Cibran Enterprises v. Bp Products North America

• Decision Date: 24 February 2005
• Docket Number: No. CIV03-60069.,CIV03-60069.
• Court: U.S. District Court — Southern District of Florida
• Parties: CIBRAN ENTERPRISES, INC., Plaintiff, v. BP PRODUCTS NORTH AMERICA, INC. f/k/a Amoco Oil Company, Defendant.

365 F.Supp.2d 1241

CIBRAN ENTERPRISES, INC., Plaintiff, v. BP PRODUCTS NORTH AMERICA, INC. f/k/a Amoco Oil Company, Defendant.

No. CIV03-60069.

United States District Court, S.D. Florida, Miami Division.

February 24, 2005.

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Moises Melendez of Gordon Hargrove & James, P.A., Ft. Lauderdale, FL, is counsel for BP.

Bernard L. Egozi of Isicoff Ragatz & Koenigsberg, P.A., in Miami is counsel for Cibran Enterprises, Inc.

ORDER ON PENDING MOTIONS

ALTONAGA, District Judge.

THIS CAUSE came before the Court on the following motions: Defendant, BP Products North America, Inc.'s ("BP['s]") Motion for Summary Judgment [D.E. 57]; Motion to Strike Jury Demand [D.E. 67]; Motion to Strike Claim for Punitive Damages, or Alternatively, for a Bifurcated Trial [D.E. 69]; and Plaintiff, Cibran Enterprises, Inc.'s ("Cibran['s]") Motion for Leave to File Surreply [D.E. 116]. On August 26, 2004, Cibran filed a Verified Second Amended Complaint [D.E. 83], alleging breach of contract, breach of the duty of good faith and fair dealing, and fraud in the inducement. BP now moves for summary judgment, arguing that no contract (and consequently no duty of good faith and fair dealing) existed between it and Cibran. Furthermore, BP argues that Cibran has failed to establish that BP breached any contract or duty and that no recoverable damages were caused by any alleged breach. Finally, BP argues that Cibran has failed to establish the elements of fraud and that Cibran's claim is based on an unenforceable "agreement to agree" and is barred by the statute of frauds. The Court heard oral argument on October 8, 2004 and has considered the parties' written submissions, the record, and the applicable law.

I. FACTUAL BACKGROUND

Cibran is a Florida corporation with a principal place of business in Florida. Its sole officer and shareholder is Mariano Cibran. BP is a Maryland corporation with a principal place of business in Illinois. It is the successor to Amoco Oil Company ("Amoco") pursuant to a merger with BP Exploration & Oil, Inc. and a subsequent name change in 2001.¹

On September 9, 1987, BP (then known as Amoco) entered into a lease (the "Ground Lease" [D.E. 58 Ex. 15]) under which BP pays monthly rent for approximately 0.7713 acres of land in Broward County, Florida (the "Land"). The original lease term ended on August 31, 1990, but BP has the option to extend the Ground Lease for up to seven successive periods of three years each. (Ground Lease ¶ 2.) The Ground Lease also gives BP the option to purchase the Land for a price ranging from $550,000 during the first lease term up to $923,000 during the seventh renewal period. (Id. ¶ 17.)

In addition to the Ground Lease, BP owns certain fixed assets and equipment (the "BP Assets") used in the operation of a gasoline service station on the Land (the "Jacaranda Station"). An unsigned Assignment and Assumption of Lease describes the BP Assets as including "all buildings erected on the real estate, the pump-island canopy, underground storage tanks and lines," and other equipment. (Assign. & Assump. of Lease [D.E. 58 Ex. 8] at 1.)

On October 28, 1998, BP entered into two four-year agreements with Jay Weinstock regarding the operation of the Jacaranda Station: a Commission Marketer Agreement ("CMA" [D.E. 83 Ex. A]) and Lease Agreement ("CML" [D.E. 83 Ex. B]). Under the terms of the CML, Mr. Weinstock paid monthly rent to lease certain premises to be used as a food shop and carwash adjacent to a parcel of land to be used as a motor fuel sales facility (the "Fuel Facility"). (CML at 1, Attach. 3.) Mr. Weinstock operated the Fuel Facility according to the terms of the CMA, but the CML expressly excluded the Fuel Facility from the premises that Mr. Weinstock leased. (Id. at 1.) Similarly, the CMA states that "Marketer [Mr. Weinstock] agrees that it shall have no right, privilege or interest in or to the Fuel Facility or the property on which the Fuel Facility is located or in the business or goodwill of Amoco by virtue of this Agreement." (CMA at 10.)

Under the CMA, Mr. Weinstock acted as an independent contractor "to dispense motor fuels at the Fuel Facility in the name and on behalf of Amoco and furnish services related thereto." (Id. at 1.) The CMA provided that BP would supply the fuel and the equipment necessary to dispense the fuel at the Fuel Facility, and "[a]ll inventories of motor fuels shall be owned by Amoco and shall be dispensed by Marketer on behalf of Amoco at retail prices established by Amoco." (Id.) Accordingly, Mr. Weinstock was required to periodically perform "motor fuel street price surveys, record and transmit the survey information and make sign and system price changes in the manner and at the times established by Amoco from time to time." (Id. at 4.) Mr. Weinstock's sole compensation under the CMA was a commission fee of 7.5¢ per gallon of motor fuel sold at the Fuel Facility. (Id. at 3.)

The CMA and CML contain many similar provisions. For example, the CML states that "[i]f Tenant presents Amoco with NSF [not sufficient funds] checks on two (2) or more occasions within any twelve (12) month period during the term of this Agreement, Amoco may terminate this Agreement." (CML at 2.) Similarly, both the CMA and CML provide that "giving one or more insufficient funds checks" is grounds for BP to terminate or not renew the agreements "upon 90 days written notice or such shorter notice as is reasonable under the circumstances or otherwise required by state law." (CMA at 7-8; CML at 10.)

Both the CMA and CML contain similar assignment and right-of-first-refusal provisions. For example, the CMA provides the following:

Marketer shall have the right to assign this Agreement after first obtaining the written consent of Amoco, which consent shall not be unreasonably withheld....

Amoco shall have a right of first refusal to purchase or otherwise acquire Marketer's interest in this Agreement and/or Marketer's business as related to this Agreement on the same terms and conditions as set forth in any contract entered into by Marketer in any bona fide arms-length transaction.... Amoco or its assignee shall have thirty (30) business days (i.e., Monday through Friday, excluding all state and federal holidays) from the receipt of fully executed copies of all contracts and related agreements between Marketer and the proposed purchaser and all additional information requested by Amoco to exercise its right of first refusal hereunder....

If Amoco does not elect to exercise its right of first refusal within the time period provided herein, Marketer may assign this Agreement if Marketer obtains Amoco's prior written consent, which shall not be unreasonably withheld....

Marketer is the sole owner of the business operations regarding the Fuel Facility and shall not sell, assign or otherwise permit the change of any legal or beneficial interest in said business, including, but not limited to, any sale, conveyance, transfer or assignment of any such interest to a corporation, limited liability company or partnership owned or controlled by Marketer, without the express written consent of Amoco.

(CMA at 11.) The CML contains similar provisions. (CML at 8-9.)

The CMA and CML also both contain similar merger and no-oral-modification clauses. Specifically, the CMA states the following:

This Agreement and the [CML] cancel and supersede all prior written and unwritten agreements and understanding between the parties pertaining to the Facility. No obligation, agreement or understanding shall be implied from any course of dealing or from any of the terms and provisions of the Agreement or the [CML], all obligations and understandings with respect to the subject matter hereof being expressly set forth in this Agreement and [CML]. No representations or statements other than those expressly set forth herein have been relied upon by the parties in entering into this Agreement. No modification or amendment of the terms of this Agreement shall be effective unless reduced to writing and signed by an authorized representative of each party.

(CMA at 12; see also CML at 14.)

In fall of 2000, Mariano Cibran and Mr. Weinstock entered into a Business Asset Sale and Purchase Agreement dated September 12, 2000 [D.E. 58 Ex. 4]. Under the terms of this agreement, Mr. Weinstock sold to Mr. Cibran "all of [Mr. Weinstock's] assets and properties pertaining to the business known as Jacaranda Amoco" in exchange for $550,000. (Bus. Asset Purch. & Sale Agrnt. ¶ 1-2.) The transaction was scheduled to close on or about November 1, 2000. (Id. ¶ 4.)

The September 12, 2000 Business Asset Sale and Purchase Agreement gave Mr. Cibran ten business days following the execution of the agreement "to inspect the assets and records of [Mr. Weinstock] and other aspects of the business that [Mr. Cibran] deems pertinent." (Id. ¶ 12.) If Mr. Cibran was not satisfied, he had the "right to cancel this Agreement for any reason and receive a return of the deposits paid." (Id.) Mr. Cibran testified in his deposition that the parties extended this initial inspection period. (Cibran Dep. I [D.E. 58 Ex. 20] at 182.) Mr. Cibran also submitted a Second Addendum to Business Asset Sale and Purchase Agreement [D.E. 86 Ex. 3] which states the following:

Because of issues that came up during the inspection of the property during the Inspection Period as described in Paragraph 12 of the BUSINESS ASSET SALE AND PURCHASE AGREEMENT, SELLER and PURCHASER agreed that PURCHASER must meet with representatives of BP/Amoco to answer certain questions concerning the property, and the inspection period was extended by the first Addendum.

PURCHASER, by this Addendum, declares that the issues outstanding under the inspection period are can [sic] only be answered by BP/Amoco and are:

1. Whether the underground tanks are double walled and meet 2009 standard.

2. What will happen when the current lease...