Seckler v. Star Enterprise, s. 96-4810

• Decision Date: 21 October 1997
• Docket Number: 96-4988,Nos. 96-4810,s. 96-4810
• Citation: 124 F.3d 1399
• Parties: , 11 Fla. L. Weekly Fed. C 679 Warren SECKLER and Warsec, Inc., a Florida Corporation, Plaintiffs-Appellants, v. STAR ENTERPRISE, a New York Partnership, Defendant-Appellee. Warren SECKLER, Warsec Inc., a Florida corporation, Plaintiffs-Appellees, v. STAR ENTERPRISE, a New York Partnership, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1399

124 F.3d 1399

39 Fed.R.Serv.3d 66, 11 Fla. L. Weekly Fed. C 679

Warren SECKLER and Warsec, Inc., a Florida Corporation, Plaintiffs-Appellants, v. STAR ENTERPRISE, a New York Partnership, Defendant-Appellee.

Warren SECKLER, Warsec Inc., a Florida corporation, Plaintiffs-Appellees, v. STAR ENTERPRISE, a New York Partnership, Defendant-Appellant.

Nos. 96-4810, 96-4988.

United States Court of Appeals Eleventh Circuit.

Oct. 21, 1997.

As Clarified Dec. 4, 1997.

John M. Reagle, Richard W. Farrell, Farrell & La Mantia, Raleigh, NC, Gary A. Woodfield, Edwards, Angell, Palm Beach, FL, for Seckler and Warsec Corp. in No. 96-4988.

Gary A. Woodfield, Edwards & Angell, Palm Beach, FL, Mark A. La Mantia, Richard W. Farrell, John M. Reagle, Farrell & La Mantia, Raleigh, NC, for Seckler and Warsec Corp. in No. 96-4810.

Elizabeth Cangelose Wheeler, Johnson & Bussey, Orlando, FL, for Star Enterprise.

Appeals from the United States District Court for the Southern District of Florida.

Before EDMONDSON, Circuit Judge, and KRAVITCH and WOOD ^*, Senior Circuit Judges.

WOOD, Senior Circuit Judge:

For more than twenty years, Warren Seckler worked at and operated a Texaco gasoline station in Boca Raton, Florida. He inherited the business from his father, who leased the station from 1973 to 1983, when Seckler took over the operations. Seckler formed Warsec, Inc. in 1991 to operate the station and was its president and sole shareholder. He devoted much of his energy to managing the station and building its goodwill, so when Star Enterprises informed him that it was selling the station, Seckler, not surprisingly, wanted to purchase it. He allegedly sold his home for less than its fair market value in order to get the money to make a down payment, and was prepared to accept Star's bona fide offer to sell when Star abruptly decided not to make that offer. Instead, it offered to renew Warsec, Inc.'s franchise agreement. Seckler grudgingly signed the lease, but felt misused. He filed this lawsuit personally and on behalf of Warsec. ¹ He alleges a violation of the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. § 2801 et. seq. (1982), as well as various state law claims including fraud and misrepresentation. The district court dismissed Seckler's state law claims, holding that the PMPA preempted them. The court later granted summary judgment for Star on the PMPA claim, holding that Seckler did not have a cause of action under the PMPA. Seckler appeals, and Star cross-appeals the district court's determination that Seckler has standing to sue. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1332 (diversity of citizenship) and 15 U.S.C. § 2801 et. seq. (PMPA).

I. Facts

We recite the facts as given in Seckler's brief. In 1993, rumors circulated among Star's dealer network in southern Florida that Star was considering withdrawing from On February 1, 1994, Seckler received a letter from Star saying that Star had contacted several area banks about assisting its franchisees in purchasing their stations. The banks which had indicated to Star that they would be interested were listed in the letter. A few weeks later, on March 7, 1994, Star wrote Seckler a letter stating that it had decided to sell his station and equipment and that his franchise was being terminated effective June 30, 1994. Star wrote that it would make Seckler a bona fide offer to sell the property to him "in accordance with the Petroleum Marketing Practices Act." Seckler then began to actively pursue selling his house in order to be financially prepared to purchase the gas station before June 30. He spoke to Star representatives several times and informed them during their conversations that he wished to purchase the station and had put his home up for sale in order to do so. On May 8, 1994, Seckler sold his home.

the market and selling its service stations to the occupying franchisees. Aware that the PMPA gave him only ninety days in which to purchase his station if it were offered to him, Seckler listed his home for sale and attempted to position himself and Warsec, Inc. to be ready to make the purchase. ²

Shortly thereafter, Seckler received two letters from Star dated May 25, 1994. The first stated that Star was unilaterally extending its termination and non-renewal date from June 30 to September 30, 1994. The second letter rescinded the March 7 notice of termination and non-renewal, but confirmed Star's intentions to make Seckler a bona fide offer to purchase the property. Concerned, Seckler spoke to Star's representatives, who assured him that this postponement was due only to an overabundance of paperwork and that his bona fide offer would be coming shortly.

Seckler waited several more months and grew more worried. He closed on the sale of his home on July 5, 1994. On August 1, 1994, Seckler's attorney sent Star a letter inquiring about when the bona fide offer would be forthcoming and emphasizing that Seckler had relied to his detriment on Star's representations that it would sell the station to him. Star's response came on August 15, 1994, and it astonished Seckler, for it said that Star had decided not to sell the station at all. Apparently, no one at Star with the appropriate authority had ever made the determination to sell Seckler's station, despite the representations of those employees who communicated with Seckler. The request for sale approval had not even been submitted to the person with the lowest level of authority to make the determination to sell the property, J.W. Bernitt, until May 29, 1994. On June 23, 1994, Bernitt declined to approve the sale. Although Seckler's district manager was told of this decision on June 28, 1994, no one notified Seckler until August 15, 1994.

Instead of giving Seckler the bona fide offer he was awaiting, Star stated that it would offer Seckler another three-year franchise renewal agreement. Star also informed Seckler that if he did not sign the agreement in a timely manner, his franchise would be terminated or nonrenewed. Seckler signed the papers and returned them to Star with a letter reserving his and Warsec, Inc.'s rights. He then filed suit against Star in the district court, alleging causes of action based on a violation of the PMPA as well as state law claims including breach of contract, promissory estoppel, fraud, negligent misrepresentation and intentional infliction of emotional distress, and seeking compensatory and punitive damages as well as specific performance of Star's offer to sell him the station premises.

The district court, on Star's motion to dismiss, held that PMPA § 2806 preempted all of Seckler's state law claims because they each arose out of or were incidental to the renewal of Seckler's franchise and the notice of termination he received. The court denied Star's motion to dismiss Seckler's PMPA claim, finding that Seckler had stated a claim as to whether Star had violated PMPA § 2802(D)(iii)(I), and it also held that Seckler had standing to sue. Star then moved for summary judgment on the PMPA claim.

The court granted the motion, holding that the PMPA did not apply to the case because Seckler's franchise was renewed and the PMPA addresses only franchise terminations and non-renewals. The court also refused to reconsider its decision to dismiss Seckler's state law claims. On appeal, we affirm the district court's conclusions that Seckler had standing to sue Star and that he could not state a claim under the PMPA, but we reverse the court's determination that the PMPA preempted Seckler's state law claims.

II.

We review the district court's grant of summary judgment de novo, applying the same legal standard as the district court. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1117 (11th Cir.1993). According to that standard, we must determine whether, after considering all the evidence, any genuine issues of material fact exist which would necessitate a trial. Fed.R.Civ.P. 56(c). Furthermore, we must consider the evidence in the light most favorable to Seckler, the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1985). Finally, we interpret the PMPA liberally in order to effect its remedial purpose. See Doebereiner v. Sohio Oil Co., 880 F.2d 329, 331 (11th Cir.1989), amended at 893 F.2d 1275 (1990).

A.

We begin with Seckler's appeal of the district court's conclusion that he could not state a claim under the PMPA. The PMPA, promulgated for the purpose of protecting petroleum franchisees from franchisors' arbitrary or discriminatory decisions to terminate or non-renew franchise leases, provides standards and procedures which a franchisor must follow when terminating or non-renewing a franchise. 15 U.S.C. § 2804; see Shukla v. BP Exploration & Oil, Inc., 115 F.3d 849, 852 (11th Cir.1997); Beachler v. Amoco Oil Co., 112 F.3d 902, 904 (7th Cir.1997). The statute allows a franchisee to bring a civil action against a franchisor in any situation where the franchisor fails to follow those procedures. 15 U.S.C. § 2805(a). Seckler has brought such a claim, alleging that by rescinding its notice of termination and non-renewal and refusing to provide him with a bona fide offer to sell the station property, Star failed to act in good faith and in the normal course of business and acted in a discriminatory and arbitrary manner towards him. In order to obtain relief under the PMPA, however, Seckler must prove that his franchise was terminated or non-renewed. 15 U.S.C. § 2805(c).

The district court found that Seckler could not meet that burden and so could not state a claim under the PMPA. He could not prove that his franchise was terminated or non-renewed, the court explained, because Star rescinded its notice of termination and renewed Seckler's franchise. In granting Star's motion for summary judgment, the district court relied principally on Akky v. BP America, 73 F.3d 974 (9th Cir.1996), where a...