Bsales v. Texaco, Inc.
| Decision Date | 17 June 1981 |
| Docket Number | Civ. A. No. 80-3063. |
| Parties | George BSALES, Robert DeTitta, Raymond Jordan, James Kelly, Martin Mundy, Robert Romo, Robert Stone, Joseph Travaglio and John Valenta, Plaintiffs, v. TEXACO, INC., Albert Shotmeyer and Henry Shotmeyer, Defendants. |
| Court | U.S. District Court — District of New Jersey |
COPYRIGHT MATERIAL OMITTED
Lowen & Abut, P. A., Fort Lee, N. J., for plaintiffs by Charles C. Abut, Fort Lee, N. J.
Jeffer, Hopkinson & Vogel, Hawthorne, N. J., for defendants Albert Shotmeyer and Henry Shotmeyer by Jerome A. Vogel, Hawthorne, N. J.
Carpenter, Bennett & Morrissey, Newark, N. J., for defendant Texaco, Inc. by Michael S. Waters, Newark, N. J.
The nine plaintiffs in this action are franchised gasoline station dealers, pursuant to lease and dealer agreements executed with defendant Texaco, Inc. Each of the stations is located on property owned by the defendants Albert and Henry Shotmeyer, or companies controlled by one or both of them ("Shotmeyers"). Texaco leases the properties from the Shotmeyers, and in turn subleases them to the individual plaintiffs. Plaintiffs instituted this action on September 18, 1980, after receiving notice from Texaco that each of the franchises was to be deemed terminated effective October 14, 1980.
The complaint alleges violations of the Petroleum Marketing Practices Act (the "PMPA"), 15 U.S.C. § 2801 et seq., the existence of a tortious conspiracy between Texaco and the Shotmeyers to deprive plaintiffs of their business premises, breach of express and implied contract, promissory estoppel, and other legal theories. Currently pending before the court are motions for summary judgment, filed by each party to the suit.
In October of 1960, defendant Texaco leased twenty-two parcels of service station properties from the Shotmeyers, including the ten involved in this litigation. Each of the ten properties was the subject of a separate lease agreement between the Shotmeyers and Texaco for a term of twenty years. The leases were scheduled to terminate on or about October 14, 1980. Each lease, however, contained an option to Texaco to extend the lease for one additional period of five years. The rent for such five-year period was not agreed upon in the original lease. Rather, rent was to be established by negotiation or by a percentage of the appraised value of the premises determined by arbitration. If Texaco sought to exercise the option, it was required to provide the Shotmeyers with 12 months' prior notice in writing.1
Affidavit of Michael J. Hogan, Exhibits 1, 4, 7, 10, 13, 16, 20, 23, 26, and 29.
Beginning sometime in late 1978, Texaco began to review the twenty-two separate parcels of service station properties it had leased from the Shotmeyers. The leases on said properties were due to expire on October 14, 1980. Between 1978 and 1980, Texaco and the Shotmeyers negotiated renewal terms and conditions. Unable or unwilling to come to terms, Texaco notified plaintiffs in June 1980 that it would no longer have an interest in the subject properties beyond October 14, 1980, and that their franchises could not be renewed. Notice of nonrenewal was sent to each plaintiff by certified mail on June 25, 1980.
Plaintiffs allege that the negotiations between Texaco and the Shotmeyers were not carried out in good faith, and were the result of "a concerted and wrongful effort to extricate themselves from contractual obligations." Plaintiffs' Brief in Opposition to Defendants Shotmeyers' Motion for Summary Judgment at 9.
In addition to the claim that the defendants did not bargain in good faith with each other, the plaintiffs contend that during the several years preceding expiration of the master leases, they received assurances from representatives of both Texaco and the Shotmeyers to the effect that they would be permitted to remain in possession of the premises past October 14, 1980. Because plaintiffs' action rests so heavily upon the alleged assurances received from the defendants, said assurances are set out in full, as sworn to by each plaintiff:
1. Plaintiff George Bsales signed a lease agreement with Texaco covering the period October 1, 1977 to September 30, 1980. When he signed the lease agreement, he was informed by a representative of Texaco that Texaco had a twenty-year lease on the property due to expire in 1980, that Texaco had an option to renew its lease, that Texaco would exercise that option, and that Bsales would be able to continue occupying the premises past 1980.
Bsales claims that during 1979, the same Texaco representative offered him a new written lease extending past 1980, and that discussions were held concerning the method of rental calculation and the amount of the proposed rental increases. Bsales was told that he would have a chance to review the proposed lease "later on", and admits that he never actually saw a written lease agreement. He was assured, however, that his occupancy of the premises would not be endangered.
Bsales further claims that he had communications with Paul Tiger, general manager of the defendant Shotmeyer. Tiger visited Bsales at his service station in late 1979 and confirmed that Texaco and Shotmeyer were negotiating for a five-year renewal. In March 1980, Tiger again visited Bsales and told him that although Texaco and Shotmeyer had not reached a firm agreement, Bsales need not worry because he could obtain a lease directly from Shotmeyer. Tiger offered a direct lease for a trial six-month period at a rental of $1200.00 per month. Bsales claims to have accepted these terms, and was awaiting a formal written agreement.
Finally, Bsales called Tiger after receiving the notice of nonrenewal from Texaco. Tiger assured him that he had nothing to worry about and that the franchise would be fully protected.
2. Plaintiff Robert DeTitta entered into a new lease on his service station property in December 1978. He was aware of the master lease and of Texaco's option to renew. He was led to believe that Texaco would exercise its option.
During 1979, DeTitta was visited by a Texaco representative and was shown a new lease agreement for his premises. He was told that if he signed the new lease, he would be able to remain in possession of the premises through 1982.
Sometime in 1980, DeTitta claims that he indicated to Mr. Tiger, the Shotmeyer representative, that he was aware of the new rent structure proposed by Shotmeyer to Texaco. After receiving the notice of nonrenewal from Texaco, DeTitta was again visited by Tiger. DeTitta was asked to fill in a financial statement, and was told that there would be no problem in his continuing in possession. He was informed that he would remain in business with either Texaco or Shotmeyer supplying the gasoline.
3. Plaintiff Raymond Jordan claims to have received information and assurances from Texaco representatives similar to that received by Bsales and DeTitta. In addition, Jordan claims to have negotiated over a period of time with a Texaco representative about a new lease agreement.
Jordan also had direct dealings with Tiger, who asked Jordan whether he would be interested in leasing directly from Shotmeyer at a rent of $1000.00 to $1200.00 per month. Jordan told Tiger that he accepted the proposal and looked forward to signing a formal lease agreement. Jordan subsequently asked Tiger when the new lease would be signed, and Tiger said that he would get back to him. Jordan claims that throughout his dealings with Tiger, he was assured that if Texaco did not renew its option, he would deal directly with Shotmeyer.
4. Plaintiff James Kelly received similar assurance and information from Texaco representatives. He claims that he was offered a new lease agreement from Texaco in 1979 and that he agreed to sign it. He was not, however, given an opportunity to sign the document.
After receiving the notice of nonrenewal from Texaco, Kelly called Robert Olum, a representative of Albert Shotmeyer. He was told not to worry, that Shotmeyer would negotiate with him, and that his situation would be protected. He was told that his occupancy of the property would not be jeopardized, and that the only possible change would be that Shotmeyer and not Texaco would become his supplier.
5. Plaintiff Martin Mundy concedes knowledge of the master lease and the option to renew. He was presented with a new lease by a Texaco representative during 1979. After discussions about the increases in rent, Mundy was assured that the proposal would be available in 1980.
Mundy claims that a representative of the Shotmeyers advised Mundy in 1980 that he would have the opportunity to negotiate directly with the Shotmeyers, and that there would be no problem in his occupying the premises past October 1980.
6. Plaintiff Robert Romo claims to have actually signed a new lease with Texaco in 1979, to take effect in 1980. At that time, he was informed that Texaco was in the process of negotiating renewal of its master lease with the landlord of the premises. He was assured that there would be no problem with Texaco's renewal. Romo was subsequently informed on several occasions by Texaco that negotiations were continuing and that there would be no problem with his continued occupancy.
According to Romo, he reached an oral agreement in 1980 with Tiger, Shotmeyer's representative, as to a lease...
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