Americana Petroleum Corp. v. Northville Industries Corp.

• Decision Date: 24 January 1994
• Citation: 200 A.D.2d 646,606 N.Y.S.2d 906
• Parties: AMERICANA PETROLEUM CORP., Appellant-Respondent, v. NORTHVILLE INDUSTRIES CORP., Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 906

606 N.Y.S.2d 906

200 A.D.2d 646

AMERICANA PETROLEUM CORP., Appellant-Respondent, v. NORTHVILLE INDUSTRIES CORP., Respondent-Appellant.

Supreme Court, Appellate Division,

Second Department.

Jan. 24, 1994.

Jay Goldberg, P.C., New York City (Mitchell Sockett, of counsel), Maler & Maler, Patchogue, and Judd Burstein, P.C., New York City (Elizabeth Hill, of counsel), for appellant-respondent (one brief filed).

Paul, Weiss, Rifkind, Wharton & Garrison, New York City (Jay L. Himes, Martin London and Paul Indig, of counsel), for respondent-appellant.

Before BRACKEN, J.P., and SULLIVAN, MILLER and LAWRENCE, JJ.

MEMORANDUM BY THE COURT.

In an action to recover damages for breach of contract, price gouging, fraud, and unjust enrichment arising from an oral agreement to sell gasoline, the plaintiff appeals from so much of an order of the Supreme Court, Suffolk County (Seidell, J.), entered July 22, 1991, as granted that branch of the defendant's motion which was to dismiss the first cause of action asserted in the amended complaint, and the defendant cross-appeals from so much of the same order as denied those branches of its motion which were to dismiss the second, third and fourth causes of action asserted in the amended complaint.

ORDERED that the order is modified, on the law, by deleting the provisions thereof which denied those branches of the defendant's motion which were to dismiss the second and third causes of action and substituting therefor provisions granting those branches of the defendant's motion; as so modified, the order is affirmed, without costs or disbursements.

The plaintiff is an independent wholesaler, distributor and retailer of gasoline, who purchased gasoline from the defendant to be resold at retail stations, from 1984 until approximately October 1990. In 1986 the parties allegedly entered into an oral agreement. The agreement allegedly provided that if the plaintiff arranged, at its own cost, for five of its franchise retail gasoline stations to change their names to the defendant's brand name, then, "so long as [the plaintiff] permitted any of the five stations to sell gasoline under [the defendant's] brand name, and [the defendant] stayed in business, [the defendant] would: (a) sell all gasoline required by [the plaintiff] for all of its stations * * * at a price annually averaging approximately one and one-half cents per gallon above 'Platt's Barge High' ". The Platt's Barge High is a pricing formula which is standard in the industry.

When the plaintiff decided that the defendant had improperly increased its prices, the plaintiff commenced this action in 1991. The defendant moved to dismiss the complaint on the ground, inter alia, that the oral agreement fell under the Statute of Frauds.

One significant question, in determining whether an agreement must be in writing pursuant to the Statute of Frauds, is whether the contract can, conceivably, be performed within one year, rather than whether there is a probability of performance, or whether the contract was susceptible of termination within the year (see, General Obligations Law § 5-701[a][1]; see also, D & N Boening v. Kirsch Beverages, 63 N.Y.2d 449, 483 N.Y.S.2d 164, 472 N.E.2d 992; LoPinto v. J.W. Mays, Inc., 170 A.D.2d 582, 566 N.Y.S.2d 357). Where there is absolutely no possibility in fact and law of full performance by both parties within one year, the Statute of Frauds bars enforcement of an oral contract (see, Meyers v. Waverly Fabrics, Div. of F. Schumacher & Co., 65 N.Y.2d 75, 489 N.Y.S.2d 891, 479 N.E.2d 236; see also, D & N Boening v. Kirsch Beverages, supra ). While the plaintiff could unilaterally terminate the agreement within one year, the defendant was required to supply gasoline indefinitely, unless the plaintiff terminated the contract or the defendant went out of business. From the defendant's point of view, such possibility of performance within one year is illusory, and the Statute of Frauds is designed to protect the defendant from just such an oral agreement (see, Huebener v. Kenyon & Eckhardt, 142 A.D.2d 185, 534 N.Y.S.2d 952).

Additionally, in order to state a cause of action sounding in fraud, the plaintiff must allege a breach of duty which is collateral or extraneous to the contract between the parties (see, Mastropieri v. Solmar Constr....