Opinion ID: 781619
Heading Depth: 2
Heading Rank: 4

Heading: The Present Action and the Judgment of the District Court

Text: 40 Ceraso commenced the present action in February 2001, alleging that the Notice of Termination was not based on valid grounds under the PMPA and seeking, inter alia, preliminary and permanent injunctive relief barring Motiva, without court approval, from terminating or failing to renew the franchise and from interfering with his occupation of the premises. Motiva counterclaimed, seeking a declaratory judgment that the Termination Letter effected a lawful termination of Ceraso's franchise under the PMPA. Ceraso moved for and was granted a preliminary injunction, and the matter was set for an expedited trial of the merits. 41 In preparation for trial, pursuant to D. Conn. L. Civ. R. 11(d), the parties submitted a Joint Trial Memorandum in which each side set forth its requests for specific findings of fact and conclusions of law. They also stipulated to the admissibility of certain documents and affidavits. 42 At the two-day bench trial, Ceraso did not testify. As discussed in Part II.B.2. below, Motiva called Marsala, Ascher, and former Ceraso employee Michael Seagren to testify, and introduced, inter alia, the affidavit of Joseph Gall, an elected Town representative. The affidavit stated, inter alia, that Gall had observed Ceraso's station several times a day in 1998, 1999, and 2000 and that usually there were at least 30 cars sitting on the lot. Several times a week I saw the lot so packed with stored cars that you could not even pull in to get gas. (Affidavit of Joseph Gall, dated November 2, 2001, ¶ 9.) Gall stated that he had received complaints from members of the public that the Texaco station at 350 Jennings Road was turning into a junkyard. ( Id. ¶ 8.) Marsala and Ascher testified that a number of cars were on the premises at various times; but neither of them could say with certainty which vehicles, if any, were awaiting repair or had been repaired. Seagren, who testified that he had left Ceraso's employ after a falling out just before Christmas of 1999, said that during the last month of his employment with Ceraso there were some 15 cars a day on the premises for repairs. 43 Following trial, the district court found in favor of Ceraso and against Motiva. As to the scope of the issues to be resolved, the court stated that [t]he only substantive ground for termination, as permitted by 15 U.S.C. § 2802(c), set forth in defendants' compliance with the Trial Preparation order, ¶ 5, p. 69, and thus relied on in the termination of the Lease and Sale Agreement, is a violation of laws or regulations. 44 Memorandum of Decision and Order Re: Pending Motions, dated January 2, 2002 (Posttrial Decision), at 6. The court also stated, in a footnote to its findings of fact, that 45 [t]he termination letter is not regarded as validly invoking any basis for termination other than the alleged zoning violation. It invoked a letter dated September 27, 2000, which does not exist. It was claimed that the date was a typographical error. Defendants cannot invoke, to state grounds for termination, the intended letter of September 18, 2000, as the notice required by PMPA is limited to that which is clearly stated, see 15 U.S.C. § 2804(c)(3), which would not include an unidentified letter. 46 Posttrial Decision at 6 n. 3. 47 With respect to defendants' contention that Motiva was entitled to terminate Ceraso's franchise for violation of the Town's zoning regulations, the court found that defendants have not proven that plaintiff was in violation of § 27.4.8.5 at a specific time nor over any identified period of time and thus have not proven a basis for the claimed termination within the grounds permitted by PMPA. Id. at 9. The court rejected Motiva's contention that Ceraso's violation of local law was established by the ZBA's decision to revoke his special permit. The court noted the strict wording of the regulation, which prohibits storing or parking of more than five cars awaiting repair or repaired,  id. at 7 (emphasis in original), and it found that the Town's application for revocation of Ceraso's special permit did not allege a violation of the Regulation because its allegations focused on the total number of cars that were unscreened, not just on the number of unscreened cars that were repaired or awaiting repair: 48 The order to comply, to which the application refers, required plaintiff to reduce the number of unscreened vehicles to five or fewer. .... The regulation imposes no such obligation on plaintiff. Defendants agree that the regulation does not cover all vehicles. See J. Trial Mem., ¶ 12, p. 28. The ZBA action cannot be said to prove a violation of the strict wording of the regulation. 49 Posttrial Decision at 7. 50 The court also found that Motiva's trial evidence had not proven that in fact Ceraso violated the Regulation. At the start of trial, Motiva had conceded in colloquy with the court that in order to warrant franchise termination there would have to be something more than just a very minor, isolated occasion of a literal violation of the Regulation. (Trial Transcript November 6, 2001, vol. I (Tr.vol.I), at 27). After trial, the court found that Motiva had not shown more than sporadic violations: 51 [D]efendants are left to prove violation of the Regulation by showing that plaintiff kept or stored, for more than a nominal duration, five or more unscreened cars that had been repaired or were awaiting repairs. It cannot be found that defendants have met that burden. The evidence offered as to the cars observed on the premises does not prove plaintiff's violation as above defined. It was conceded that more than five unscreened cars were on the premises at various times. There was, however, no evidence as to how long any of the cars were observed to remain on the premises. Clearly cars came and went. Furthermore, there was no evidence as to the status or character of the cars from which it could be found that any cars so observed came within the prohibition of cars repaired or awaiting repair. There was evidence that the cars could be employees', could be unregistered vehicles awaiting disposal, could be tows awaiting claim by their owners, could be tows awaiting their owners' or insurers' determination of disposition and, if to be repaired, by whom, or could be cars of convenience store customers (a limited likelihood), none of which count toward a violation of § 27.4.8.5. 52 Posttrial decision at 7. The court noted that there was some evidence as to how long certain towed cars had remained on the premises. However, the Regulation applied to cars that were repaired or awaiting repair, and the documents offered by Motiva to prove the duration of the presence of towed cars on the lot d[id] not delineate the time a car was actually being repaired, to which the Regulation, by its terms, does not apply. Id. at 8. Although noting that 53 there were a number of cars, probably more than five, on the premises in the months prior to the November 2, 2000 ZBA hearing[, d]efendants cannot be said to have proven that for any substantial period of time in that period, nor at any precise time, that more than five cars which had been repaired or which were awaiting repairs were in the unscreened portion of the lot for any duration beyond a nominal time. 54 Id. at 8-9. 55 The court concluded that defendants' burden of proof on their claimed entitlement to terminate the Lease and Sales Agreement cannot be found to have been met. Id. at 8. Judgment was entered enjoining defendants from terminating or failing to renew Ceraso's franchise and from affecting his occupation of the premises on the basis of the events in dispute in this case. This appeal followed.