contracts. Defendant’s Appendix, Exhibits M, N. These letters specified the many dates on which the stations were out of gas and warned that future violations of the franchise agreements would result in their termination. On December 29, 1989, Mobil sent Smoot another letter describing additional, more recent dates on which the stations were out of gas and stating that any further violation after a ten day grace period would result in termination of the franchises. Defendant’s Appendix, Exhibit O.

In a January 10, 1989 letter, Mobil notified Smoot of the days in January in which the Mattapan station was out of gas, and terminated that franchise effective January 13, 1989. Smoot Dep., Exhibit 19. Apparently, Smoot relinquished control of the Mattapan station on January 13, 1989.

On January 31, 1989 Mobil wrote to Smoot again, citing Smoot’s failure to have gas for sale at the Franklin Park station from January 22-25. See Defendant’s Appendix, Exhibit P. The letter referred to the October, November and December warnings and stated:

Although the most recent violations (and the other past violations) provide clear grounds for such termination, we have elected not to terminate your franchise at this time. ANY FURTHER VIOLATIONS, HOWEVER, WILL RESULT IN AN IMMEDIATE, IRREVOCABLE TERMINATION OR NONRENEWAL OF THE LEASE, CONTRACT AND FRANCHISE RELATIONSHIP.

Id.

Four days later, on February 3, 1989, Mobil sent a letter to Smoot terminating the Franklin Park franchise, effective March 3, 1989. Defendant’s Appendix, Exhibit Q. In that letter Mobil stated that its decision to terminate was based in part on Smoot’s violation of specific provisions of his lease by: (1) failing to maintain an adequate inventory of Mobil products to serve customers; (2) failing to operate the premises for the sale of gasoline for seven consecutive days and other unreasonable periods; and (3) failing to make his best efforts to sell Mobil products. Id. This letter cited January 3-12, 22-25, and 29-31, 1989 as recent dates on which there was no gas for sale at the Franklin Park station. Id.

Smoot does not dispute Mobil’s claims that he was out of gas on the dates alleged in the various letters.

III. Prior Proceedings

On March 2, 1989, plaintiff brought this action. Counts I-IV of the Complaint assert claims under the PMPA, alleging that Mobil failed to give Smoot the notice of termination of both franchises required by 15 U.S.C. §§ 2802(b)(2)(A), and (B) and 2804. Counts V-VII allege that Mobil is liable for damages due to its alleged failure to perform diligently the renovations at the Franklin Park station and to supply plaintiff with certain equipment as required by the terms of the franchise agreement. In Count VIII, plaintiff brings a claim under Mass.Gen.L. ch.

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Bluebook (online)
722 F. Supp. 849, 1989 U.S. Dist. LEXIS 11739, 1989 WL 117713, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smoot-v-mobil-oil-corp-mad-1989.