Opinion ID: 3011076
Heading Depth: 1
Heading Rank: 1

Heading: Summary Judgment on Petroleum Act

Text: The Carters3 argue that the non-renewal of their franchise agreement violated the Petroleum Act. Congress enacted the statute for the purpose of protecting franchisees, who generally have inferior bargaining power when dealing with franchisors, from unfair termination or nonrenewal of their franchises. See S. Rep. No. 95-731, at 17-19, (1978), reprinted in 1978 U.S.C.C.A.N. 873, 875-77. However, Congress also provided franchisors with some flexibility to terminate franchise relationships by delineating specific provisions which indicate when a franchisor may permissibly terminate a franchise agreement. See 15 U.S.C. S 2802(b)(3). The district court granted summary judgment against the Carters based upon such a provision. Specifically, the district court relied upon section 2802(b)(3) of the Petroleum Act which states: [T]he following are grounds for nonrenewal of a franchise relationship: (A) The failure of the franchisor and the franchisee to agree to changes or additions to the provisions of the franchise, if -- (i) such changes or additions are the result of determinations made by the franchisor in good faith and in the normal course of business . . . . 15 U.S.C. S 2802(b)(3). When the franchisor terminates or does not renew a franchisee's contract, the burden falls upon the franchisor to prove that it declined to renew for one of the permissible reasons set forth in the Petroleum Act. See Lugar v. Texaco, Inc., 755 F.2d 53, 56 (3d Cir. 1985); Sun Refining and Marketing Co. v. Rago, 741 F.2d 670, 672 (3d Cir. 1984); 15 U.S.C. S 2805(c). Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show _________________________________________________________________ 3. The district court held that Forsum, the Carters' corporation, was the party with standing to bring the Petroleum Act claim; we refer to the Carters for simplicity. 7 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 has the burden of demonstrating that the standards of Rule 56(c) have been satisfied. See Boyle v. County of Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998). When a court is deciding a motion for summary judgment, inferences should be drawn in the light most favorable to the non-moving party, and where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true. Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 507 U.S. 912 (1993). The judge's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. See id. (quotations omitted). If the non-movant has offered more than a scintilla of evidence, the judge may not discredit the non-movant's evidence even if the movant's evidence far outweighs that of the non-movant. See id. Our review of the district court's decision is plenary, and we use the same standard the district court should use in the first instance. See Patel v. Sun Co., 141 F.3d 447, 451 (3d Cir. 1998). The parties dispute whether there is a genuine issue of material fact as to whether Exxon offered the Carters an unconditional renewal of their franchise agreement. The Carters claim that the renewal of the franchise agreement was conditioned upon their assent to other agreements, including the covenant not to sue and investment and amortization agreements related to the hi-grade plan. Exxon claims that it offered the Carters a franchise agreement without any strings attached. If Exxon conditioned the renewal offer upon Carter's assent to these agreements, then the non-renewal did not comply with the Petroleum Act. See 15 U.S.C. SS 2802(b)(3) and 2805(f). The district court so stated the issue on the summary judgment motion. We must review the record in the light most favorable to the Carters and determine if there is a genuine issue of material fact as to whether Exxon conditioned its renewal offer upon these agreements. We are persuaded that a genuine issue of material fact exists. 8 Carter testified several times at deposition that Exxon's offer of a franchise renewal was conditioned upon his assent to other agreements. In Carter's words, [A] sales agreement on its own, alone, was never offered to me, and [T]he way it was offered was in a package . . . if I signed a full release, if I put $30,000 in the building . .. . Carter addressed the June 1992 time period which was crucial to the district court's reasoning. When asked if Exxon had offered him a franchise agreement before July 2, 1992, Carter responded [I]n some form of package form, I believe so . . . . Carter specifically defined the package as a general release for claims arising from the tank damage, an agreement to upgrade the station with $30,000 of improvements, an amortization agreement, and an agreement to clear the debt Carter allegedly owed Exxon from past transactions, including the gasoline used to fill the tanks during repair. Other evidence on the record indicates that there is a genuine factual issue as to whether the offer was unconditional. Haughey, who was present at the meeting of June 3, 1992, testified that Exxon was tying the renewal of the sales agreement to the damage of the tanks and had been doing so from the beginning. Carol Carter testified that every time Exxon made an offer, the Carters were not free to sign only the franchise agreement. In her words, You couldn't pick up one so [sic] stack and say, okay, I'll take this and leave the other two. They were set in front of you as a whole and this is what you had to decide on. You had to sign all three. Exxon's own employees testified that before June 1992, Exxon offered package deals. O'Connor testified that in October 1991, he communicated with Exxon's attorneys regarding an offer to the Carters that contained a covenant not to sue and an amortization agreement. Further, Luciano testified that Exxon offered Carter a deal in which Carter would receive a new franchise agreement, but also would have to sign a covenant not to sue. Moreover, the evidence cited by the district court and Exxon does not persuade us that there is no genuine issue of material fact. Both the district court and Exxon rely heavily on O'Connor's testimony that there were no 9 conditions placed on the June 18, 1992, offer of a new franchise agreement. However, that testimony is in direct conflict with Carter's testimony that he was never offered a franchise renewal with no strings attached. When the nonmovant's evidence contradicts the movant's, the nonmovant's must be taken as true. See Big Apple BMW, Inc., 974 F.2d at 1363. Instead, the district court accepted Exxon's, the movant's, evidence as true. The district court and Exxon also make much of Carter's admission that on June 3, 1992, Exxon never explicitly stated that the offer was conditioned upon his assent to other agreements. However, as Carter's testimony shows, Exxon certainly did not explicitly tell him that the offer was not conditioned upon other agreements, as Exxon had indicated in the past. Carter's statement at most represents an ambiguity in his testimony. Ambiguities in deposition testimony are for the jury to resolve. See Meinhardt v. Unisys Corp., 74 F.3d 420, 433 n.10 (3d Cir.), cert. denied, 519 U.S. 810 (1996).4 The district court also relied on a letter Haughey wrote on January 2, 1992, requesting that Exxon handle the renewal of the franchise agreement and the damage to the tanks as two distinct issues and a letter Biedrzycki wrote in July of 1992, indicating that Exxon was treating the matters separately. In the district court's opinion, the letters showed that both parties understood that the franchise renewal was distinct from discussions relating to the damaged tanks. However, the inference the district court drew from the correspondence is too broad and certainly not in the Carters' favor. The letter only directly shows that Haughey was asking for the issues to be treated separately, and at one point in July, Exxon indicated that they were. It does not directly show that Exxon made an unconditional offer, and inferring that it does is inappropriate on summary judgment. _________________________________________________________________ 4. Exxon also relies upon on a statement that Carter made in a meeting in July 1992 indicating that he had no choice but to cease operations. Exxon claims that this amounts to a rejection of a franchise agreement. Carter's statement, however, does not show that Exxon made an unconditional offer. Read in a light most favorable to Carter, the statement only shows that Carter could not continue his operations if he was forced to agree to Exxon's package offer--including his waiver of claims arising out of the tank replacement. 10 In short, the district court failed to place the events of June and July in context with the previous relations between the parties and only accepted Exxon's version of the events. The record, when viewed in the light most favorable to the Carters, reveals that a genuine issue of material fact exists as to whether the renewal offer was conditional. We therefore reverse the grant of summary judgment for Exxon.