Santiago-Sepulveda v. ESSO Standard Oil Co.
| Decision Date | 19 March 2012 |
| Docket Number | Civil No. 08-2032 (BJM),Civil No. 08-1950 (BJM),Civil No. 08-2044 (BJM) |
| Parties | LUIS ALFREDO SANTIAGO-SEPULVEDA, et al., Plaintiffs, v. ESSO STANDARD OIL COMPANY (PUERTO RICO), INC., et al., Defendants ROBERTO MUNOZ ARILL, et al., Plaintiffs, v. ESSO STANDARD OIL COMPANY OF PUERTO RICO, INC., et al., Defendants CARLOS GONZALEZ-RAHOLA, et al., Plaintiffs, v. ESSO STANDARD OIL CO. (PUERTO RICO), et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
(Lead Case)
On September 11, 2008, Roberto Muñoz Arill ("Muñoz Arill"), Laura Rebeca Ayoroa ("Ayoroa"), their conjugal partnership, Julio Muñoz Delgado ("Muñoz Delgado"), Frayda Maiz Rivera ("Maiz Rivera"), and others (collectively, "the Muñoz plaintiffs") sued Esso Standard Oil Company of Puerto Rico, Inc. ("Esso") and Total Petroleum Puerto Rico Corporation ("Total") under Title I of the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. §§ 2801-2807 overEsso's decision to terminate their gas station franchises and leave the Puerto Rico market.1 (Civil No. 08-2032, Docket No. 1). On September 15, 2008, Carlos González Rahola ("González Rahola"), Lourdes Llamas ("Llamas"), and their conjugal partnership (collectively, "the González plaintiffs") also sued Esso under the PMPA, and sought a refund of money paid to Esso under a 1990 contract. (Civil No. 08-2044, Docket No. 1). These cases were consolidated with Civil Nos. 08-1950, 08-1986, and 08-2025 (collectively, "the Santiago cases") on September 24, 2008. (Docket No. 46). The court held a hearing on injunctive relief in the Santiago cases from September 30, 2008 through October 2, 2008. (Docket Nos. 82, 83, 84). On October 7, 2008, the Muñoz and González plaintiffs agreed to forego a preliminary injunction and permit Total to take Esso's place in their franchise agreements, while preserving their claims in all other respects. (Docket No. 81).
Before the court are motions for summary judgment by Esso (Docket No. 299) and Total (Docket No. 358), which were held in abeyance pending the outcome of an appeal in the Santiago cases. (Docket No. 363). Both groups of plaintiffs opposed Esso's motion (Docket Nos. 319 and 331), Esso replied (Docket No. 334), and the Muñoz plaintiffs sur-replied (Docket No. 347). The González plaintiffs also moved for summary judgment on their refund claim against Esso. (Docket No. 331, p. 5-7). Both groups opposed Total's motion2 (Docket Nos. 385 and 401) and Total replied (Docket No. 418). For the reasons that follow, defendants' motions for summary judgment are granted, and the González plaintiffs' motion is denied.
The facts of the case are summarized here after applying Local Rule 56, which structures thepresentation of proof at summary judgment.3
Muñoz Arill and Ayoroa stated that they were Esso franchisees for over 30 years, and had been in an agreement with Esso since January 1, 2008. (Docket No. 321, hereinafter "Muñoz St.," ¶ 1). Muñoz Delgado and Maíz Rivera stated that they were franchisees under an agreement with Esso since August 31, 2007. (Muñoz St., ¶ 2). A contract with Esso states that Muñoz Delgado agreed to the lease of a gas station, that Maiz Rivera consented to the transaction as Muñoz Delgado's wife, and that Muñoz Delgado would be considered the lessee/franchisee under the PMPA. (Docket No. 346-2, p. 2). González Rahola stated that he and Llamas were franchisees under an agreement with Esso since September 6, 2007. (Docket No. 331-4, hereinafter "González St.," ¶ 1). A contract with Esso states that González Rahola agreed to the lease of a gas station, that Llamas consented to the transaction as González Rahola's wife, and that González Rahola would be considered the lessee/franchisee under the PMPA. (Docket No. 346-3, p. 2). The plaintiffs operated convenience stores under separate agreements with Esso. (Muñoz St., ¶ 3).4 While Esso built the store facilities, the plaintiffs operated them, bore the operational costs, developed the stores' market, and purchased the products sold in the stores for resale. (Muñoz St., ¶ 4).
Esso began "exploring the possibility of leaving Puerto Rico" in late 2006 because of thecompany's financial losses. (Docket No. 299-3, hereinafter "Esso St.," ¶ 1).5 Estuardo Trujillo ("Trujillo"), Esso's president, testified that Esso negotiated with Total and other potential purchasers between mid-2007 and March 2008. (Esso St., ¶ 2). According to the plaintiffs' statements, (Muñoz St., ¶ 5). On March 7, 2008, Esso's Board of Directors resolved to sell its assets to Total. (Esso St., ¶¶ 3-4). On March 10, 2008, Esso communicated its decision to the Governor of Puerto Rico and some other agencies, and distributed a press release. (Esso St., ¶ 6). The company notified the Governor in person on March 10. (Esso St., ¶ 7). Trujillo testified that the Governor's office received a letter stating their decision to leave Puerto Rico, which Trujillo had signed. (Esso St., ¶ 9). Trujillo testified that Esso sent a "standard letter" to "many of these agencies and authorities," and that Esso contacted the Puerto Rico Land Administration, the Federal Trade Commission, the Puerto Rico Environmental Quality Board, the Environmental Protection Agency, and the U.S. Coast Guard. (Esso St., ¶ 10). Trujillo testified that Esso sent letters by certified mail to its dealers, informing them that their contracts would be terminated on September 30, and that Esso representatives hand-delivered the letters as well. (Esso St., ¶¶ 11-12).
On March 17, 2008, Esso sent letters to Ayoroa, Muñoz Delgado, and González Raholastating that Esso would stop distributing motor fuel in Puerto Rico, that it had an agreement to sell its assets to Total, that its determination was made under sections 2802(b)(2)(E) and 2804 of the PMPA, and that its agreements would terminate on September 30, 2008. (Muñoz St., ¶ 6). The letter was not addressed to Maíz Rivera or Llamas. (Id.). Esso proffered a letter dated March 17, 2008 addressed to "Mrs. Laura Rebeca Ayoroa and Mr. Roberto Muñoz." (Docket No. 346-3). The letters stated that Esso's procedures would not change prior to September 30, 2008, that dealers would receive further information, that a Total representative would visit to offer a new franchise contract, and that Esso would work with Total and the dealers to effect the transition. (Muñoz St., ¶ 7). The plaintiffs ambiguously state that "[t]his did not happen," though it is not clear what "this" means. (See id.). The letter did not expressly address what would happen to plaintiffs' convenience stores. (Muñoz St., ¶ 8).
In August 2008, Esso began "partial debranding" by removing small Esso signs from certain stores, leaving Esso signs on pumps and on the canopy structure covering the pumps. (Docket No. 359, hereinafter "Total St.," ¶ 14). Around September 22, 2008, because of the pending requests for injunctive relief in the Santiago cases, Esso extended the time for its withdrawal until the end of October. (Total St., ¶ 15).
Pierre Alexander Vigil, who was Total's marketing director between October 2004 and August 2008, testified that Esso retailers were offered "standard franchise contracts," which were also offered to some Total retailers and to all new potential Total dealers. (Esso St., ¶ 15). Total does not negotiate certain general terms of its franchise agreements with individual franchisees. (Total St., ¶ 24). The agreements state that they are governed by Puerto Rico law, and that unenforceable terms are severable. (Total St., ¶ 25). Several Total dealers entered these franchise contracts. (Esso St., ¶ 16). The standard contract was drafted in 2005, and its terms were revised in 2007 and 2008. (Esso St., ¶¶ 17-18). Vigil testified the changes were made in response to market conditions and Total's business experience under the contracts. (Total St., ¶ 17). These changes included a goodwill clause, a clause regarding personal guarantees and payment bonds, and a clauseregarding subleases. (Id., ¶¶ 17-19). Vigil testified that the sublease provision was offered in order to establish fast food restaurants, broaden the services offered, and increase customer flow at the stations. (Total St., ¶ 18). The revised contract was offered to new and renewal franchisees. (Esso St., ¶ 19). Total has not signed or renewed versions of its franchise contracts predating the revisions. (Total St., ¶ 22).
In July 2008, Total offered a Lease Agreement, Sales and Supply Agreement, and Convenience Store Franchise to Ayoroa, Muñoz-Delgado, González Rahola, and Llamas. (Muñoz St., ¶ 9). The offered contracts were different from some already-existing Total contracts and the Esso contracts they were replacing. (Muñoz St., ¶ 10).
Pursuant to a 1990 "Private Agreement," the González plaintiffs paid Esso $250,000 in two installments. (González St., ¶¶ 11-12). On September 6, 2007, Esso and the González plaintiffs executed a lease agreement, which provided that Esso would have no responsibilities on termination of the lease except as provided in the private agreement. (González St., ¶ 14). González Rahola's acts did not cause the termination of the Esso lease agreement. (González St., ¶ 16).
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is material only if it "might affect the outcome of the suit under the governing law," Anderson v....
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