81 F.3d 1070 (11th Cir. 1996), 94-6906, Hopkins v. BP Oil, Inc.

Docket Nº:94-6906.
Citation:81 F.3d 1070
Party Name:Troy HOPKINS, individually and on behalf of all BP/Gulf dealers in Alabama, Herbert Sharpe, individually and on behalf of all BP/Gulf dealers in Alabama, John Mann, individually and on behalf of all BP/Gulf dealers in Alabama, Plaintiffs-Appellees, Robert Shaw, individually and on behalf of all BP/Gulf dealers in Alabama, Sherry Shaw, individually
Case Date:April 26, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1070

81 F.3d 1070 (11th Cir. 1996)

Troy HOPKINS, individually and on behalf of all BP/Gulf

dealers in Alabama, Herbert Sharpe, individually and on

behalf of all BP/Gulf dealers in Alabama, John Mann,

individually and on behalf of all BP/Gulf dealers in

Alabama, Plaintiffs-Appellees,

Robert Shaw, individually and on behalf of all BP/Gulf

dealers in Alabama, Sherry Shaw, individually and on behalf

of all BP/Gulf dealers in Alabama, Tom Pool, individually

and on behalf of all BP/Gulf dealers and Exxon dealers in

Alabama, Terry Palamotos, individually and on behalf of all

BP/Gulf dealers and Exxon dealers in Alabama, Plaintiffs,

v.

BP OIL, INC., Defendant-Appellant,

Exxon Corporation, Chevron USA, Inc., Defendants.

No. 94-6906.

United States Court of Appeals, Eleventh Circuit

April 26, 1996

Page 1071

Linda A. Friedman, Susan Donovan Josey, Bradley, Arant, Rose & White, Birmingham, AL, Richard H. Gill, George W. Walker, III, Copeland, Franco, Screws & Gill, P.A., Montgomery, AL, for appellant.

John R. Chiles, Donna Bowling Nathan, Sirote & Permutt, P.C., Birmingham, AL, Frank M. Wilson, Beasley, Wilson, Allen, Main & Crow, P.C., Montgomery, AL, for appellees.

Appeal from the United States District Court for the Middle District of Alabama.

Before TJOFLAT, Chief Judge, COX, Circuit Judge, and WELLFORD [*], Senior Circuit Judge.

PER CURIAM:

BP Oil, Inc. ("BP") sells gasoline to gasoline station operators for them to re-sell to the public. In this diversity case, three gasoline station operators (the "dealers") sued BP under Alabama law for breach of contract and breach of statutory obligation, among other claims. The dealers alleged that, by billing them based on gross gallons of gasoline rather than based on temperature-compensated gallons of gasoline, BP breached the parties' contracts and its obligation under User Regulation 3.5 ("U.R. 3.5") of National Bureau of Standards Handbook 44. A jury returned a verdict for the dealers on each of their claims. BP appeals, and we reverse the judgment entered on those verdicts.

I. FACTS

BP began operating in Alabama on February 1, 1985, when it acquired certain Gulf facilities in Alabama and assumed Gulf contracts to supply gasoline to Gulf-brand gas

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stations in Alabama. The dealers were operators of Gulf-brand gas stations in Alabama who began buying gasoline from BP when it assumed Gulf's contracts. The dealers eventually executed renewal contracts with BP.

Gasoline's volume varies according to its temperature. Volume expands as temperature rises; volume contracts as temperature falls. To account for gasoline consistently despite fluctuating temperatures, the American Petroleum Institute, a private trade organization, has established a voluntary standard of temperature compensation. Temperature compensation involves adjusting the actual volume of gasoline at a particular temperature to what its volume would be at 60 degrees Fahrenheit.

The Alabama Department of Weights and Measures has adopted National Bureau of Standards Handbook 44 and it was in effect during the relevant time period. U.R. 3.5 of Handbook 44 requires that any written invoice based on a reading of a wholesale measuring device equipped with an "automatic temperature compensator" show that the gasoline delivered has been adjusted to the volume at 60? F. 1 An "automatic temperature compensator" physically adjusts the volume of gasoline dispensed to equal the gallon amount that would be dispensed if the gasoline's temperature were 60? F.

Until February 1, 1988, BP billed the dealers and other Alabama retailers based on the number of gross gallons delivered. In addition to the number of gross gallons, BP's invoices to the dealers showed the gasoline's temperature when dispensed at BP's terminal, as well as its specific gravity. BP was able to record this information on its invoices because the loading line at its terminal was equipped with a temperature probe. The gasoline's temperature was sent automatically by computer to Cleveland, where BP processed the invoices. The invoices then were printed out at the selling terminal. 2 The contracts between the dealers and BP did not define "gallon." However, each dealer testified that he understood that he was receiving gross gallons of gasoline from BP, just as he had received gross gallons from Gulf.

In July of 1985, dealer Hopkins's accountant discovered an inventory shortage and informed Hopkins that the shortage probably was due to variations in temperature and gross billing. Hopkins wrote to BP requesting billing on a temperature-adjusted basis. The local BP representative told Hopkins that shortages and overages even out over the course of a year. After Hopkins wrote another letter requesting temperature-compensated billing, BP responded that it did not sell gasoline to dealers on a temperature-adjusted basis and that it would continue to bill Hopkins based on gross gallons.

II. PROCEDURAL BACKGROUND

The dealers sued BP for breach of contract, breach of statutory obligation, and fraudulent suppression under Alabama law. Dealer Hopkins also sued BP for affirmative misrepresentation under Alabama law.

In their complaint, the dealers alleged that the dispensing equipment at BP's terminal was "equipped with automatic temperature compensating devices to measure the volume

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of motor fuel sold in an adjusted volume (as would have been dispensed at 60? F)." (Compl. at p 13.) In its answer, BP stated: "BP is without sufficient information, knowledge or belief to admit or deny the allegations ... and, therefore, denies same. BP denies, in any event, that the dispensing equipment for sales to plaintiff is at the BP terminal." (Answer at p 13.)

The dealers further alleged in their complaint that BP "had invoiced ... according to volumes of gasoline measured at the ambient temperature at the terminal and had refused to temperature compensate the motor fuel sold." (Compl. at p 16.) These billing practices allegedly violated Handbook 44. In addition, they allegedly violated the...

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