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SAWYER v. BP OIL

October 7, 1985

TIMOTHY C. SAWYER, Plaintiff,
v.
BP OIL, INC., Defendant



The opinion of the court was delivered by: GREENE

 Plaintiff Timothy Sawyer brought this action seeking injunctive and declaratory relief against the defendant, BP Oil, Inc., pursuant to the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. § 2801 et seq. The general issue before the Court is whether defendant BP Oil fully complied with the requirements of the PMPA when it failed to renew plaintiff's franchise. More specifically, this case presents the question of whether a prior notice of termination is invalidated by a promise by a franchisor to allow a franchisee to continue to operate a service station while negotiations for sale of the lease are ongoing between them.

  I

 On May 3, 1982, plaintiff and defendant entered into a Dealer License Agreement, authorizing plaintiff to operate a gasoline service station at 1448 U Street as a franchised BP dealer. *fn1" The Agreement provided that the franchise would expire on May 31, 1985.

 On May 29, 1985, defendant notified plaintiff by certified mail of its decision not to renew the Agreement because the company had decided to close and sell its interest in the U Street gas station. *fn2" The notice informed plaintiff that his franchise would terminate on August 31, 1985. *fn3"

 Approximately one month later, on July 1, 1985, BP Oil sent a letter to plaintiff offering to sell him its interest in the U Street property for $ 375,000. *fn4" The letter gave plaintiff 60 days to accept the offer and execute a formal agreement. *fn5" On August 21, 1985, almost six weeks later and a little over a week before the August 31 franchise expiration date, plaintiff responded to BP Oil's offer with a $200,000 counteroffer which BP Oil promptly rejected by a letter dated August 28. The letter also notified plaintiff that the expiration of his franchise would become effective on August 31, 1985, pursuant to BP's May 29 notice of intent not to renew, and that BP Oil intended to close the U Street gas station on September 20, 1985. *fn6"

 In the only disputed fact in this case, plaintiff claims that during the course of the negotiations for BP's interest in the leasehold, the company agreed to extend the dealer licensing agreement indefinitely. Defendant denies that it agreed to any such extension, acknowledging, however, that it informed plaintiff's attorney that it would not close the station until the conclusion of the negotiations in the event that they extended past August 31.

 On September 18, 1985, two days before defendant was scheduled to close the U Street station, plaintiff filed this action, seeking a temporary restraining order and a preliminary injunction against such closure. Following an agreement by the parties to maintain the status quo pending a decision on the case, the Court agreed to disregard the request for a temporary restraining order and to decide the case as a motion for preliminary injunction.

 II

 As indicated, plaintiff brings this action pursuant to the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. Section 2805(b)(2) of Title 15 provides that, in actions brought by franchisees alleging violations of the Act:

 
. . . the court shall grant a preliminary injunction if
 
(A) the franchisee shows
 
(ii) there exists sufficiently serious questions going to the merits to make such questions a fair ...

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