Texaco Refining and Marketing Inc. v. Davis, Civ. No. 93-481-FR

CourtU.S. District Court — District of Oregon
Writing for the CourtDavid S. Shannon, Thomas P. Walsh, Shannon, Johnson & Bailey, P.C., Portland, OR, for defendant
Citation835 F. Supp. 1223
Decision Date21 October 1993
Docket NumberCiv. No. 93-481-FR,93-595-FR.
PartiesTEXACO REFINING AND MARKETING INC., a Delaware corporation, Plaintiff, v. Barry P. DAVIS, Defendant. (Two Cases)

835 F. Supp. 1223

TEXACO REFINING AND MARKETING INC., a Delaware corporation, Plaintiff,
v.
Barry P. DAVIS, Defendant.
(Two Cases)

Civ. Nos. 93-481-FR, 93-595-FR.

United States District Court, D. Oregon.

October 21, 1993.


835 F. Supp. 1224
COPYRIGHT MATERIAL OMITTED
835 F. Supp. 1225
Robert E. Maloney, Jr., James L. Robart, Lane Powell Spears Lubersky, Portland, OR, for plaintiff

David S. Shannon, Thomas P. Walsh, Shannon, Johnson & Bailey, P.C., Portland, OR, for defendant.

OPINION

FRYE, Judge:

The matters before the court are the motions for summary judgment of Texaco Refining and Marketing, Inc. (Texaco) in its consolidated cases for declaratory judgment against Barry P. Davis (# 34 and # 74).

UNDISPUTED FACTS

Texaco owns three retail motor fuels stations in the State of Oregon which, until May 23, 1993, had been leased to and operated by Davis. The stations are located in the cities of Salem, Eugene and Clackamas, Oregon.

Texaco sold TEXACO brand motor fuels to Davis pursuant to a separate sales agreement for each retail station. The sales agreements provide Texaco with rights of termination upon the happening of certain events. Under paragraph 22 of the sales agreements, Texaco has the right to terminate the franchises:

(i) If Purchaser fails to comply with any applicable laws, ordinances, regulations, judicial or administrative orders, or other legal requirements of all governmental authorities, federal, state, municipal or other authority, pertaining to this Agreement and the loading, unloading, storage, transportation and sale of petroleum products;
....
(m) Upon any breach of any of the terms, covenants, warranties, agreements or conditions of this Agreement or any other agreement that may be in effect between the parties;
....
835 F. Supp. 1226
(p) If Purchaser fails to comply with provisions of Paragraph 17, Hours of Operation.

Also provided in each sales agreement is the agreement of the parties that the right of the parties to terminate the sales agreement is both "reasonable and of material significance" to their franchise relationship. Sales Agreements, para. 12.

Texaco and Davis also entered into lease agreements for each station. Under paragraph 12(d) of each lease agreement, Texaco may terminate the lease agreement if Davis "fails to comply with any applicable law, ordinance, regulation, judicial or administrative order, or other legal requirement of any governmental authorities pertaining to this Lease." Paragraph 12 further provides that if Davis breaches any of the conditions allowing termination, then such a breach:

constitutes a failure by Davis to comply with a provision of this Lease which is both reasonable and of material significance to the relationship between Texaco and Davis, and shall constitute good cause to cancel or terminate this Lease as the term "good cause" or any similar term is or may be used in any federal or state statute affecting the rights of the parties to terminate this Lease. Texaco's rights of termination for good cause as defined above shall not in any way be affected by any previous waiver, forbearance or course of dealing.

In the late fall of 1992, a controversy arose between the parties regarding the hours of operation at the three stations. Davis wanted to close the stations from sundown on Friday nights to sundown on Saturday nights for religious reasons. Texaco maintained that the sales agreements for each station required Davis to keep the stations open for twenty-four hours a day, every day of the year. Davis maintained that Texaco officials, by oral agreement, had promised to allow him to set his own hours of operation.

Beginning January 1, 1993, and each Friday and Saturday thereafter, Davis closed the stations from sundown Friday until sundown Saturday. Texaco objected to this practice, but the parties were unable to reach an agreement. Texaco then notified Davis in writing that he was in breach of his sales agreements. Davis persisted in closing the stations from sundown Friday until sundown Saturday.

On April 21, 1993, Texaco commenced an action against Davis, Texaco Refining and Marketing, Inc. v. Davis, Civil No. 93-481-FR ("the specific performance suit"), seeking a declaratory judgment that the closures of the stations by Davis were in breach of the sales agreements, and seeking an order of the court requiring Davis to keep the stations open in accordance with the agreements. Davis filed an answer containing counterclaims for damages for Texaco's alleged violations of 42 U.S.C. § 1983 and O.R.S. 650.200 et seq. Texaco now moves for summary judgment in Civil No. 93-481-FR.

On April 21, 1993, Texaco moved the court for a temporary restraining order restraining Davis from breaching the provisions in his franchise agreements relating to hours of operation. On April 26, 1993, this court granted Texaco's motion and temporarily restrained Davis from closing the stations. Davis defied the court's order and closed the stations from sundown Friday, April 30, 1993, until sundown Saturday, May 1, 1993, in observance of his religious beliefs.

After a hearing held on May 3, 1993, the court granted Texaco's motion for a preliminary injunction enjoining Davis from breaching the provisions of the parties' sales agreements relating to hours of operation. In granting Texaco's motion for a preliminary injunction, the court found: (1) the sales agreements for the stations in the cities of Eugene and Salem required Davis to keep the stations open twenty-four hours a day, seven days a week, and the sales agreement for the station in the City of Clackamas required Davis to keep the station open for twenty-four hours a day, Sunday through Friday; (2) Davis materially breached the sales agreements by closing the stations from sundown Friday through sundown Saturday; (3) the balance of the hardships favored Texaco, and Davis had no legally justifiable excuse for closing the stations; and (4) the motoring public, other Texaco dealers, and

835 F. Supp. 1227
Texaco have been and will continue to be irreparably harmed by the closings

Davis continued to close the stations from sundown Friday until sundown Saturday, in violation of this court's preliminary injunction. By letter dated May 18, 1993, Texaco gave Davis ten days notice that his franchises would be terminated effective May 28, 1993 at 12:01 a.m. The notices set forth the grounds for termination and included a summary statement of Davis' rights under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. §§ 2801 et seq.

On May 19, 1993, Texaco commenced a second action against Davis, Texaco Refining and Marketing, Inc. v. Davis, Civil No. 93-595-FR ("the declaratory suit"), seeking a judicial declaration that Texaco justifiably terminated the franchises operated by Davis, as well as preliminary and permanent injunctive relief requiring Davis to surrender possession of the stations to Texaco. Davis filed an answer and counterclaim for preliminary and permanent injunctive relief enjoining Texaco from terminating the franchises operated by Davis.

On May 27, 1993, this court denied the motion filed by Davis for an order temporarily restraining Texaco from terminating the franchises. This court based its decision, in part, on Davis' violations of the injunctive orders of the court. After this court denied the motion for a temporary restraining order, and following negotiations between the parties, Davis surrendered possession of the stations to Texaco.

On June 14, 1993, this court granted the motion of Texaco in the specific performance suit for an order adjudging Davis to be in civil contempt for willfully disobeying the temporary restraining order.

CONTENTIONS OF THE PARTIES

Texaco contends that it is entitled to summary judgment because it properly terminated its franchises with Davis under section 2802(b) of the PMPA because Davis violated this court's temporary restraining order and preliminary injunction. Davis contends that Texaco does not have subject matter jurisdiction and asserts several other procedural defenses.

Texaco contends that it is entitled to summary judgment because Davis has surrendered possession of the stations and Texaco has properly terminated the contracts. Davis asserts counterclaims based on 42 U.S.C. § 1983, O.R.S. 650.210(5), and O.R.S. 650.245. Texaco contends that the claim of Davis under 42 U.S.C. § 1983 must fail as a matter of law, and that the claims under the laws of the State of Oregon are moot.

APPLICABLE STANDARD

Summary judgment should be granted only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The burden to establish the absence of a material issue of fact for trial is on the moving party. British Airways Bd. v. Boeing Co., 585 F.2d 946, 951 (9th Cir.1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979). This burden "may be discharged by `showing' ... that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). The burden shifts to the nonmoving party to "go beyond the pleadings and ... designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. at 2553.

"The interpretation of a contract is a mixed question of law and fact." Miller v. Safeco Title Ins. Co., 758 F.2d 364, 367 (9th Cir.1985). When the court's ruling rests on either an analysis of the language of the contract or an application of the principles of contract interpretation, the decision is one of law, and is therefore appropriate for summary judgment. See id.

DISCUSSION

1. The Declaratory Judgment Suit: The Termination of the Franchises Under the PMPA

Texaco contends that it properly...

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6 practice notes
  • Esso Standard Oil Co. v. Zayas, Civil No. 04-1711(SEC).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • January 12, 2005
    ...under the PMPA over the franchisee's challenge that it lacked subject matter jurisdiction. Texaco Ref. & Mktg., Inc. v. Davis, 835 F.Supp. 1223, 1231 (D.Or.1993). We find this approach to be better reasoned and, in fact, In the instant case, the anticipated claim arises under federal law. T......
  • Interstate Petroleum Corp. v. Morgan, No. 97-1409
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • May 5, 1998
    ...under the Petroleum Act, and thus their claims do not arise under federal law), with Texaco Refining and Marketing Inc. v. Davis, 835 F. Supp. 1223, 1231 (D. Or. 1993), affirmed, 45 F.3d 437 (9th Cir. 1994) (table), cert. denied, 514 U.S. 1127 (1995) (finding jurisdiction over a franchisor'......
  • Shell Oil Co. v. Altina Associates, Inc., No. 94-886-CIV-T-25(C)
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • July 19, 1994
    ...in favor of franchisor, for termination of franchise relationship, state law preempted). Texaco Refining and Marketing Inc. v. Davis, 835 F.Supp. 1223 (D.Or.1993), deals squarely with the issue of subject matter jurisdiction. It cites a plethora of cases which establish that federal questio......
  • Chevron, U.S.A., Inc. v. Mebtahi, No. CV 99 08266FMC(RZX).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • November 30, 2000
    ...laws. The cases cited by Plaintiff do not require a contrary result. Plaintiff relies on Texaco Refining and Marketing, Inc. v. Davis, 835 F.Supp. 1223, aff'd, 45 F.3d 437 (9th Cir.1994), cert. denied, 514 U.S. 1127, 115 S.Ct. 2000, 131 L.Ed.2d 1001 (1995), and Baker v. Amoco Oil Co., 956 F......
  • Request a trial to view additional results
6 cases
  • Esso Standard Oil Co. v. Zayas, Civil No. 04-1711(SEC).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • January 12, 2005
    ...under the PMPA over the franchisee's challenge that it lacked subject matter jurisdiction. Texaco Ref. & Mktg., Inc. v. Davis, 835 F.Supp. 1223, 1231 (D.Or.1993). We find this approach to be better reasoned and, in fact, In the instant case, the anticipated claim arises under federal law. T......
  • Interstate Petroleum Corp. v. Morgan, No. 97-1409
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • May 5, 1998
    ...under the Petroleum Act, and thus their claims do not arise under federal law), with Texaco Refining and Marketing Inc. v. Davis, 835 F. Supp. 1223, 1231 (D. Or. 1993), affirmed, 45 F.3d 437 (9th Cir. 1994) (table), cert. denied, 514 U.S. 1127 (1995) (finding jurisdiction over a franchisor'......
  • Shell Oil Co. v. Altina Associates, Inc., No. 94-886-CIV-T-25(C)
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • July 19, 1994
    ...in favor of franchisor, for termination of franchise relationship, state law preempted). Texaco Refining and Marketing Inc. v. Davis, 835 F.Supp. 1223 (D.Or.1993), deals squarely with the issue of subject matter jurisdiction. It cites a plethora of cases which establish that federal questio......
  • Chevron, U.S.A., Inc. v. Mebtahi, No. CV 99 08266FMC(RZX).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • November 30, 2000
    ...laws. The cases cited by Plaintiff do not require a contrary result. Plaintiff relies on Texaco Refining and Marketing, Inc. v. Davis, 835 F.Supp. 1223, aff'd, 45 F.3d 437 (9th Cir.1994), cert. denied, 514 U.S. 1127, 115 S.Ct. 2000, 131 L.Ed.2d 1001 (1995), and Baker v. Amoco Oil Co., 956 F......
  • Request a trial to view additional results

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