Loomis v. Gulf Oil Corp. (567 F. Supp. 591, 1983)

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER

KOVACHEYICH, District Judge.

Pursuant to the Petroleum Marketing Practices Act, (hereinafter PMPA) 15 U.S. C.A. Section 2801 et seq., Plaintiff Vader Loomis (hereinafter Loomis) filed a Complaint for preliminary and permanent injunctive relief, seeking to prohibit Defendant Gulf Oil Corporation (hereinafter Gulf) from terminating and not renewing his franchise as a Gulf dealer, and his service station lease as a lessee of Gulf. Loomis alleged in Count I that Gulf’s Notices of Termination failed to set forth with particularity the reasons for termination; in Count II that Gulf’s notices were untimely having been sent less than ninety days prior to the date the termination was to take effect; and in Count III that the reasons for termination were not proper grounds under the PMPA. Loomis also filed a claim for wrongful eviction under Florida Statutes Chapter 82.

The Complaint of Loomis was filed on October 25, 1982. On October 25, 1982 the Court held a hearing on a Motion for a Temporary Restraining Order. The Court entered a Temporary Restraining Order on October 25,1982, based on the stipulation of the parties that Gulf would not seek to terminate the agreements between Loomis and Gulf pending a hearing on October 29, 1982 on the condition that Gulf be paid daily for product withdrawn from the pumps. On October 29, 1982, the Court held a hearing and heard argument of Loomis, pro se, and counsel for Gulf, and extended the Temporary Restraining Order to November 4, 1982 on the condition that Gulf be paid daily for product withdrawn from the pumps. On October 29, 1982, the Court also entered an order providing that a Preliminary Injunction would be granted commencing on November 5,1982, provided Loomis posted a good and sufficient bond in the sum of $50,000.00 conditioned to pay all costs and damages that Gulf might sustain in the event that Gulf was wrongfully enjoined or restrained, and with the further conditions that during the pendency of the Preliminary Injunction Gulf be paid daily for product withdrawn from the pumps and that Gulf be paid for rent and other obligations as incurred during the term of the Preliminary Injunction. The Order also provided that the Court would entertain Motions for Sanctions, including contempt, should either party violate the Preliminary Injunction Order. However, the Preliminary Injunction Order did not become effective because Loomis failed to post the $50,000.00 bond.

Gulf filed an Answer, Affirmative Defenses, and a Counterclaim for breach of contract based upon the alleged failure of Loomis to pay Gulf for 48,197 gallons of petroleum products, for eviction of Loomis from the service station, and replevin of certain personal property located in the station.

In addition, Gulf filed a Motion to Dismiss or Strike the unlawful eviction count contained in Loomis’ Complaint, a Motion for Contempt Citation for failure of Loomis to pay for product delivered during the term of the Temporary Restraining Order, and a Motion for Summary Judgment. Therefore, on February 2, 1983, this case came on to be heard on Gulf’s Motion for Summary Judgment, Motion to Dismiss the Wrongful Eviction Count from Loomis’ Complaint and Motion for Contempt against Loomis for failure to pay for $3,520.21 worth of gasoline delivered by Gulf to Loomis during the period of the Temporary Restraining Order.

Having considered the arguments of counsel, the pleadings, depositions, Answers to Interrogatories, Answers to Requests for Admissions, and Affidavits on file, the Court makes the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. Gulf and Loomis entered into a Service Station Lease dated March 1, 1982 for a service station located at 4720 South Kirk-man Road, Orlando, Orange County, Florida, a Dealer Contract of Sale dated March 11, 1982, a Reseller Commodity Schedule dated March 1, 1982, two Commodity Schedules dated March 1, 1982, a Diesel Fuel Agreement dated March 1,1982, a Car Wash Equipment Agreement dated March 1, 1982, a Rider to Automobile Gasoline Agreement dated March 1, 1982, a. New Lease Option For Service Station Location dated February 26,1982, a Gulf Credit Card Agreement dated August 25, 1982, and a Rental Schedule dated March 1, 1982.

2. The Dealer Contract of Sale dated March 11,1982 provides “That at the option of Seller, this contract may be terminated after written notice as required by law (1) upon the failure of Purchaser to desist from any such further acts or conduct after written notice from Seller to do so, or (2) upon Purchaser’s failure to pay any amount when and as due, and no forbearance, course of dealing, or prior payment shall affect these rights of termination. If at any time the financial responsibility of Purchaser shall become impaired or unsatisfactory to Seller, or should Purchaser be in arrears in his accounts with Seller, Seller may require, as a condition of making further deliveries under this contract, payment by Purchaser of all past due accounts and cash payment for all future deliveries.”

3. The Automobile Gasoline Agreement dated March 1, 1982 provides “Gulf retains the option of accepting payment for the gasoline delivered hereunder or the return of the gasoline as provided for herein. Dealer is authorized to sell the gasoline to his customers in the ordinary course of his business and such prices and on such terms as the Dealer shall determine, and it is agreed that title to said gasoline shall pass to the Dealer at the meters on the pumps. Dealer shall pay Gulf for all gasoline so purchased and withdrawn by dealer when and as directed, Gulf’s dealer-tank wagon price plus all applicable federal, state and local excise taxes, prevailing at the time and place of such purchase and withdrawal by Dealer for the grade and quantity of gasoline so purchased.”

4. The Automative Gasoline Agreement further provides that “Should Dealer refuse or fail to pay when and as directed by Gulf for all gasoline purchased and withdrawn from storage by Dealer or should Dealer fail to pay Gulf for any gallonage rental due Gulf or any other indebtedness due Gulf which is based on gallonage, then in such event Gulf shall have the right to: (a) Forthwith terminate this Agreement by written notice to Dealer and to lock the pumps to prevent further withdrawals from storage, or (b) Suspend this Agreement by locking the pumps until Dealer has paid Gulf all monies due and owing to Gulf under this paragraph. In the event Dealer’s obligation to Gulf hereunder is satisfied prior to written notice to Dealer of termination as above provided, this Agreement will be automatically reinstated and deliveries hereunder will be resumed. The above remedies shall be deemed to be cumulative, and the election by Gulf of one remedy shall not preclude it from exercising any other remedy provided for in this Agreement.”

5. The Automotive Gasoline Agreement dated March 1, 1982, provides that “The pumps, meters and computers located upon the premises have been jointly checked by Gulf and Dealer and are believed to be accurate. Either party, at its own expense and upon prior notice to the other party, may at any time cause the pumps, meters, and computers to be inspected and repaired as needed; but all previous pump, meter and computer readings shall be conclusively presumed between the parties to have been correct. Dealer agrees to give Gulf notice immediately of any defective conditions of said pumps, meters and computers.”

6. The Service Station Lease dated March 1, 1982 provides “Concurrently herewith, Lessor and Lessee have entered into a Contract of Sale covering petroleum products. Lessee agrees, as a covenant of this lease, that the breach of any of the terms or conditions of said Contract of Sale shall constitute a breach of this Lease, and that termination of said Contract of Sale shall, at the option of the Lessor terminate this Lease.”

7. Gulf Oil Corporation placed petroleum products in tanks located on the premises leased to Loomis on a consignment basis. Under the agreements, title to the gasoline passed to Loomis when the petroleum products passed through the meters on the pumps, and Loomis became obligated immediately to pay Gulf for all petroleum products so purchased and withdrawn.

8. On October 18,1982, Loomis met with Mr. A.J. D’Amico, General Manager of the Florida Marketing District of Gulf Oil Corporation, and presented an Automotive Gasoline Agreement Settlement form showing that Loomis was indebted to Gulf for 48,197 gallons of petroleum products, and that the amount due and owing to Gulf was $56,-233.52. At that meeting D’Amico advised Loomis that Gulf would require a minimum payment of $35,000.00 on or before October 21,1982, and the balance was to be paid at the rate of 2$ a gallon on future dealer sales as a condition of maintaining the contractual agreements between Gulf and Loomis.

9. Thereafter, Gulf prepared and hand delivered to Loomis on October 19, 1982, a letter embodying in writing the terms which D’Amico had orally related to Loomis on October 18,1982. A copy of the letter is attached hereto as Appendix A. The letter provided that failure to comply with the provisions of the letter would result in Gulf terminating or nonrenewing the Automotive Gasoline Agreement, Service Station Lease Agreement, Contract of Sale and Commodity Schedule, and any and all other contracts and agreements by and between Gulf and Loomis. Attached to the letter was a copy of the Department of Energy Summary of Title One of the Petroleum Marketing Practices Act.

10. On October 21, 1982, Gulf hand delivered a second letter to Loomis advising that Loomis had failed to make payment as required in the October 19, 1982 letter. A copy of the October 21 letter is attached hereto as Appendix B. Gulf also notified Loomis that as required by Section 104 of the PMPA, 15 U.S.C.A. 2804, notice was given that pursuant to subsections 102(b)(2)(C) and 102(c)(8) of the PMPA, all agreements between Gulf and Loomis were terminated as of October 21, 1982. Loomis was advised to remove his personal property and vacate the premises by 5:00 p.m. on October 25, 1982. Again Gulf attached a copy of the Department of Energy Summary of the Petroleum Marketing Practices Act.

11. Affidavits of Gulf employees Gordon Bryant, S.E. Branch and Bill Masur and S.E. Branch establish meter readings and physical inventories of petroleum products at the station operated by Loomis on August 4, 1982, October 8, 1982 and October 18, 1982, respectively. In addition, affidavits of Alvin W. Woods, III and Benjamin Bathke, employees of Florida Petroleum Services, Inc., establish the meter readings at the station operated by Loomis on October 8, 11, and 12 respectively. A comparison of these reports, together with the Automotive Gasoline Agreement Settlement Report delivered by Loomis to D’Amico on October 18, 1982 establishes that between August 4, 1982 and October 8, 1982 Loomis sold 35,340 gallons of petroleum products for which he has not paid Gulf, and between October 8 and October 12, 1982, Loomis sold an additional 12,857 gallons of petroleum products for which he has not paid Gulf, for a total shortfall of 48,197 gallons.

12. In addition, and as a means of verifying the accuracy of the meter readings, C.F. Patterson, Manager of Finance and Service for the Florida Marketing Division of Gulf Oil Corporation, by affidavit, testified that a review of (A) the physical inventories present on August 4, 1982, (B) deliveries from August 4 through August 18, 1982 by Gulf to Loomis’ station, (C) reports by Loomis on the Automotive Gasoline Agreement Settlement reports submitted to Gulf from August 4, 1982 to October 18, 1982, and (D) the physical Inventory of petroleum products at Loomis’ station on October 18, 1982 confirms the shortfall in payment for product independent of the meter readings on the pumps at Loomis’ station. The Patterson affidavit also establishes that at various times throughout the period of August 4 through October 18, 1982, a comparison of the physical inventories at the station and records of deliveries to the station against Loomis’ report of petroleum products sold at the station results in book inventories in some cases two times the capacity of the tanks at Loomis’ station. In other words, for Loomis’ record of sales during the period to have been correct, Loomis would have had in some cases twice as much gasoline at the station as his tanks had physical capacity to hold, thus establishing that during the period of August 4, 1982 through October 18, 1982, Loomis backread the meters to avoid paying Gulf for all petroleum products passing through the meters and sold by Loomis.

13. This is not the first time that Gulf has had financial difficulty with Loomis. The affidavit of J.E. Kittrell, Retail Sales Supervisor for the Florida Marketing District of Gulf Oil Corporation, details numerous financial problems with Loomis over the years, in increasing amounts, culminating in a February 4, 1982 meeting with Loomis at which time Loomis advised that five (5) checks given to Gulf by Loomis would “bounce” resulting in unpaid invoices, of $54,244.00. Therefore, Gulf has had recurring financial difficulties with Loomis over the years prior to the present incident.

14. At the deposition of Vader Loomis taken on December 28, 1982, Loomis admitted that he had been having trouble meeting his financial obligations in 1982. (Loomis deposition page 29).

15. In opposition to the evidence established by Gulf, Loomis has come forward with no evidence that he does not owe Gulf $56,233.52 for 48,197 gallons of gasoline for the period of August 4, 1982 through October 18, 1982. His presentation to D’Amico of an AGA Settlement Report on October 18, 1982 showing a shortfall of 48,197 gallons of petroleum products is an admission that the funds are due Gulf. In addition, at an earlier hearing in this case on the Motion for Temporary Restraining Order, which hearing was held on the record, Loomis, appearing pro se, admitted in open court that he probably owed Gulf at least $30,-000.00 for petroleum products. At the hearing on the Motion for Summary Judgment on February 2, 1983, counsel for Loomis advised the Court that Loomis had filed no affidavits presenting facts to refute Gulf’s position, and counsel admitted that Loomis could not refute the Gulf evidence with respect to the shortfall in payment for petroleum products.

16. In addition, Loomis has admitted that he failed to pay Gulf $3,520.21 for petroleum products delivered during the pendency of the Temporary Restraining Order. During the time the Temporary Restraining Order was in effect, Gulf was ordered to deliver petroleum products on a regular basis, and Loomis was ordered to pay Gulf on a daily basis for said deliveries. However, Loomis failed to pay for the last day of delivery in the amount of $3,520.21. During Loomis’ deposition he testified that he received product during the Temporary Restraining Order, but that he failed to pay Gulf for the last day of delivery. (Loomis deposition pages 33-36).

17. By October 18, 1982, Loomis was indebted to Gulf Oil Corporation in the amount of $56,232.52. As of October 18, 1982, Loomis had a credit balance in his account with Gulf in the amount of $5,622.69. When the credit balance of $5,622.69 is subtracted from the amount owed by Loomis to Gulf of $56,232.52 Loom-is owed Gulf $50,610.83.

18. In addition, as of November 4, 1982, Loomis owed Gulf an additional $3,520.21 for the last day of delivery of product during the Temporary Restraining Order.

19. The $50,610.83 owed by Loomis to Gulf as of October 21, 1982 and the $3,520.21 owed by Loomis to Gulf as of November 4, 1982 have not been paid by Loomis to Gulf, and constitute breaches of the Dealer Contract of Sale, Automotive Gasoline Agreement and Service Station Lease specified above.

20. Throughout these proceedings Gulf has been the owner and Lessor of the station at 4720 South Kirman Road, and Loom-is has been in possession and has operated the station.

CONCLUSIONS OF LAW

1. The notices sent by Gulf to Loomis on October 19 and October 21 set forth with particularity the reasons for termination or nonrenewal as required by the PMPA. Title 15 U.S.C.A., Section 2804(c) provides:

Notification under this section (1) shall be in writing; (2) shall be posted by certified mail or personally delivered to the franchisee; and (3) shall contain (A) a statement of intention to terminate the franchise or not to renew the franchise relationship, together with the reasons therefor; (B) the date on which such termination or nonrenewal takes effect; and (C) the summary statement provided under subsection (d) of this section.

2. Gulf’s notices of default and intention to terminate as contained in the October 19, 1982 and October 21, 1982 letters advised Loomis in writing of his failure to make Automotive Gasoline Agreement settlement payments when due, and were hand delivered to Loomis. The letters also contained a statement of intention to terminate the franchise or not to renew the franchise relationship because of the failure to make Automotive Gasoline Agreement settlement payments when due, and stated the date upon which such termination or nonrenewal would take effect. The letters attached the Department of Energy summary of Title One of the PMPA. The notices comply with the PMPA. Complete copies of the letters and attachments are attached as Appendix A and B to this Order.

3. The reasons given are adequate to comply with the PMPA notice provisions if they apprise the party of the reason for nonrenewal so that he can determine if the franchisor has complied with the provisions of the PMPA. Orr v. Texaco, Inc., No. C80-1983A (N.D.Ga. December 5, 1980), 1980-81 Trade Cases ¶ 63, 672. In Orr the Court held that there is no support in the legislative history of the PMPA for an argument that the reason given must parrot the specific provision upon which it is based. In Brack v. Amoco Oil Company, 677 F.2d 1213 (7th Cir.1982) the Court stated that the “PMPA requires only that the franchisor articulate with sufficient particularity the basig for the-decision not to renew so that the franchisee can determine his rights under the.Act.” 677 F.2d at 1226.

4. “In determining the sufficiency of notices of nonrenewal, courts have considered, not only the reason stated in the formal notice, but all the facts about nonrenewal known to the franchisee.” Sutton v. Atlantic Richfield Company, 539 F.Supp. 658, 660 (C.D.Cal.1982).

5. Gulf acted reasonably in terminating the franchise with less than ninety (90) days notice under the circumstances of this case. The PMPA, Section 15 U.S.C.A. Section 2804(a)(2) provides for ninety days notice of termination of a franchise. However, 15 U.S.C.A. Section 2804(b)(1) allows a franchisor to terminate or not renew a franchise on less than ninety days notice where it would not be reasonable for the franchisor to furnish ninety days notice. Under the circumstances of this case, Gulf’s notices of October 19, 1982 and October 21, 1982 complied with the specific PMPA exception to the ninety day notice requirement. As shown by the letters, Loomis was given three days from the October 18th meeting in which to cure the deficiency and five days additional time to vacate after termination on October 21. In the present case Loomis developed a deficiency in payment to Gulf of $56,233.52 in a period of thirty (30) to sixty (60) days. Requiring Gulf to continue to' provide product to Loomis for an additional ninety days would expose Gulf to potential large additional deficiencies for the remainder of the ninety day termination period. Based on this circumstance alone, it would not be reasonable to require franchisor to continue to do business with franchisee for an additional ninety days after discovery of a shortfall of this magnitude in a thirty to sixty day period.

6. Further the reasons given by Gulf for terminating or refusing to renew Loomis’ franchise in its letters of October 19 and 21, 1982 are proper and sufficient under the PMPA. 15 U.S.C.A. Section 2802(b) provides that a franchisor may termínate any franchise or fail to renew any franchise relationship based upon the occurrence of an event which is relevant to the franchise relationship. Section 2802(c) states that an event which is relevant to the franchise relationship and as a result of which termination of the franchise or non-renewal of the franchise relationship is reasonable includes failure by the franchisee to pay to the franchisor in a timely manner when due all sums to which the franchisor is legally entitled. The terms of the Dealer Contract for Sale, the Automotive Gasoline Agreement, and the Service Station Lease, all of which have been specified above, clearly delineate the obligation of the dealer to pay Gulf for gasoline when it passes through the pumps, and provides that failure to so pay is a default in the agreements entitling Gulf to terminate the agreements.

7. Loomis has remained in possession of the service station throughout the pendency of these proceedings, and therefore Gulf’s Motion to Dismiss Count IV of Loomis’ Complaint alleging wrongful eviction is granted and Count IV is dismissed for failure to state a claim upon which relief can be granted. An essential element of a claim for either forcible entry or unlawful entry and unlawful detention is that the Plaintiff has been ousted of possession and Defendants withhold possession without their consent. Florida Athletic and Health Club v. Royce, 160 Fla. 27, 33 So.2d 222, 224 (1948).

8. The Court reserves ruling on the Motion for Contempt filed by Gulf without prejudice to Gulf to renew the motion at a later time.

9. Based upon the foregoing findings of fact and conclusions of law, the Court concludes that there is no genuine issue of material fact, and that summary judgment should be entered in favor of Gulf Oil Corporation and against Vader Loomis on the Complaint filed by Vader Loomis and the Counterclaim filed by Gulf Oil Corporation.

10. Gulf Oil Corporation is entitled to recover from Defendant Vader Loomis the amount of $50.610.83 with interest at the rate of 12% from October 18, 1982, in the amount of $2.179.73 and $3.520.21 with interest at the rate of 12% from November 4, 1982, in the amount of $143.51 for a total amount due and owing to Gulf of $56.454.-28. The Clerk is directed to enter a final judgment in favor of Gulf Oil Corporation and against Vader Loomis in the amount of $56.454.28 on a separate document pursuant to Rule 58 of the Federal Rules of Civil Procedure.

11. In addition, Gulf Oil Corporation is entitled to possession of the premises located at 4720 South Kirkman Road, Orlando, Florida, and the Clerk is directed to enter a Writ of Possession in favor of Gulf Oil Corporation and against Vader Loomis on a separate document pursuant to Rule 70 of the Federal Rules of Civil Procedure.

APPENDIX A

GULP REPINING AND MARKETING COMPANY

FLORIDA DISTRICT OFFICE

October 19,1982

Mr. Vader M. Loomis

4720 S. Kirkman Road

Orlando, Florida 32805

Dear Mr. Loomis:

This letter acknowledges our conversation of October 18, 1982 with regard to your indebtedness of $56,233.52 as a result of shortages on your AGA settlements.

The terms of payment of the above amount will be as follows:

1. $35,000 payable on or before October 21, 1982; at 12:00 P.M.

2. The balance of the indebtedness will be paid in monthly installments of not less than $5,000 in any one month, including the full amount of interest calculated at 15% per annum will be due on this balance at the time of payment of each installment balance.

Monthly installments shall be paid pro rata as follows:

(a) 2