United States District Court, S.D. New York
For Scarsdale Central Service Inc., Plaintiff, Counter Defendant: Eric Richardson Sharp, Galgano & Associates, White Plains, NY; Michael Paul Hess, O'Connor Redd LLP, White Plains, NY.
For Cumberland Farms, Inc., Gulf Oil Limited Partnership, Defendants, Counter Claimants: Timothy G. Griffin, LEAD ATTORNEY, Law Offices of Timothy G. Griffin, Bronxville, NY; Paul Dewitt Sanson, PRO HAC VICE, Shipman & Goodwin, LLP (Hartford), Hartford, CT; Vaughan Finn, Shipman & Goodwin, LLP, Hartford, CT.
For 880 Central Park Avenue LLC, Counter Claimant, Counter Defendant: Kathleen Ann Daly, Wilson, Elser, Moskowitz, Edelman & Dicker, (WPls), White Plains, NY; Katrine Aliha Beck, Katrine Aliha Beck, Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, White Plains, NY.
OPINION & ORDER
NELSON S. ROMÁN, United States District Judge.
Scarsdale Central Service Inc. (" Plaintiff") was a tenant and franchisee of Gulf Oil Limited Partnership (" Gulf Oil") and Cumberland Farms, Inc. (" Cumberland") (together, " Defendants"). Plaintiff operated a Gulf Oil gas station at 880 Central Park Avenue in Scarsdale, New York (the " Premises"). Gulf Oil is a subsidiaiy of Cumberland.
Plaintiff filed the instant suit against Defendants and other parties seeking, among other remedies, to enjoin Defendants' sale of the Premises to third-patty 880 Central Park Avenue LLC (" 880 CPA"), to enjoin Defendants from evicting Plaintiff from the Premises, to prevent Defendants from terminating the franchise relationship, and to order Defendants to honor Plaintiff's right of first refusal under terms consistent with a bona fide arm's length transaction. Plaintiff also seeks a declaration that the sales agreement with 880 CPA is invalid, and Plaintiff seeks damages under various tort and contract theories.
Defendants assert counterclaims, namely, a claim seeking a declaration that Defendants satisfied the nonrenewal requirements of the Petroleum Marketing Practices Act (" PMPA"), 15 U.S.C. § § 2802, 2804, a trademark infringement claim under the Lanham Act, 15 U.S.C. § 1114(1), breach of contract and unjust enrichment claims, and a claim for attorneys' fees.
Defendants now move for summary judgment, seeking an order granting their counterclaims and dismissing all Plaintiff's claims. The Court previously granted Defendants' motion for a preliminary injunction due to Plaintiff's continued occupancy of the Premises and wrongful act of selling gasoline under the Gulf Oil trademark long after Gulf Oil ceased delivery to Plaintiff. The Court ordered Plaintiff to vacate and surrender the Premises, return to Defendants all property belonging to them, and remove Plaintiff's personal property without harming the Premises. See dkt. no. 40. The Court now GRANTS Defendants' motion for summary judgment in its entirety for the reasons set forth below.
The following facts are not in dispute, unless so noted, and are derived from the parties' summary judgment submissions and submissions on the motion for a preliminary injunction. Until 2001, the Premises were owned by non-party Exxon Corporation. Non-party J& V Central Service, Inc. (" J& V") operated the gas station as an Exxon franchisee. In 2001, Cumberland bought the Premises from Exxon, and J& V became a Gulf Oil franchisee. On or about December 1, 2010, J& V entered into the most recent franchise and lease agreements with Gulf Oil concerning J& V's occupancy of the gas station. These agreements were to expire on November 30, 2013. On April 19, 2012, J& V assigned to Plaintiff the Gulf Oil franchise and lease agreements.
Former defendants David Ross (" Ross") and Richard Becker (" Becker") own 880 CPA and its parent, Patio.com, a furniture store. On or about October 18, 2012, before forming 880 CPA, Ross made an unsolicited offer to Cumberland to purchase the Premises. On or about June 19, 2013, Cumberland's Real Estate Manager, JoAnne Miller (" Miller") emailed Plaintiff's principal, Jim DeRentis (" DeRentis"), disclosing the negotiations with Ross and Becker, and acknowledging Plaintiff's possible interest in purchasing the Premises:
As we discussed, there is a contract being negotiated at $1.3 million. Once all terms and conditions have been agreed to . . . you will be given a signed copy of the Purchase and Sales Agreement. . . . [I]f you are interested in submitting an offer please send it to my attention.
See Affidavit of Joanne Miller (" Miller Aff.") Ex. 1.
On June 26, 2013, Cumberland's Director of Real Estate Acquisitions and Divestments, Deborah Gonsalves (" Gonsalves"), further informed Plaintiff by letter that Cumberland had decided to divest the Premises and that Plaintiff had thirty days to submit an offer to purchase the property. See Plaintiff's Opposition Memorandum (" Opp. Mem.") Ex. B. The letter said Cumberland was not obligated to accept Plaintiff's offer, but if Cumberland contracted with a third party, Plaintiff retained its right of first refusal under the PMPA. Id.
Separately, on June 28, 2013, Gulf Oil, through its Regional Director of Dealer Sales Operations and Property Management, Rich Watts (" Watts"), notified Plaintiff by letter that the franchise relationship would terminate October 7, 2013, purportedly because Plaintiff had failed continuously to operate the gas station at the Premises, by not dispensing fuel for at least seven consecutive days. Id. Ex. C. This letter was sent on behalf of Cumberland and on Cumberland letterhead.
With respect to the purported non-operation of the gas station, Plaintiff claims it ceased operations for four months in the fall and winter of 2012, because Cumberland required Plaintiff to close the gas station so that Cumberland could install new oil storage tanks. Plaintiff does not proffer evidence, however, of such tanks having been installed successfully, or of the impact that work had on the environment surrounding the tanks. In any event, after transmission of the June 28, 2013 letter citing non-operation as a basis to terminate the franchise, no further action was taken on that basis. Defendants instead decided to move forward with divestiture of the Premises, which provided separate and independent grounds to terminate the franchise under the PMPA.
On July 25, 2013, responding to the June 2013 notices concerning divestiture and ongoing negotiations with 880 CPA, Plaintiff offered Defendants $800, 000 to buy the Premises, which was the August 16, 2010 appraisal value upon which Plaintiff's rent was based. Id. Ex. D. By letter dated August 27, 2013, however, Cumberland formally notified Plaintiff that Cumberland had received a $1.3 million offer from 880 CPA. See Miller Aff. Ex. 3. The August 27 letter advised Plaintiff that, under the PMPA, Plaintiff had forty-five days to exercise its right of first refusal by making an offer to purchase the Premises at the same purchase price. Id. Barring that, the franchise would be " terminated and non-renewed effective December 9, 2013, " 109 days later. Id. Cumberland attached a copy of the Revised Summary to Title I of the PMPA as published in the Federal Register, as well as a copy of the sales contract with 880 CPA. Id. Ex. 2, 3. The agreement with 880 CPA required a down payment of $750, 000, with the remaining amount due at closing. Id. Ex. 2.
On October 11, 2013, Plaintiff commenced the instant action in New York Supreme Court, Westchester County, although the action later was removed to this Court. Plaintiff also sent a letter to Watts outlining Plaintiff's theory that Defendants were " conspiring" with former defendant and fellow Gulf Oil franchisee Syed Kirmani (" Kirmani") to strip Plaintiff of the franchise in violation of the PMPA. Id. Ex. 4. Plaintiff claimed the $750, 000 down payment was highly unusual and had been selected purposely, so that Plaintiff could not exercise its right of first refusal. Defendants allegedly knew Plaintiff was unable to make a down payment of that magnitude for cash flow reasons. Despite these accusations, however, Plaintiff informed Cumberland that Plaintiff would exercise its right of first refusal to match 880 CPA's $1.3 million offer. Id.
On October 24, 2013, Cumberland acknowledged Plaintiff's wish to exercise its right of first refusal and advised that Plaintiff would receive the same contract as 880 CPA had received, except that the down payment would be reduced dramatically to $130, 000 to accommodate Plaintiff's financial condition. On October 28, 2013, Cumberland sent Plaintiff's counsel a proposed purchase and sale agreement for the Premises with the new down payment amount. See Affidavit of Deborah Gonsalves (" Gonsalves Aff.") Ex. 1. The remainder of the $1.3 million purchase price would still be due at closing. The only other difference was the ...