Pickerign v. Pasco Marketing, Inc., 44992

• Decision Date: 11 April 1975
• Docket Number: No. 44992,44992
• Citation: 228 N.W.2d 562,303 Minn. 442
• Court: Minnesota Supreme Court
• Parties: Leo G. PICKERIGN, Appellant, v. PASCO MARKETING, INC., Respondent.

Page 562

228 N.W.2d 562

303 Minn. 442

Leo G. PICKERIGN, Appellant, v. PASCO MARKETING, INC., Respondent.

No. 44992.

Supreme Court of Minnesota.

April 11, 1975.

Syllabus by the Court

1. A temporary injunction should be granted to maintain the status quo of the parties until the case can be decided on the merits where the rights of one of the parties will be irreparably injured or where the relief sought in the main action will be ineffectual or impossible to grant.

2. In considering the validity of termination clauses in service station lease agreements and dealer agreements, the court should consider all of the circumstances in determining if the clauses may be unconscionable and unenforceable.

3. Under the facts of this case, a temporary injunction should have been issued to maintain the status of the parties under their lease agreement but not under their dealer agreement.

Smith & Persian and Gary E. Persian, Minneapolis, for appellant.

O'Connor & Hannan, Joe A. Walters and Michael M. Whalen, Minneapolis, for respondent.

Heard before SHERAN, C.J., and OTIS, YETKA, SCOTT, and KNUTSON, JJ., and considered and decided by the court en banc.

TODD, Justice.

Plaintiff appeals from an order of the Hennepin County District Court denying his motion for temporary injunction in connection with his action for declaration of rights under a service station lease and dealer contract, and for permanent injunction to prevent removal from or interference with the operation of a service station.

On June 28, 1973, the parties executed a station lease, dealer agreement, and supplement to the dealer agreement, each agreement to commence July 1, 1973. The term of each agreement was 6 months with successive terms of 6 months, subject to the right of either party to terminate at the end of any term upon 30 days' prior written notice. These agreements continued a business relationship that had existed since July 28, 1958.

On November 22, 1973, plaintiff received written notice from defendant that the agreements would be terminated as of midnight December 31, 1973. On January 2, 1974, plaintiff was refused additional gasoline deliveries. Plaintiff commenced the action on January 4, 1974.

1. The limited issue raised by this appeal is whether the order of the trial court constitutes a clear abuse of discretion. Cramond v. AFL--CIO, 267 Minn. 229, 126 N.W.2d 252 (1964). A court may grant a temporary injunction when it is apparent that the rights of a party will be irreparably injured before a trial on the merits is reached or where the relief sought in the main action will be ineffectual or impossible to grant. Minn.St.1971, § 585.02; Cramond v. AFL--CIO, Supra.

The granting of a temporary injunction serves only to maintain the status quo until the case can be decided on the merits. Village of Blaine v. Independent School Dist. No. 12, 265 Minn. 9, 121 N.W.2d 183 (1963); 9A Dunnell, Dig. (3 ed.) § 4489. The trial court determined that plaintiff's delay in seeking relief beyond the purported date of termination of the written agreements barred him from obtaining an injunction. The plaintiff argues, and we agree, that this is determinative of one of the basic issues presented in his case, namely, the validity of the 30-day termination notice clause contained in the lease agreement and the dealer agreement. Although we agree that we must consider these two documents together for proper analysis of the relationships of the parties, we do not find that for purposes of injunctive relief identical results need be forthcoming. We hold that the issue of validity of the termination clause raises important questions that should be fully considered by the trial court.

2. The recent energy crisis has necessarily required a reexamination of available petroleum products. We are conscious of the pressure placed on refiners and distributors of such products. Nevertheless, we cannot accept the narrow construction defendant seeks to place on the agreements before this court. The parties obviously had a landlord-tenant relationship. However, they recognized that their relationship was broader than that as they executed a dealer agreement together with each lease agreement. Plaintiff claims that he is a franchisee. Although we need not determine his status at this time, we recognize that he has been a dealer for defendant for over 15 years, that he has invested a large portion of his available work life in promoting defendant's products, that he is completely without fault regarding the purported termination of the agreement, and that he lacked effective bargaining position to negotiate the terms of these agreements.

The unwarranted discontinuance of service station operating agreements throughout this country is producing much litigation. Recently, in Shell Oil Co. v. Marinello, 63 N.J. 402, 307 A.2d 598 (1973), certiorari denied, 415 U.S. 920, 94 S.Ct. 1421, 39 L.Ed.2d 475 (1974), the New Jersey court made the following observation (63 N.J. 408, 307 A.2d 601):

'Viewing the combined lease and franchise against the foregoing background, it becomes apparent that Shell is the dominant party and that the relationship lacks equality in the respective bargaining positions of the parties. For all practical purposes Shell can dictate its own terms. The dealer, particularly if he has been operating the station for a period of years and built up its business and clientele, when the time for renewal of the lease and dealer agreement comes around, cannot afford to risk confrontation with the oil company. He just signs on the dotted line.'

In Shell Oil Co. v. F.T.C., 360 F.2d 470, 487 (5 Cir. 1966), certiorari denied, 385 U.S. 1002, 87 S.Ct. 705, 17 L.Ed.2d 541 (1967), Judge Wisdom made the following analysis of the dealer-seller relationship:

'The...