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Jimico Enterprises, Inc. v. Lehigh Gas Corp.

October 14, 2010

JIMICO ENTERPRISES, INC.; AND BROWNSON ENTERPRISES, INC., PLAINTIFFS,
v.
LEHIGH GAS CORPORATION, DEFENDANT.
LEHIGH GAS CORPORATION, COUNTER-CLAIMANT,
v.
BROWNSON ENTERPRISES, INC.; AND PETER BROWNSON, COUNTER-DEFENDANTS.



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM-DECISION and ORDER

On September 14, 2010, the Court held an evidentiary hearing on damages in this action, filed by Jimico Enterprises, Inc. and Brownson Enterprises, Inc. ("Plaintiffs") against Lehigh Gas Corporation ("Defendant") pursuant to, inter alia, The Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2805. At the hearing, documentary evidence was admitted,*fn1 and testimony was taken of Plaintiffs' five witnesses,*fn2 as well as Defendant's witness.*fn3 At the conclusion of the hearing, the Court indicated that a written decision would follow. This is that written decision. For the reasons stated below, Plaintiffs are awarded a total of $141,892.79 in compensatory damages, and a total of $30,000.00 in punitive damages, in this action.*fn4

I. RELEVANT BACKGROUND

Because this Decision and Order is intended primarily for the review of the parties, and because the parties have demonstrated an accurate understanding of the claims, facts and issues presented in this action, the Court will not, in this Decision and Order, describe in detail those claims, facts and issues. Rather, the Court will simply refer the parties to the relevant portions of that Decision and Order of July 27, 2010, which generally describes the claims, facts and issues remaining in this action, following the Court's decision on the parties' cross-motions for summary judgment. See generally Jimico Enter., Inc. v. Lehigh Gas Corp., 07-CV-0578, 2010 WL 2985962 (N.D.N.Y. July 27, 2010) (Suddaby, J.).

II. GOVERNING LAW

Again, because this Decision and Order is intended primarily for the review of the parties, and because the parties to this action have demonstrated (particularly, in their pre-hearing written submissions of September 13, 2010, and their oral arguments to the Court on September 14, 2010) a general understanding of the legal standards governing the damages hearing in this action, the Court will not, in this Decision and Order, describe in detail those legal standards. Rather, the Court will simply refer the parties to the relevant portions of their pre-hearing briefs. (See generally Dkt. Nos. 77, 78.)

The Court would add only two points. First, "the plaintiff[ has the] burden to put on proof from which the [factfinder] c[an] ascertain damages with reasonable certainty[.]" Portland 76 Auto/Truck Plaza, Inc. v. Union Oil Co. of California, 153 F.3d 938, 947 (9th Cir. 1998). Second, Defendant has argued that Plaintiffs are not entitled to any damages because (1) Section 2805 allows for the recovery of damages only based on a violation of Section 2802, 2803, or 2807, and (2) in the Court's Decision and Order of July 27, 2010, the Court determined that Defendant violated Section 2804 of the PMPA. As stated during the evidentiary hearing, the Court rejects this argument, given that the relevant portion of the PMPA--i.e., Section 2803, which governs trial franchiserelationships--provides that a franchisor must comply with the notice requirements of Section 2804, prior to non-renewal of the trial franchise relationship.*fn5

III. ANALYSIS

A. Compensatory Damages

1. Lost Income from Relevant 90-Day Periods

With regard to Plaintiffs' request for damages compensating them for their lost income, the Court finds that Plaintiffs are entitled to lost income of a total of $81,683: $62,560 in income that would have been earned by Plaintiff Jimico during the relevant 90-day periods at the Angola and Seneca Stations ($41,977 in income at the Angola Station, and $20,583 in income at the Seneca Station); and $19,123 in income that would have been earned by Plaintiff Brownson during the relevant 90-day period at the New Baltimore Station.

Generally, the Court bases this finding on the following, in part: (1) Hrg. Ex. PJ-1 (Operations Analysis of Angola Station for 2004); (2) Hrg. Ex. PJ-2 (Operations Analysis of Angola Station for 2005); (3) Hrg. Ex. PJ-5 (Supplemental Expert Witness Report of Jeffrey Bernard, dated Sept. 9, 2010); (4) the hearing testimony of Karl Herba, an accountant for Plaintiff Jimico; (5) the hearing testimony of Jeffrey Bernard, Plaintiff's expert witness; (6) the fact that Plaintiffs requested these precise amounts of lost income for the relevant 90-day periods, and the fact that defense counsel conceded, during the hearing, that Defendant did not have any objection to the calculations performed by Plaintiffs regarding that lost income.

The Court notes that Plaintiffs' calculations appear afflicted by a number of flaws, including the following: (1) the fact that, although the 90-day period regarding the Angola Station included four days from July 2006 and twenty-five days from October 2006, Plaintiffs' calculations regarded no days from July 2006, and all thirty-one days in October 2006; (2) the fact that, although the 90-day period regarding the Seneca Station consisted of April through June of 2007, Plaintiffs' calculations regarded no days from April 2007, and all thirty-one days in July; (3) the fact that, although Plaintiffs' expert relies on monthly financial data regarding the Seneca Station from 2006, Plaintiffs did not admit such data into evidence at the hearing; and (4) the fact that, although the 90-day period regarding the New Baltimore station regarded the months of February, March, April and May of 2007, Plaintiffs' calculations regarded the entirety of years of 2004, 2005 and 2006. However, the Court has carefully analyzed the underlying financial data that was made available to it, and has concluded that the financial data supports an award of lost income substantially the same as that requested by Plaintiffs and unopposed by Defendant.

Finally, the Court notes that Plaintiff appears to argue that a third-party franchisee may have earned higher profits on the New Baltimore Station than Plaintiff Brownson would have earned during the relevant 90-day period, because Defendant would have sold gas at a lower rate to a third-party franchisee who owned other gas station franchises with Defendant on the Thruway. However, the Court finds such a fact, even if presumed to be true, to be immaterial to the ...


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