Exxon Corp. v. Wagner

• Decision Date: 16 December 1977
• Citation: 382 A.2d 45,154 N.J.Super. 538
• Parties: , 1978-1 Trade Cases P 61,833 EXXON CORPORATION, a New Jersey Corporation, Plaintiff-Respondent, v. Paul G. WAGNER, Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 538

154 N.J.Super. 538

382 A.2d 45, 1978-1 Trade Cases P 61,833

EXXON CORPORATION, a New Jersey Corporation, Plaintiff-Respondent, v. Paul G. WAGNER, Defendant-Appellant.

Superior Court of New Jersey, Appellate Division.

Argued Nov. 15, 1977.

Decided Dec. 16, 1977.

Roger A. Clapp, Red Bank, for defendant-appellant.

William L. Dill, Jr., Newark, for plaintiff-respondent (Stryker, Tams & Dill, Newark, attorneys; Thomas M. Roche, Newark, on the brief).

Before Judges LYNCH, BISCHOFF and KOLE.

The opinion of the court was delivered by

KOLE, J. A. D.

Defendant (Wagner) appeals from a grant of summary judgment in favor of plaintiff (Exxon) on counts 3 and 4 of his amended counterclaim.

Both counts alleged violations of the state Anti-Trust Act. Count 3 charged that Exxon, by and through its agents or employees, caused trade to be diverted away from Wagner and to other businesses owned by and operated for the benefit of Exxon, contrary to N.J.S.A. 56:9-3. Count 4 alleged that Exxon, by and through its agents or employees, attempted to monopolize and has monopolized sales under its trademarks to the exclusion of independent dealers, contrary to N.J.S.A. 56:9-4.

The trial judge entered the judgment after considering the pleadings, affidavits and Wagner's deposition testimony.

We have carefully reviewed the record and have applied the same standard in determining whether the summary judgment should have been granted as was applied by the trial judge. R. 4:46-2; Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 110 A.2d 24 (1954). In reaching our determination we have considered that where subjective elements, such as intent or motive, are involved, summary judgment is to be granted with caution. Judson, at 76, 110 A.2d 24; Allen v. Evesham Tp. Planning Bd., 137 N.J.Super. 359, 349 A.2d 99 (App.Div.1975). So viewed, we have concluded that there was no genuine issue of material fact raised and that Exxon was entitled to judgment on both counts as a matter of law.

What follows are the facts that are undisputed.

Exxon was a lessee of the premises at 47 Shrewsbury Avenue, ¹ Red Bank, New Jersey, at which an Exxon service station was operated. In 1968 its 15-year lease had expired but it had the option thereunder to renew the lease for ten additional 1-year periods. Wagner entered into his first written sublease with Exxon for a service station dealership for these premises on January 31, 1969. He operated under the name "Commuter's Esso." He apparently knew that he was operating under the one-year option periods of Exxon's original lease, but even if he was not aware of this fact, he knew that the life of his sublease was limited to the period of Exxon's rights under its lease. In any event, that sublease commenced on February 1, 1969 and was to terminate February 1, 1970. Wagner borrowed $11,000 from Exxon for his initial inventory. A second and third sublease were executed covering the one-year periods from February 1, 1970 to February 1, 1972. On February 1, 1972 Wagner became a month-to-month tenant. Exxon endeavored to terminate the tenancy as of April 1, 1972. After litigation instituted by Wagner, which was dismissed without prejudice, the monthly tenancy was continued.

In late January 1973 Wagner commenced negotiations with Getty Oil Company for the operation of a Getty service station at 93 Shrewsbury, about 11/2 blocks from his Exxon station at 47 Shrewsbury. He acquired title to the 93 Shrewsbury property on April 1, 1973 after he failed in his efforts to purchase the Exxon leased property at 47 Shrewsbury and bring a Getty station to that location. Exxon would not respond to his request to sell him its right to purchase the leased premises. On March 28, 1973 Wagner notified Exxon that he would vacate its premises on April 30, 1973. For the month of April 1973 Wagner was operating two gasoline service stations, Getty and Exxon. Up until the time Wagner left the Exxon station he was supplied by Exxon with all of the products he needed.

Wagner claimed that the verbal agreement between the Exxon representative and him at the outset of his sublease was that the business at 47 Shrewsbury would be his until he decided that he did not want it and that he would be "the last dealer at that location." He stated that he lost substantial sums of money because he was forced to move the location of his station. The station at 47 Shrewsbury had 80 parking spots which he was able to rent to commuters at a monthly rate, while the station at 93 Shrewsbury (Getty) only had 40 parking spaces. The commuters would buy gas and have repairs made. The termination of his Exxon station, he stated, diverted his clientele to other Exxon stations within the vicinity of 47 Shrewsbury.

There are 13 service stations in Red Bank. These represent seven different oil companies, including Exxon. There is also another service station in the municipality of Shrewsbury, at the border of Red Bank.

In 1969 Exxon marketed its products through four outlets, including Wagner's Commuter's Esso, in Red Bank. One outlet was managed by Exxon itself, while the others were independent dealerships. During the time Wagner operated Commuter's Esso, Exxon added a new independent dealership and a new company-owned and managed station. ² Both were near Wagner's Commuter's Esso. We accept Wagner's allegation that there was a percentage increase in company-managed Exxon stations in Red Bank before and after his Esso operation was terminated from 25% (one out of four) to 40% (two out of five), even though the actual number of Exxon stations had actually increased from four to five.

The company-managed stations and other dealers were selling at lower prices than Wagner, since they were getting temporary price reductions from Exxon over a matter of months, while Wagner only got two such temporary reductions. These reductions generally assisted the stations in meeting the lower prices of a competitor. Although the Commuter's Esso Station was deteriorating and Wagner repeatedly requested Exxon to make repairs, it refused to honor the request.

The trial judges determined that there was no contract or combination in restraint of trade under N.J.S.A. 56:9-3 merely because the remaining Exxon dealers may have acquired many of Wagner's customers after he left 47 Shrewsbury, nor could any reasonable inference be made that Exxon's motive in eliminating the operation at the location was to restrict trade or, in violation of N.J.S.A. 56:9-4(a), to monopolize or attempt to monopolize the relevant market. In the words of the trial judge, it "just isn't there, except to the extent Exxon had a trade market, and, within (that) market, can make a judgment in its distribution." He stated that although Exxon was powerful in the industry, it was not dominant, and that it had done nothing to restrict competition.

We are satisfied that the pleadings, affidavits and depositions, and the reasonable inferences therefrom, viewed most favorably to Wagner, plainly support the judge's conclusions as a matter of law.

Wagner argues that, although the state Anti-Trust Act provides that it shall be construed "in harmony with ruling judicial interpretations of comparable Federal antitrust statutes," N.J.S.A. 56:9-18, the court need not "slavishly" follow the federal cases. Whether or not this contention is correct, we have concluded that in this case we would be guided by judicial precedent in the federal sphere. See Kugler v. Koscot Interplanetary, Inc., 120 N.J.Super. 216, 238, 293 A.2d 682 (Ch.Div. 1972).

The third count of Wagner's amended counterclaim charges a violation of N.J. S.A. 56:9-3, which is similar to § 1 of the Sherman Anti-Trust Act (the Sherman Act) 15 U.S.C.A. § 1. N.J.S.A. 56:9-3 makes unlawful every "contract, combination * * * or conspiracy in restraint of trade or commerce, in this State."

Wagner contends that by Exxon's "deliberate destruction" of his "competing" business, a unilateral offer was given to the independent dealers "continue to do business as usual and you will gain the benefit of the (Wagner's) lost business". He also argues that Exxon unilaterally "eliminated (Wagner) as a competitor so that (his) business could be divided up and combined with the business" of Exxon at its retail outlets, as well as with the business of the surviving independents at their retail outlets. He finds support for these allegations in Exxon's refusal (1) to give him the price advantages given to other gas stations; (2) to help him repair his station at 47 Shrewsbury; ³ (3) to offer him a new location in his trade area when his tenancy at 47 Shrewsbury was eliminated, and (4) to accept his offer to purchase Exxon's rights in 47 Shrewsbury. He contends also that Exxon, acting as both wholesaler and retailer, had a short-range plan to eliminate and spread his business over the other remaining Exxon outlets, with a long-range plan of eliminating all independent dealers, thereby leaving Exxon with exclusive control of the wholesale and retail market for its products.

Even if these charges are factually accurate, Exxon has not violated N.J.S.A. 56:9-3.

For there to be a contract, combination or conspiracy in restraint of trade in violation of N.J.S.A. 56:9-3, there must exist a plurality of actors, that is, two or more persons, and concerted action. There can be no such contract, combination or conspiracy by a corporation here Exxon with its own officers, agents or employees, who are performing their usual job of formulating and carrying out its managerial policy. Even if Wagner's tenancy or contract had been terminated improperly by Exxon, there was no violation of N.J.S.A. 56:9-3, as there was only unilateral action by Exxon. Such termination does not implicate that provision of the statute. No such contract or combination may be found merely because of the claimed unilateral offer by Exxon, acquiesced in by the other dealers in the area. Nor...