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Jimico Enterprises, Inc.; and Brownson Enterprises, Inc v. Lehigh Gas Corporation

September 30, 2011

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

Currently before the Court in this action brought by Jimico Enterprises, Inc., and Brownson Enterprises, Inc. ("Plaintiffs") against Lehigh Gas Corporation ("Lehigh") pursuant to, inter alia, the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2805, are the following: (1) Plaintiffs' motion for attorney's fees and expert fees (Dkt. No. 84); (2) Plaintiffs' motion for costs (Dkt. No. 85); (3) Plaintiffs' motion for pre- and post-judgment interest (Dkt. No. 97); (4) Plaintiffs' motion for entry of final judgment, pursuant to Fed. R. Civ. P. 54(b) (Dkt. No. 104); (5) Lehigh's motion for a stay of entry of final judgment, pursuant to Fed. R. Civ. P. 62(d) (Dkt. No. 105); and (6) Lehigh's motion for summary judgment on its counterclaims (Dkt. No. 114). For the reasons set forth below, Plaintiffs' motion for attorney's fees and expert fees is granted in part and denied in part; Plaintiffs' motion for costs is granted in part and denied in part; Plaintiffs' motion for pre- and post-judgment interest is granted in part and denied in part; Plaintiffs' motion for entry of final judgment, pursuant to Fed. R. Civ. P. 54(b) is denied; Lehigh's cross-motion for a stay of entry of final judgment, pursuant to Fed. R. Civ. P. 62(d), is denied; and Lehigh's motion for summary judgment on its counterclaims is granted in part and denied in part.

I. RELEVANT BACKGROUND

A. Plaintiffs' Claims

Generally, liberally construed, Plaintiffs' Complaint alleges that Defendant violated the PMPA and breached the agreement that it had with Plaintiffs. More specifically, Plaintiffs allege as follows: (1) because Defendant obtained a license from ExxonMobil to operate as the franchisor of Mobil stations, including Plaintiffs, Defendant became the successor in interest to ExxonMobil for all purposes with respect to franchise relationships; (2) because Plaintiffs were existing franchisees, pursuant to their franchise relationship with ExxonMobil, it was unlawful for Defendant to "refus[e] to extend to Plaintiffs a renewed three year franchise agreement" (and instead proffer a Temporary Franchise Agreement ["TFA"]); (3) because the TFA that Plaintiffs signed was invalid, and because Defendant made assurances to Plaintiffs "that their TFA' s would be renewed by full term leases upon expiration," it was unlawful for Defendant to terminate its franchise relationship with Plaintiffs within one year of Plaintiffs signing the TFAs; and (4) even if the TFAs were valid, and Defendant was therefore allowed to terminate its trial franchise relationship with Plaintiffs within one year of Plaintiffs signing the TFAs, Defendant did not provide Plaintiffs with the statutorily required notice before terminating its relationship with Plaintiffs. (Id.) Based on these allegations, Plaintiffs assert the following two claims: (1) violation of the PMPA; and (2) breach of contract.

For the sake of brevity, the Court will not describe in detail, the Court's rulings with regard to these claims. (Dkt. No. 68, 82.) Rather, the Court will only note that, on October 14, 2010, this Court issued a Decision and Order awarded Plaintiffs a total of $141,892.79 in compensatory damages, and a total of $30,000.00 in punitive damages, on their claims arising under the PMPA. (Dkt. No. 82.)*fn1

B. Defendant's Counterclaims Against Brownson Enterprises, Inc., and Peter Brownson

Generally, liberally construed, Lehigh's Counterclaim alleges that, on or about May 25, 2006, Brownson Enterprises, Inc. and Peter Brownson (hereinafter "the Brownson Defendants") individually, signed a TFA, a Key Individual Guaranty, and a Shareholder Guaranty, in which Brownson Enterprises promised to fully and satisfactorily perform all of its obligations under the TFA, and Peter Brownson guaranteed such performance. (Dkt. Nos. 21, 22.) The Counterclaim further alleges that, following the termination of the TFA, Brownson Enterprises owed Lehigh $89,153.27, which it has failed and refused to pay despite demands from Lehigh. (Id.) Based on these allegations, Lehigh asserts the following four claims: (1) breach of contract; (2) unjust enrichment; (3) breach of key individual guaranty; and (4) breach of shareholder guarantee. (Id.)

C. Parties' Motions

1. Plaintiffs' Motion for Attorney's Fees and Expert Fees

Generally, in support of their motion for attorney's fees and expert fees, Plaintiffs argue as follows: (1) their request is timely; (2) fee requests are typically granted pursuant to federal remedial statutes; and (3) their fee requests are reasonable. (Dkt. No. 84, Attach. 6.)

Generally, in its response, Lehigh argues that Plaintiffs are not entitled to attorney's fees and expert fees because (1) Plaintiffs were not a "prevailing party" given that they "failed" on one of their claims, (2) Plaintiffs' attorneys failed to provide the Court and Defendant with a copy of their contingency agreement with Plaintiffs, (3) there is insufficient information in the billing sheets to enable the Court to determine whether the hours billed are reasonable, and (4) the time billed is excessive and unreasonable. (Dkt. No. 90, Attach. 10.) In addition, Lehigh argues that, in the event the Court determines that Plaintiffs satisfy the definition of "prevailing party," and that neither the billing information nor the absent contingency fee agreement is fatal to the request, Plaintiffs should be required to "remove[] all . . . [fees] incurred in connection with Plaintiffs' failed claim . . . and a hearing should be scheduled during which Lehigh may examine Plaintiffs' counsel regarding their fees and costs." (Id.)

Generally, in their reply, Plaintiffs essentially reiterate previously advanced arguments. (Dkt. No. 99.)*fn2

2. Plaintiffs' Motion for Costs

In their motion for costs, Plaintiffs request costs based on the fact that they were awarded compensatory and punitive damages on one of their claims. (Dkt. No. 85, Attach. 1.) Among other things, Plaintiffs request reimbursement for (1) witness fees, (2) copying expenses, and (3) food and travel expenses. (Id.)

Generally, in its response, Lehigh argues that Plaintiffs are not entitled to costs for "multiple hotel bills for meetings with clients when one attorney could have met the clients, steak and lobster dinners, cocktails, expensive wine and after dinner drinks[,]" and that, because Plaintiffs have submitted requested costs for these items, Plaintiffs' entire request for costs should be denied. (Dkt. No. 90, Attach. 10.)

In response, Plaintiffs argue that their request for costs is reasonable, and, even if the Court finds that some costs are unreasonable, the reasonable costs should still be awarded. (Dkt. No. 99.)

3. Plaintiffs' Motion for Pre- and Post-Judgment Interest

In their motion for interest, Plaintiffs argue that they are entitled to (1) pre-judgment interest to put Plaintiffs in the position they would have been in had they been paid immediately, and (2) post-judgment interest to compensate them for the delay in payment that they suffer from the time damages are reduced to an enforceable judgment to the time Lehigh pays the judgment. (Dkt. No. 97, Attach. 1.)

Lehigh did not specifically oppose these arguments. (See generally Docket Sheet.) Instead, it characterized Plaintiffs' motion as "premature" and "unnecessary" because "Lehigh would have consented to that application." (Dkt. No. 105, Attach. 1, at ¶¶ 12-14.)

4. Plaintiffs' Motion for Entry of Final Judgment and Lehigh's Motion for a Stay of Entry of Final Judgment

Generally, Plaintiffs argue that a final judgment should be entered for Plaintiff Jimico Enterprises, Inc. ("Jimico"), pursuant to Fed. R. Civ. P. 54(b), and that a final judgment should be entered for Plaintiff Brownson Enterprises, Inc. ("Brownson Enterprises") on its PMPA claims, pursuant to Fed. R. Civ. P. 54(b), despite the fact that Lehigh has an outstanding counterclaim against it. (Dkt. No. 104.)

Generally, in its response, Lehigh argues that Plaintiffs' motion should be denied because outstanding issues remain in this action regarding (1) Plaintiffs' motion for attorney's fees and expert fees, (2) Plaintiffs' motion for pre- and post-judgment interest, and (3) Lehigh's counterclaims against Brownson Enterprises and Peter Brownson. (Dkt. No. 105, Attach. 2.)

Lehigh further argues that, in the event the Court decides to grant Plaintiffs' motion, the Court should grant Lehigh's cross-motion for an order staying enforcement of the judgment pending a decision on appeal, and approve Lehigh's supersedeas bond in an amount totaling $191,051.00. (Id.)

Generally, in their reply, Plaintiffs argue that their motion should be granted because their PMPA claims satisfy the requirements for judgment under Fed. R. Civ. P. 54(b) (i.e., multiple claims and parties are present, Plaintiffs' PMPA claims have been finally decided, and the three outstanding issues identified by Lehigh do not create any just reason to delay entry of judgment on Plaintiffs' PMPA claims). (Dkt. No. 106.) In addition, Plaintiffs argue that Lehigh's cross-motion should be denied because (1) a stay may not be granted under Fed. R. Civ. P. 62(d) when the appeal is of an interlocutory order, and (2) Lehigh's proposed supersedeas bond is inadequate because it does not account for an award of pre-judgment interest, attorney's fees, or costs on appeal. (Id.)

5. Lehigh's Motion for Summary Judgment

Generally, in support of its motion for summary judgment on its breach-of-contract and unjust enrichment counterclaims against the Brownson Defendants, Lehigh argues as follows:

(1) based on the admissible record evidence, a rational factfinder could conclude only that Brownson Enterprises violated the Trial Franchise Agreement ("TFA") between Lehigh and Brownson Enterprises by "unilaterally terminating [Lehigh's] right to withdraw funds to pay for gasoline deliveries[,] . . . refusing to compensate [Lehigh] in any other way in full for petroleum products delivered to [Brownson Enterprises'] New Baltimore Stations[,]" and "fail[ing] to make payments for gasoline when due"; (2) based on the admissible record evidence, a rational factfinder could conclude only that "the outstanding balance for petroleum products supplied and delivered by [Lehigh] to Brownson [Enterprises] . . . was $84,889.72"; (3) based on the admissible record evidence, a rational factfinder could conclude only that Brownson Enterprises has been unjustly enriched by not having to pay for this gasoline, from which they profited through sales to consumers; (4) based on the admissible record evidence, a rational factfinder could conclude only that Brownson Enterprises' defenses for not paying their outstanding balance are without merit; (5) based on the admissible record evidence, a rational factfinder could conclude only that, as the personal guarantor of Brownson Enterprises, Peter Brownson is liable for Lehigh's counterclaims against Brownson Enterprises; and (6) based on the admissible record evidence, a rational factfinder could conclude only that Lehigh is entitled to attorney's fees pursuant to the TFA. (Dkt. No. 114.)

Generally, in their response, the Brownson Defendants argue as follows: (1) Lehigh's motion for summary judgment on its breach-of-contract claim should be denied because (a) disputed issues of material fact exist regarding the adequacy of Lehigh's performance, (b) disputed issues of material fact exist regarding Brownson Enterprises' alleged breach, and (c) disputed issues of material fact exist regarding Lehigh's damages; (2) Lehigh's motion for summary judgment on its unjust enrichment claim should be denied because the existence of a valid and enforceable contract precludes recovery under this theory of liability; (3) Lehigh's request for attorney's fees should be denied because (a) Lehigh is not entitled to summary judgment on any of its claims, (b) they cannot be compelled to perform under the TFA (and pay attorney's fees) because Lehigh substantially failed to perform its side of the bargain, and (c) the request is barred by the PMPA; and (4) Lehigh's motion for summary judgment on its claims against Peter Brownson as a personal guarantor should be denied because (a) Lehigh is not entitled to summary judgment on any of its claims, and (b) the personal guarantees included in the TFA are unconscionable, and therefore unenforceable. (Dkt. No. 115.)

Generally, in its reply, in addition to reiterating previously advanced arguments, Lehigh argues as follows: (1) because the Brownson Defendants failed to provide record citations in support of their denials of the material facts asserted by Lehigh, those material facts should be deemed admitted under Local Rule 7.1(a)(3); (2) the Brownson Defendants failed to adduce admissible record evidence from which a rational factfinder could conclude that Lehigh did not fully perform under the TFA by delivering all petroleum products required of it to Brownson Enterprises; (3) there is "no correlation between the termination [of the TFA] and Brownson Enterprises' breach[,] other than that the breach was the driving reason behind the termination"; (4) the Brownson Defendants have failed to adduce admissible record evidence from which a rational factfinder could conclude that they did not breach the TFA; (5) the Brownson Defendants have failed to adduce admissible record evidence from which a rational factfinder could conclude that Lehigh did not suffer damages as a result of their breach of the TFA; (6) in the event the Court invalidates the TFA, Lehigh's claim of unjust enrichment must be considered; (7) the personal guarantees set forth in the TFA are not unconscionable; and (8) the PMPA does not prohibit Lehigh from recovering attorney's fees incurred as a result of prosecuting its contractual rights. (Dkt. No. 116.)

D. Undisputed Material Facts

The Court incorporates by reference the undisputed material facts set forth in the Court's Decision and Order of July 27, 2010. (Dkt. No. 68, at 5-11.) Generally, the additional undisputed material facts of this case are as follows. (Dkt. No. 114, Attach. 3 [Lehigh's Rule 7.1 Statement]; Dkt. No. 115, Attach. 1 [Brownson Defs.' Rule 7.1 Response and Counter-Statement];Dkt. No. 116 [Lehigh's Rule 7.1 Response].)

On or about May 25, 2006, Lehigh and Brownson Enterprises entered into PMPA Trial Franchise Agreement ("TFA") for the New Baltimore Stations. The TFA provided that Brownson Enterprises was obligated to pay for all petroleum products sold pursuant to the TFA, before delivery, and that it was within Lehigh's discretion whether to extend Brownson Enterprises credit for petroleum products that Brownson Enterprises purchased. In addition, the TFA and subsequent extension thereto included a provision by which Brownson Enterprises agreed to open and maintain a bank account, which would allow Lehigh to deposit and withdraw sums of money in connection with gasoline delivered to Brownson Enterprises.

In or about October 2006, Brownson Enterprises unilaterally and without notice to Lehigh revoked Lehigh's right and ability to deposit and withdraw funds from Brownson Enterprises' bank account. Linford Bauer, Jr., who was the territory manager for Lehigh, contacted Peter Brownson about this matter. Peter Brownson advised Bauder that he would not reinstate Lehigh's right to withdraw funds for gasoline deliveries unless and until Lehigh provided him with an opportunity to be more profitable.

Brownson Enterprises remained in arrears to Lehigh from October 2006 through January 2007. On January 22, 2007, Lehigh notified Brownson Enterprises that it was terminating the franchise relationship effective January 24, 2007. Following the termination, the outstanding balance for the petroleum products supplied and ...


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