Opinion ID: 1526964
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Heading: Bay Oil The Claim of Actual Agency

Text: Bay Oil is a petroleum products jobber doing business primarily in Harford, Cecil and Baltimore counties. It has, for some time, purchased petroleum products from several national gasoline producers, and sold those products to branded and unbranded retail gasoline service stations. It became a Chevron jobber in 1972, after which it provided Chevron products to branded Chevron dealers. Contractual rights and obligations between Bay Oil and Chevron U.S.A. for the period of time involved in this case were controlled by a Branded Jobber Petroleum Products Agreement dated 11 September 1984. As part of this agreement, Bay Oil was authorized to supply Chevron products and insignia [3] to those retail stations that were approved by Chevron U.S.A. as acceptable outlets for Chevron branded products. The service station involved in this case was first approved as a Chevron branded station in 1976. The business of that station was then owned by Ben Walker, and was operated as a sole proprietorship. Ben Walker had been in the service station business for some time, and had owned the business at this particular station since the mid-1960's. Prior to that time, he had owned a service station business on Rock Spring Road, approximately two miles from the Conowingo Road station. The Rock Spring Road location was a branded Sinclair station, and Ben Walker traded there as Walker's Sinclair. When he moved his business to Conowingo Road, he continued to operate as Walker's Sinclair. In the mid or late 1960's, B.P. Oil, Inc. bought Sinclair, and Walker's Sinclair became Walker's BP. In 1976, Bay Oil obtained a leasehold interest in the Conowingo Road property from B.P. Oil, Inc., and in turn entered into a sublease with Ben Walker. It was at that time that Bay Oil entered into a Reseller's Contract with Walker, and Walker's BP became Walker's Chevron. The original Reseller's Contract, which was apparently extended by an oral agreement of the parties, was a fairly simple document consisting of two pages. Bay Oil agreed to sell and deliver, and Ben Walker agreed to buy, certain quantities of Chevron gasoline, oil, and lubricants. Additionally, Bay Oil agreed to lease an eight foot internally lighted Chevron sign and a credit card imprinter to Walker. The contract did not grant Bay Oil any control over the operation of Walker's business, and included this provision: It is the spirit and intent of this contract that Buyer will have the right to conduct and carry on the business of selling at retail, automobile fuel and gasoline and lubricating oils and greases, wholly free and independent of any domination or control by Seller; and nothing in this contract is intended or shall be construed to give Seller any domination or control of Buyer's said business. The original lease agreement between Bay Oil and Walker's Chevron was also an uncomplicated pre-printed document consisting of two pages. It provided, at paragraph 10, that: The provisions of this lease shall not be construed as reserving to the Lessor any right to exercise any control over the business or operations of the Lessee conducted upon the leased premises or to direct in any respect the manner in which any such business and operations shall be conducted. Although these provisions are not controlling, they may be of assistance in determining the intent of the contracting parties. In support of their contention that Bay Oil exercised actual control over Walker's Chevron, plaintiffs point to a letter of 16 December 1982 from Bay Oil to Ben Walker. This letter advised Walker of certain problems regarding the operation of your service station, and stated that if Walker wished to continue to occupy the premises, then he would be expected to conform to certain conditions. The conditions stated in the letter were: 1. The station will be kept clean and free of debris and trash at all times. 2. The station will be opened seven days per week no later than 7:00 a.m. and closed no earlier than 8:00 p.m. 3. The station will be properly lighted in a manner to give the appearance the station is open for business between sundown and 8:00 p.m. 4. All junk cars will be removed immediately, no more than three motor vehicles shall remain outside overnight and no automobile shall remain on the premises for more than one week. 5. You will be expected to furnish a deposit of $700.00 as security for future payments of rent. 6. Gas will be paid for in full at the time of delivery. 7. Monthly rent will be calculated based on the previous month's sales according to the attached schedule. 8. We will bill you for rent at the beginning of each month. Your rent shall be due upon receipt of the bill. The Court of Special Appeals, characterizing this letter as an ultimatum, held that its contents constituted sufficient evidence of Bay Oil's power to control the conduct of Walker's Chevron to permit a trier of fact to find the existence of a master-servant relationship. Lesch v. Chevron, supra, 75 Md. App. at 698-700, 542 A.2d 1292. We do not agree. In evaluating the relationship that existed between these parties to determine whether Bay Oil may be held vicariously liable for the torts of employees of Walker's Chevron, we keep in mind that not every close relationship will create that liability. One may be an agent of another, owing to his principal the fiduciary obligations of loyalty and general obedience, but at the same time not be sufficiently under the control of the principal to be considered a servant. See Brady v. Ralph Parsons Co., 308 Md. 486, 510-512, 520 A.2d 717 (1987). The relationship of master and servant exists only when the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done. Id. at 510; Mackall v. Zayre Corp., 293 Md. 221, 230, 443 A.2d 98 (1982). In Keitz v. National Paving Co., 214 Md. 479, 491, 134 A.2d 296 (1957), this Court said: [T]here are at least five criteria that may be considered in determining the question whether the relationship of master and servant exists. These are: (1) the selection and engagement of the servant, (2) the payment of wages, (3) the power to discharge, (4) the power to control the servant's conduct, (5) and whether the work is a part of the regular business of the employer. Standing alone, none of these indicia, excepting (4), seems controlling in the determination as to whether such relationship exists. The decisive test in determining whether the relation of master and servant exists is whether the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done. (emphasis in original). To like effect, see Whitehead v. Safway Steel Products, 304 Md. 67, 77-78, 497 A.2d 803 (1985); B.P. Oil Corp. v. Mabe, 279 Md. 632, 637-39, 370 A.2d 554 (1977). Assuming, as we do for the purpose of considering Bay Oil's motion for summary judgment, that the plaintiffs could establish that Ben Walker, and his successor, Walker's Chevron, had accepted and agreed to be bound by the conditions imposed by Bay Oil, we hold that to be insufficient evidence of the right on the part of Bay Oil to exercise the degree of control that would support a claim of vicarious liability. This exercise of control by Bay Oil flows partly from its status as landlord, and partly from its status as jobber. Provisions dealing with required cleanliness of the premises, number of cars that may be parked overnight, and revised rent structures are customary in lease agreements. See, e.g., Miller v. Sinclair Refining Company, 268 F.2d 114, 117 (5th Cir.1959); Texas Co. v. Wheat, 140 Tex. 468, 168 S.W.2d 632, 635 (1943). Because the parties apparently were in agreement that they were on a month-to-month rental basis, Bay Oil announced the change in terms as a condition to the continuation of the lease. For example, Item 2, dealing with the minimum hours of operation of the station, parallels a provision that was contained in the original, pre-printed lease, but which had not been filled in by the parties. In addition, Item 6, which provided that gas would be sold to Walker's Chevron on a C.O.D. basis, was entirely in accordance with the Reseller's Contract that existed between the parties. Individually or collectively, these conditions did not demonstrate a claim to, or exercise of, the degree of control required to establish a master-servant relationship. Summary judgment was correctly entered in favor of Bay Oil.