Guyer v. Cities Serv. Oil Co.

• Decision Date: 28 November 1977
• Docket Number: Civ. A. No. 74-C-252.
• Citation: 440 F. Supp. 630
• Parties: Gerald W. GUYER, Harry Dowodzenka, and Lauren R. Karnes, Plaintiffs, v. CITIES SERVICE OIL COMPANY, a Delaware Corporation, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

440 F. Supp. 630

Gerald W. GUYER, Harry Dowodzenka, and Lauren R. Karnes, Plaintiffs, v. CITIES SERVICE OIL COMPANY, a Delaware Corporation, Defendant.

Civ. A. No. 74-C-252.

United States District Court, E. D. Wisconsin.

November 28, 1977.

Daniel W. Hildebrand, Madison, Wis., for plaintiffs.

Donald Heaney, Madison, Wis., for defendant.

DECISION AND ORDER

REYNOLDS, Chief Judge.

This is an action for damages and injunctive relief arising out of the termination of contracts entered into between the plaintiffs and the defendant. The matter is before the Court on defendant's motion for summary judgment, which motion will be granted for the reasons hereafter stated.

The plaintiffs in this action, Gerald W. Guyer, Harry Dowodzenka, and Lauren Karnes, are former operators and lessees of Cities Service Oil Company gasoline service stations located in Milwaukee. Each of them held his lease under a year-to-year automatically renewable contract which was terminable by either party upon ninety days' notice. Mr. Guyer began operation of his station in 1963. His last lease was signed on February 2, 1973, was automatically renewed the next year, and was terminated by letter dated February 28, 1975. Mr. Guyer received notice of nonrenewal on October 17, 1974. Mr. Dowodzenka began operation of his station in 1965. His last lease was signed on December 21, 1973, and terminated on December 31, 1974. Mr. Dowodzenka received notice of nonrenewal by letter dated September 24, 1974. Mr. Karnes began operation of his station on September 1, 1972. His last lease was signed on September 17, 1973, and terminated on September 30, 1974. Mr. Karnes received notice of nonrenewal by letter dated June 3, 1974.

The plaintiffs charge, and the Court accepts for purposes of this summary judgment motion, that beginning in 1971, the defendant Cities Service Oil Company began a re-evaluation of its investments in the Milwaukee area and thereafter decided to terminate all but eighteen to twenty-five of its gasoline station leases. The Milwaukee market strategy recommendations were reduced to writing in a study dated January 1973, and Case VI thereof, which called for the elimination of each of the plaintiff's stations, was adopted as company policy in April or May of 1973. Pursuant to this policy each of the plaintiffs was thereafter presented with and signed a rider to his lease which provided that in the event the defendant sold the station before the term of the lease, the lease would be terminable upon thirty days' notice.

The plaintiffs further contend, and the Court accepts for purposes of this motion, that they were never informed of defendant's new marketing strategy but rather were told that their stations were priced so high that it was unlikely they would be sold, and were further induced to believe that if they maintained good performance records, their leases would be automatically renewed for an indefinite period. Defendant, on the contrary, claims that in April or May of 1973 when it adopted the new marketing strategy, it informed those dealers whose leases were to be terminated of the impending termination.

Plaintiffs claim that the alleged failure of the defendant to inform the plaintiffs of its marketing strategy constitutes a fraudulent concealment which induced them to renew their leases to their damage in the amount of $75,000.00 each,^* and, further, that the defendant made actual misrepresentations to the plaintiffs, to their injury. Specifically, plaintiffs charge in their amended complaint as follows:

"15. When Plaintiffs entered into the leases and agreements with Cities Service, they understood and relied upon the fact, and were led to believe, that they would have a lengthy period of time to operate the gasoline service stations and that Defendants did not customarily terminate service station leases; * * *. * * * While operating their businesses under the terms of the leases, representatives of the Defendant continually encouraged and induced Plaintiffs to participate in promotional programs organized by Defendant to sell products of Defendant and of other companies recommended by Defendant and to purchase various other items for use in Plaintiffs' service stations as well as for resale; and Plaintiffs were so induced and did make such purchases in reliance upon the recommendations and inducements of the Defendant. Plaintiffs were continually informed that their sales and performance was excellent and were accordingly led to believe that they were never in any danger of losing their stations for any reason whatsoever.

* * * * * *

"20. Because of the aforementioned fraudulent concealment of the Milwaukee marketing strategy, and because Plaintiffs relied upon the representations and inducements of Defendant, Plaintiffs suffered injury and incurred damages as heretofore set forth."

Defendant has denied that it made any actual misrepresentations to the plaintiffs, has also denied that it had a duty to reveal to them its marketing strategy, and has moved for summary judgment. For the reasons hereinafter stated, defendant's motion will be granted.

There is no dispute that the leases themselves were year-to-year and terminable upon ninety days' notice by either party. Parol evidence is not admissible to vary the terms of a written agreement which is clear and unambiguous. Conrad Milwaukee Corporation v. Wasilewski, 30 Wis.2d 481, 141 N.W.2d 240 (1966). However, parol evidence may be admissible in support of a claim of fraudulent inducement to enter into a contract, as in such a case there is no attempt made to vary the terms of the contract itself. See the concurring opinion of Justice Fairchild in Beers v. Atlas Assurance Company, 215 Wis. 165, 253 N.W. 584 (1934), accepted by the majority of the Wisconsin Supreme Court in Alropa Corporation v. Flatley, 226 Wis. 561, 566, 277 N.W. 108, 110 (1938). Such inducements must, however, constitute promises made with a present intention not to perform, and must also be promises "upon which the purchaser has a right to rely." Alropa, supra. See also Anderson v. Tri-State Home Improvement Co., 268 Wis. 455, 67 N.W.2d 853 (1955). Statements made which are merely unfulfilled promises or statements of future events cannot form the basis for a claim...