Cason v. Texaco, Inc.

Decision Date07 November 1985
Docket NumberCiv. A. No. 83-936-B.
Citation621 F. Supp. 1518
PartiesHerbert CASON v. TEXACO, INC.
CourtU.S. District Court — Middle District of Louisiana

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A. Justin Ourso, III, Margaret E. Woodward, Barham & Churchill, New Orleans, La., for plaintiff.

Larry N. Port, C. Suzanne Dittmer, New Orleans, La., G. William Jarman, Kean, Miller, Hawthorne, Darmond, McCowan & Jarman, Baton Rouge, La., for defendant.

POLOZOLA, District Judge.

Herbert Cason filed this suit alleging certain violations of the Petroleum Marketing and Practices Act ("PMPA")1 and the Louisiana Unfair Trade Practices and Consumer Protection Law2. Cason contends that Texaco, Inc. ("Texaco") has engaged in unfair trade practices and predatory pricing schemes in an effort to terminate his lease of a service station. According to Cason, Texaco engaged in these alleged practices to transform the plaintiff's dealer operated station into a company operated station.

Texaco has filed three motions for summary judgment.3 In its motions, Texaco seeks to dismiss the claim brought pursuant to the PMPA, certain of plaintiff's Unfair Trade Practices and Consumer Law claims, and, finally, seeks to resolve the issue of whether there was a breach of a fiduciary relationship between Texaco and the plaintiff. In addition, Texaco has filed three motions in limine which seek to exclude evidence of (a) unfair trade practices occurring prior to August 30, 1982; (b) a nationwide plan of Texaco to eliminate independent retailers; and (c) Cason's intent to sublease the retail marketing outlet.

I. Petroleum Marketing and Practices Act

Texaco reurges an earlier motion for summary judgment which seeks to dismiss two claims alleging violations of PMPA. The first claim alleges a violation of 15 U.S.C. § 2802(b)(3)(A) which provides in pertinent part that:

For purposes of this subsection, the following are grounds for nonrenewal of a franchise relationship:
(A) The failure of a franchisor and the franchisee to agree to changes or additions to the provisions of the franchise if
(i) such changes or addition are the result of determinations made by the franchisor in good faith and in the normal course of business; and
(ii) such failure is not the result of the franchisor's insistence upon such changes or additions for the purpose of preventing the renewal of the franchise agreement.

The plaintiff contends that the only new issue raised by the present motion is his alleged admission that he was not "singled out for harsh treatment by Texaco." Texaco asserts that this admission is the equivalent of the plaintiff having admitted that Texaco acted in "good faith" in proposing changes as is required by 15 U.S.C. § 2802(b)(3)(A). Senate Report, S.Rep. No. 95-731, 95th Cong.2d Sess. 37, reprinted in 1978 U.S.Code Cong. & Ad.News 873, 895-896, states that the "good faith test is meant to preclude sham determinations from being used as an artifice for termination or nonrenewal."4 The good faith requirement of the statute has been interpreted to require only "subjective good faith, i.e. a `good heart' without evil intent." Munno v. Amoco Oil Co., 488 F.Supp. 1114, 1120 (D.Conn.1980).5 This Court holds that questions of subjective intent are factual inquiries. Tiller v. Amerada Hess Corp., 540 F.Supp. 160 (D.S.C. 1981).6 Therefore, this Court is precluded from granting the motion for summary judgment at this time because of the factual dispute regarding the intent of the parties.7

Texaco also contends that plaintiff's allegations that Texaco violated 15 U.S.C. § 2802(b)(3)(D)(iii) are without merit. 15 U.S.C. § 2802(b)(3)(D) provides

(3) For purposes of this subsection, the following are grounds for nonrenewal of a franchise relationship:
(D) ... a determination made by the franchisor in good faith and in the normal course of business, if —
(i) such determination is —
(I) to convert the leased marketing premises to a use other than the sale or distribution of motor fuel,
(II) to materially alter, add to, or replace such premises,
(III) to sell such premises, or
(IV) that renewal of the franchise relationship is likely to be uneconomical to the franchisor despite any reasonable changes or reasonable additions to the provisions of the franchise which may be acceptable to the franchisee;
(ii) with respect to a determination referred to in subclause (II) or (IV), such determination is not made for the purpose of converting the leased marketing premises to operation by employees or agents of the franchisor for such franchisor's own account; and
(iii) in the case of leased marketing premises such franchisor, during the 90-day period after notification was given pursuant to section 104 15 U.S.C. § 2804, either —
(I) made a bona fide offer to sell, transfer, or assign to the franchisee such franchisor's interests in such premises; or
(II) if applicable, offered the franchisee a right of first refusal of at least 45-days duration of an offer, made by another, to purchase such franchisor's interest in such premises.

Cason has alleged in his complaint that Texaco has violated the PMPA by not offering to assign its lease to the plaintiff. Texaco contends, however, that 15 U.S.C. § 2802(b)(3)(D)(iii) requires it to offer to assign its interest in the lease only if it had refused to renew the franchise because of its decision "to materially alter, add to, or replace such premises." See 15 U.S.C. § 2802(b)(3)(D)(i)(II). Texaco asserts that since it offered to renew the franchise, this section is inapplicable to the present set of facts.

The Court finds that it is premature to make a legal determination of the exclusiveness of the grounds for nonrenewal set forth in 15 U.S.C. § 2802(b)(3). There are genuine issues of material fact to be resolved at the trial which preclude the Court from granting the motion for summary judgment. See Dorden v. Heist, 743 F.2d 1135 (5th Cir.1984) and Williams v. Shell Oil, 677 F.2d 506 (5th Cir.1982), cert. denied, 459 U.S. 1087, 103 S.Ct. 570, 74 L.Ed. 933 (1982). Once these factual determinations are made, the Court can then decide the legal issues based on those factual determinations. See Federal Election Commission v. Lance, 635 F.2d 1132, 1138 (5th Cir.1981), appeal dismissed, cert. denied by Lance v. Federal Election Commission, 453 U.S. 917, 101 S.Ct. 3151, 69 L.Ed.2d 999 (1981).

II. Louisiana Unfair Trade Practices and Consumer Protection Law, Louisiana Revised Statute 51:1401-1418

Texaco's second motion for summary judgment pertains to plaintiff's claims which were filed pursuant to Louisiana's Unfair Trade Practices and Consumer Protection Law. Louisiana Revised Statute 51:1401-1418. Two assertions are advanced by Texaco with regard to these claims.

Texaco contends that all "unfair trade practices" alleged by the plaintiff to have occurred prior to August 30, 1982, have prescribed. This contention is based upon Louisiana Revised Statute 51:1409(E) which provides that "the action provided by this section shall be prescribed by one year running from the time of the transaction or act which gave rise to this right of action." Cason argues, however, that "Texaco's continuing and repeated wrongful acts" should be regarded as a continuing violation and as such, prescription did not commence to run until the violation had ceased. In support of this contention, the plaintiff cites several decisions which hold that "where the cause of the injury is a continuous one giving rise to successive damages, prescription dates from cessation of the wrongful conduct causing the damage." South Central Bell Telephone Co. v. Texaco, Inc., 418 So.2d 531, 533 (La.1982).8 The cases relied upon by the plaintiff involve the judicial construction of Louisiana Civil Code article 35379, a general prescription statute, and the application of the continuing violation doctrine to this statute. This Court has failed, however, to find a case discussing the applicability of such doctrine to the prescription statute at issue. The present issue before the Court, therefore, is res nova.

Louisiana Revised Statute 51:1409 has been interpreted to be penal in nature. Morris v. Rental Tools, Inc., 435 So.2d 528 (La.App. 5th Cir.1983) and Coffey v. Peoples Mortg. & Loan of Shreveport, Inc., 408 So.2d 1153, 1156 (La.App. 2nd Cir. 1981). Therefore, it is subject to strict construction. Federal Trade Commission v. Mandel Brothers, 359 U.S. 385, 79 S.Ct. 818, 3 L.Ed.2d 893 (1959) and Diversacon Industries v. National Bank of Commerce of Mississippi, 629 F.2d 1030 (5th Cir.1980). Section 1409(E) is unambiguous and clearly and expressly provides that a civil action brought pursuant to Louisiana Revised Statute 51:1409 prescribes unless such action is brought within one year from the date of the alleged violation. The penal nature of this statute prohibits this Court from applying the doctrine of the continuing violation to prevent the commencement of the running of prescription under Section 1409(E).10 Therefore, this Court holds that all of the unfair trade practices claims that have occurred prior to one year of the date of the filing of this suit have prescribed.11 The Court is unable, however, to determine from the record and the facts presented in the briefs which of the alleged unfair trade practices have occurred prior to one year of the filing of the present suit. It is incumbent upon the defendant to prove that a claim has prescribed. See, e.g., DiCarlo v. Laundry & Dry Cleaning Service, 178 La. 676, 152 So. 327 (1933). Since Texaco has not met its burden of proving which of the alleged unfair trade practices occurred prior to one year from the filing of suit, the Court is precluded from granting this motion for summary judgment based upon prescription.12

Texaco also urges that the claims asserted in paragraphs 17(a) and 17(b) of the plaintiff's complaint are preempted by PMPA. The claims asserted in these two paragraphs of the complaint are based...

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