Texaco Refining and Marketing Inc. v. Davis

835 F. Supp. 1223, 1993 U.S. Dist. LEXIS 14929, 1993 WL 432124
District Court, D. Oregon·Decided October 21, 1993·No. Civ. 93-481-FR, 93-595-FR·Published·Cited by 8 cases

Opinion

OPINION

FRYE, Judge:

The matters before the court are the motions for summary judgment of Texaco Refining and Marketing, Inc. (Texaco) in its consolidated cases for declaratory judgment against Barry P. Davis (#34 and #74).

UNDISPUTED FACTS

Texaco owns three retail motor fuels stations in the State of Oregon which, until May 23, 1993, had been leased to and operated by Davis. The stations are located in the cities of Salem, Eugene and Clackamas, Oregon.

Texaco sold TEXACO brand motor fuels to Davis pursuant to a separate sales agreement for each retail station. The sales agreements provide Texaco with rights of termination upon the happening of certain events. Under paragraph 22 of the sales agreements, Texaco has the right to terminate the franchises:

(i) If Purchaser fails to comply with any applicable laws, ordinances, regulations, judicial or administrative orders, or other legal requirements of all governmental authorities, federal, state, municipal or other authority, pertaining to this Agreement and the loading, unloading, storage, transportation and sale of petroleum products;
(m) Upon any breach of any of the terms, covenants, warranties, agreements or conditions of this Agreement or any other agreement that may be in effect between the parties;
*1226 (p) If Purchaser fails to comply with provisions of Paragraph 17, Hours of Operation.

Also provided in each sales agreement is the agreement of the parties that the right of the parties to terminate the sales agreement is both “reasonable and of material significance” to their franchise relationship. Sales Agreements, para. 12.

Texaco and Davis also entered into lease agreements for each station. Under paragraph 12(d) of each lease agreement, Texaco may terminate the lease agreement if Davis “fails to comply with any applicable law, ordinance, regulation, judicial or administrative order, or other legal requirement of any governmental authorities pertaining to this Lease.” Paragraph 12 further provides that if Davis breaches any of the conditions allowing termination, then such a breach:

constitutes a failure by [Davis] to comply with a provision of this Lease which is both reasonable and of material significance to the relationship between [Texaco] and [Davis], and shall constitute good cause to cancel or terminate this Lease as the term “good cause” or any similar term is or may be used in any federal or state statute affecting the rights of the parties to terminate this Lease. [Texaco’s] rights of termination for good cause as defined above shall not in any way be affected by any previous waiver, forbearance or course of dealing.

In the late fall of 1992, a controversy arose between the parties regarding the hours of operation at the three stations. Davis wanted to close the stations from sundown on Friday nights to sundown on Saturday nights for religious reasons. Texaco maintained that the sales agreements for each station required Davis to keep the stations open for twenty-four hours a day, every day of the year. Davis maintained that Texaco officials, by oral agreement, had promised to allow him to set his own hours of operation.

Beginning January 1, 1993, and each Friday and Saturday thereafter, Davis closed the stations from sundown Friday until sundown Saturday. Texaco objected to this practice, but the parties were unable to reach an agreement. Texaco then notified Davis in writing that he was in breach of his sales agreements. Davis persisted in closing the stations from sundown Friday until sundown Saturday.

On April 21, 1993, Texaco commenced an action against Davis, Texaco Refining, and Marketing, Inc. v. Davis, Civil No. 93-481-FR (“the specific performance suit”), seeking a declaratory judgment that the closures of the stations by Davis were in breach of the sales agreements, and seeking an order of the court requiring Davis to keep the stations open in accordance with the agreements. Davis filed an answer containing counterclaims for damages for Texaco’s alleged violations of 42 U.S.C. § 1983 and O.R.S. 650.200 et seq. Texaco now moves for summary judgment in Civil No. 93-481-FR.

On April 21, 1993, Texaco moved the court for a temporary restraining order restraining Davis from breaching the provisions in his franchise agreements relating to hours of operation. On April 26, 1993, this court granted Texaco’s motion and temporarily restrained Davis from closing the stations. Davis defied the court’s order and closed the stations from sundown Friday, April 30, 1993, until sundown Saturday, May 1, 1993, in observance of his religious beliefs.

After a hearing held on May 3, 1993, the court granted Texaco’s motion for a preliminary injunction enjoining Davis from breaching the provisions of the parties’ sales agreements relating to hours of operation. In granting Texaco’s motion for a preliminary injunction, the court found: (1) the sales agreements for the stations in the cities of Eugene and Salem required Davis to keep the stations open twenty-four hours a day, seven days a week, and the sales agreement for the station in the City of Clackamas required Davis to keep the station open for twenty-four hours a day, Sunday through Friday; (2) Davis materially breached the sales agreements by closing the stations from sundown Friday through sundown Saturday; (3) the balance of the hardships favored Texaco, and Davis had no legally justifiable excuse for closing the stations; and (4) the motoring public, other Texaco dealers, and *1227 Texaco have been and will continue to be irreparably harmed by the closings.

Davis continued to close the stations from sundown Friday until sundown Saturday, in violation of this court’s preliminary injunction. By letter dated May 18, 1993, Texaco gave Davis ten days notice that his franchises would be terminated effective May 28, 1993 at 12:01 a.m. The notices set forth the grounds for termination and included a summary statement of Davis’ rights under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. §§ 2801 et seq.

On May 19, 1993, Texaco commenced a second action against Davis, Texaco Refining and Marketing, Inc. v. Davis, Civil No. 93-595-FR (“the. declaratory suit”), seeking a judicial declaration that Texaco justifiably terminated the franchises operated by Davis, as well as preliminary and permanent injunctive relief requiring Davis to surrender possession of the stations to Texaco. Davis filed an answer and counterclaim for preliminary and permanent injunctive relief enjoining Texaco from terminating the franchises operated by Davis.

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Texaco Refining and Marketing Inc. v. Davis, 835 F. Supp. 1223, 1993 U.S. Dist. LEXIS 14929, 1993 WL 432124 (D. Or. 1993).

835 F. Supp. 1223 (Texaco Refining and Marketing Inc. v. Davis) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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