Call Carl, Inc. v. BP Oil Corp.

• Decision Date: 26 April 1977
• Docket Number: Nos. 76-1345,76-1346,s. 76-1345
• Citation: 554 F.2d 623
• Parties: , 1977-1 Trade Cases 61,401 CALL CARL, INC., a Delaware Corporation, et al., Appellants, v. BP OIL CORPORATION, a Delaware Corporation, and Standard Oil Company (Ohio), an Ohio Corporation, Appellees. CALL CARL, INC., a Delaware Corporation, et al., Appellees, v. BP OIL CORPORATION, a Delaware Corporation, and Standard Oil Company (Ohio), an Ohio Corporation, Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 623

554 F.2d 623

41 A.L.R.Fed. 841, 1977-1 Trade Cases 61,401

CALL CARL, INC., a Delaware Corporation, et al., Appellants, v. BP OIL CORPORATION, a Delaware Corporation, and Standard Oil

Company (Ohio), an Ohio Corporation, Appellees.

CALL CARL, INC., a Delaware Corporation, et al., Appellees, v. BP OIL CORPORATION, a Delaware Corporation, and Standard Oil

Company (Ohio), an Ohio Corporation, Appellants.

Nos. 76-1345, 76-1346.

United States Court of Appeals Fourth Circuit.

Argued Nov. 8, 1976.

Decided April 26, 1977.

John Henry Lewin, Jr., Baltimore, Md. (Benjamin R. Civiletti, Venable, Baetjer & Howard, Baltimore, Md., on brief) for appellees in No. 76-1345 and for appellants in No. 76-1346.

Jerry S. Cohen, Washington, D. C. (Michael D. Hausfeld, Washington, D. C., William C. Sammons, Tydings & Rosenberg, Baltimore, Md., on brief), for appellants in No. 76-1345 and for appellees in No. 76-1346.

Before BRYAN, Senior Circuit Judge, WIDENER and HALL, Circuit Judges.

WIDENER, Circuit Judge:

In late summer of 1973, the plaintiffs, ten independent service station operators doing business in Maryland as BP dealers, were notified by BP that their leases and franchise agreements would not be renewed when their current terms expired. Business expectations frustrated, litigation was not far behind. The operators charged BP along with its parent corporation, Standard Oil Co. of Ohio (SOHIO), with terminating their franchises as part of a price fixing conspiracy in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. State law claims for breach of contract and fraudulent misrepresentation were asserted as well.

Trial was held in the district court with a jury, and at the close of the plaintiffs' case defendants were granted a directed verdict on the count alleging violations of the Sherman Act. The other counts were submitted to the jury, which found that there had been no breach of contract by the defendants, but that BP and SOHIO were liable under the Maryland law of fraud and deceit. Damages of more than 1.2 million dollars were awarded by the jury, about half of which was ordered remitted by the court in lieu of a new trial on the issue of damages. The district court opinions are reported as 391 F.Supp. 367 (D.Md.1975) and 403 F.Supp. 568 (D.Md.1975).

Appeals are taken by both sides. Plaintiffs claim the district court erred in directing a verdict on the antitrust count and in remitting approximately $600,000 of the jury's damage award. BP and SOHIO allege error in the district court's fraud and deceit damage charge, and assert that they are entitled to judgment on the merits of that count. We view plaintiffs' antitrust allegations as lacking in merit and affirm the district court's grant of a directed verdict in favor of the defendants. On the fraud and deceit count, however, we find ourselves in agreement with BP and SOHIO that the jury was erroneously instructed on the proper measure of damages in this case, and that under the evidence there should have been no award of damage on the fraud count. The district court's judgment for the plaintiffs on that count will therefore be reversed.

At the time of BP's incorporation in 1969, plaintiffs Call Carl, Inc., Gage, Smith, Luksenburg and DeLeonibus had operated their service stations under the Sinclair tradename pursuant to short-term, renewable leases. When BP acquired Sinclair properties on the East Coast in 1969, it took over these leases for the remainder of their terms and, as they expired, renewed them for additional periods, with the plaintiffs becoming BP dealers. In only one instance, that of the plaintiff Smith, was a lease renewed for a period longer than one year, in accordance with BP's policy of limiting franchise agreements to one year terms.

The years 1970-1972 witnessed the expansion of BP marketing in the Washington, D. C. area through traditional franchise arrangements. During this period, BP acquired the service stations later operated by the other five plaintiffs, Cochrane, Stickell, Loekle, Sherbert, and Diaz. These five were initially given six-month leases and supply contracts that could be, and in fact were, later renewed, but again never for longer than one-year terms. Each of the plaintiffs' agreements with BP specified that, after the expiration of an initial period of time, they would be renewed "thereafter for successive terms of one year each, provided, however, that either party may terminate the lease at the end of the first one-year or any successive yearly term on Thirty (30) days' written notice given prior to the end of any such term."

BP suffered substantial losses during the years 1970-72 and, by the fall of 1972, was re-evaluating its marketing program in the Washington, D. C. area. A tentative list of candidates for franchise non-renewal was prepared, and certain stations were identified as suitable for transition to no-frill Gas & Go stations, geared toward the provision of gasoline and oil cheaply and quickly, with no additional services provided. BP decided that the stations operated by the plaintiffs would be converted to the Gas & Go format, and in September 1973 gave timely notice to the plaintiffs that their dealerships would not be renewed at the expiration of their terms. ¹ Because of an injunction pendente lite issued by the district court, plaintiffs did not actually vacate the stations until February 1976.

A threshold issue is whether plaintiffs, having accepted a remittitur " under protest," may nevertheless contest the propriety of the remittitur on direct appeal, rather than having to seek such review after a new trial. This is an issue over which the circuits have divided at least three ways, ² though, somewhat anomalously, it seems to us it has long been settled by the Supreme Court against appealability. See Woodworth v. Chesbrough, 244 U.S. 79, 37 S.Ct. 583, 61 L.Ed. 1005 (1917); Koenigsberger v. Richmond Silver Mining Co., 158 U.S. 41, 52, 15 S.Ct. 751, 39 L.Ed. 889 (1895). Cf. Lewis v. Wilson, 151 U.S. 551, 14 S.Ct. 419, 38 L.Ed. 267 (1894). Any contention that this prohibition had grown stale with the passage of time has been put to rest by the Court this year in Donovan v. Penn Shipping Co., Inc., 536 F.2d 536 (2d Cir. 1976), aff'd. 429 U.S. 648, 97 S.Ct. 835, 51 L.Ed.2d 112 (1977), where the preclusion of direct appeal from a remittitur, accepted with or without qualifications, was reaffirmed. In Woodworth, the Court of Appeals found a damage award supported by insufficient evidence, but granted plaintiff the option of filing a remittitur in lieu of a new trial. The plaintiff did so, purporting to preserve his right to challenge the remittitur in the Supreme Court in a cross proceeding. Although defendant's writ of error was decided on its merits, plaintiff's cross writ of error was dismissed by the Court, which was unwilling to permit a successful litigant to secure a conditional judgment and at the same time seek to retract the condition upon which that judgment was obtained.

We find it necessary to discuss this issue despite our reversal of the district court on the merits of the fraud and deceit count because it implicates still a larger, related, threshold question of relevance to the remaining issues before us whether plaintiffs' attempted acceptance of the remittitur under protest, when direct appeal is not permitted, is in fact an acceptance for the purpose of rendering the district court's judgment a final, appealable order from which either side might appeal on other grounds. Once a remittitur is accepted, the reduced judgment achieves finality quite apart from whether the order of remittitur can then be appealed. But if the proper course for the district court in this case was to treat plaintiffs as having rejected the remittitur, then a new trial should have been ordered, and none of the issues in this case would properly be before us for review, for such orders are interlocutory in nature and leave no final judgment from which to appeal. Atlantic Coast R. R. Co. v. Sonenshine, 226 F.2d 220 (4th Cir. 1955).

Again, we look to the Supreme Court's opinion in Woodworth for guidance. There, the Court of Appeals apparently treated the remittitur as having been accepted although it attempted to reserve a non-existing right of review. The Supreme Court did not indicate that the Court of Appeals acted properly in this regard, and indeed the effect of the Court's holding was to leave the plaintiff with his reduced judgment, which amounts to no less than treating the conditional acceptance as unconditional. If the district court treated plaintiff's response to its order of remittitur as an unconditional acceptance in the present case, we think it was correct in doing so. See Donovan v. Penn Shipping Co., Inc., 536 F.2d 536 (2d Cir. 1976), aff'd, --- U.S. ----, 97 S.Ct. 835, 51 L.Ed.2d 112 (1977).

As a final threshold matter, although plaintiffs are precluded from appealing the district court's order of remittitur on their fraud and deceit count, we see no reason why they should not be able to raise before this court the propriety of the directed verdict entered against them on the Sherman Act count. As we have said, the final judgment rule presents no bar, for, the acceptance being deemed unconditional, the order in fact is final, and we do not think that the reasons for prohibiting direct appeals from remittiturs require such a result with respect to entirely separate and distinct causes of action once a remittitur has been accepted on one count of a complaint. Whether phrased in terms of waiver or estoppel, the many cases prohibiting direct appeals from remittiturs base their preclusion on the idea that a plaintiff should not be able to appeal from a judgment to which he has consented and from which he has accepted benefits. ³ But the mere acceptance of benefit in a case not involving remittitur from a judgment is not necessarily an absolute bar to appeal with respect to...