Opinion ID: 541985
Heading Depth: 2
Heading Rank: 1

Heading: Devoting Personal Attention Upon the Premises

Text: 11 Amoco first claims that its decision to terminate Thompson's franchise is supported by Paragraph 15 of the Lease Agreement, which states: 12 15. Lessor shall have the right to terminate or nonrenew this lease, and any applicable franchise relationship under the Petroleum Marketing Practices Act or other applicable federal, state or local act of a similar nature, if any of the following events shall occur: 13 . . . . . 14 (f) Failure of Lessee, in good faith, to devote his personal attention upon the Premises to managing the business activities of the gasoline sales facility ... without first securing a written consent from Lessor. 15 Amoco argues that Thompson's prolonged absence from the vicinity of the Northtown station made it impossible for him to be physically present at the station (in order to devote his personal attention upon the Premises ); therefore, Amoco claims that its termination was justified because Thompson failed to comply with [a] provision of the franchise, which provision is both reasonable and of material significance to the franchise relationship.... 15 U.S.C. Sec. 2802(b)(2)(A) (1982). 16 The district court disagreed with Amoco's analysis on this defense. Announcing its decision from the bench, the court ruled that the phrase upon the Premises did not clearly require physical presence at the station. The court reasoned that since Amoco permits its dealers to operate multiple franchises, it could not have intended the lease to require these dealers to be physically present at every one of their stations all the time. See Trans. at 494-97; see also Thompson v. Amoco, 705 F.Supp. at 1353 (explaining previous ruling). It is thus obvious, wrote the court, that 'personal attention upon the Premises' does not require that a franchisee devote his exclusive attention to one franchise location. Hence, Clause 15(f) cannot be said to require actual physical presence upon the premises. 705 F.Supp. at 1353. 17 We review de novo a trial court's legal determination that contractual terms are ambiguous. Air Line Stewards and Stewardesses Assoc. v. American Airlines, Inc., 763 F.2d 875, 878 (7th Cir.1985), cert. denied, 474 U.S. 1059, 106 S.Ct. 802, 88 L.Ed.2d 778 (1986); see National Tea Co. v. American Natl' Bank & Trust Co., 100 Ill.App.3d 1046, 1049, 56 Ill.Dec. 474, 476, 427 N.E.2d 806, 808 (1st Dist.1981). In conducting this review, we are guided by Illinois contract law: 2 A contract is ambiguous when its terms are reasonably capable of interpretation in more than one way. UIDC Management, Inc. v. Sears Roebuck & Co., 141 Ill.App.3d 227, 230, 95 Ill.Dec. 691, 693, 490 N.E.2d 164, 166 (1st Dist.1986). 18 Based upon this standard, we cannot agree with the district court that Paragraph 15(f) is undeniably ambiguous. 705 F.Supp. at 1353. We agree with the district court that Amoco, by permitting its dealers to operate multiple stations, cannot interpret the contractual language to require full-time dealer presence at each station; however, we do not agree that the conclusion properly drawn from this is that no dealer presence is required. The more reasonable conclusion, we believe, is that Paragraph 15(f) requires at least some degree of dealer presence at the station. 19 Thompson disputes this conclusion and argues that the phrase to devote his personal attention upon the Premises does not necessarily suggest physical presence: 3 Quite simply, there are many instances where the English language uses the term 'upon' where no physical contact is required. For example: The youth reached the top of the mountain and gazed in wonder upon the valley below him. No one can seriously contend that the young man in question must be in physical contact with the valley. Appellee's Brief at 15. That the term upon is susceptible of various meanings in different contexts, however, does not demonstrate that the term suggests all these meanings within our specific context. 20 We examine the meaning of contract terms within the broader context of the contract as a whole. Air Line Stewards & Stewardesses Assoc. v. TWA, 713 F.2d 319, 321-22 (7th Cir.1983). Indeed, [u]nless a contrary intent is evident, words used in one sense in one part of a contract are deemed of like significance in another part. Cedar Park Cemetery Ass'n v. Village of Calumet Park, 398 Ill. 324, 334, 75 N.E.2d 874, 880 (1947). In this case, our construction of Paragraph 15(f) is supported by the use of the term upon the Premises in other paragraphs of the same Lease Agreement: in these instances, the term is used specifically to denote physical presence. Lease Paragraph 12(d) forbids a dealer from permitting upon the Premises any vending machines for contraceptives or other items of a nature which may offend an appreciable segment of the public; Paragraph 12(e) prohibits a dealer from stor[ing] or permit[ting] to be stored upon the Premises any wrecked or abandoned vehicles; and Paragraph 25 permits a dealer to remove any and all equipment, tools, fixtures, containers or machinery belonging to Lessee and placed or installed by Lessee upon the Premises  once the lease expires or terminates (emphasis supplied). The use of the term upon the Premises to denote physical presence in these paragraphs supports our interpretation of Paragraph 15(f). 21 Further, were we to hold that Paragraph 15(f) did not contain a physical presence requirement, we would render meaningless the phrase upon the Premises. If, as Thompson contends, all that Paragraph 15(f) requires of dealers is that they direct their personal attention to the business activities of their stations, the phrase upon the Premises could be deleted from the lease without affecting the substantive rights of the parties. Since we try not to interpret contracts in a manner that would render specific contractual language mere surplusage, Nice Ball Bearing Co. v. Lescure, 227 F.2d 118, 120 (7th Cir.1955), we must reject Thompson's interpretation. 4 22 Since the Lease requires some degree of physical presence at the station--and since such a requirement seems reasonable (given the district court's factual finding that Amoco looks upon all of these dealerships as being family owned, family run, on the job out there on the deck, part and parcel of the operation ... this is their policy, this is their procedure, this is the underlying approach they make to their entire operation, Trans. at 491) and material (given Amoco's economic interest in promoting the personal nature of its dealers and the purported economic loss suffered by the Northtown station due to Thompson's absence prior to the termination, 705 F.Supp. at 1357 & n. 2)--a dealer's total absence from the station constitutes a legitimate ground for termination or nonrenewal under the lease. 15 U.S.C. Sec. 2802(b)(2)(A) (1982). Our conclusion, however, that the phrase upon the Premises denotes some degree of physical presence does not resolve precisely how much physical presence is required to satisfy the terms of Paragraph 15(f). 5 Unfortunately, the record sheds little light on this question. 6 23 In order to determine whether Thompson, in good faith, ... devote[d] his personal attention upon the Premises to managing the business activities of the gasoline sales facility, we must know precisely how regularly, if at all, Thompson visited the Northtown station. The touchstone of our inquiry must be Thompson's physical presence at the station, not the length of his commute to the station. Presumably, Thompson could move to Nome, Alaska without violating Paragraph 15(f) so long as he continued, in good faith, to be physically present at the station within the terms of the lease. Without knowing how often Thompson returned to his Northtown station--or whether he returned at all--we cannot determine whether he failed to comply with Paragraph 15(f). We therefore must remand the case so that the district court may determine whether Thompson was physically present at the station within the terms of the lease. 24