Lieberman v. Howard Johnson's Inc.
| Decision Date | 29 June 1973 |
| Docket Number | 4168 |
| Citation | 68 Pa. D. & C.2d 129 |
| Parties | Lieberman v. Howard Johnson's Inc. (No. 1) |
| Court | Pennsylvania Commonwealth Court |
June term, 1972.
Steven M. Feldman, for plaintiff.
Richard E. McDevitt, for defendant Howard Johnson's, Inc.
Edward I. Swichar, for defendant Atlantic Richfield Co.
Benjamin M. Quigg, Jr., for defendant Humble Oil & Refining Co.
Hoyt H. Harmon and Arthur L. Vangeli, for defendant Gulf Oil Corp.
Preliminary objections to complaint in equity
Preliminary objections have been filed to a complaint in equity in the above matter instituted by plaintiff on his own behalf, and as a class action on behalf of all other users of the Pennsylvania Turnpike who have purchased, or will in the future purchase, gasoline, motor fuel, motor oils and food from any or all of defendants at prices allegedly in excess of the retail prices prevailing in the vicinity of defendants' turnpike establishments.
In essence the complaint alleges that pursuant to lease agreements with the Pennsylvania Turnpike Commission (Turnpike Commission), the Atlantic-Richfield Company (Atlantic) [1], Humble Oil and Refining Company (Humble), and the Gulf Oil Corporation (Gulf), were granted the exclusive right to operate gas stations and restaurant facilities at various locations along the Pennsylvania Turnpike in the Commonwealth of Pennsylvania. The lease contracts provide, inter alia, that the prices at which gasoline, motor fuel, motor oils and food should be sold from the various demised premises should not be in excess of the retail prices charged in the vicinity.
The complaint further alleges that under the lease agreements the three oil companies were permitted to sublet the various demised premises with the approval of the Turnpike Commission and that, pursuant thereto they had subleased the various restaurant facilities to defendant, Howard Johnson, Inc. (Howard Johnson) and that under those subleases Howard Johnson was likewise required to sell food at prices not in excess of the retail prices prevailing in the vicinity.
The complaint further alleges that because the Pennsylvania Turnpike is a limited access toll highway with entrances and exits spaced at such distances as to make it impractical for users of the turnpike to obtain gasoline, motor fuel, motor oil and food at facilities other than those operated by the respective defendants along the turnpike, and because of the spacing of these facilities, defendants enjoy an exclusive monopoly with no control on the prices they can charge other than the provisions of the aforementioned leases and subleases.
It is further alleged that the provisions relating to the prices to be charged by defendants are intended for the benefit of the users of the turnpike and exist to protect them from an allegedly monopolistic position enjoyed by defendants. The complaint then contends that the users of the Pennsylvania Turnpike are third-party beneficiaries under the said lease and sublease agreements.
The complaint further alleges that at the time of, and for a period of six years prior to the filing of, the present action, plaintiff had been a regular user of the Pennsylvania Turnpike, that he had been compelled to make use of the facilities operated by defendants for the purchase of gasoline, motor oil, foods and other substances, that plaintiff and other users of the turnpike had been repeatedly and consistently overcharged by defendants since the inception of the leases and subleases, and that the present action was brought as a class action on his own behalf and on behalf of all other users of the Pennsylvania Turnpike who had in the past or would in the future purchase the foregoing items from defendants at their respective facilities along the Pennsylvania Turnpike.
It is alleged that all users of the Pennsylvania Turnpike who had in the past or would in the future purchase the foregoing items from the various defendants at their facilities along the Pennsylvania Turnpike constitute a class of persons similarly situated and so numerous as to make it impractical to join all of them as parties. Plaintiff also alleges that he can adequately represent the interests of the entire class.
The relief prayed for is that the individual defendants be permanently enjoined from further breaches of their lease and sublease agreements; that each member of the class be awarded compensatory and punitive damages in an amount in excess of $ 10,000; that the court award attorney fees and costs of suit; together with a general prayer for additional relief.
The three oil companies have filed preliminary objections to the complaint. They are essentially similar and may be summarized as follows:
I. The complaint fails to state a cause of action upon which relief can be granted in that plaintiff and the class which he purports to represent lack capacity to sue and are not third-party beneficiaries under the lease contracts and subcontracts;
II. The class action is not a proper device because: the users of the turnpike purchase different items from the three oil company defendants, and any alleged claims of the users would vary among themselves and among the various defendants; the class which would be involved in the litigation would be so large and unknown that it would be unmanageable;
III. The complaint is vague and is lacking in particularity and fails to allege specifically the names of the sellers, their locations and the specific transactions which allegedly constitute a violation of the terms of the lease agreements;
IV. Plaintiff has misjoined defendants in that any right to relief does not arise out of the same transaction, occurrence or series of transactions or occurrences;
V. Plaintiff has failed to set forth a cause of action or to allege any facts supporting a claim for punitive damages;
VI. Plaintiff has misjoined causes of action in law and equity by seeking monetary damages, since the primary relief sought is damages and the equity relief sought is merely incidental; and that plaintiff has a full, adequate and complete remedy at law.
VII. Defendant Atlantic asserts that it has sublease agreements with parties other than Howard Johnson, and that these sublessees have not been joined, and are necessary parties to this action.
The preliminary objections filed by defendant, Howard Johnson, are essentially the same as the first six objections set forth above, with the additional factor that the company had not contracted directly with the Pennsylvania Turnpike Commission but instead operates under subleases with the three oil company defendants.
For the purpose of disposing of defendants' preliminary objections, all facts averred in the complaint, other than conclusions and statements of law, are to be considered as admitted. " Moreover, when the sustaining of defendants' preliminary objections will result in a denial of plaintiffs' claim, or a dismissal of plaintiffs' suit, preliminary objections should be sustained only in cases which are clear and free from doubt" : Gardner v. Allegheny County, 382 Pa. 88, 94 (1955).
One of the basic questions as to whether the within action may be maintained is the standing of plaintiff and the class he purports to represent to bring this action. Plaintiff claims he and the class are third-party beneficiaries under the provisions of the lease contracts between the Turnpike Commission and the three oil company defendants which provide that the prices to be charged for gasoline, motor fuels, motor oils and food to be sold from the demised premises should not be in excess of the retail prices prevailing in the vicinity. He likewise contends that they are third-party beneficiaries under the subleases to Howard Johnson.
The invitation pursuant to which bids were allegedly submitted by the three oil company defendants dated December 14, 1949, provides as follows:
" The servicing of patrons of the Pennsylvania Turnpike System with gasolines, oils, station service and food, places upon the Commission the responsibility of guaranteeing that all products sold on the Turnpike shall be of the highest quality, expeditiously and efficiently provided and sold for no more than similar products and services available off and in proximity to the Turnpike Right-of-Way. " (Emphasis supplied.)
In addition, General Provisions accompanying the invitation provide:
More specifically, the December 14, 1953, contract between the Turnpike Commission and Atlantic provides:
The lease of March 8, 1950, between the Turnpike Commission and Gulf does not specifically mention food:
The contract between the Turnpike Commission and Humble has not been supplied to this court. Because defendant Humble has neither objected to this omission nor attempted to produce the contract, although it is in a superior position to do so the allegation in the complaint that said contract requires Humble to charge prices for gasoline, motor fuels, motor oils and food not exceeding the retail prices prevailing in the vicinity, will be accepted as true for the purpose of the motion. Moreover, the language in...
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