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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND L.M.P. SERVICE, INC. : : v. : Civil Action No. DKC 99-771 : SHELL OIL COMPANY, et al. :

MEMORANDUM OPINION This case stems from a motor fuel franchise agreement between Plaintiff and Defendants. Pending before the court are

Plaintiff and Defendants' cross-motions for summary judgment (papers no. 12, 17). The issues are fully briefed, and the

court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons stated more fully below, the

court will DENY Defendants' motion for summary judgment and GRANT Plaintiff's cross-motion for summary judgment. I. Background Plaintiff is a Maryland corporation engaged in the retail service station, automotive repair and carwash business in

Rockville, Maryland.

Plaintiff has operated the business since

1989 pursuant to a series of franchise agreements with Defendant Shell and Defendant Motiva, the successor-in-interest to Shell's most recent agreement with Plaintiff for the period April 1,

1994

to

March

31,

1999.

Defendants

are

both

Delaware

corporations engaged in the business of marketing motor fuel and related products. In October and November of 1998, James Deakin, the Central Maryland district sales manager for Motiva, assessed the

performance of Motiva's service stations in Montgomery County. Mr. Deakin initially determined that Plaintiff's station was performing accordingly premises. below comparable to stations third in the region, on and the

decided

solicit

party

offers

On December 3, 1998, Deakin received an initial offer Defendants' Motion Exhibit B. Based

of $1.2 million in cash.

upon this offer, Mr. Deakin made a decision not to renew the franchise agreement with Plaintiff but instead to sell the premises. Mr. Deakin thus provided notice to Plaintiff in a Defendant's Motion Exhibit C.

letter dated December 15, 1998.

On December 21, 1998, Plaintiff, through an agent, made an offer to Motiva to purchase the premises for $1.04 million, $160,000 less than the earlier offer. On February 10, 1999,

Motiva received a third offer from Mr. Aris Mardirossian for $1.2 million plus a ten-year supply agreement for products. gasoline

The purchase price included "all marketing equipment, 2

including underground storage tanks, car wash, and all gasoline dispensers necessary for the operation of a gasoline/convenience store/carwash." The supply provision included an unnamed

concession off the existing dealer tank wagon price. On February 11, 1999, Motiva delivered a letter to Plaintiff informing it of the most recent offer and informing it of the right of first refusal. On February 23, 1999, Plaintiff's

counsel wrote to Mr. Deakin to clarify the supply agreement: I view those as buyer contingencies which may be waived at the buyer's discretion. The provisions related to a continued Shell supply agreement are provisions that fall within that category. Please confirm that this is consistent with Shell's understanding. If Shell's understanding is different, then I have a question about whether there are truly grounds for a nonrenewal of the relationship. If Shell is insisting on a supply agreement, then it obviously wants to continue a franchise relationship -- not end it. Defendants' Motion Exhibit a G. copy of a On an March "Offer 1, to for Motiva's Purchase" a supply

representative drafted by

delivered and

Motiva,

including

provision

agreement.

Plaintiff's Motion Exhibit 17.

Defendant also wrote

a letter on March 8, 1999, advising Plaintiff's counsel that the supply agreement was an essential term of the offer, as

3

"additional million."

consideration

to

the

purchase

price

of

$1.2

Defendants' Motion Exhibit I.

On March 18, 1999, Plaintiff initiated the instant law suit. II. Standard of Review Pursuant to Fed. R. Civ. P. 56(c), summary judgment is appropriate "if the and pleadings, admissions on depositions, file, answers with to the

interrogatories,

together

affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 477 U.S. 242, 248 (1986); Anderson v. Liberty Lobby, Inc.,

see also Matsushita Elec. Indus. Co. The movant,

v. Zenith Radio Corp. , 475 U.S. 574, 587 (1986). then, bears two burdens.

First, the movant must show that no

genuine issues of material fact remain for the fact finder to determine at trial. is in his favor. Conversely, the non-movant must demonstrate that genuine issues of material fact exist. 248-49. See Anderson, 477 U.S. at Second, the movant must show that the law

This burden "is particularly strong when the non-moving Pachaly v. City of Lynchburg, A fact is material for

party bears the burden of proof."

897 F.2d 723, 725 (4th Cir. 1990).

summary judgment purposes if, when applied to the substantive 4

law, it affects the outcome of the litigation. 477 U.S. at 248. material fact by

See Anderson,

A non-movant cannot create a genuine issue of resting upon her own mere allegations or

denials contained in her pleadings, Fed. R. Civ. P. 56(e), nor can she create a dispute of fact by relying upon "mere

speculation or the building of one inference upon another." Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). Instead, in

order for a genuine issue of material fact to exist, there must be sufficient evidence upon which a jury could return a verdict in the non-movant's favor. See Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir. 1991). III. Discussion Plaintiff brings this suit pursuant to Title I of the Petroleum Marketing Practice Act (PMPA), 15 U.S.C.

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