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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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FILED 

-1Tnited Stat.es Court of Appeals UNITED STATES COURT OF APPEALt,~ 'l'Pnt.h drcuit 

FOR THE TENTH CIRCUIT 

FASI M. FILIAGA, ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

) 

CHEVRON U.S.A., INC., ) 

) 

Defendant-Appellee. ) 

ORDER AND * JUDGMENT 

JUL 2 0 1990 

ROBERT L. HOECKER 

Clerk 

No. 89-4098 

(D.C. No. 88-NC-096S) 

(D. Utah) 

Before TACHA, SETH, Circuit Judges, and BROWN,** District Judge. 

**Honorable Wesley E. Brown, Senior District Judge, United 

States District Court for the District of Kansas, sitting by 

designation. 

This case comes to us on appeal of summary judgment entered 

in favor of defendant Chevron U.S.A., Inc. Plaintiff Fasi Filiaga 

claims that Chevron violated the provisions of Title I of the 

Petroleum Marketing Practices Act, 15 u.s.c. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 89-4098 Document: 010110038724 Date Filed: 07/20/1990 Page: 1 
' 

§§ 2801-2806 (1982)(the PMPA or the Act), when it did not renew 

its five-year-old franchise with Filiaga. We reverse and remand 

to the district court for further proceedings. 

Filiaga asserts that Chevron's marketing agent made negligent 

representations to Filiaga and to a loan officer of the Small 

Business Administration (SBA) before Filiaga entered the franchise 

relationship. The agent allegedly told Filiaga and the SBA that 

the franchise would continue to be renewed to at least ten years' 

duration. Allegedly on the basis of these representations, 

Filiaga applied for and was granted a $45,000 SBA loan, secured by 

his home, other real property, his car and all his personal 

property. Filiaga argued below and reasserts here that Chevron's 

agent's negligent misrepresentations should estop Chevron from 

asserting compliance with the PMPA as a total defense. 

Chevron counters this claim by asserting that compliance with 

the PMPA preempts all common law claims and theories tangential to 

the termination or nonrenewal of a franchise, including equitable 

estoppel. Chevron maintains that it did not violate any of the 

provisions of the PMPA when it notified Filiaga of its decision 

not to renew his franchise at the expiration of the ground lease 

underlying the franchise. Chevron's defense relies on two 

provisions of the PMPA: (1) section 2802(c)(4), which 

specifically acknowledges that loss of the underlying ground lease 

by the franchisor is a legitimate reason to terminate or decline 

renewal; and (2) section 2804, which sets forth an explicit notice 

procedure. The district court, acting upon a magistrate's 

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Appellate Case: 89-4098 Document: 010110038724 Date Filed: 07/20/1990 Page: 2 
recommendation, agreed with Chevron and entered summary judgment 

in its favor. 

We review this grant of a motion for summary judgment under 

the same standard employed by the trial court: 

Under Rule 56(c), summary judgment is proper only if it 

is apparent from the record 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 moving party carries the 

burden of showing beyond a reasonable doubt that it is 

entitled to summary judgment, and the court must review 

the record in the light most favorable to the opposing 

party. 

Ewing v. Amoco Oil Co., 823 F.2d 1432, 1437 (10th Cir. 1987). 

The parties do not dispute the facts underlying Chevron's 

stated rationale for abandoning the franchise or the notification 

procedure which Chevron utilized. The term of Filiaga's first 

Dealer Lease and Dealer Supply Agreement was June 1, 1983, through 

May 31, 1986 (the first agreement). This agreement was renewed by 

another Dealer Lease and Dealer Supply Agreement which expired 

June 30, 1988 (the second agreement), the date on which Chevron's 

ground lease expired. Although Chevron had an option to renew the 

ground lease for an additional ten years, it chose not to do so, 

allegedly because of the age of the building, the market share of 

retail gasoline sales in the franchise's geographical area, and 

Chevron's long range retail marketing plans for that area.

1 Both 

the first and the second agreements expressly stated that Chevron 

1 Merely having an option to renew an underlying ground lease 

does not obligate the franchisor to do so. See Lugar v. Texaco, 

Inc., 755 F.2d 53, 56 (3d Cir. 1985); S. Rep. No. 731, 95th Cong., 

2d Sess. 3, reprinted in 1978 U.S. Code Cong. & Admin. News 873, 

896. 

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Appellate Case: 89-4098 Document: 010110038724 Date Filed: 07/20/1990 Page: 3 
had the right to terminate the agreements, subject to notice 

provisions, if its underlying ground lease terminated. The second 

agreement was also accompanied by a letter dated January 20, 1986, 

which informed Filiaga that the ground lease for his station 

expired June 30, 1988. Subsequently, on February 2, 1988, Filiaga 

received written notification of Chevron's intent not to renew his 

franchise agreement and the reason for nonrenewal. All of these 

actions were conducted pursuant to and in compliance with the 

PMPA's franchise nonrenewal provisions. 

However, we disagree with the district court's decision that 

there is no merit in Filiaga's argument that equitable estoppel 

prevents a franchisor from claiming a complete defense through 

compliance with the PMPA. While Chevron relies on section 2806 of 

the Act for authority that Filiaga's estoppel claim is preempted, 

other courts have gone beyond the PMPA when warranted by equitable 

considerations. See Wesley v. Mobil Oil Corp., 513 F. Supp. 227, 

230-31 (E.D. Pa. 1981); cf. Baldauf v. Amoco Oil Co., 553 

F. Supp. 408, 417 (W.D. Mich. 1981), aff'd, 700 F.2d 326 (6th Cir. 

1983)(examining promissory estoppel claim but rejecting it under 

the facts of the case); Wojciechowski v. Amoco Oil Co., 483 

F. Supp. 109, 115 (E.D. Wis. 1980)(same). 

This circuit has articulated the intent of Congress in the 

PMPA when we stated in Ewing v. Amoco Oil: 

[O]ne of Congress' primary purposes in enacting the PMPA 

was to protect franchisees against arbitrary and 

discriminatory terminations or nonrenewals. A 

longstanding franchisee has a legitimate expectation 

that the franchise relationship will be a continuing 

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one. The statute is thus directed in part at 

"protecting the buildup of goodwill by those individuals 

who have invested time and money into the operation of a 

franchise." 

823 F.2d at 1438 (quoting Brewer v. Exxon Corp., 626 F. Supp. 76, 

79 (E.D. Tenn. 1985)). See also Sandlin v. Texaco Refining & 

Marketing Inc., 900 F.2d 1479, 1480-81 (10th Cir. 1990). 

The legislative history of the Act supports the view that 

equitable estoppel should be considered even in the face of 

compliance with the Act. For example, the Senate report states: 

[O]ften the reasonable expectations of the parties to a 

motor fuel franchise are that the relationship will be a 

continuing one. This expectation by the franchisee, in 

particular, is often the result of, and fostered by, 

statements and actions of the franchisor. As a result, 

non-renewal of a motor fuel franchise relationship at 

the expiration of its term can be almost as punitive as 

termination of the franchise during its term. The 

reasonable expectations of the franchisee, rather than 

any definitive contract rights, are destroyed. 

s. Rep. No. 731, 95th Cong., 2d Sess. 3, reprinted in 1978 U.S. 

Code Cong. & Admin. News 873, 876 (the Senate report). It would 

be anomalous for us to interpret the statute as preempting 

equitable protection from this very destruction of reasonable 

expectation. Furthermore, the legislative history goes on to 

state: 

It is clear that no single statutory principle would be 

flexible enough to deal with so wide a range of 

potential conflicts. Therefore, the [PMPA] leaves to 

the courts the task of resorting to traditional 

principles of equity to maximize attainment of the 

competing statutory objectives consistently with the 

supremacy clause of the Constitution and the purposes of 

the Federal legislation. 

Senate report at 901 (commenting on PMPA § 2806). 

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We are persuaded that compliance with the provisions of the 

PMPA was not intended by Congress to insulate the franchisor from 

equitable considerations and therefore hold that the district 

court must examine Filiaga's claim of equitable estoppel. 

In granting summary judgment in favor of Chevron, the 

district court acknowledged that there are disputed issues of 

material fact relating to Filiaga's claim of equitable estoppel. 

Although that court described these disputes as "frail," 

nevertheless, they also render summary judgment inappropriate 

because, taken in the light most favorable to Filiaga, they 

present material issues for resolution by the trier of fact. 

Filiaga asserts in his complaint and his affidavit that, 

before Filiaga entered into the first agreement, George Fotes, a 

marketing representative of Chevron, assured Filiaga in the 

presence of Filiaga's wife that Chevron would renew the franchise 

documents to accommodate a franchise arrangement of at least ten 

years' duration. Relying on this information, Filiaga applied for 

a $45,000 loan from the SBA. The SBA would not approve the loan 

for a franchise of less than a ten-year duration. In his answers 

to interrogatories, Filiaga listed Allen Ferre, the SBA loan 

officer who handled Filiaga's loan, as a witness, stating that 

Ferre would testify that while he had no recollection of a 

particular communication with a Chevron representative, he would 

not ordinarily have approved a ten-year loan on a three-year lease 

without confirmation of the franchisor's commitment to a ten-year 

franchise relationship. Filiaga also testified in deposition that 

he called Fotes to request that Fotes contact the SBA to give it 

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the necessary assurance. The SBA called Filiaga to notify him of 

approval of his loan within a day or two after Filiaga called 

Fotes. 

Fotes disputes Filiaga's account of their interactions. 

Instead, Fotes stated in his affidavit that he informed Filiaga 

that the dealership would be discontinued if Chevron did not renew 

the ground lease and that nonrenewal was a possibility. Fotes 

also denies assuring Filiaga or any other entity or person that 

Filiaga would be granted any particular tenure in the subject 

property beyond the expiration of the initial ground lease term in 

1988. 

According to the deposition testimony of the regional retail 

manager in charge of Filiaga's franchise area, the particular 

regional marketing analysis which dictated Chevron's abandonment 

of Filiaga's station was not begun until a year after the first 

agreement was executed. At the time Filiaga and Chevron entered 

the first agreement, Chevron's long-term marketing plans were made 

on the basis of each individual location's performance rather than 

larger geographic area market analysis. However, this same 

supervisor stated that even under the previous station-by-station 

long range planning, there had been inferences in the file that it 

was probably not a long-term site. 

The record also reveals that Filiaga attempted to purchase 

the property and improvements prior to expiration of the ground 

lease, but was unsuccessful in his attempts to do so. Chevron 

first quoted a "ballpark estimate" of $100,675 for the purchase of 

' 

the improvements on the property, a price sufficiently high that 

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it prohibited Filiaga from obtaining financing. Later Chevron 

amended that purchase price down to $36,000, but by that time, 

still prior to his receipt of the ninety-day notification, another 

party, whom Filiaga claims was another Chevron dealer, had 

allegedly obtained an option to purchase or lease the underlying 

property. Chevron denies any association with this third party in 

conjunction with the property prior to the expiration of Chevron's 

ground lease on June 30, 1988. 

This brief recitation of disputed facts from the district 

court record of the parties' preliminary discovery, truncated by 

the order granting summary judgment, indicates that this case is 

not appropriate for summary judgment. While we express no opinion 

as to the eventual outcome of the case, there are several 

significant issues which await resolution by the trier of fact. 

The judgment of the United States District Court for the 

District of Utah is REVERSED and REMANDED for further proceedings 

consistent with this opinion. 

8 

ENTERED FOR THE COURT 

PER CURIAM 

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