Lyons v. Mobil Oil Corp., Civ. No. B 81-406.

• Decision Date: 28 December 1982
• Docket Number: Civ. No. B 81-406.
• Citation: 554 F. Supp. 199
• Parties: Daniel J. LYONS, Plaintiff, v. MOBIL OIL CORPORATION, Defendant.
• Court: U.S. District Court — District of Connecticut

554 F. Supp. 199

Daniel J. LYONS, Plaintiff, v. MOBIL OIL CORPORATION, Defendant.

Civ. No. B 81-406.

United States District Court, D. Connecticut.

December 28, 1982.

Richard W. Farrell, of Abate, Fox & Farrell in Stamford, Conn., for plaintiff.

Richard M. Reynolds and Scott P. Moser, of Day, Berry & Howard, Hartford, Conn., on briefs, for defendant.

RULING ON PLAINTIFF'S MOTION FOR COSTS AND ATTORNEY'S FEES

EGINTON, District Judge.

This action was commenced by plaintiff Daniel J. Lyons on August 31, 1981, pursuant to the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. (the "PMPA"), seeking preliminary and permanent injunctive relief prohibiting defendant Mobil Oil Corporation ("Mobil") from terminating Lyons' franchise to operate a retail gasoline service station. Lyons also sought compensation pursuant to Conn.Gen.Stat. § 42-133e, exemplary damages and costs and attorney's fees.

Lyons' predecessor franchisee in the operation of the Station was William D. Melillo. Melillo's franchise contained a provision providing for its termination upon Melillo's death. Subsequent to the creation of Melillo's franchise, Connecticut enacted a statute, Conn.Gen.Stat. § 42-133m, which purported to render such a termination provision "ineffective and void as contrary to public policy." After Melillo's death, Mobil refused to treat his heirs as its franchisee, contending that the Connecticut statute was unconstitutional insofar as it purported to invalidate termination clauses in franchise agreements executed prior to passage of the act. Melillo's estate then sued Mobil.

While that suit was pending, Mobil and the plaintiff established the franchise relationship to which this lawsuit relates. As a part of that transaction, the parties executed a letter agreement, dated September 29, 1979 (the "Letter Agreement"), which provided, inter alia, that "a future determination by Mobil to acknowledge the rights claimed to exist by the Melillo estate, whether or not successfully asserted in a judicial or administrative action, will ... constitute `good cause' for terminating" the franchise pursuant to the PMPA.

In 1981 Mobil settled its lawsuit with Melillo's Estate by means of a payment by Mobil of $75,000. Mobil advised the plaintiff that it considered the settlement an "acknowledgment" of the rights claimed to exist by Melillo's estate within the meaning of the Letter Agreement and, hence, a ground for terminating the Lyons franchise. Mobil stated it would not terminate if the plaintiff agreed to reimburse Mobil for its settlement payment to Melillo's estate.

Lyons refused to reimburse Mobil, and Mobil sought to terminate his franchise. Lyons commenced this action to enjoin termination. Hearings on the plaintiff's request for an injunction were held on four separate days. This court rejected Mobil's interpretation of the Letter Agreement and preliminarily enjoined Mobil from terminating Mr. Lyons' franchise. 526 F.Supp. 961.

Thereafter, the plaintiff moved for summary judgment, seeking to transform the preliminary injunction into permanent injunctive relief. Instead, however, on the basis of a stipulation of counsel dated July 7, 1982, the record in the case was considered closed so that the court could enter its final judgment. On September 23, 1982, this court entered judgment in favor of the plaintiff, permanently enjoining Mobil from terminating the Lyons franchise on the basis of the Letter Agreement.

Plaintiff now seeks attorney's fees and costs in connection with this litigation. Defendant challenges his right to attorney fees.

The basic issue is the interpretation of 15 U.S.C. § 2805(d)(1), which provides:

If the franchisee prevails in any action under subsection (a) of this section, such franchisee shall be entitled—

(A) consistent with the Federal Rules of Civil Procedure, to actual damages;

(B) in the case of any such action which is based upon conduct of the franchisor which was in willful disregard of the requirements of section 2802 or 2803 of this title, or the rights of the franchisee thereunder, to exemplary damages, where appropriate; and

(C) to reasonable attorney and expert witness fees to be paid by the franchisor, unless the court determines that only nominal damages are to be awarded to such franchisee, in which case the court, in its discretion, need not direct that such fees be paid by the franchisor.

Plaintiff reads this section to mean that this court is required to award reasonable attorney and expert witness fees to a prevailing franchisee except where the franchisee obtains nothing more in the way of relief than nominal damages. Since Lyons obtained injunctive relief through this action, he concludes that the court must award him fees.

Mobil reads the statute to hold that the court has discretion to award such fees unless damages are awarded and those damages are more than nominal. Since Lyons obtained only injunctive relief in this case, and no damages, Mobil asks this court to exercise its discretion to deny him any award of fees.

The position advanced by Mobil finds support in a decision of a Federal District Court in Missouri holding that attorneys' fees would not be assessed in the absence of an award of actual damages. The court did not amplify its conclusion nor did it discuss at all the...