Golden v. Mobil Oil Corp., 88-3517
| Decision Date | 05 September 1989 |
| Docket Number | No. 88-3517,88-3517 |
| Parties | Larry GOLDEN, d/b/a Golden Mobil, Plaintiff-Appellee, Cross-Appellant, v. MOBIL OIL CORPORATION, a New York corporation, Defendant-Appellant, Cross-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
William D. Palmer, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Orlando, Fla., Michael C. Russ, Charles H. Kirbo, Stephanie E. Parker, King & Spalding, Atlanta, Ga., for defendant-appellant, cross-appellee.
W. Scott Gabrielson, Rush, Marshall, Bergstrom, Reber & Gabrielson, Orlando, Fla., for plaintiff-appellee, cross-appellant.
Appeals from the United States District Court for the Middle District of Florida.
Before VANCE and ANDERSON, Circuit Judges, and ATKINS *, District Judge.
In this diversity case, the defendant appeals the district court's denial of judgment notwithstanding the verdict for plaintiff on his breach of contract claim. On cross-appeal, the plaintiff challenges the court's directed verdict for the defendant on the plaintiff's fraud claim. We conclude that the court erred in both instances.
Plaintiff Larry Golden leased and operated a Sun Oil Company ("Sunoco") service station located on South Orange Blossom Trail in Orlando, Florida. The station had three pumps at the full service island and two pumps at the self service island, all of which dispensed gasoline in liters. Two of the full service pumps and one of the self service pumps contained blenders, devices unique to Sunoco stations. The blenders allowed the pumps to dispense three types of unleaded gasoline from the same hose: regular unleaded, super unleaded, and a blend of regular and super unleaded. A customer could choose the desired type of unleaded gasoline by turning a switch on the pump. The configuration of the pumps at Golden's Sunoco station was as follows:
Full Service Self Service
Pump 1 Super Unleaded Pump 2 Leaded
Pump 4 Regular Unleaded Pump 3 Super Unleaded
Pump 5 Leaded
Golden's lease with Sunoco gave the company the right to terminate the agreement in the event the station was sold. In the spring of 1984, defendant Mobil Oil Corporation purchased Golden's station and eighty-six other Sunoco stations in Florida. Mobil notified Golden of the purchase and gave him the option of buying the station for $200,000 or entering into a new lease as a Mobil dealer. Golden was interested in the possibility of purchasing the station, but was concerned that he would not be able to obtain financing. On July 11-12, 1984, therefore, he attended two meetings held by Mobil to promote the advantages of becoming a Mobil dealer. The first was held on July 11 in Orlando and the second on July 12 in Tampa. Golden testified that at the Orlando meeting a Mobil representative told him that it was the policy of the company to give customers a four cent per gallon discount for cash purchases. When Golden inquired as to the company's cash discount policy for gasoline purchased in liters, the representative responded that "it's not a problem because Mobil doesn't have gas pumps that work in liters so you won't have a problem with that."
Golden also testified that between the Tampa meeting and the date he signed the lease, Mobil representatives Dennis O'Brien and J.J. Moore promised that he would receive new gallon pumps:
[O'Brien, Moore, and I] were talking about the transition period and they were kind of telling me what would occur and I asked well, you know, when are we going to get the [new Mobil sign], when are we going to get the pumps. That was important to me. And I was told that they were starting near the end of the county or end that I was up on to put on signs and nearer the ends of the county there I gathered north or northwest and working kind of toward one another and, you know, I would get the sign and then I would get the pumps, the regular type Mobil pumps.
The Tampa meeting, which Golden's wife also attended, was entitled "Welcome Aboard." All Sunoco dealers, their spouses, and key employees were invited. The agenda included a period for viewing exhibits, a presentation, cocktails, and dinner. Golden later testified that the Tampa meeting was a
[p]olitical rally kind of thing. At the very first going in it's hey, how [sic] you doing? Everything is going to be great for you. [Dennis O'Brien, a Mobil representative,] was taking me and I believe part of the time my wife and introducing me to just various people were [sic] there. I guess other people at his level and other people from Mobil and say [sic] hey, have you signed yet? I said, no. Well, you should sign. And things along that line.
Golden also testified that a Mobil representative told the Sunoco dealers that if they agreed to become Mobil dealers their relationship with the company "would be just like a marriage that was just going to get stronger."
On their way home from the Tampa meeting, Golden and his wife discussed their options and decided, based on Mobil's presentations, that becoming a Mobil dealer would be a good career opportunity. The company thereafter provided Golden with a proposed lease agreement and Golden sent it to his attorney for review. The attorney informed Mobil that many of the provisions of the lease were unsatisfactory, including the following limitation of liability clause:
In no event shall Landlord be liable for prospective profits or special, indirect, or consequential damages.
The company replied that the proposed agreement was its standard service station lease contract and the terms were not negotiable. Golden decided to enter into the lease anyway and signed it on July 25, 1984. The lease became effective on August 1, 1984, with a term of three years.
Golden's relationship with Mobil started to sour soon after he began operating as a Mobil dealer. Many of his requests to the company for the repair of the pumps, lighting, and pavement at his station went unheeded. The company replaced one of his liter pumps with a new gallon pump, but refused to replace others. This left Golden in the position of having to sell some gasoline in liters and some in gallons. The company also removed the blender from Pump 3 without Golden's permission and replaced it with a regular nozzle. As a result, Golden could sell only two types of gasoline at the self service island. The configuration of the pumps after the removal of the blender was as follows:
Full Service Self Service
Pump 1 Regular Unleaded Pump 2 Leaded
Super Unleaded
Blend
Pump 4 Regular Unleaded Pump 3 Unleaded
Super Unleaded Super Unleaded
Blend Blend
Pump 5 Leaded
Mobil did not renew the lease at the end of its three-year term and Golden brought suit against the company in Florida state court. Mobil removed the case to federal court and Golden filed an amended complaint that alleged breach of contract and fraud. At the ensuing jury trial, Golden presented evidence of two types of damages, lost profits and lost rental rebates. Both were related to his inability to sell three types of gasoline at the self service island. The lost rental rebates were those that Golden would have received under a rental incentive program Mobil had offered to encourage dealers to sell more gasoline.
At the close of trial, the court granted Mobil's motion for directed verdict on the fraud claim, but denied its motion for directed verdict on the breach of contract claim. The jury subsequently returned an $83,000 verdict for Golden on the breach of contract claim and the court denied Mobil's motion for judgment notwithstanding the verdict. This appeal followed.
Mobil contends that the district court erred in denying judgment notwithstanding the verdict because the evidence was insufficient to support the jury's verdict on the contract claim. In reviewing a district court's ruling on a motion for directed verdict or judgment notwithstanding the verdict, we must consider all of the evidence in the light most favorable to the nonmoving party, with all reasonable inferences taken in favor of that party. If the facts and evidence point so strongly and overwhelmingly in favor of the moving party that no reasonable person could have reached a verdict for the nonmoving party, the motion should have been granted. On the other hand, if a reasonable and fair-minded person could have returned a verdict for the nonmoving party, the motion should have been denied. Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir.1969) (in banc).
Mobil argues that only evidence of consequential damages was admitted at trial and that the limitation of liability clause bars Golden from recovering consequential damages. Golden does not dispute that the lost profits and lost rental rebates he sought were consequential damages as contemplated under the limitation of liability clause, but argues that the clause itself is unenforceable on the ground of unconscionability. We disagree.
Under Florida law, a contractual provision is not unenforceable on the ground of unconscionability unless "no decent, fairminded person would view the ensuing result without being possessed of a profound sense of injustice...." Steinhardt v. Rudolf, 422 So.2d 884, 890 (Fla.Dist.Ct.App.1982), review denied, 434 So.2d 889 (Fla.1983). Both procedural unconscionability and substantive unconscionability must exist before the provision is unenforceable. Fotomat Corp. of Fla. v. Chanda, 464 So.2d 626, 629-30 (Fla.Dist.Ct.App.1985); Kohl v. Bay Colony Club Condominium, Inc., 398 So.2d 865 (Fla.Dist.Ct.App.), review denied, 408 So.2d 1094 (Fla.1981); see Steinhardt, 422 So.2d at 889-90 (). Procedural unconscionability exists when the individualized circumstances surrounding the transaction reveal that there was...
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