Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-06023/USCOURTS-ca10-91-06023-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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PUBLISH 

t:ttED 

United StJtet Court ~f Appeals 

Tenth Circutt 

JUN 2 4 1991 

UNITED STATES COURT OF APP~OBERT L. HOECKER 

TENTH CIRCUIT Clerk 

METRO OIL COMPANY, INC., an Oklahoma 

corporation, 

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Plaintiff-Appellant, 

v. No. 91-6023 

SUN REFINING AND MARKETING COMPANY, 

a Pennsylvania corporation, 

Defendant-Appellee. 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-90-443-B) 

Clell I. Cunningham III, Jack s. Dawson, and Jennifer B. Miller of 

Miller, Dollarhide, Dawson & Shaw, Oklahoma City, Oklahoma, for 

Plaintiff-Appellant. 

Robin F. Fields and Dixie L. Coffey of McKinney, Stringer & 

Webster, P.C., Oklahoma City, Oklahoma, for Defendant-Appellee. 

Before ANDERSON, TACHA, and BRORBY, Circuit Judges 

BRORBY, Circuit Judge. 

After examining the briefs and the appellate record, this 

three-judge panel has determined unanimously that oral argument 

would not be of material assistance in the determination of this 

appeal. See Fed. R. App. P. 34(a); lOth Cir. R. 34.1.9. The 

cause is therefore ordered submitted without oral argument. 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 1 
In this diversity case for breach of contract and tortious 

interference with a business relationship, both parties moved for 

summary judgment. The trial court granted summary judgment in 

favor of Sun Refining and Marketing Company (Appellee or Sun), and 

denied the motion of Metro Oil Company (Appellant or Metro). It 

is from this ruling that Metro now appeals. 

Metro is a wholesale distributor of motor fuel. Metro has 

purchased fuel from Sun, a manufacturer of motor fuel, under a 

series of contracts, since 1977. The latest agreement entered 

into between Metro and Sun in 1987, entitled Distributor Branded 

Motor Fuel Agreement (Agreement), provided in pertinent part: 

that Sun could establish and change the terms under which Metro 

was to pay for the product; and that the Agreement was subject to 

and governed by the Petroleum Marketing Practices Act, 15 u.s.c. 

§ 2801 et seq. (PMPA). 

In 1988, Sun became concerned about Metro's credit position. 

This concern was prompted by the failure of Metro to deliver 

mortgages promised for collateral to partially secure Metro's 

credit line and due to several past due invoices. Consequently, 

Sun placed Metro on a C.O.D. basis. Letter dated February 5, 

1988. Thereafter, in a letter dated February 24, 1988, Metro 

advised Sun that its action of altering the credit terms and 

payment methods had "terminated the Distributor Agreement," and if 

Sun maintained its position for one more day Metro would lose its 

dealers. The letter further stated: "Sun has breached the 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 2 
Uniform Commercial Code covenant of good faith and fair dealing in 

its treatment of Metro." Sun responded by letter the next day, 

February 25, 1988, stating Sun had not terminated the Agreement 

and had been acting in good faith in "attempting to resolve a 

difficult credit situation with Metro." Sun further stated that 

its previous request for adequate assurance of Metro's ability to 

meet its future performance obligations had not been complied 

with. Moreover, the letter indicated the interim credit policy 

that Sun outlined for Metro had been fully satisfied by Sun, but 

again, Metro failed to comply. About ten days later, in a letter 

dated March 3, 1988, Metro's counsel again wrote to Sun stating 

that Metro's position was that the modification of the payment 

terms imposed by Sun "had the effect of constructively terminating 

the Distributor Agreement," and notified Sun that "Metro has now 

lost its dealers." The letter further provided: "You [Sun] will 

be hearing from us in the very near future on a lawsuit under the 

Petroleum Marketing Practices Act and other claims which will 

probably exceed $2 million dollars." Sun responded in a letter 

dated March 17, 1988, that it had acted in good faith in 

accordance with the Agreement, and that despite its good faith 

efforts, Metro demanded an all or nothing resolution: threatened 

frivolous litigation: and generally failed to act in good faith. 

Apparently this was the last correspondence between the parties on 

this matter. 

More than two years later, however, on March 19, 1990, Metro 

filed a complaint against Sun alleging breach of contract and 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 3 
tortious interference with a business relationship. Thereafter, 

Metro moved for summary judgment as to Sun's liability. Sun moved 

for summary judgment contending Metro's claims were barred by the 

applicable statutes of limitation. 

The trial court granted Sun's motion concluding PMPA clearly 

applied to the Distributor Agreement, and therefore Metro's claim 

that Sun's breach of the Agreement resulted in the termination of 

the Agreement was barred by the one-year statute of limitations 

established for franchise terminations. Moreover, the court 

concluded Metro's claim of tortious interference was barred by the 

applicable two-year statute of limitations for tort claims under 

Oklahoma law. 

Metro contends the trial court erred in ruling Metro's claim 

for breach of contract was barred by PMPA. Specifically, Metro 

argues the agreement was not terminated but breached by Sun, 

rendering PMPA inapplicable. Metro argues the Oklahoma five-year 

statute of limitations set forth in Okla. Stat. tit. 12, § 95 

governs this controversy. 

The Agreement between Metro and Sun expressly provides that 

it "is subject to and governed by the Petroleum Marketing 

Practices Act, 15 u.s.c. § 2801 et. ~ [PMPA] for purposes 

of expressing the grounds upon which this Agreement may be 

terminated." 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 4 
Section 2805 of PMPA provides: 

If a franchisor fails to comply with the requirements of 

section 2802 or 2803 of this title, the franchisee may 

maintain a civil action against such franchisor[,] 

except that no such action may be maintained unless 

commenced one year after the later of--

(1) the date of termination of the franchise ... or 

(2) the date the franchisor fails to comply with 

section 2802 or 2803 of this title. 

15 u.s.c. § 2805(a). 

The question we must address is whether Metro's action 

against Sun is based upon a termination as contemplated in PMPA. 

In considering the propriety of a grant or denial of a summary 

judgment, we apply the same standard as the district court. 

Missouri Pacific R.R. v. Kansas Gas & Elec., 862 F.2d 796, 798 

(lOth Cir. 1988); Fed. R. Civ. P. 56(c). We examine the 

evidentiary material submitted by the parties to determine if 

there exists any genuine issue of material fact, and if none 

exists, whether the substantive law was correctly applied. 

Setliff v. Memorial Hosp., 850 F.2d 1384, 1391-92 (lOth Cir. 

1988); Fed. R. Civ. P. 56(c). 

The evidence in this case can be summarized as follows: Sun 

changed the terms and conditions of payment by demanding cash on 

delivery due to Metro's failure to pay certain invoices; from that 

point, Metro alleged Sun had wrongfully terminated the contract 

(which Sun consistently denied); and in a final letter to Sun 

dated March 3, 1988, Metro informed Sun it would be instituting 

suit against Sun under PMPA. 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 5 
Sun presented, inter alia, the following evidence: Metro's 

complaint alleging Sun caused "a termination of this relationship 

and expectancy" (referring to Metro's Agreement with Sun); 

prelitigation letters from Metro's counsel clearly alleging Sun 

had wrongfully terminated the Agreement; and that the parties 

stopped doing business with each other as of March 1988. 

Metro contends: (1) it is entitled to damages for Sun's 

breach of the Agreement; (2) the letters from its counsel were but 

"pre-litigation threats"; and (3) that since Sun did not terminate 

but breached the Agreement, PMPA is inapplicable. 

Metro's argument is semantic. A breach of contract is 

normally defined as a failure, without legal excuse, to perform 

any promise that forms the whole or any part of a contract. The 

thrust of Metro's complaint and of the proof presented is that Sun 

breached the Agreement by altering the credit terms thereby making 

it impossible for Metro to perform. 15 U.S.C. § 2802(a) contains 

a prohibition against termination by the franchisor of any 

franchise prior to the conclusion of its term. Metro presented no 

facts showing the purpose of this action is to recover for 

something other than damages caused by the termination. 

cause of action, therefore, was clearly governed by PMPA. 

This 

One of the purposes of a motion for summary judgment is to 

pierce the pleadings and to assess the proof in order to ascertain 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 6 
whether there exists a genuine need for trial. See Fed. R. Civ. 

P. 56, Advisory Committee Notes. It is clear from the complaint 

and the proof that the Agreement here was in fact terminated. The 

only issue at trial would be which party terminated the Agreement. 

If Sun terminated, the action would be time-barred by PMPA. If 

Metro terminated, this would be a defense for Sun. Under rules 

applicable to summary judgment, once Sun established its 

entitlement, Metro had the obligation to come forward with 

evidence, more than mere conclusory allegations, that the real 

purpose of its suit was to recover damages for something other 

than the termination of the Agreement. Metro has failed to come 

forward with such evidence. 

Metro also complained Sun's actions tortiously interfered 

with Metro's business relationships with its dealers. The 

district court determined this 

Oklahoma's two-year statute of 

claims, and was therefore barred. 

was a tort claim, subject to 

limitations applicable to such 

Okla. Stat. tit 12, § 95. 

On appeal, Metro argues the statute of limitations did not 

commence until April 1988 the date when it actually suffered 

damages. Oklahoma law fails to support Metro's contention. Under 

Oklahoma case law, a cause of action accrues upon the date the 

tortious act, or the happening of the breach, and not the date of 

the resulting damage. Neff v. Willmott, Roberts & Looney, 170 

Okla. 460, 41 P.2d 86 (1935). We also note the evidence before 

the district court when the summary judgment was heard showed 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 7 
/. 

Metro would lose its dealers on February 25, 1988, and in its own 

letter of March 3, 1988 Metro claimed it had in fact lost its 

dealers. Even assuming, arguendo, Metro was correct in its 

interpretation of Oklahoma law, the record establishes Metro 

incurred damage as early as March 3, 1988, thus this claim would 

still be time-barred. In a final effort, Metro points to an 

affidavit claiming it establishes a factual dispute as to when it 

was damaged. This affidavit states, in essence, that Metro's own 

letter stating it had lost its dealers on March 3, 1988 was 

inaccurate. A party cannot resist a motion for summary judgment 

by contradicting its own evidence thereby creating an issue of 

fact. 

Thus, we find summary judgment was properly granted in favor 

of Sun. The judgment of the district court is AFFIRMED. 

Appellate Case: 91-6023 Document: 01019297229 Date Filed: 06/24/1991 Page: 8