Opinion ID: 781619
Heading Depth: 3
Heading Rank: 2

Heading: The Termination Letter's Flawed Reference to Image

Text: 73 Further, to the extent that the district court may have intended to rule that there was an alternative basis for refusing to find that Motiva had terminated Ceraso's franchise for image violations, see Posttrial Decision at 6 n. 3 ([t]he termination letter is not regarded as validly invoking any basis for termination other than the alleged zoning violation (emphasis added)), we are unpersuaded that that ruling was erroneous. 74 Under the PMPA, to the extent pertinent to this appeal, proper grounds for a franchisor's termination of a franchise include a failure by the franchisee to comply with any provision of the franchise, which provision is both reasonable and of material significance to the franchise relationship, 15 U.S.C. § 2802(b)(2)(A), and a knowing failure of the franchisee to comply with Federal, State, or local laws or regulations relevant to the operation of the marketing premises, id. § 2802(c)(11); see id. § 2802(b)(2)(C)(i). See generally Russo v. Texaco, Inc., 808 F.2d 221, 225 (2d Cir.1986) (termination for any of the reasons enumerated in 15 U.S.C. §§ 2802(c)(1)-(12) is conclusively presumed to be reasonable as a matter of law). 75 In order to effect a valid termination, the franchisor must give the franchisee written notice of termination by personal delivery or certified mail, see 15 U.S.C. §§ 2804(c)(1) and (2), which must include a statement of intention to terminate the franchise or not to renew the franchise relationship, together with the reasons therefor,  id. § 2804(c)(3)(A) (emphasis added). [T]here must be strict compliance with the notice provisions of the PMPA. Escobar v. Mobil Oil Corp., 678 F.2d 398, 400 n. 2 (2d Cir.1982); see, e.g., Thompson v. Kerr-McGee Refining Corp., 660 F.2d 1380, 1390 (10th Cir.1981); Mobil Oil Corp. v. Clark, 652 F.2d 2, 3 (8th Cir.1981). The franchisor has the burden of showing that termination was justified and properly executed. See 15 U.S.C. § 2805(c). 76 In the present case, the court stated that the PMPA's requirement that a notice state the reasons for termination were not satisfied by the Motiva Termination Letter's reference to a nonexistent letter in order to provide notice of a criticism that had been communicated to Ceraso only in a letter to which the Termination Letter made no reference. We cannot conclude that this assessment was erroneous in this case. Ceraso did not testify at trial, and we have been pointed to no evidentiary basis for a finding that he knew that September 27 meant September 18. 77 Further, even had the Termination Letter cited the September 18 letter, rather than the nonexistent September 27 letter, the paragraph numbered three — the only paragraph of the Termination Letter that mentioned image — was ambiguous. That paragraph set out as a reason for termination 78 [y]our failure to exert good faith efforts to carry out the provisions of the franchise, namely your continued practice of parking too many vehicles on the marketing premises after the Town's demands and following Motiva's September 27, 2000 letter to you also demanding that you comply therewith and correct other identified image violations at the station. 79 (Termination Letter at 1, ¶ 3 (emphases added).) The Town's demands, of course, related only to alleged zoning violations, and, as phrased, this paragraph could be interpreted as mentioning prior correspondence complaining of image violations only as pinpointing the time following which Ceraso made no effort to reduce the number of vehicles on the marketing premises, rather than asserting image violations as a ground in itself for the termination. Certainly we cannot conclude as a matter of law that the third numbered paragraph as written was sufficient to inform Ceraso that one reason for the termination notice was weeds, or unkempt, unswept, and obstructed bays, or unregistered vehicles. 80 In sum, the district court did not err in holding that, even if image-based termination were an issue in the case notwithstanding Motiva's failure to articulate that issue in the JTM, Motiva's Termination Letter was inadequate to give Ceraso notice of termination on that ground. 81