Court Opinion

ID: 2963464
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:10:11.684704+00
Date Added: 2024-06-11T13:10:11.754942
License: Public Domain

USCA1 Opinion

	

          May 24, 1995          [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 94-2096                                     NABIH AOUDE,                                Plaintiff, Appellant,                                          v.                                MOBIL OIL CORPORATION,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. Richard G. Stearns, U.S. District Judge]
                                              ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,
                                        _____________                           Campbell, Senior Circuit Judge,
                                     ____________________                              and Stahl, Circuit Judge.
                                         _____________                                 ____________________            Jeffrey A. Gorlick with  whom Law Offices of Robert E. Weiner  was
            __________________            _______________________________        on brief for appellant.            Edward C.  Duckers with  whom Lowell  R. Stern,  Hogan &  Hartson,
            __________________            ________________   ________________        Thomas J.  Sartory and  Goulston  & Storrs,  P.C.  were on  brief  for
        __________________      _________________________        appellee.                                 ____________________                                 ____________________

                 Per  Curiam.    This   case  arises  because  Mobil  Oil
                 ___________            Corporation   sought  to  terminate   the  franchise  of  its            distributor Nabih Aoude.   Aoude  had for a  number of  years            operated Aoude Mobil as a retail gasoline station in  Medway,            Massachusetts; the  agreement between Aoude and Mobil forbade            Aoude  from using Mobil's name in connection with the sale of            any other brand  of gasoline.   On February  28, 1992,  Mobil            proposed to terminate Aoude's franchise for violation of this            restriction and  Aoude  immediately filed  suit  in  district            court.   After  staying the  termination, the  district court            granted summary  judgment  in favor  of  Mobil.   On  Aoude's            appeal we consider the propriety of summary judgment de novo,
                                                                 _______            drawing  all   reasonable  inferences  in  favor   of  Aoude.            Maldonado-Denis v. Castillo-Rodriquez, 23  F.3d 576, 581 (1st
            _______________    __________________            Cir. 1994).                 Under  the Petroleum Marketing  Practices Act, 15 U.S.C.                2801  et  seq.,  Mobil  was  entitled  to  terminate  the
                      ________            franchise for "willful"  mislabeling or misbranding  of motor            fuel.   15 U.S.C.   2802(c)(10).   Based on the record before            it,  the district court  ruled that it  was beyond reasonable            dispute that on  February 6, 1992, somewhere  between 200 and            300 gallons of non-Mobil  gasoline were diverted from another            nearby  station  (controlled  by  Aoude and  managed  by  his            brother) and deposited in  one of the tanks at  Aoude's Mobil                                         -2-
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            station.  The gasoline  in the tank was  subsequently offered            for sale through Mobil-labeled facilities.                 On   this  appeal,   Aoude   purports  to   dispute  the            determination that the 200 plus gallons were deposited in the            Aoude Mobil station tank,  but this claim is frivolous.   The            driver  who   delivered  the  gasoline   gave  uncontradicted            testimony that  he had  deposited the  gasoline in the  Aoude            Mobil tank.    This direct  testimony  was supported  by  two            eyewitnesses, who saw the  truck parked at the Mobil  Station            apparently unloading,  and by Aoude's  own tank measurements,            which  showed that  on February  7 one  of his  tanks had  an            unexplained  surplus of  about  275 gallons.    Based on  the            evidence,  no  reasonable juror  could  doubt  that 200  plus            gallons  were delivered to Aoude, stored in one of his tanks,            and ultimately sold to the public.1                 It  is also irrelevant under the law that samples of the            gasoline, collected  by Mobil  representatives on the  day of            the  misdelivery,  showed  no insufficient  concentration  of            Mobil additives:  it would not be a defense to misbranding or            mislabeling  that the  non-Mobil  gasoline  delivered by  the            truck was too small  an amount to dilute seriously  the Mobil            gasoline in the tank.  "Misbranding occurs when a  franchisee                                
            ____________________                 1Given  the uncontradicted  testimony that  the gasoline            was  deposited  in  Aoude's tank,  we  do  not  think that  a            material  factual dispute is created by  some confusion as to            which  of Aoude's several tanks  was thus filled.   Aoude has
            _____            offered nothing else to contradict the driver's testimony.                                         -3-
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            passes  off  other gasoline  as that  of the  franchisor's by            dispensing the gasoline through pumps and at stations bearing            the  franchisor's   logo."     Dandy  Oil,  Inc.   v.  Knight
                                           _________________       ______            Enterprises,  Inc., 654  F.  Supp. 1265,  1270 (E.D.  Mich.),
            __________________            appeal dismissed, 830 F.2d 193 (6th Cir. 1987).
            ______ _________                 Aoude's  only  serious  claim  on  appeal  is  that  the            requirement of  willfulness in the statute  presents an issue            of material fact in this case.  Although this requirement has            not been widely parsed, both  Aoude and Mobil cite us to  the            Ninth Circuit's  decision in Retsieg Corp.  v. ARCO Petroleum
                                         _____________     ______________            Prods., 870 F.2d 1495 (9th Cir. 1988), as reflecting a proper
            ______            standard.  There, the  Ninth Circuit said that to  be willful            the  dealer's act  must be done  "either with  an intentional            disregard of,  or plain indifference to,  the requirements of            the franchise  agreement."  Id. at 1498.   This appears to us
                                        ___            to be a plausible gloss of the statute and, in the absence of            any  developed argument  for a  different legal  standard, we            follow this aspect of Retsieg in this case.
                                  _______                 There  is no  reason  to describe  the somewhat  unusual            events surrounding  the diversion of the  gasoline to Aoude's            Mobil station because the  district court rested its judgment            of willfulness  on events occurring after the  delivery.  The
                                                _____            district  court determined  that  Aoude was  given notice  on            February 6 that  he likely  had received a  delivery of  non-            Mobil gas; that this was confirmed by his own measurements on                                         -4-
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            February 7; and that his failure either to halt sales or make            a  serious  investigation of  the  matter  amounted to  plain            indifference  to   his  obligation  to  avoid   the  sale  of            misbranded gasoline.                 What  the record shows is  that on February  6 Mobil was            tipped  off by  a  telephone call  from  an Aoude  competitor            (located  across  the street  from  Aoude's  station) that  a            delivery had been made  to Aoude Mobil from a  non-Mobil tank            truck.   Representatives from Mobil visited  Aoude later that            same day and  told him that  they had information  indicating            that he had  received the improper delivery.   Although Aoude            offered  some evidence that he  had told an  employee to make            some inquiries that  same day, he  did little to  investigate            the  matter seriously or to halt sales when, on the following            day, his own measurements confirmed that a significant amount            of  unaccounted for  gasoline  was contained  in his  station            tank.   He could easily  have investigated since  he knew the            name  of  the  company that  had  dispatched  the  tanker and            apparently knew that it had made its main delivery at his own            non-Mobil station down the road.                 Although Aoude  says that willfulness is  not normally a            matter  to  be  resolved  on  summary  judgment,  we  have no            difficulty  concluding  that  his  objective   behavior  from            February 7 onward--given  what he was admittedly  told by the            Mobil  representatives  and  what  he learned  from  his  own                                         -5-
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            measurements--constituted    plain   indifference    to   his            obligations.     Aoude   further  objects   that  the   Mobil            representatives told  him only that  non-Mobil gasoline "may"            have been  deposited in his tank; but  Aoude was also told by            his own employee  that the  non-Mobil truck had  been at  his            station,  and  his  own  measurements on  the  following  day            confirmed that such a delivery had occurred.                 Under these  circumstances, we need not  rely upon other            evidence suggesting that Aoude had earlier engaged in selling            non-Mobil gasoline from the same Mobil station.  Accordingly,            there  is no  need to  resolve the  question raised  by Aoude            whether such evidence was presented  to the district court in            an  admissible  form  and   whether  any  such  objection  to            admissibility has been waived.                 Affirmed.    
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