Simaan, Inc. v. Bp Products North America, Inc.

• Decision Date: 02 May 2005
• Docket Number: No. 1:03 CV 00127.,1:03 CV 00127.
• Citation: 395 F.Supp.2d 271
• Court: U.S. District Court — Middle District of North Carolina
• Parties: SIMAAN, INC. and Simaan Market Street, LLC, Plaintiffs, v. BP PRODUCTS NORTH AMERICA, INC. and BP Oil and Exploration, Inc. Defendants.

Page 271

395 F.Supp.2d 271

SIMAAN, INC. and Simaan Market Street, LLC, Plaintiffs, v. BP PRODUCTS NORTH AMERICA, INC. and BP Oil and Exploration, Inc. Defendants.

No. 1:03 CV 00127.

United States District Court, M.D. North Carolina.

May 2, 2005.

Harry C. Storm, Lerch Early & Brewer, Bethesda, MD, Patricia P. Ridenhour, Thomas Allen Worth, The Worth Law Firm, Greensboro, NC, for Plaintiffs.

David M. Harris, Dawn M. Johnson, Sandra B. Gallini, Greensfelder Hemker &amp Gale, PC, St. Louis, MO, Keith John Merritt, Richard C. Gaskins, Jr., Hamilton Gaskins Fay & Moon, PLLC, Charlotte, NC, for Defendants.

MEMORANDUM OPINION

TILLEY, Chief Judge.

This case arises out of Plaintiffs' Simaan, Inc. ("Simaan") and Simaan Market Street, LLC ("SMS") purchase of a retail gasoline station from Defendants BP Products North America, formerly BP Oil and Exploration, Inc., who is also a Defendant (collectively "BP"). This case is before the Court on Defendants' Motion to Dismiss or, in the Alternative, for Judgment on the Pleadings and Motion to Strike or, in the Alternative, to Make More Definite and Certain [Doc. # 100]. For the reasons set forth below, the Defendants' Motion is DENIED.

I.

The allegations of the Complaint, stated in the light most favorable to the Plaintiffs, are as follows: BP is engaged in the business of refining, marketing, and selling petroleum and other products. At all times relevant to this case, BP marketed its petroleum products in the Greensboro, North Carolina area, in part, through a franchise distribution system. Under that system, BP entered into franchises with independent retail dealers through Dealer Lease and Service Agreements ("DLSA") that required BP to lease retail station premises to the independent dealers, or "franchisees," who then purchased motor fuel from BP for resale to the motoring public under the "BP" or "Amoco" trademark. BP also operated its own retail service stations in the Greensboro area.

Simaan is a North Carolina corporation owned by members of the Simaan family. Simaan became a BP-franchised dealer in 1996 when it entered into a three-year DLSA for the operation of a motor fuel station and convenience store located at 801 East Market Street in Greensboro. BP and Simaan subsequently renewed the franchise by executing a new three-year DLSA on August 1, 1999.

Late in 2000 or early in 2001, BP made a business decision to divest certain retail markets, including the Greensboro area market. The thirteen BP-branded retail locations in the Greensboro area were offered as a package to certain BP distributors, or "jobbers," who were identified as having an interest in those locations. Three of the thirteen locations, including Simaan's retail station, were leased and operated by BP franchisees, nine were operated directly by BP, and one was owned and operated by an independent BP dealer.

BP received several bids for the thirteen stations in the Greensboro area and ultimately accepted the offer of jobber M.M. Fowler, Inc. ("Fowler"). Fowler offered to purchase the thirteen locations in Greensboro for a total package amount of $10,450,000. On June 25, 2001, a Draft Agreement of Purchase and Sale ("Draft Agreement") was created. This Draft Agreement assigned a value of $430,000 to Simaan's location, which was based upon an appraisal BP had conducted on the property. Similarly, prices were assigned to the other franchisee locations consistent with values identified in appraisals that BP had previously obtained.

BP determined that the transfer of Greensboro retail stations to Fowler required BP to comply with the Petroleum Marketing Practices Act ("PMPA"), and in accordance with the PMPA, Simaan and the owners of the other franchisee-operated retail stations would have to be granted rights of first refusal to purchase their station properties. BP informed Fowler that the sale of the three franchisee-operated stations was contingent on BP's offer of rights of first refusal to the franchisees. However, BP and the Jobber proceeded to undermine the franchisees' exercise of any such right of first refusal to assure that either the right would not be exercised, or if exercised, would be based on false and inflated prices. First, BP and Fowler provided in the Final Agreement of Purchase and Sale ("Final BP/Fowler Agreement") that the three franchisees including Simaan would not be provided with a copy of the Final BP/Fowler Agreement upon which the right of first refusal would purportedly be based. Next, BP and Fowler modified the values assigned to the properties in the package so as to inflate the values assigned to the three franchisee locations and reduce the values assigned to the company-operated locations. Thus, while the total purchase price between BP and Fowler remained at $10,450,000, the value assigned to Simaan's station increased to $900,000, up from $430,000 in the Draft Agreement. The other two franchisee-operated locations were similarly inflated.

On February 7, 2002, BP sent Simaan by certified mail a notice informing Simaan that BP had decided to sell its interest in the Simaan location. The notice further informed Simaan that BP had received an offer from Fowler to purchase Simaan's station for $1,052,684, a price above the allegedly inflated $900,000 price included in the Final BP/Fowler Agreement, and offered Simaan a right of first refusal to purchase the station on the same terms and conditions as Fowler's offer, which included (1) a fifteen year motor fuel purchase commitment of 1,082,389 gallons per year; (2) a fifteen year deed restriction prohibiting, inter alia, the sale of motor fuel on the premises unless operated as a BP-branded station; and (3) a right of first refusal to repurchase the station in favor of BP. The notice explained that the parties' franchise relationship would expire by its own terms on July 31, 2002, and that if Simaan did not exercise its right of first refusal, BP would assign its rights and delegate its obligations under the DLSA to Fowler in connection with Fowler's purchase of the station. The notice informed Simaan that the right of first refusal would remain open for forty-five days from the postmark date of the notice.

Upon receiving the February 7 Notice, Simaan's representatives, including its counsel, Thomas A. Worth, communicated with BP's representatives, including BP's counsel, William Kazer, Jr., and BP's real estate representative, William Smith, regarding the purported right of first refusal. Simaan's representatives specifically requested that Simaan be provided with information regarding the alleged jobber contract upon which the right of first refusal was based, including a copy of the contract between BP and Fowler. BP refused to provide any information and also refused to provide a copy of its contract with Fowler.

On March 15, 2002, BP forwarded to Simaan's counsel a proposed Purchase and Sale Agreement ("PSA") based upon the $1,052,684 price that was included in the February 7 Notice. Additionally, BP sent Simaan a copy of its appraisal for the Simaan location. The appraisal revealed that the location had a fair market value of $505,000, less than one-half the price at which the location was offered to Simaan for purchase. Nevertheless, BP continued to claim that the amount offered by Fowler for the Simaan location was $1,052,684 and that Simaan had the right to exercise its right of first refusal at that price.

After receiving the PSA, Simaan attempted to learn from both BP and Fowler what would happen to Simaan's business if it decided not to purchase the property. BP through its counsel claimed that it could not say, and Fowler refused to even talk to Simaan's representatives. Thereafter, in an effort to save its business which it had developed, Simaan executed the PSA "under protest"¹ and forwarded the contract to BP on April 3, 2002. After executing the PSA, the Simaan family formed plaintiff SMS and assigned all of Simaan's rights in the PSA to SMS. SMS proceeded with the closing and acquired the property at the inflated price of $1,052,684.

Plaintiffs originally filed a Complaint alleging claims under the PMPA on February 5, 2003. BP's Motion for Summary Judgment on Plaintiffs' PMPA claims was granted on January 20, 2005, and Plaintiffs were given leave to amend their Complaint to allege claims based on BP's allegedly deceitful conduct. On February 2, 2005, Plaintiffs filed their Third Amended Complaint alleging claims under the North Carolina unfair and deceptive trade practices statute and common law fraud. On February 16, 2005, Defendant filed the motion currently before this Court seeking to dismiss the Plaintiffs' Complaint, or in the alternative, to dismiss Simaan as a party to the case, and to strike certain allegations of the Complaint, or in the alternative, to make the allegations more definite.

II.

Defendants seek to dismiss the case under Federal Rule of Civil Procedure 12(b)(6), or, in the alternative, for judgment on the pleadings under Federal Rule of Civil Procedure 12(c).

A Rule 12(b)(6) motion should be granted only if, after accepting all well-pleaded allegations in the complaint as true, it appears certain that Plaintiffs cannot prove any set of facts in support of their claims that entitles them to relief. Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir.1999). The Fourth Circuit has stated that "[u]nder the liberal rules of federal pleading, a complaint should survive a motion to dismiss if it sets out facts sufficient for the court to infer that all the required elements of the cause of action are present." Wolman v. Tose, 467 F.2d 29, 33 n. 5 (4th Cir.1972).

Similarly, in considering a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), facts presented in the pleadings and the inferences drawn therefrom must be viewed in the light most favorable to the non-moving party. Edwards v. City of Goldsboro, 178 F.3d 231, 248 (4th Cir.1...