United States District Court, W.D. New York
June 9, 2005.
SERWAT SERRY, Plaintiff,
EXXON MOBIL CORPORATION, Defendant.
The opinion of the court was delivered by: MICHAEL TELESCA, Senior District Judge
DECISION and ORDER
On October 23, 2000, plaintiff Serwat Serry ("plaintiff")
initiated this action against defendant Exxon Mobil Corporation
("defendant"), alleging, inter alia, that defendant violated
the Petroleum Marketing Practices Act ("PMPA") when it failed to
renew plaintiff's gasoline service station franchise. (Doc. No.
1). By Decision and Order dated March 4, 2005, this Court granted
summary judgment in favor of defendant and dismissed with
prejudice plaintiff's only remaining cause of action. (Doc. No.
82). Defendant now moves pursuant to § 2805(d)(3) of the PMPA,
for an order directing plaintiff to pay the fees associated with
the defense of this action, alleging that plaintiff's suit was
frivolous.*fn1 For the reasons that follow, defendant's
motion for attorneys' fees is denied. DISCUSSION
Defendant argues that plaintiff is liable for payment of the
expenses associated with defending this action under two separate
theories: (1) contractual liability pursuant to the Franchise
Agreement; and (2) statutory liability under the PMPA. However, a
plain reading of both the Franchise Agreement and the PMPA
reveals that any liability for defendant's attorneys' fees to
which plaintiff may be exposed arises not from than separate
liability under each document, but rather from a combined reading
of the two documents.
Article XIV, paragraph C of the Franchise Agreement provides in
Dealer shall pay Mobil's reasonable attorneys' fees
and costs in the event that Mobil sues successfully
to enforce any of the provisions of this Agreement or
in the event that Mobil successfully defends a suit
by Dealer alleging breach by Mobil of any obligation
to Dealer under this Agreement or as otherwise
imposed by law.
Memorandum In Support of Exxon Mobil Corporation's Motion for
Attorney's Fees, Ex. 1, p. 23 (Doc. No. 85); .
Thus, the Franchise Agreement dictates that plaintiff is liable
for any attorneys' fees and costs if: (1) defendant successfully
sues plaintiff for breach of the Franchise Agreement; (2)
defendant successfully defends a suit brought by plaintiff for
breach of the Franchise Agreement; or (3) defendant is otherwise
legally entitled to fees. Since none of plaintiffs claims alleged
that defendant breached the Franchise Agreement, and defendant maintained no counterclaims against plaintiff for breach of the
Franchise Agreement, plaintiff will only be liable for payment of
defendant's attorneys' fees if defendant is otherwise legally
entitled to such relief under the PMPA.
The PMPA allows for an award of attorneys' fees in a
defendant's favor where the court finds that a suit brought by a
franchisee is frivolous. 15 U.S.C. § 2805(d)(3). Unfortunately,
there is little case law which defines "frivolous" in the context
of the PMPA. Nevertheless, there is an abundance of case law
which defines "frivolous" in the context of attorneys' fees
awards made pursuant to other statutes. Generally, a frivolous
lawsuit is one which is unreasonable or groundless. See
Davidson v. Keenan, 740 F.2d 129, 132 (2d Cir. 1984)
(determining motion for attorneys' fees under 42 U.S.C. § 1983);
Parker v. Sony Pictures Entertainment, Inc., 260 F.3d 100, 111
(2d Cir. 2001) (determining motion for attorneys' fees under
Americans with Disabilities Act); American Federation of State,
County and Municipal Employees v. County of Nassau, 96 F.3d 644,
645-646 (2d Cir. 1998) (determining motion for attorneys' fees in
Title VII gender discrimination suit).
At least one of plaintiff's claims falls well short of this
definition. Although many of plaintiff's claims were dismissed
for failure to state a claim upon which relief could be granted,
See Doc. Nos. 14 and 24, his claim that defendant's decision to
sell the Site was not made in good faith and in the normal course
of business was not dismissed until well-into the litigation. In
fact, the parties spent more than two years conducting discovery
before summary judgment was issued in favor of defendant on that
claim. Accordingly, I determine that plaintiff's suit was not
frivolous and defendant is not entitled to an award of attorneys'
fees under the PMPA. This Circuit, along with a host of other
Circuits, has determined that, "not all unsuccessful arguments
are frivolous or warrant sanctions." Pierce v. F.R. Tripler &
Co., 955 F.2d 820, 830 (2d Cir. 1992); Protective Life
Insurance Company v. Dignity Viatical Settlement Partners, L.P.,
171 F.3d 52 (1st Cir. 1999); Teamsters Local Union No. 430 v.
Cement Express, Inc., 841 F.2d 66 (3d Cir. 1988); Hunter v.
Earthgrains Company Bakery, 281, F.3d 144 (4th Cir. 2002); Matta
v. May, 118 F.3d 410 (5th Cir. 1997); Matos v. Richard A.
Nellis, Inc., 101 F.3d 1193 (7th Cir. 1996); Lemos v. Fencl,
828 F.2d 616 (9th Cir. 1987); Baker v. Alderman, 158 F.3d 516
(11th Cir. 1998).
For the reasons set forth above, I find that plaintiff's suit
was not frivolous. Accordingly, defendant's motion for attorneys'
fees is denied.
ALL OF THE ABOVE IS SO ORDERED.