Oskey Gasoline & Oil Co., Inc. v. Continental Oil Co.
| Citation | 534 F.2d 1281 |
| Decision Date | 22 April 1976 |
| Docket Number | No. 75-1374,75-1374 |
| Parties | 1976-1 Trade Cases 60,837, 19 UCC Rep.Serv. 61 OSKEY GASOLINE AND OIL COMPANY, INC., a Minnesota Corporation, Appellant, v. CONTINENTAL OIL COMPANY, a Delaware Corporation, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
Solly Robins, Stanford Robins and Deborah J. Palmer, Minneapolis, Minn., for appellant.
Daniel R. Shulman, Minneapolis, Minn., for appellee.
Before GIBSON, Chief Judge, CLARK, Associate Justice, Retired, * and BRIGHT, Circuit Judge.
Oskey Gasoline and Oil Company, Inc. (Oskey) appeals from a summary judgment dismissing in substantial part its complaint seeking damages against Continental Oil Company (Continental) for breach of contract (count I) and for antitrust violations of the Clayton Act (15 U.S.C. §§ 15 and 26), and the Sherman Act (15 U.S.C. § 1) (count II). 1
The district court dismissed the contract action as unenforceable under the applicable Minnesota Statutes of Frauds and ruled that a release of claims executed by appellant Oskey in favor of Continental on June 6, 1969, barred any contract or antitrust claims accruing prior to that date. Appellant disputes these rulings on this appeal. We agree with the district court that the contract and antitrust claims are limited by the release, notwithstanding our view that the statutes of frauds do not serve as an absolute bar to the contract action.
In 1969, the principals of Oskey organized Oskey as a wholesale distributor of heating oil and gasoline to serve the upper midwestern part of the United States. During March of 1969, Oskey and Continental reached an oral agreement whereby Continental agreed to supply Oskey with heating oil and gasoline through a number of Continental's distribution terminals. Continental granted Oskey a line of credit for $300,000, to apply to Oskey's purchases. During the latter part of March 1969, Oskey drew off about 50 thousand gallons of petroleum products from Continental terminals for resale. On March 31, 1969, with no warning given to Oskey, Continental sent telegrams to its terminals cancelling all sales to Oskey effective immediately.
This interruption of petroleum supplies caused a substantial crisis in Oskey's business and Oskey undertook negotiations with Continental in an effort to reopen that source of supply. As a consequence of these negotiations, Continental eventually agreed to a written contract to supply Oskey with 10 million gallons of petroleum products during 1969 at Continental's Cadott, Wisconsin, terminal. Contemporaneously with this contract, Oskey and Continental executed an agreement mutually releasing each other from claims arising prior to June 6, 1969, the date of this "mutual agreement." 2
The district court ruled that the two Minnesota Statutes of Frauds barred contractual claims in count I and that the mutual release signed June 6, 1969, also barred count I as well as all claims on count II prior to June 6. The appellant asserts that the district court committed error in these rulings. We separately discuss each of these issues.
The district court construed the complaint for breach of contract as one seeking damages for breach of a contract which extended over a period of more than one year. As such, the court applied the provisions of Minnesota's one-year statute of frauds 3 to bar the contract action.
Additionally, the district court ruled the contractual claim to be unenforceable under the Uniform Commercial Code provision requiring a contract in writing for a sale of goods for a price of five hundred dollars or more. Minn.Stat. § 336.2-201. 4
The appellant does not contend that the various memoranda surrounding the March 1969 oral agreement satisfies the stringent requirements of the one-year statute of frauds provision, Minn.Stat. § 513.01. Rather, Oskey relies upon the more liberal provisions of the Minnesota Uniform Commercial Code (see n.4 supra ) and asserts that the record establishes a contract for the sale of goods; that the oral contract was evidenced by other writings; and that the quantity is established at approximately 50 million gallons per year. 5 As alternative proof of compliance with the UCC provision, Oskey relies on deposition testimony of a high-level Continental manager, 6 which appellant contends establishes an enforceable contract under Minn.Stat. § 336.2-201(3) (b), for the quantity admitted by Continental.
The district court did not directly reach these contentions for its construed the appellant's complaint as asserting a right of recovery for a contract extending over several years. Although appellant's principals interpreted the oral agreement as extending beyond one year, appellant offered no documentation to support that construction of the oral agreement. We agree with the district court that Minn.Stat. § 513.01 bars any action on a multi-year contract theory. However, the amended complaint alleges a contract " * * * under the terms of which defendant agreed to sell to plaintiff approximately 50 million gallons of gasoline and heating oil within a period of approximately one year * * *." Thus, the district court was obligated to consider whether the evidence could justify a jury determining that the parties had agreed to an oral contract to be performed within one year, and hence, not reached by the general statute of frauds (Minn.Stat. § 513.01) but covered by the UCC provision. In determining the propriety of summary judgment of dismissal of the contract action, we need only consider appellant's alternative contention that the oral contract could be enforced to the extent admitted by Continental.
From our review of the record, we conclude that the plaintiff produced sufficient evidence to overcome the defendant's contention that the UCC Statute of Frauds provision constitutes a defense in this case as a matter of law.
Mr. Robert S. Bramlett testified in his deposition testimony as follows:
Vern (Oskey) made a pretty good pitch as to his goals; what he planned to do with the new company, indicating that he had he wanted more than one supplier and that he was interested in buying up to fifty million gallons a year. I said, "Well, we're interested in selling the product," and we agreed to sell it or put it in singular, I agreed to sell it, subject to credit clearance and other clearances back at the home office. (Emphasis added).
Appellant's attorney questioned further:
(By Mr. Robins (appellant's attorney)) At the time you entered into your discussion with Mr. Oskey and then instructed Mr. Dodson (of Continental) to do the paper work, what period of time, assuming things went well now, and assuming that let's assume that you managed to sell product and product was available and so forth, in the normal course of events, how long were you thinking that that transaction would last or how long would you be selling to Oskey?
(Mr. Bramlett) Well, to answer your question, so far as I was concerned, it could go on indefinitely. Again, subject to change on reasonable notice.
Although, as we have already noted, the appellant's officers testified that they believed that the contract extended for a term of several years, and the appellee believed it was engaging in a "spot" sales arrangement, 7 the agreement was an oral one and from Bramlett's testimony, with support from certain documents in evidence, a jury could find that Continental agreed to supply up to 50 million gallons of petroleum products to Oskey within a one year period.
As noted above, the Uniform Commercial Code Statute of Frauds provision governing sales of goods permits recovery if "the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted * * *." Minn.Stat. § 336.2-201(3)(b). Here, Continental does not deny that it made some agreement for sale of petroleum products to Oskey and indeed, the written documentation discloses a $300,000 credit authorization and the various sales actually made in the month of March. The crucial question on this point focuses on whether Mr. Bramlett's testimony constitutes an admission of a term contract or whether he was speaking exclusively of a spot contract, i. e., did Continental have an agreement to furnish petroleum products to Oskey in addition to the 50 thousand gallons supplied in March of 1969?
The "spot sales" theory of Continental, if established, would appear to be dispositive of count I on the merits as well as establish a statute of frauds defense. A jury, however, could well take Bramlett's testimony quite literally as promising to supply Oskey's needs in one year up to 50 million gallons of petroleum products and, thereby, reject appellee's "spot sales" contention.
The district court, therefore, erred in granting summary judgment on count I based on the statutes of frauds defense.
As noted above, Continental cut Oskey off from obtaining supplies at all of its terminals on March 31, 1969. However, on June 6, 1969, Continental agreed to supply Oskey with 10 million gallons of gasoline at its terminal in Cadott, Wisconsin. As a condition precedent for this action, Oskey signed a document entitled, "mutual release," 8 by which the parties mutually released each other from claims arising prior to June 6, 1969.
The district court found that the express terms of the release barred any claims by appellant Oskey Gas and Oil Company, Inc. against Continental and the court rejected appellant's contention that Continental obtained that release under conditions of economic duress and coercion. For reasons stated in the district court opinion, we agree that the release bound the appellant corporation in addition to the individuals named therein. We turn to...
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