Kostantas v. Exxon Co., U.S.A., 80-2307
| Decision Date | 11 December 1981 |
| Docket Number | No. 80-2307,80-2307 |
| Citation | 663 F.2d 605 |
| Parties | 1981-2 Trade Cases 64,396 Cleo KOSTANTAS, Individually and as Administratrix of the Estate of Andreas G. Kostantas, Deceased, Plaintiff-Appellant, v. EXXON COMPANY, U.S.A., a Division of Exxon Corporation, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Brown & Todd, Alton Todd, Alvin, Tex., for plaintiff-appellant.
Melinda F. Harmon, Houston, Tex., for defendant-appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before GEE and RUBIN, Circuit Judges, and SPEARS, * District Judge.
Cleo Kostantas, the surviving spouse and personal representative of the Estate of Andreas Kostantas, brought this action pursuant to 15 U.S.C. § 2801 et seq., the Petroleum Marketing Practices Act (PMPA), against Exxon Company, U.S.A. (Exxon), alleging that Exxon wrongfully terminated its franchise relationship with her late husband, Andreas Kostantas. The district court dismissed the complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., for failure to state a claim upon which relief could be granted. We affirm.
On October 3, 1978, Andreas Kostantas and Exxon executed a lease and franchise agreement and entered into a one-year franchise relationship in connection with a service station in Galveston, Texas. The lease and franchise agreement specifically provided for termination upon the death of Andreas Kostantas. 1 On August 12, 1979, Andreas Kostantas died. On or about August 20, 1979, Exxon changed the locks on the station and sometime in early September leased the building to another individual. Exxon did not notify Mrs. Kostantas of Exxon's termination of the franchise relationship with her husband.
The PMPA permits termination of a franchise agreement for stated reasons and then requires notice to effect that termination. 15 U.S.C. § 2802, § 102(b). Because the Act does not specify death as a ground for termination, Mrs. Kostantas contends that Exxon could not terminate the franchise relationship upon her husband's death. She argues, alternatively, that if death is a ground for termination, the notice requirements of the Act were not met.
Neither of these contentions is consistent with the purpose of the PMPA. First, the Act is designed to protect franchisees from arbitrary and discriminatory termination or nonrenewal of a franchise for failure to comply with the marketing policies of a franchisor. S.Rep.No. 95-731, 95th Cong., 2d Sess. 15, reprinted in (1978) U.S.Code Cong. & Ad.News, 873, 874. Nothing in the Act, however, requires a franchisor to create a permanent estate of inheritance in the franchise, thus disabling itself from selecting those with whom it wishes to deal. Such a result is foreign to the manifest purpose of the Act, to regulate the relationship between persons who have chosen to associate themselves. Death is not a circumstance that the Act was designed to cover.
Second, the Act defines the types of events that require notice, and...
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