1

The parties are in agreement that the two defendants as well as

the entity once known as Fleetman, Inc., which is a party to relevant

documents, can be treated as one and the same for purposes of the

motion for summary judgment. The abbreviated reference "FleetCor"

refers to each and all of them, as applicable. 

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

BARNEY HOLLAND OIL COMPANY, §

§

Plaintiff, §

§

VS. § NO. 4:06-CV-183-A

§

FLEETCOR TECHNOLOGIES, INC., §

ET AL., §

§

Defendants. §

MEMORANDUM OPINION

and

ORDER

After having considered the motion for summary judgment

filed in the above-captioned action on August 14, 2006, by

defendants, FleetCor Technologies, Inc., and FleetCor

Technologies Operating Company, LLC, ("FleetCor")1 the court has

concluded that such motion should be granted in part and denied

in part.

I.

Plaintiff's Claims

The current pleading of plaintiff, Barney Holland Oil

Company, is its first amended complaint, filed July 18, 2006. 

 

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2

The descriptions given in the text of the allegations of the

complaint are significantly abbreviated. When describing the

distinct claims alleged by plaintiff, the court is, for the most

part, adopting the characterizations of the claims used by defendants

in their brief in support of the motion for summary judgment. 

Counsel for plaintiff basically agreed with the accuracy of those

characterizations during a telephone conference/hearing conducted

between the court and counsel on October 19, 2006. Tr. of Oct. 19,

2006, Conf./Hr'g at 7-8.

2

Plaintiff alleges that:2

FleetCor operates a fuel card program ("Fuelman System") by

which businesses and governmental entities with fleets of

automobiles, trucks, or other vehicles can acquire fuel at

participating retail fuel sites around the country. In October

1995 plaintiff and FleetCor entered into a license agreement

pursuant to which FleetCor granted plaintiff the exclusive right

to market the Fuelman System in the Dallas/Fort Worth ("DFW")

territory, consisting of Tarrant and Dallas Counties and twentytwo other counties in the same area. Since the license agreement

was entered into, plaintiff has made extensive investments in,

and continues to operate, the program in the DFW territory, has

developed a large number of business relationships, and has

entered into long-term contracts with various entities to develop

the program in that territory. The business relationships and

long-term contracts primarily are with retail service stations

and unattended fuel sites ("merchants") and with commercial fleet

owners, independent school districts, municipalities, federal,

state, and county governmental entities and other end-users of

fuel ("customers"). 

 

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3

An important feature of the Fuelman System is that it

incorporates pre-purchase controls that restrict a driver's

ability to use the Fuelman card to transactions that comply with

restrictions established by the Fuelman System customer for whom

the driver works, including types and grades of fuel, gallon

limits per fill-up, gallon limits per week, and fueling events

per day and/or per week. Plaintiff is obligated contractually to

many of its customers to maintain those controls in place, and is

obligated to other customers to honor good-faith representations

that the controls will be kept in place.

Until 2001, FleetCor operated the nationwide Fuelman System

primarily through thirty licensees, each of whom had the

exclusive right to market the program within a defined

geographical territory. Commencing in 2001 FleetCor has engaged

in an effort to terminate the license agreements so that it might

operate the program directly. It now has terminated twenty-nine

of its thirty licensees, leaving plaintiff as the only operating

licensee. In 2002 plaintiff and FleetCor engaged in negotiations

that, if successful, would have led to the termination of

plaintiff's license. When the negotiations failed, FleetCor

embarked on a campaign to (i) damage plaintiff and (ii) destroy

the value of plaintiff's DFW Fuelman System territory, all in an

attempt to force plaintiff to accept less than the fair market

value for its business. 

Before plaintiff and FleetCor entered into the October 1995

license agreement, they, in February 1995, entered into an

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 3 of 33 PageID 834
4

agreement entitled "Bridging Agreement." At that time plaintiff

was participating as a licensee in a fuel card program known as

"Gascard." In October 1995 FleetCor acquired the Gascard

operations. The Bridging Agreement was entered into in

anticipation of FleetCor's acquisition of Gascard, and it

provided the terms and conditions for a multitude of

relationships between the parties, including plaintiff's

continued participation in the Gascard program and the conditions

for establishing a Fuelman System license for plaintiff covering

the DFW territory. The Bridging Agreement, which continues to

govern certain relations between the parties, contains a "favored

nations" provision that affects the Fuelman System license

agreement the parties ultimately entered into in October 1995. 

In or about August 2001, FleetCor entered into agreements

with a number of other Fuelman System licensees that amended

their respective license agreements by providing each of those

licensees with a clear and exclusive right to market, in the

licensee's territory, all new products and services offered by

FleetCor. Pursuant to the favored nations provision in the

Bridging Agreement, plaintiff is entitled to incorporate that

term and condition into its license agreement. Plaintiff has

made repeated demands on FleetCor to review all Fuelman System

license agreements, including all amendments thereto, in order to

determine whether there are other favorable provisions that

plaintiff might elect to incorporate into its license agreement. 

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 4 of 33 PageID 835
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FleetCor has refused to allow plaintiff to have access to the

other agreements.

* * * * * *

The legal theories into which plaintiff channels its alleged

facts are breach of contract, tortious interference, and de facto

termination of the October 1995 license agreement. 

Briefly stated, plaintiff's breach of contract theories are

as follows:

1. Failure to Maintain a Nationwide System of Licensees. 

Plaintiff contends that FleetCor agreed in their license

agreement to build and maintain a nationwide network of Fuelman

System licensees, and breached that agreement by acquiring for

direct operation by FleetCor the territories of all other Fuelman

System licensees.

2. Establishing Fuelman Locations Within the DFW

Territory. Plaintiff contends that the conduct of FleetCor in

entering into agreements with Shell and other national merchants

to establish Fuelman locations in the DFW territory violated

plaintiff's exclusive right under the license agreement to

operate a Fuelman license in that territory.

3. National Merchant Agreements that Eliminated Some PrePurchase Controls. Plaintiff asserts that FleetCor breached the

license agreement by entering into agreements with national

merchants for the use of Fuelman cards that eliminate some of the

pre-purchase controls on Fuelman System transactions. 

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 5 of 33 PageID 836
6

4. "Retail-Minus" National Merchant Agreement. Plaintiff

contends that FleetCor was contractually obligated by the license

agreement to price fuel involved in Fuelman System transactions

on a cost-plus basis, and that FleetCor violated the agreement by

entering into an agreement with a national merchant for purchase

of fuel on a retail-minus basis.

5. Failure to Escrow the Fuelman Source Code. Plaintiff

maintains that the license agreement obligates FleetCor to

deposit all proprietary source codes for the software used in the

operations of the Fuelman System with an escrow agent mutually

agreed to by FleetCor and plaintiff, and that FleetCor violated

the agreement by failing to do so.

6. Expert Assistance and Support. Plaintiff asserts that

FleetCor assumed an obligation under the license agreement to

provide expert assistance and support in the technical aspects of

operating the Fuelman System, and that FleetCor violated that

obligation by failing to provide the required assistance and

support.

7. Departure of Plaintiff's Employees. Plaintiff contends

that it and FleetCor agreed that the negotiations they had for

the sale by plaintiff of its Fuelman System business to FleetCor

would be confidential, and that after those negotiations failed

FleetCor leaked word within the industry that it had acquired

plaintiff's Fuelman System business, causing several of

plaintiff's employees to leave plaintiff. 

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 6 of 33 PageID 837
3

The allegation relative to the CFN cards is that FleetCor

recently acquired Commercial Fueling Network, a former Fleet fueling

competitor, and is now actively marketing CFN cards and sites in the

DFW territory, which clear directly through FleetCor or third

parties, in violation of a right plaintiff claims it has to market

FleetCor products and services in the DFW territory.

7

8. CFN; FleetAll; MasterCard. Plaintiff contends that

FleetCor breached the license agreement by marketing Commercial

Fueling Network ("CFN") cards in plaintiff's exclusive Fuelman

System territory.3 A similar claim is made in reference to the

alleged marketing by Fleetcor, in conjunction with a company

called ComData, of a FleetAll card in the DFW territory and the

alleged marketing by FleetCor, through ComData, of a MasterCard

in the DFW territory. Apparently plaintiff also contends as to

these cards that the favored nations provision in the Bridging

Agreement operated to cause the license agreement to be amended

to provide that plaintiff had an exclusive right to market these

cards, which plaintiff characterizes as new products and services

offered by FleetCor.

9. Favored Nations Provision. Plaintiff maintains that

FleetCor has violated the favored nations provision of the

Bridging Agreement by failing to disclose to plaintiff the terms

and conditions of other license agreements so that plaintiff

might evaluate whether to exercise the right it contends it has

to cause more favorable terms to be incorporated into its license

agreement.

The tortious interference claims are based on the same sets

of facts on which the breach of contract claims related to the

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 7 of 33 PageID 838
8

changes in pre-purchase controls and the making of a retail-minus

agreement with a national merchant are based. According to

plaintiff, those activities by FleetCor tortiously interfered

with plaintiff's business relationships with its customers and

merchants.

The theory of de facto termination of the license agreement

is two-pronged. First, plaintiff contends that the actions of

FleetCor described in the complaint destroyed plaintiff's ability

to fully realize the benefits of its license agreement, with the

result that FleetCor caused a de facto termination of plaintiff's

rights under the agreement, giving plaintiff entitlement to a

recovery from FleetCor of the fair market value of its Fuelman

System operation. Alternatively, plaintiff asserts that

FleetCor's actions constitute a de facto election by FleetCor to

terminate plaintiff's right to exclusive operation of the Fuelman

System within the DFW territory, giving plaintiff the right to

recover the liquidated damages set forth in the Licensor

Termination Provision contained in the October 1995 license

agreement.

Plaintiff alleges that FleetCor's breaches of contract and

acts of tortious interference are, jointly and severally, a

proximate and producing cause of actual damages to plaintiff for

which plaintiff seeks recovery. In addition, plaintiff seeks

punitive damages, reasonable attorneys' fees, pre-judgment and

post-judgment interest, and permanent injunctive relief.

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 8 of 33 PageID 839
9

II.

Grounds of FleetCor's Motion

Generally speaking, FleetCor concedes in its motion the

facts alleged by plaintiff concerning the existence, history, and

nature of the relationships between plaintiff and FleetCor. 

However, FleetCor disagrees with conclusions alleged by plaintiff

as to the effect of those relationships and as to whether

FleetCor's conduct has infringed on rights acquired by plaintiff

through their relationships.

FleetCor maintains in its motion that all of plaintiff's

claims are precluded by the terms of the operative contracts and

by undisputed facts. As to certain of the theories of recovery,

FleetCor also maintains that there is no evidence to support one

or more of the facts essential to the theories. Other

contentions made by FleetCor in its motion will be considered in

the course of the analysis of the viability of plaintiff's claims

and theories of recovery.

III.

Analysis

A. Applicable Summary Judgment Principles

A party is entitled to summary judgment on all or any part

of a claim as to which there is no genuine issue of material fact

and as to which the moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247 (1986). The moving party has the initial

burden of showing that there is no genuine issue of material

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 9 of 33 PageID 840
10

fact. Anderson, 477 U.S. at 256. The movant may discharge this

burden by pointing out the absence of evidence to support one or

more essential elements of the non-moving party's claim "since a

complete failure of proof concerning an essential element of the

nonmoving party's case necessarily renders all other facts

immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 323-25

(1986). Once the moving party has carried its burden under Rule

56(c), the non-moving party must do more than merely show that

there is some metaphysical doubt as to the material facts. 

Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.

574, 586 (1986). The party opposing the motion may not rest on

mere allegations or denials of pleading, but must set forth

specific facts showing a genuine issue for trial. Anderson, 477

U.S. at 248, 256. To meet this burden, the nonmovant must

"identify specific evidence in the record and articulate the

'precise manner' in which that evidence support[s] [its]

claim[s]." Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994). 

An issue is material only if its resolution could affect the

outcome of the action. Anderson, 477 U.S. at 248. Unsupported

allegations, conclusory in nature, are insufficient to defeat a

proper motion for summary judgment. Simmons v. Lyons, 746 F.2d

265, 269 (5th Cir. 1984).

The standard for granting a motion for summary judgment is

the same as the standard for rendering judgment as a matter of

law. Celotex Corp., 477 U.S. at 323. If the record taken as a

whole could not lead a rational trier of fact to find for the

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 10 of 33 PageID 841
4

For all practical purposes, plaintiff failed to respond to the

part of FleetCor's motion directed to the theory that it breached the

(continued...)

11

non-moving party, there is no genuine issue for trial. 

Matsushita, 475 U.S. at 597. See also Boeing Co. v. Shipman, 411

F.2d 365, 374-75 (5th Cir. 1969) (en banc) (explaining the

standard to be applied in determining whether the court should

enter judgment on motions for directed verdict or for judgment

notwithstanding the verdict). 

B. The Breach of Contract Claims.

1. Failure to Maintain a Nationwide System of Licensees. 

In support of its claim that FleetCor is contractually

obligated to maintain a nationwide system of licensees, plaintiff

relies on two recitals on the first page of the October 1995

license agreement saying that:

Licensor has developed and is continuing to

develop certain unique methods and techniques known as

the "Fuelman" system for the provision of fuel and

computer-generated reports detailing fleet and vehicle

fuel consumption to vehicle fleet owners, through the

means of licenses.

. . . .

Licensor licenses licensees to operate businesses

under the name "Fuelman."

Mot., App. at 8. Those recitals are nothing more than noncontractual statements of an expectation FleetCor had in October

1995 for the development of its Fuelman System. The court is

persuaded that the recitals did not cause FleetCor to be

obligated to develop and maintain a nationwide network of Fuelman

System licensees.4 Moreover, as FleetCor maintains in its

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 11 of 33 PageID 842
4

(...continued)

license agreement by terminating the other licensees. During the

October 19, 2006, telephone conference/hearing, counsel for plaintiff

virtually admitted that this theory is without support in the

language of the license agreement. Tr. of Oct. 19, 2006, Conf./Hr'g

at 11.

12

motion, plaintiff failed to adduce any evidence that it suffered

any injury from FleetCor's termination of the other licenses. As

a result, plaintiff has failed to show the existence of a genuine

issue of material fact as to the damage element of this breach of

contract theory. 

2. Establishing Fuelman Locations Within the DFW

Territory. 

The provisions of the license agreement that are pertinent

to this alleged breach of the agreement are as follows:

1.1 Grant of License. Licensor hereby grants to

Licensee and Licensee hereby accepts from Licensor the

following rights and license for the term and upon the

conditions hereinafter set forth:

A. To establish the exclusive right to

operate a "Fuelman" license in the "Licensed Territory"

outlined in Exhibit C;

. . . .

B. To establish, operate and service

"Fuelman" card accepting stations (locations) in the

"Licensed Territory"; 

(1) Licensee understands and agrees

that its license to operate a license under the name

"Fuelman" or any other name or mark of Licensor is

exclusive in the geographic area outlined in Exhibit C. 

The exclusivity of said license to use the "Fuelman"

name or any other trade name delineated in this

Agreement shall not, however, prohibit Licensor from

entering into agreements for the use or acceptance of

"Fuelman" cards at locations within said "Licensed

Territory."

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 12 of 33 PageID 843
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Mot., App. at 9 (emphasis added). The facts related to this

breach of contract claim do not appear to be in dispute. After

the license agreement was made, FleetCor entered into agreements

with several national fuel retailers, such as Shell and Circle K,

to add the retail outlets of those merchants across the country

to the Fuelman card-acceptance network. Mot., App. at 4, ¶ 15.

Some of those merchants had retail outlets in the DFW territory,

and now accept Fuelman cards pursuant to their agreements with

FleetCor. The court is persuaded that these facts do not

establish a violation of the license agreement. The exception to

exclusivity saying that the agreement does not "prohibit

[FleetCor] from entering into agreements for the use or

acceptance of 'Fuelman' cards at locations within [the DFW

territory]," Mot., App. at 9, appears to apply.

The court will consider at a later point in this memorandum

opinion plaintiff's contention that the favored nations provision

of the Bridging Agreement would enable it to incorporate into the

license agreement language that would eliminate the exception to

exclusivity in the DFW territory.

3. Elimination of Pre-Purchase Controls. 

There is nothing in the license agreement that explicitly

prohibits FleetCor from entering into agreements with national,

or other, merchants for the use of Fuelman cards that eliminate

some of the pre-purchase controls on Fuelman System transactions. 

Nevertheless, the court is inclined to think from the summary

judgment record that the pre-purchase controls feature of the

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 13 of 33 PageID 844
14

Fuelman System is such an integral part of the system that

actions taken by FleetCor to defeat to a significant extent that

feature of the system could well constitute the breach of an

implied term of the agreement. In his affidavit, Barney Holland

makes a compelling case for the existence of an implied

understanding, saying, inter alia, that:

The Fuelman Program uses pre-purchase controls

that enable a fleet owner to restrict a driver's

purchase of types and grades of fuel, gallons per fillup, gallons per week, and fueling transactions per week

and/or day. These pre-purchase controls are a

distinguishing factor between the Fuelman Program and

other programs offered by FleetCor competitors. These

pre-purchase controls provide fleet owners with tools

to better manage their total cost of fueling and reduce

or eliminate theft. These pre-purchase controls are

used in marketing and promoting the Fuelman Program.

. . . .

FleetCor has entered into agreements with national

merchants that enable Fuelman cards to be used in the

CRIND in the D/FW Territory and that such agreements

result in the removal of BHOC's VeriFone devices that

operate all the requisite pre-purchase controls. It is

the VeriFone device, which FleetCor required BHOC to

purchase and install at every one of its locations in

the D/FW Territory (now approximately 600 locations),

that enables the pre-purchase controls to operate.

. . . .

Without the pre-purchase controls, the Fuelman

card is simply a credit card. Without pre-purchase

controls, it is unlikely that fleet owners would be

willing to pay above posted retail prices. With the

pre-purchase controls operational, the driver of a

commercial truck that operates on diesel may be limited

to 20 gallons of diesel a day. No other purchase will

be authorized or processed. If that driver attempts

later to fill up his SUV with 15 gallons of premium

gasoline, the transaction is denied. But at one of the

new "locations" established by FleetCor within BHOC's

exclusive D/FW Territory, the transaction will be

completed. BHOC's representations to its customers,

such as the Fort Worth ISD and Tarrant County, will

 

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15

become misrepresentations, resulting in BHOC incurring

losses in the form of having to make restitution to

those customers where unapproved transactions occurred.

. . . .

BHOC has contracts and agreements with hundreds of

fleet owner customers. In every case, BHOC has

represented to the customer that the Fuelman Program 

contains certain pre-purchase controls, including

restrictions on type and grade of fuel. In most

instances, BHOC has contractually committed to the

customer to maintain those pre-purchase controls.

Resp., App. at 17-19.

FleetCor admits that it has entered into agreements with

national merchants, such as Shell, ExxonMobil, and Circle K, to

allow Fuelman cards to be "swiped" or "read" at the fuel pumps at

the places of business of the national merchants in a way that

does not provide all pre-purchase controls that, according to

Barney Holland's affidavit, have been an integral part of the

Fuelman System. First Am. Answer at 3-5, ¶¶ 9-13; Mot., App. at

3-4. However, FleetCor contends that section 5.5 of the license

agreement gave it the right to make such a change in the Fuelman

System. Section 5.5 reads as follows:

5.5 Modification of System. Licensee recognizes

and agrees that from time-to-time hereafter Licensor

may change or modify the "Fuelman" system, including

the adoption and use of new or modified tradenames,

trademarks, service marks, manuals or new techniques,

and that Licensee will accept and use for the purpose

of this Agreement any such changes in the "Fuelman"

system, including new or modified tradenames,

trademarks, service marks, manuals or new techniques,

as if they were part of this Agreement at the time of

execution hereof. Licensee will make such expenditures

 

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as such changes or modifications in the system may

reasonably require, and do so within a reasonable time. 

 

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17

Mot., App. at 16. The court is not persuaded that this contract

provision justifies the conduct of FleetCor in eliminating the

pre-purchase controls that undoubtedly are important to many of

the Fuelman System customers with whom plaintiff contracted

apparently on the legitimate belief that the controls would

continue.

4. "Retail-Minus" National Merchant Agreement.

Undisputed facts pertinent to this breach of contract claim

are that (1) FleetCor entered into a Fuelman card agreement with

the entity that controls all Shell-branded stations nationwide

for the purchase of fuel on a retail-minus basis, First Am.

Answer at 5-6, ¶ 17; Mot., App. at 4-5, ¶¶ 16 & 17, and (2)

FleetCor and all of its Fuelman licensees have used a cost-plus

formula with some of their Fuelman merchants for years, First Am.

Answer at 5-6, ¶ 17. FleetCor again places reliance on section

5.5 of the license agreement as legal justification for this

change in the Fuelman System. The court agrees with FleetCor as

to the retail-minus claim. Plaintiff has not provided summary

judgment evidence that would raise an issue that use of the costplus formula is such an integral part of the Fuelman System that

FleetCor has impliedly committed not to change it. There being

no express prohibition against such a change, the court concludes

that there should be a summary adjudication against plaintiff as

to this breach of contract theory.

 

 Case 4:06-cv-00183-A Document 64-2 Filed 12/27/06 Page 17 of 33 PageID 848
5

Section 10.18 of the license agreement reads as follows:

10.18 Escrow of Source Code. Licensor agrees to

deposit all proprietary source code for software used in

the operations defined in this Agreement with an escrow

agent mutually agreed to by Licensor and Licensee and

pursuant to the terms of an escrow agreement, in a form

substantially similar to the escrow agreement attached as

Exhibit E mutually acceptable to both parties. Such

source code may be contained in electronic or magnetic

medium, and current to the date of this Agreement. 

Licensor also agrees to provide escrow agent with updated

copies of source code as changes are made on an annual

basis. Licensee shall have the right to receive and use

the source code upon the Licensor's default under this

Agreement or upon Licensor's failure to continue in

operation for whatever reason.

Mot., App. at 32-33. The summary judgment record indicates that the

parties never reached agreement on the form of an escrow agreement.

18

5. Failure to Escrow the Fuelman Source Code.

Plaintiff failed to respond to the part of the motion for

summary judgment directed to the allegations of the complaint

that FleetCor breached the license agreement by failing to escrow

the Fuelman source code. The court has not been able to find any

provision in the agreements in question that would impose such an

obligation on FleetCor. Plaintiff does not dispute the statement

in the declaration of Charles Freund that, while plaintiff and

FleetCor negotiated over an agreement to place the source code in

escrow, no agreement was ever reached.5 Mot., App. at 5, ¶ 18. 

Therefore, the court concludes that this breach of contract claim

is without merit. 

6. Expert Assistance and Support. 

Other than a recital on the subject of expert assistance and

support on the first page of the license agreement, Mot., App. at

 

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19

8, the only contractual provision contained in the license

agreement reads as follows:

4.1 Services. Licensor agrees that it will

perform the following services for the benefit of 

Licensee:

A. Provide to Licensee or to Licensee's

designated representative two (2) weeks (Monday through

Friday) of training at Licensor's home office. Said

training shall include the basic information necessary

to operate the licensed business, including marketing

and sales techniques, accounting, record keeping and

other business practices;

B. Provide, on Licensee's request, the

assistance of Licensor's advertising department or

agency for Licensee's local advertising campaigns; and

C. Provide, on Licensee's request, the

assistance of Licensor's business consultants in those

areas pertaining to the operation of the licensed

business.

(1) The cost of the training provided

pursuant to (A) above shall be borne by Licensor;

however, Licensee shall be responsible for all travel

and living expenses of Licensee or Licensee's

representative. The cost of any assistance requested

by Licensee pursuant to (B) and (C) of this Paragraph

4.1 shall be borne by Licensee as reasonably determined

by Licensor.

Mot., App. at 14. 

FleetCor maintains in support of its motion that plaintiff

can present no evidence that it ever requested any of the

specified kinds of training or assistance that FleetCor failed to

provide. Indeed, plaintiff has not adduced any summary judgment

evidence in support of this breach of contract claim, with the

result that it is subject to summary disposition.

7. Departure of Plaintiff's Employees.

 

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20

During the October 19, 2006, telephone conference/hearing

counsel for plaintiff said that the confidentiality agreement on

which this alleged breach of contract is based was not as broad

as plaintiff originally believed it was, and that plaintiff no

longer is asserting this breach of contract theory. Therefore,

summary adjudication against plaintiff as to this theory is

appropriate.

8. CFN; FleetAll; MasterCard.

Charles Freund says in his declaration that FleetCor has not

marketed any card under the name "FleetAll" in the DFW territory

or anywhere else, and has not authorized anyone else to do so. 

Mot., App. at 5, ¶ 21. In the same declaration, Freund says that 

FleetCor has not introduced a MasterCard fleet card in the DFW

territory, has no sales personnel in that territory to market the

MasterCard to customers or potential customers of plaintiff, and

has excluded the counties in the DFW territory from mailings by

which FleetCor has marketed the MasterCard through direct mail. 

Id., ¶ 20. Plaintiff has presented no summary judgment evidence

raising a fact issue in support of its FleetAll and MasterCard

breach of contract claims.

As to the CFN breach of contract claim, FleetCor admits that

in 2003 one of its subsidiaries acquired a business from CFN that

contracts with numerous independent fuel merchants around the

country who market their own fleet cards. Br. in Supp. of Mot.

at 16 n.13. CFN processes the transactions on those cards, but

does not issue cards to, contract with, or provide services to

 

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21

the fleet-owner customers. Id. Plaintiff has not pointed to any

contractual provision that appears to be applicable to the CFN

arrangement, and the court can find none.

The court will consider under the next heading in this

memorandum opinion plaintiff's contention that the favored

nations provision of the Bridging Agreement gives it rights

relative to use of FleetAll cards, MasterCard, and CFN

facilities.

9. Favored Nations Provision.

The favored nations provision contained in the Bridging

Agreement reads in its entirety as follows:

11. Favored Nation's Provision. As additional

consideration of Licensee's execution of this

Agreement, Licensor agrees that if the license

agreements or franchise agreements with any of the

Licensees (as that term is defined in the Letter of

Intent), grants to any other Licensee material terms or

conditions in the license or franchise agreements that

are more favorable than the terms and conditions of

this Agreement, Licensor will notify Licensee of such

material terms and conditions and, for no additional

consideration, offer to amend this Agreement as well as

the License Agreement so that it also contains such

identical material terms and conditions. Likewise,

Licensor agrees that if Licensee learns of the fact

that Licensor has granted more favorable material terms

or conditions in any other license or franchise

agreement with another Fuelman licensee or Gascard

franchisee, Licensee will have the right to have such

favorable material terms and conditions added to this

Agreement, effective as of the date such terms and

conditions were first added to another Fuelman

licensee's or Gascard franchisee's agreement.

Mot., App. at 63. 

There is no summary judgment evidence that the first

sentence of the provision is applicable--there is no evidence of

a license agreement or franchise agreement with "any of the

 

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22

Licensees (as that term is defined in the Letter of Intent)." 

Id. Apparently plaintiff is relying on the second sentence. 

 

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23

Differences in the wording of the first and second sentences of

the favored nations provision lead to a restrictive

interpretation of the second sentence: 

a. The first sentence obligates FleetCor (a) to notify

plaintiff of any other license agreement of a kind contemplated

by the sentence that contains terms or conditions more favorable

than the terms and conditions of the Bridging Agreement and (b)

to offer to amend the Bridging Agreement "as well as the License

Agreement so that it also contains such identical material terms

and conditions." Mot., App. 15 63, ¶ 11. In contrast, the

second sentence does not impose a notification obligation on

FleetCor, but gives the plaintiff the right to benefit from more

favorable terms and conditions in another license agreement only

if it learns through its own devices of the existence of those

terms and conditions and makes known its wish to have the more

favorable terms added to the Bridging Agreement. 

b. As noted above, the first sentence expressly states

that the license agreement as well as the Bridging Agreement are

subject to being amended to contain terms and conditions

contained in another license agreement of the kind contemplated

by the sentence that are more favorable than the terms and

conditions contained in the Bridging Agreement. In contrast, the

second sentence says that plaintiff will have the right to have

more favorable terms and conditions of a license agreement added

to the Bridging Agreement but makes no reference to adding

anything to the license agreement. 

 

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24

The October 1995 license agreement contains what commonly is

referred to as a merger clause, which reads as follows:

10.13 Entire Agreement. This Agreement

supersedes any and all other agreements, either oral or

in writing, between the parties with respect to the

subject matter hereof and contains all of the covenants

and agreements between the parties with respect to said

matter. Each party to this Agreement acknowledges that

no representations, inducements, promises, or

agreements, orally or otherwise, have been made by any

party, which are not embodied herein, and that no other

agreement, statement or promise not contained in this

Agreement shall be valid as binding.

Mot., App. at 32. 

FleetCor maintains that the merger clause causes the favored

nations provision in the earlier-made Bridging Agreement no

longer to be operative. The court is not persuaded by that

contention. The wording of the provision makes clear that the

parties intended that it would survive the later making of a

license agreement--otherwise, they would not have included the

"as well as the License Agreement" language in the first

sentence. Alternatively, FleetCor argues that because the second

sentence of the provision contemplates that the more favorable

terms will be added only to the Bridging Agreement, plaintiff is

wrong in contending that it can elect to have more favorable

terms it learns of added to the license agreement. At first

blush, this argument seems to have merit. But the argument does

not give effect to the final section of the license agreement,

which reads as follows:

10.23 Bridging Agreement. In the event of any

conflict between the terms of this Agreement and the

terms of the Bridging Agreement signed by the parties

 

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25

on Feb. 22 , 1995 ("Bridging Agreement"), the terms

of the Bridging Agreement shall control.

Mot., App. at 34. 

There would appear to be a conflict between the first

sentence of the favored nations provision and the merger clause

because the first sentence makes clear that the parties intended

in those instances where the first sentence is applicable that

the more favorable terms or conditions of a license agreement to

which it applies will, at the option of plaintiff, become a part

of the prospective license agreement between the parties. 

Similarly, if plaintiff chooses to add terms and conditions to

the Bridging Agreement based on the language of the second

sentence of the favored nations provision, those terms and

conditions would prevail over the terms of the license agreement

to the extent of a conflict between them.

The court is not prepared at this time to make summary

rulings against plaintiff on its contention that the favored

nations provision has the potential to cause plaintiff to benefit

from more favorable terms and conditions contained in license

agreements between FleetCor and third persons. However, the

court is not satisfied that plaintiff gains a benefit from the

allegedly more favorable terms and conditions it has attempted to

incorporate into its license agreement with FleetCor. 

Plaintiff has placed into the summary judgment record a copy

of an August 31, 2006, letter directed by plaintiff to FleetCor

making known plaintiff's election to include in the license

agreement between plaintiff and FleetCor certain terms and

 

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6

Although there are other contractual documents between FleetCor

and what appear to be other FleetCor licensees, id. at 145-92, 210-

13, there is no evidence that plaintiff elected to adopt in its

agreement or agreements with FleetCor any term or condition from

these other documents. Be that as it may, the adoptions sought to be

accomplished by the August 31, 2006, letter appear to involve all of

the allegedly more favorable terms and conditions that are contained

in any of the documentation included in the appendix. 

26

provisions contained in (a) an agreement between FleetCor and A.

N. Rusche Distributing Company ("Rusche") dated December 18,

1996, as modified by an addendum dated the same date, (b) an

amendment dated August 30, 2001, to an agreement between FleetCor

and WESCO, and (c) an August 27, 2002, addendum to an agreement

between FleetCor and Cardlock Fuel System ("Cardlock"). Resp.,

App. at 222-24.6 The court has concluded for the reasons given

below that those terms and conditions would not benefit plaintiff

even if made a part of plaintiff's license agreement:

a. The Rusche Agreement. 

The two Rusche documents on which plaintiff relies, one of

which shows to be an addendum to the main document, appear to

have been executed simultaneously on December 18, 1996. Resp.,

App. at 89, 119. Plaintiff claims a benefit of an allegedly more

favorable position in section 1.1A of the main document, which is

a provision that was replaced in its entirety, and supplemented,

in the addendum. Id. at 90, 119-20. Thus, the court focuses on

the language of the addendum. 

Plaintiff contends that it is entitled to the benefit of two

allegedly more favorable provisions in the Rusche agreement. 

First, plaintiff says that the Rusche agreement "provide[s] that

 

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27

the licensee is entitled to the exclusive right to establish

sites accepting Fuelman cards within the licensed territory,

subject to exceptions that are not applicable to the facts of

this case." Br. in Opp'n at 7, ¶ 1. Apparently plaintiff has

reference to the part of section 1.1A of the Rusche agreement (as

contained in the addendum) that is worded as follows:

Except as hereafter set forth in this Agreement,

including, but not limited to, Section 5.15 hereof,

Marketer's license pursuant to this Agreement is

exclusive in the Licensed Territory as to use of the

names Fuelman and GASCARD, as to obtaining Fuelman

and/or GASCARD access card customers, and as to

establishing sites accepting Fuelman and GASCARD access

cards; provided that, the exclusivity of said license

pursuant to this Agreement shall not: (1) prohibit

Licensor from entering into agreements involving the

territories of more than one of Licensor's marketer's

[sic] providing for the acceptance of Fuelman and/or

GASCARD access cards at locations within said Licensed

Territory, operated directly through Licensor; . . . .

Resp., App. at 119 (emphasis added). Plaintiff's argument seems

to be that this language would prohibit FleetCor from

establishing Fuelman locations within the DFW territory. See

supra at 14-16, subsection 2. The court is not persuaded that

the Rusche language accomplishes that result. It contains an

exception that allows FleetCor directly to enter into with

merchants, such as Shell and Circle K, for acceptance on a

nationwide basis, including within the DFW territory, of Fuelman

access cards. Consequently, the provision, if incorporated into

the license agreement, would not have been breached by FleetCor's

arrangements with the national fuel retailers about which

plaintiff complains. 

 

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28

The second benefit plaintiff claims to gain from the Rusche

agreement is found in the last paragraph of the replacement

section 1.1A, and reads as follows:

In the event Licensor enters into an agreement

with another party for the acceptance of Fuelman and/or

GASCARD, or any other fleet card in the Licensed

Territory, as exempted in Section 1.1A(i) and (ii),

Licensor shall compensate Marketer for any business

lost to any additional acceptance site that does not

accept such cards on a cost-plus basis within

appropriate network guidelines and will credit the same

gallons towards volume requirements.

Resp., App. at 120. Plaintiff urges that this provision, if

incorporated into its license agreement, would benefit it by

"provid[ing] that FleetCor will compensate [plaintiff] for any

business lost to any acceptance site that does not accept cards

on a 'cost-plus' basis." Br. in Opp'n at 7, ¶ 2. The court has

concluded that this provision would not benefit plaintiff in this

action because here plaintiff is not contending that it lost any

business to any additional acceptance site that does not accept

Fuelman cards on a cost-plus basis within appropriate network

guidelines. Rather, plaintiff's complaint is that the retailminus agreement between FleetCor and the entity that controls

Shell-branded stations nationwide, supra at 19, subsection 4, has

cut its profit margin and made projection of future profits more

difficult, see 1st Am. Compl. at 6-7, ¶ 17; Br. in Opp'n at 16-

18, § 3. Even if plaintiff were to be given the benefit of this

loss-of-business provision, the provision would not appear to

have relevance to any of plaintiff's breach of contract claims. 

b. The WESCO Agreement.

 

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29

The allegedly more favorable term and condition in the

August 30, 2001, amendment to the WESCO license agreement is as

follows:

Exclusive Rights to New Products/Services. Marketer

will have the "exclusive rights" to market in the

Licensed Territory new products and services offered by

Licensor. Neither the Licensor nor anyone acting on

its behalf will circumvent Marketer to market directly

to their customers.

Resp., App. at 205. Plaintiff apparently contends that if it

were to be given the benefit of this exclusive-rights provision

in its license agreement with FleetCor, FleetCor would have

breached it by "marketing the CFN and ComData products and

services (the 'FleetAll' and MasterCard) in the DFW Territory

without first offering such products and services to

[plaintiff]." 1st Am. Compl. at 8-9, ¶ 20. The summary judgment

record establishes the lack of merit of this contention--there is

undisputed summary judgment evidence that FleetCor has not

marketed any card under the name "FleetAll" in the DFW territory

or anywhere else, FleetCor has not made any attempt to market a

MasterCard in the DFW territory, and FleetCor's CFN arrangement

does not involve the provision of a product or service by

FleetCor. See supra at 22-23, subsection 8. For those reasons,

plaintiff would not benefit from the exclusive-rights provision

even if it were deemed to be a part of its license agreement with

FleetCor. 

c. The Cardlock Agreement.

 

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7

The only comparison plaintiff makes between the laws of Georgia

and Louisiana is the statement in its brief in opposition that

"[w]hether Texas, Georgia, or Louisiana law applies, the elements of

a breach of contract lawsuit are straightforward." Br. in Opp'n at

6.

8

For instance, the court has not reached a conclusion as to

whether plaintiff has the right to adopt a favorable term and

(continued...)

30

The provision in the August 27, 2002, agreement between

FleetCor and Cardlock upon which plaintiff relies is worded as

follows:

18. Choice of Law. It is expressly agreed and

stipulated that this Agreement shall be deemed to have

been made in and shall be interpreted under and

governed by the laws of the State in which the

corporate headquarters of the Licensor is domiciled.

Resp., App. at 202. According to plaintiff, the benefit it would

gain from this provision if it were a part of its license

agreement is that "Georgia law, the state of FleetCor's domicile,

not Louisiana law, will apply." Br. in Opp'n at 7, ¶ 4. There

is no allegation in the amended complaint directed to this

subject, nor has anything been brought to the court's attention

to demonstrate that plaintiff would be any better off in this

particular action if the laws of Georgia rather than the laws of

Louisiana governed the resolution of the legal issues in this

case.7

* * * * * *

There might well be other reasons that the court has not

explored why plaintiff cannot benefit in this case from the

provisions of the Rusche, WESCO, and Cardlock agreements it seeks

to incorporate into its agreement with FleetCor8; however, the

 

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8

(...continued)

condition from a license agreement between FleetCor and another party

without, at the same time, being burdened with less desirable

features of the agreement. Neither party provided the court

meaningful legal authority on that subject.

9

Of course, plaintiff will not be entitled to assert in a later

action the precise claims it unsuccessfully has urged in this action.

31

reasons given above are sufficient to cause the court to conclude

that summary adjudication in favor of FleetCor is appropriate on

that subject. Such an adjudication will be without prejudice to

the right the court has concluded that plaintiff has to receive

from FleetCor on request for review license agreements between

FleetCor and other licensees, see Epic Sys. Corp. v. Allcare

Health Mgmt., 2002 WL 31051023 (N.D. Tex. 2002), and to urge that

it is entitled to the benefit of any more favorable terms and

provisions of which plaintiff learns as a result of such review

or by other means.9

C. The Tortious Interference Claim.

There is no summary judgment evidence that would support a

tortious interference claim against FleetCor. While FleetCor

might well have breached its license agreement with plaintiff by

making arrangements that eliminated certain pre-purchase controls

at outlets in the DFW territory, and those arrangements might

well have been at variance with contractual commitments plaintiff

had with its Fuelman System customers, the undisputed summary

judgment evidence leads to the conclusion that FleetCor took the

action it took in a good-faith belief that it had a contractual

right to do so. The literal wording of section 5.5 of the

 

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32

license agreement, Mot., App. at 16, gave FleetCor the right from

time-to-time to change or modify the Fuelman System. As noted

above, supra at 16-19, subsection 3, the court has concluded that

the obligation not to eliminate cost-control features is not

expressed in the contract but is an implied obligation. The

court is satisfied from undisputed evidence in the summary

judgment record that in eliminating the cost-control features at

issue FleetCor was of the not unreasonable belief that it was

exercising a contractual right and that it did so in good faith,

not with the intent to harm plaintiff. No evidence in the

summary judgment record would support a contrary finding or

conclusion.

D. Plaintiff's De Facto Termination Theories.

Plaintiff's de facto termination theories are not supported

by any summary judgment evidence. There is no summary judgment

evidence that would support a conclusion that FleetCor took any

of the actions of which plaintiff complains for the purpose of

destroying, or interfering with, the operation by plaintiff of

its FleetCor System business. Consequently, the court is

summarily ruling against plaintiff on its de facto termination

theories.

IV.

Conclusion and Order

For the reasons given above, the court has concluded that

all of the theories for relief asserted by plaintiff in its first

amended complaint other than the breach of contract theory based

 

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33

on alleged elimination of pre-purchase controls should summarily

be resolved against plaintiff. Therefore,

The court ORDERS that FleetCor's motion for summary judgment

be, and is hereby, granted as to all theories for relief other

than plaintiff's claim that FleetCor breached its license

agreement with plaintiff by entering into agreements with

merchants for the use of Fuelman cards that eliminate some of the

pre-purchase controls on Fuelman System transactions.

The court further ORDERS that all claims and causes of

action asserted by plaintiff against FleetCor in the abovecaptioned action, other than its claim that FleetCor breached its

license agreement with plaintiff by entering into agreements with

national, or other, merchants for the use of Fuelman cards that

eliminate some of the pre-purchase controls on Fuelman System

transactions, be, and are hereby, dismissed.

The court further ORDERS that in all future activity in this

action, including discovery, the preparation of the required

pretrial order, preparation of any verdict form, and trial

presentation, be consistent with the rulings made herein.

SIGNED December 27 , 2006.

 /s/ John McBryde 

JOHN McBRYDE

United States District Judge

 

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