Court Opinion

ID: 9522071
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:17:30.596475+00
Date Added: 2024-06-11T13:02:15.987662
License: Public Domain

Robinson, J.,
¶ 20. dissenting. The majority concludes that Foti Fuels, Inc. was not a “franchisee” protected by the Petroleum Marketing Practices Act (PMPA or Act) because it lacked authority to use or authorize use of the Citgo trademark. Because I conclude that the only possible conclusion on this record is that Foti was Evans’ franchisee under their distribution agreement and was authorized, in turn, to permit Quick Stop’s use of the Citgo brand, I respectfully dissent.
¶ 21. No one argues that Quick Stop was not a franchisee; it was selling Citgo brand fuel under a Citgo sign, and was indisputably “authorized or permitted, under a franchise, to use” the Citgo trademark. See 15 U.S.C. § 2801(4). But who is Quick Stop’s franchisor?
¶22. Under the majority’s holding, Foti would not qualify because it had no authority to use or authorize the use of the Citgo trademark. See id. § 2801(3) (“ ‘franchisor’ means a refiner or distributor (as the case may be) who authorizes or permits, under a franchise, a retailer or distributor to use a trademark in connection with the sale, consignment, or distribution of motor fuel.”); Koylum, Inc. v. Peksen Realty Corp., 272 F.3d 138, 145 (2d Cir. 2001) (recognizing that the Act applies where the “distributor authorizes the retailer to sell motor fuel under a trademark which is owned or controlled by ... a refiner which supplies motor fuel to the distributor” (quotation omitted)).
¶ 23. But the record reflects that prior to Evans’ consummation of an agreement with Quick Stop after terminating its relationship with Foti, Evans had no direct contract with Quick Stop, and therefore could not have been Quick Stop’s franchisor under the Act. See Estate of Handy v. R.L. Vallee, Inc., 993 F. Supp. 236, 240 (D. Vt. 1998) (noting that “[u]nder the PMPA, a franchise must involve a direct contractual relationship between parties,” *320and holding that retailer which received fuel under contract with subdistributor could not sue distributor with whom it had no direct contract and therefore no franchise relationship); accord DuFresne’s Auto Serv., Inc. v. Shell Oil Co., 992 F.2d 920, 927 (9th Cir. 1993) (“A franchise is a contract.”); Hutchens v. Eli Roberts Oil Co., 838 F.2d 1138, 1144 (11th Cir. 1988) (“We agree with every court that has considered the question and hold that there can be no franchise relationship under the PMPA in the absence of some direct contractual relationship.”); Rogue Valley Stations, Inc. v. Birk Oil Co., 568 F. Supp. 337, 343 (D. Or. 1983) (“A ‘franchise’ results only if there is a ‘contract’ between the parties.”); Brown v. American Petrofina Mktg., Inc., 555 F. Supp. 1327, 1332 (D. Fla. 1983) (“In order for a franchise to exist, there must be a contract — either written or oral — between the parties which pertains to the sale or distribution of motor fuel.”).
¶ 24. Unless Quick Stop was acting as a Citgo dealer without legal authorization to do so — and nobody suggests that was the ease ■ — • somebody had to confer upon Quick Stop the authority to sell Citgo-branded gas. That authority had to derive from a direct contract with another party authorized to confer the license to use the Citgo mark.
¶ 25. In support of its implicit conclusion that Evans had a direct franchisor-franchisee relationship with Quick Stop, the majority cites Daniel Evans’ affirmation that Quick Stop was “licensed through [Evans]” to use the Citgo insignia. This assertion was true, but does not support the majority’s conclusion. As Daniel Evans himself testified, the back-of-a-napkin agreement giving rise to this litigation was between Evans and Foti. Evans had the license to distribute Citgo-branded gas, and Foti had the retailer/client, namely, Quick Stop. Together, Evans and Foti put together a distribution network from Citgo to Quick Stop.
¶ 26. Nobody claims that Evans had any agreement of any kind directly with Quick Stop at the time in question, and there is no evidence in the record to support such a claim. Indeed, Daniel Evans’ brother and partner, Douglas Evans, testified that it was only after the relationship with Foti deteriorated that Quik Stop’s principal owner turned to Evans to become Quick Stop’s distributor of Citgo fuel. See Koylum, 272 F.3d at 146 (whether the complaint alleges a violation of the [PMPA] “turns, in part, on *321whether a franchise relationship existed at the time of the events complained of!’ (emphasis added)).5
¶ 27. The majority is right that Quick Stop derived its license to use the Citgo mark through Evans, as Evans was the first link in the distribution chain through which the right to sell Citgobranded gas, and to use the accompanying Citgo mark, passed. But the evidence in the record unequivocally points to Foti as the last link in that distribution chain to Quick Stop through which the retailer acquired its right to use the Citgo mark. Given the absence of any evidence of contractual privity between Quick Stop and Evans prior to Evans’ termination of its arrangement with Foti, and given that Quick Stop’s conversion to a Citgo-branded station arose as a result of the Evans-Foti agreement, Quick Stop had to have acquired its right to use the Citgo mark through Foti. The evidence does not support any other conclusion.
¶ 28. Likewise, the majority’s observation that Evans was a branded licensee of Citgo and Foti was not prior to its arrangement with Evans, ante, ¶ 15, does not in any way undermine the clear evidence that Foti was a franchisee vis-a-vis Evans. The arrangement between Evans and Foti created a relatively informal, albeit unremarkable, distributor-to-distributor franchise relationship that supplied Citgo fuel to Foti and allowed Foti, in turn, to supply Citgo fuel to Quick Stop as a branded Citgo franchisee. See Handy, 993 F. Supp. at 238 (discussing oral agreement between fuel distributor and subdistributor to supply Mobil fuel for sale to Mobil service station); 15 U.S.C. § 2801(l)(A)(iii) (defining “franchise” to include a contract “between a distributor and another distributor”). Essential to this agreement was authorization to use or permit the use of the Citgo trademark. Moreover, given the absence of any evidence of an agreement between Quick Stop and Evans, Evans’ partial payment for the cost of installing new Citgo signs at the Quick Stop — a step Evans took pursuant to its agreement with Foti — was not sufficient to establish a direct franchisor-franchisee relationship between Evans and Quick Stop. See Handy, 993 F. Supp. at 240-41 (finding that wholesale distributor’s “occasional provision of materials to the Station and its supply of gasoline to [the Station’s *322subdistributor did] not demonstrate the existence of a direct contract”).
¶ 29. The majority’s focus on the fact that the hauler contracted by Foti did not transport the fuel in trucks bearing the Citgo label is misplaced. Despite the majority’s suggestion to the contrary, ante, ¶ 14, there is no dispute that Foti’s role in this web of relationships was not merely that of a hauler. Foti’s status as a franchisor under the PMPA is not evidenced by its own public display of a Citgo mark on its vehicles or those of its contracted haulers. Rather, we know that Foti was a franchisor to Quick Stop, and a franchisee to Evans because the only inferences supported by the evidence are that Foti authorized Quick Stop to use the Citgo mark in the context of the Foti-Quick Stop agreement, and that Foti derived its authority to do so from the Foti-Evans agreement. See 15 U.S.C. § 2801(3) (including in the definition of “franchisor” a distributor who authorizes a retailer to use a trademark in connection with the sale of motor fuel).
¶ 30. Although we generally defer to the trial court’s findings unless clearly erroneous, Waterbury Feed Co. v. O’Neil, 2006 VT 126, ¶ 6, 181 Vt. 535, 915 A.2d 759 (mem.), there must be “some credible evidence to support a finding.” In re Hamm Mine Act 250 Jurisdiction, 2009 VT 88, ¶ 9, 186 Vt. 590, 980 A.2d 286 (mem.). The trial court’s conclusion that Foti was not a franchisee protected by the Act is unsupported by the law as applied to this record. I would therefore reverse the judgment and remand for further proceedings on Foti’s counterclaim under the PMPA.

 For this reason, the fact that Quick Stop continued selling Citgo-branded gas distributed directly by Evans after Foti’s relationship with Quick Stop fell apart does not in any way support the majority’s conclusion that Evans and Quick Stop had a direct franchise relationship before that time.