Sgro v. Getty Petroleum Corp., Civ. A. No. 91-2007 (MLP).

• Decision Date: 17 June 1994
• Docket Number: Civ. A. No. 91-2007 (MLP).
• Citation: 854 F. Supp. 1164
• Parties: Anthony P. SGRO, Plaintiff, v. GETTY PETROLEUM CORP., Defendant.
• Court: U.S. District Court — District of New Jersey

854 F. Supp. 1164

Anthony P. SGRO, Plaintiff, v. GETTY PETROLEUM CORP., Defendant.

Civ. A. No. 91-2007 (MLP).

United States District Court, D. New Jersey.

June 17, 1994.

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Gary E. Fox, Ocean, NJ, for plaintiff.

William D. Grand, Greenbaum, Rowe, Smith, Ravin & Davis, Woodbridge, NJ, for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

PARELL, District Judge.

I. INTRODUCTION

This is an action in which plaintiff Anthony P. Sgro ("Sgro") sues defendant Getty Petroleum Corp. ("Getty") seeking specific performance of an alleged contractual obligation to remove underground petroleum tanks located on Mr. Sgro's property, and seeking damages for alleged breach of contract and tortious interference with plaintiff's actual and/or prospective economic advantage. Defendant counterclaims for damages from plaintiff in the amount of increased removal costs, in the event that plaintiff is granted specific performance.

This Court has jurisdiction pursuant to 28 U.S.C. § 1332 based upon diversity of citizenship between plaintiff, a resident of New Jersey, and defendant, a Delaware Corporation having its principal place of business in New York. The amount in controversy exclusive of interest and costs exceeds $50,000. The following are the Court's findings of fact and conclusions of law following a non-jury trial, pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

II. FINDINGS OF FACT

Plaintiff owns property ("the property") located at 845 Broadway in West Long Branch, New Jersey. He purchased the property in or about June, 1985. The prior owner had leased it for a number of years to Getty (and its predecessors and sub-tenants) for use as a Getty gas station, and when Sgro acquired the property it contained various items of equipment owned by Getty including signs, gas pumps, a tire machine, an in-ground lift, and several underground storage tanks ("the tanks"). Shortly after acquiring the property, Sgro entered into an oral arrangement with Getty whereby the property would be supplied with Getty petroleum products, and would be operated as a Getty service station by plaintiff. In connection with that arrangement the parties entered into a written Equipment Loan Agreement (Ex. J-1)¹. A Dealer Supply Contract (Ex. J-4) and other proposed contracts were prepared at that time, but were never executed by the parties.

The items of equipment owned by Getty at the property, including the underground tanks, were used by plaintiff subject to the terms and conditions of the Equipment Loan Agreement. That Agreement provided that upon the expiration or other termination of the agreement, plaintiff was obligated to return Getty's equipment to it. The Equipment Loan Agreement also provided the following with respect to Getty's rights in the equipment at termination of the Agreement:

If the Equipment is not sold by Company to Operator, a succeeding supplier of petroleum products, or to any other party, then Company may without notice to Operator enter at any time upon the Station or any other premises of Operator and take back said equipment; ...

(Ex. J-1 ¶ 3(b).)

Plaintiff and his family and persons hired by them operated the property as a Getty station from on or about July 1, 1985 until approximately October, 1987, when plaintiff stopped operating that business and closed the Getty station. Plaintiff apparently continued to operate the adjacent property, an auto body shop which he had owned and operated for 30 years.

On November 2, 1987 plaintiff's attorney, Gary Fox, Esq., sent a letter to Getty requesting that it remove its equipment from the property as soon as possible. (Ex. J-11.) That letter further stated:

We also request that you have the soil tested and provide to us certificate stating that the soil is clean, in accordance with all EPA and ECRA environmental standards. We would also request that you repair any holes in the pavement, which the removal of the aforementioned may create by filling the holes with clean sand, trap rock and covering same with an appropriate cover of black top consistent with the black top in the surrounding area.

(Ex. J-11.)

Following receipt of that letter, Getty promptly began the preparations for removing the equipment by issuing a work order on November 20, 1987, (Ex. J-17), to Lombardo Equipment Company ("Lombardo"), an independent contractor. Before Lombardo commenced performance on the job, however, plaintiff himself orally contacted Getty and told Getty that he continued to be interested in leasing the property as a gas station, either to Getty or to another company. Plaintiff thereafter negotiated with various entities, including Getty, Globe Petroleum Co. ("Globe") and Century Oil U.S.A., Inc. ("Century").² Getty accordingly instructed Lombardo to await further instructions regarding removal of the equipment.

As of March, 1988 plaintiff's negotiations with Getty were not reaching fruition; his negotiations with Globe had ended; and Century had indicated to plaintiff and to Getty that it would want Getty's equipment removed if it leased the property. Getty therefore revived its preparations to remove the equipment, including the underground tanks, by issuing a Request for Bid, (Ex. J-39), which again resulted in Getty engaging the Lombardo firm to perform the removal. The work was scheduled to begin on March 11, 1988. However, when the Lombardo crew arrived that day, plaintiff only permitted Lombardo to remove the signs and gas pumps, and would not discuss the scheduling of a date for the contractor to remove the rest of Getty's equipment. (Ex. D-1 and testimony of Adel Hreiz and Thomas Lombardo.)

On May 23, 1988 Edward Delaney, Getty's Field Sales Manager, wrote to plaintiff's attorney, Gary Fox, Esq., stating that since Mr. Sgro had refused to discuss further equipment removal directly with Getty representatives, Getty was requesting through Mr. Fox's office "a date when all equipment may be either removed or sold to Mr. Sgro." (Ex. J-6.) In response, Mr. Fox wrote to Getty on August 29, 1988, stating inter alia as follows:

Please be advised that client is requesting that you remove all of the fixtures on the property by two weeks from today's date, including gas tanks, light posts, signs, in ground lift and air compressor.

In addition, we are going to require that you provide us with a certification, consistent with federal law, that the property is in a "clean state" after removal of the gas tanks.

(Ex. J-8.)

The same letter also discussed a dispute which had arisen between the parties concerning a balance due to Getty in a stated invoice amount of approximately $1,900. Further, the letter stated:

We have a prospective tenant that is interested in leasing the property as of September 1, 1988. In fact, as a result of the problems that you caused for us with Century Oil, the property has been off the market since November of 1987. We believe that your company has some responsibility with regards to this loss of income and once you have attended to removing the fixtures from the property so that we can lease the property, I do want to clear up your invoice as well as the damages that we have substained (sic) as a result of the delays.

(Ex. J-8.)

A further exchange of correspondence took place between Getty and Mr. Fox in September and early October, 1988 regarding the accounts receivable dispute and the time for removal of the remaining equipment. (Exs. J-7, J-9, J-10 and J-43.) As of the approximate date of October 10, 1988 the accounts receivable matter was resolved by taking a stick reading of the gasoline remaining in the tanks on the property, and giving plaintiff credit for that amount against his balance due to Getty. Also in that exchange of correspondence, Getty advised Mr. Fox that it had tentatively scheduled the tank removal for October 17, 1988. (Ex. J-43.)

While these communications were ongoing between Getty and plaintiff's attorney, Mr. Fox, plaintiff himself sent a letter dated October 10, 1988 to the President of Getty, Mr. Leo Liebowitz, in which he stated, inter alia:

If your decision is to remove the tanks, then this must be done immediately (our first request was made in November to remove these tanks) failure to do this has resulted in the loss of several opportunities to lease the property. (sic)

A decision to remove the tanks under the following terms must be confirmed in writing before any work is done.

— soil tested, and certified by the State Department

— clean fill replaced

. . . . .

— eight inches of stone on top of the clean fill

— asphalt base coat and after settling, finish coat of the entire premises.

— replacement of the loss of rental income from the time of the notification to your office to remove them, at the rate of $3,600 a month up to the date of their removal

(Ex. J-26.)

This letter also described a number of problems plaintiff had been having with Getty, which plaintiff attributed to Mr. Delaney, and concluded as follows:

I hope that we can avoid legal action and reach a mutually satisfactory agreement. This property was purchased with the intent of continuing to lease it at fair market value and this remains our primary concern. The location is an excellent one and with modern equipment it will be a high volume station and as such, would prove mutually profitable to both our interests and save considerable tank removal fees and legal fees in the process.

(Ex. J-26.)

After receiving and reviewing plaintiff's letter of October 10, 1988, Getty continued to prepare for the tank removal tentatively scheduled for October 17, 1988 as had been previously stated in Getty's correspondence to Mr. Fox dated September 27, 1988, (Ex. J-43.) Getty made these plans based upon its view that it had the right under the Equipment Loan Agreement to remove that equipment, and that it was under no obligation to enter into a further written...