Opinion ID: 1467769
Heading Depth: 1
Heading Rank: 2

Heading: judge doyle's order granting summary judgment to gulf

Text: Summary judgment is appropriate only when the pleadings and other materials before the trial court demonstrate 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. Super. Ct.Civ.R. 56(c); see McCoy v. Quadrangle Development Corp., 470 A.2d 1256, 1258 (D.C.1983). In reviewing on appeal the propriety of a summary judgment, this court must determine whether there is any unresolved issue of fact relevant to the ruling and also whether the trial court correctly applied the substantive law. Sullivan v. Heritage Foundation, 399 A.2d 856, 859 (D.C.1979). In carrying out that task, we must view the record in the light most favorable to the party who opposes summary judgment and thus resolve any doubt as to the existence of a factual dispute against the moving party. Swann v. Waldman, 465 A.2d 844, 846 (D.C. 1983).
In 1978, Congress enacted PMPA in an effort to protect automotive service station franchisees from arbitrary or discriminatory termination or non-renewal of their franchises. S.REP. No. 731, 95th Cong., 2d Sess. 15, reprinted in 1978 U.S.CODE CONG. & AD.NEWS 873, 874. Congress concluded that federal regulation was necessary because of the typical disparity of bargaining power between franchisors and franchisees in the petroleum industry, S.REP. No. 731, supra, at 17, [2] and because of the need [t]o provide certainty and uniformity in franchise relationships which permeate a nationwide motor fuel distribution and marketing network. Id. at 16, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 874. Although the principal motivation underlying PMPA was to protect the interests of service station franchisees, Congress clearly intended the Act to strike a balance between the at times conflicting interests of the parties to the relationship. Id. at 15, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 874. Accordingly, in addition to considering the interests of service station franchisees in not having their businesses arbitrarily terminated, Congress declared it [p]articularly important to recognize the significance of providing adequate flexibility so that franchisors may initiate changes in their marketing activities to respond to changing market conditions and consumer preferences. Id. at 19, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 877; see, e.g., Munno v. Amoco Oil Co., 488 F.Supp. 1114, 1120 (D.Conn.1980) (PMPA legislative history reflects a sensitivity to the legitimate needs of both the franchisees and the franchisors). PMPA provides two types of protection to franchisees. First, it prohibits a franchisor from terminating a franchise during the course of the parties' agreement, or from nonrenewing a franchise at the conclusion of such an agreement, unless the franchisor's decision is based upon a ground enumerated in the statute. 15 U.S.C. § 2802(b)(1)(B) (1982). Second, the Act requires a franchisor to provide the franchisee with notice of a decision to terminate or nonrenew the franchise, id. at § 2802(b)(1)(A), and it sets forth standards governing the content and timing of the required notification. Id. at § 2804. On appeal, Davis does not argue that Gulf based its decision to cancel his franchise on improper grounds. Nor does he contend that the content of Gulf's notice was inadequate. Instead, he maintains that if the parties' ten-week lease extension is properly voidable as induced by frauda premise which we must accept for purposes of this appealthen Gulf's notification of nonrenewal on December 3, 1982 was untimely and could not serve to nonrenew the last valid lease, which expired on December 31, 1982. Davis' argument relies on PMPA § 104(a)(2), which provides that, except in certain limited circumstances not relevant here, notification of nonrenewal must be furnished not less than 90 days prior to the date on which such termination or nonrenewal takes effect. 15 U.S.C. § 2804(a)(2) (1982). Davis reads this provision to require that notification of nonrenewal be delivered 90 days before the date on which a franchise agreement expires. Thus, according to Davis, Gulf's December 3 notification of nonrenewal was ineffective under § 2804(a)(2) because it was received less than 90 days before December 31, 1982. In its brief, Gulf argues that Davis has misinterpreted § 2804(a)(2). Gulf contends that this provision requires only that notice be given 90 days before the date on which the franchisee is required to forfeit possession of the premises. Under this interpretation, Gulf argues that Davis' allegations of fraud are immaterial, because the effectiveness of Gulf's notice of nonrenewal under PMPA is totally independent of the extension of the lease. We therefore must determine whether a notice of nonrenewal, delivered less than 90 days before the expiration of the franchise agreement, but more than 90 days before the franchisor sought to retake possession, complies with PMPA. The few courts which have considered this issue are divided in their interpretation of PMPA. Several courts expressly have held that § 2804(a)(2) requires that notice be given 90 days before the date on which termination is to `take effect,' not 90 days before the expiration date listed in the franchise agreement. Day Enterprises, Inc. v. Crown Central Petroleum Corp., 529 F.Supp. 1291, 1299 (D.Md.1982); accord Ferriola v. Gulf Oil Corp., 496 F.Supp. 158, 161 (E.D.Pa. 1981); aff'd mem., 649 F.2d 859 (3d Cir.1981); Kesselman v. Gulf Oil Corp., 479 F.Supp. 800, 803 (E.D. Pa.1979), aff'd mem., 624 F.2d 1090 (3d Cir.1980); see Brach v. Amoco Oil Co., 677 F.2d 1213, 1219, 1225-26 (7th Cir. 1983) (approving, without discussion of timeliness, nonrenewal notice furnished after expiration of the parties' written franchise agreement, but more than 90 days before franchisor demanded possession). Other courts have held that, for a notice of nonrenewal to be effective, the franchisee must receive it at least 90 days before the date on which the franchise agreement expires. Lasko v. Consumers Petroleum of Connecticut, Inc., 547 F.Supp. 211, 220-21 (D.Conn. 1981); Frankard v. Amoco Oil Co., 116 Wis.2d 254, 265, 342 N.W.2d 247, 252 (Wis. Ct.App.1983); see Clark v. Mobil Oil Corp., 1981-1 Trade Cas. (CCH) ¶ 63,903, at 75, 694 (E.D.Mo.1980) (dictum). [3] For the reasons discussed below, we adopt the courts' interpretation of § 2804(a)(2) in the first group of cases: Day Enterprises, Ferriola, and Kesselman. In interpreting PMPA, our `starting point' must be the language of the statute itself. Checkrite Petroleum, Inc. v. Amoco Oil Co., 678 F.2d 5, 7 (2d Cir.) (quoting Lewis v. United States, 445 U.S. 55, 56, 60, 100 S.Ct. 915, 916, 918, 63 L.Ed.2d 198 (1980)), cert. denied, 459 U.S. 833, 103 S.Ct. 74, 74 L.Ed.2d 73 (1982); see Peoples Drug Stores v. District of Columbia, 470 A.2d 751, 753 (D.C.1983) (en banc). On its face, § 2804(a)(2) requires only that notice be furnished at least 90 days before the date on which nonrenewal takes effect. 15 U.S.C. § 2804(a)(2) (1982) (emphasis added). These words, construed according to their ordinary sense, Peoples Drug Stores, 470 A.2d at 753 (citations omitted), appear to refer to the date after which the franchisee no longer is authorized by the franchisor to conduct business. See Day Enterprises, 529 F.Supp. at 1299; Ferriola, 496 F.Supp. at 161. [4] Therefore, regardless of when the franchise agreement is scheduled to expire, it would defy the common meaning of the words to say that nonrenewal has taken effect as long as the franchisor willingly permits the franchisee to maintain possession of the premises and continues to supply the franchisee with gasoline pursuant to the agreement. Moreover, the legislative history of PMPA simply states that [t]he notification requirements of the legislation mandate 90 days advance notice of termination or nonrenewal of a franchise in most cases. S.REP. No. 731, supra, at 15, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 874. Although this statement adds little to the plain wording of the Act, it does support the logical inference that the purpose behind § 2804(a)(2) is to provide franchisees with a reasonable period of time in which to make arrangements to dissolve or relocate their businesses. This purpose of providing the franchisee with a 90-day winding-up period will be accomplished equally well whether the notice is required to be furnished 90 days before the franchise agreement expires or 90 days before the franchisor requests possession. [5] Furthermore, there is nothing in the legislative history to suggest that the purpose of § 2804(a)(2) was to roll back and rigidly fix the date by which the franchisor must either exercise the right to nonrenew the franchise or be deemed to have agreed to a complete renewal of the existing agreement. Indeed, such a construction of the statute would impede the negotiations of parties who wished to renew their franchise relationship: [T]he franchisor would be placed in a position of giving notice of intent to terminate at the same time it was negotiating terms for a renewal of the franchise agreement, to protect itself in the event that negotiations failed .... [T]he franchisee would then be negotiating under the gun .... Clearly a more reasonable construction is that if negotiations fail, the franchisee must be given at least ninety days notice in order to make whatever arrangements are necessary to cease doing business as a franchisee, regardless of when the agreement expired. Ferriola, 496 F.Supp. at 161. Any attempt to read § 2804(a)(2) to establish an unnecessarily rigid cutoff date after which the franchisor forfeits any right to nonrenew the franchise runs counter to PMPA's general policy of permitting the franchisor maximal flexibility in conducting its marketing activities, consistent with those interests of the franchisee which the Act attempts to protect. See S.REP. No. 731, supra, at 17-19. In summary, because we read PMPA to require only that notification of nonrenewal precede by 90 days the franchisor's termination of performance and demand for possession, Gulf's December 3, 1982 notification was timely. Davis received it more than 90 days before nonrenewal was to take effect on March 10, 1983. This is true irrespective of whether the ten-week lease extension was valid. Accordingly, Davis' allegations of fraud could not possibly serve as the basis of a successful PMPA defense to Gulf's action for possession.
Davis also argues that Gulf's actions violated two provisions of the District of Columbia RSSA. Gulf's response to this argument is that, to the extent the RSSA in any way purports to interfere with Gulf's nonrenewal of the franchise and repossession of the premises, RSSA (enacted one and one-half years before the PMPA) is preempted by PMPA, 15 U.S.C. § 2806(a) (1982). Although we do not find the PMPA preemption analysis to be as facile as Gulf suggests, we nonetheless conclude that RSSA, as a matter of law, does not provide Davis with a cognizable defense to this action.
In determining the extent to which PMPA preempts RSSA, our focus is on Congress' intent. Pre-emption may be either express or implied, and `is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose.' Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 2899, 77 L.Ed.2d 490 (1983) (citations omitted). Thus, we must consider the preemptive effect of both the explicit and implicit manifestations of congressional intent reflected in PMPA. See Jones v. Rath Packing Co., 430 U.S. 519, 540-41, 97 S.Ct. 1305, 1317, 51 L.Ed.2d 604 (1977). Preemption will be inferred either when Congress has implicitly indicated an intent to occupy an entire field of regulation, in which case all local law in the field will be preempted, e.g., Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982), or when local law actually conflicts with federal law, in which case the local law will be preempted to the extent it `stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' Jones, 430 U.S. at 526, 97 S.Ct. at 1310 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941)). PMPA contains a provision which explicitly addresses the Act's preemptive effect. To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty applicable to any violation thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of notification with respect thereto) of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of this subchapter. 15 U.S.C. § 2806(a) (1982). [6] Looking first at this statutory language, we note the limited nature of the preemption which this section prescribes. Preemption is required only to the extent that PMPA applies to the termination, ... the nonrenewal, ... or the furnishing of notification with respect to these two practices. Similarly, PMPA preempts local laws only with respect to termination, ... nonrenewal,... or the furnishing of notification with respect thereto. [7] We read this language to be an explicit statement of Congress' intent to occupy the entire field of franchise termination and nonrenewal, without displacing local law which governs other matters related to service station franchises. Accordingly, § 2806(a)'s scope is limited to preempt[ing] state law in the subject areas in which the federal legislation deals. S.REP. No. 731, supra, at 16, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 874. To the extent that the provisions of [PMPA] do not apply to an aspect of the franchise relationship, State laws dealing with such aspects of the relationship are not preempted.... The preemption provisions of the legislation are limited to provisions of State law dealing with termination or nonrenewal of franchise relationships. Id. at 42, U.S. CODE CONG. & ADMIN.NEWS 1978, p. 900. It follows that PMPA § 2806(a) preempts only those provisions of RSSA which address termination, nonrenewal, or the notice required with respect to these practices. Any RSSA provision that regulates some other aspect of a franchise relationship is preemptedunder the doctrine of implied preemptiononly insofar as it stands as an obstacle to the accomplishment and execution of the full purposes and objectives, Jones, 430 U.S. at 540-41, 97 S.Ct. at 1317, of PMPA. To the extent that such a provision does not interfere with PMPA's intended purpose of establishing a uniform set of rules governing the grounds for termination and non-renewal of motor fuel marketing franchises and the notice which franchisors must provide franchisees, S.REP. No. 731, supra, at 19, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 877, it will not be preempted, even if it has some incidental effect on a franchisor's obligations in cancelling a franchise. [8]
We next consider the RSSA provisions on which Davis relies. He first argued to the trial court that Gulf's nonrenewal notice failed to meet the standards set by D.C.Code § 10-223(b)(1), with the result that this violation requires a renewal of the franchise agreement pursuant to D.C.Code § 10-223(b)(3). [9] More specifically, § 10-223(b)(1) sets forth a 90-day notice requirement governing a franchisor's attempt to terminate, cancel, or fail to renew a franchise. Section 10-223(b)(3) specifies the remedy for a violation of this notice requirement: a one-year renewal. These provisions of RSSA are precisely the types of local law which PMPA § 2806(a) is designed to address. We hold that insofar as §§ 10-223(b)(1) and (b)(3) are not the same as the applicable provision[s] of PMPA, 15 U.S.C. § 2806(a), those sections of RSSA are preempted. The same reasoning that led us to reject Davis' asserted defenses under PMPA accordingly compels us to reject his arguments under RSSA §§ 10-223(b)(1) and (b)(3).
The second RSSA provision on which Davis relies is D.C.Code § 10-221(a)(10) (1981) which provides, simply, that no franchise agreement shall [b]e for a term of less than 1 year. Although, by establishing a one-year minimum lease term, this provision may have an effect on a franchisor's ability to use the 90-day nonrenewal provisions of PMPA, it does not attempt to regulate directly any aspect of franchise terminations or nonrenewals. Accordingly, PMPA § 2806(a) does not automatically preempt RSSA § 10-221(a)(10). Accord Lasko, 547 F.Supp. at 216-18 (Connecticut statute's three-year minimum lease term not preempted). [10] Ordinarily, therefore, absent an application of § 10-221(a)(10) that obstructs a purpose of PMPA, retail service station franchise agreements in this jurisdiction may not be for less than one year's duration. The question, therefore, is whether RSSA § 10-221(a)(10)unlike RSSA §§ 10-223(b)(1) and (b)(3)survives PMPA § 2806(a) so as to provide a defense to Gulf's action for possession. Davis asserts that the ten-week lease extension was unlawful under § 10-221(a)(10) and thus should be construed as a one-year lease extension under one of two theories: (1) reformation of its terms by reference to the § 10-221(a)(10) one-year minimum, or (2) invalidation of the extension and thus conversion of the relationship to a tenancy at sufferance which, because of § 10-221(a)(10), becomes year-to-year instead of month-to-month. [11] If we were to accept either argument, Davis would be deemed to have a lease running from January 1, 1983 to December 31, 1983, and thus have a valid defense to Gulf's action for possession. If we were to read § 10-221(a)(10) to invalidate every retail service station lease extension that is shorter than one year, but see Ferriola, 496 F.Supp. at 162 (interpreting Pennsylvania's one-year minimum lease provision not to prohibit temporary extensions during renewal negotiations), we could not permit Davis to prevail here, even on the assumption that Gulf fraudulently induced Davis to settle for an unlawful, short-term extension. The appropriate remedy would be either to rescind the lease extension at the franchisee's instance and provide recovery for restitution and incidental losses, or to permit the franchisee to enforce the extension and recover for damages incurred as a result of the franchisor's conduct. The lease extension could not, however, be specifically enforced as a one-year agreement on either a reformation or modified tenancy-at-sufferance theory. [12] Thus, although § 10-221(a)(10) may have provided Davis with a basis for invalidating the lease extension or for claiming damages against Gulf, it does not support his argument that the lease extension should have been construed against its plain language to extend the franchise agreement until December 31, 1983. Davis never presented the trial court with a claim for damages based on § 10-221(a)(10) and, on the facts of this case, such a claim would not have been cognizable by the Landlord and Tenant Branch. Super.Ct. L & T R. 5(b); see Campos v. Aguila, 464 A.2d 132, 133 (D.C.1983); Brown v. Young, 364 A.2d 1171, 1173 (D.C.1976). We do not determine here whether RSSA § 10-221(a)(10) requires an automatic one-year renewal of a retail service station lease ifbefore the lease expiresthe franchisor says nothing to the franchisee, or negotiates an extension of less than one year, or attempts to nonrenew the franchise in a manner that violates PMPA. Nor need we address the difficult question whether such an application of § 10-221(a)(10) would obstruct the purposes of PMPA to such an extent as to require preemption. We hold only that when, as here, a franchisor does give the required notice of nonrenewal (here 90 days under PMPA) before the date on which a retail service station lease expires, and nonrenewal will not take effect until a date after the conclusion of the term, the resulting extension is, facially, a periodic tenancy [13] that cannot be reformed or otherwise deemedand specifically enforced asan automatic one-year lease renewal at the original expiration date. Accordingly, as a matter of law, an RSSA § 10-221(a)(10) defense was not available to Davis in Gulf's action for possession. Summary judgment here was appropriate.