The opinion of the court was delivered by: HAROLD H. GREENE
Pending before the Court are cross motions for summary judgment in this action involving Amoco Oil Company's ("Amoco") decision to sell its facility located at 500 New Jersey Avenue, Northwest, in Washington, D.C. The plaintiff, Soheil Razavi, who was operating an Amoco service station at this location as a trial franchise claims that, in executing this sale, Amoco violated the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C.A. §§ 2801-2806 (1982 and 1993 supp.). There are essentially four issues in dispute between the parties, and the lack of genuine issues of material fact enables the Court to decide these matters on the motions for summary judgment. First, the plaintiff contends that Amoco did not provide him with the required notice under the PMPA for non-renewal of a franchise. Razavi's second claim is that Amoco's decision to sell the property was not made in good faith or within the normal course of business. The plaintiff contends that even if the decision to sell this property was proper, the right of first refusal offered to Razavi was inadequate. Finally, plaintiff argues that Amoco is estopped from selling the property on the basis of representations contained in a letter Amoco sent to Razavi discussing an extension of his trial franchise. After discussing the background of this case, the Court addresses each of these arguments in turn. For the reasons stated below, the Court finds that summary judgment in favor of the defendant is appropriate.
Mr. Razavi entered into a contract with Amoco in June 1990 to operate an Amoco gas station at 500 New Jersey Avenue, N.W., as a trial franchise. The contract clearly states on its face that the franchise agreement was to run from July 1, 1990 to June 30, 1991.
See Exhibit #A to Defendant's Motion for Summary Judgment. Although Mr. Razavi had been involved with the operation of the gas station under the prior franchisee, this was the first contract he had signed with Amoco. As such, he was designated as a trial franchisee, which would normally allow Amoco, the franchisor, to elect not to renew the franchise for any reason.
Amoco advised the plaintiff three months prior to the signing of this contract that it intended to sell the 500 New Jersey Avenue property assuming a buyer could be located. Razavi sent Amoco a letter on May 18, 1990, prior to the signing of the contract, stating that he understood that "Amoco intends to sell [the property] at some time in the immediate future." See Exhibit #F to Defendant's Motion for Summary Judgment. As noted, as a trial franchisee, Razavi was not legally entitled to the nonrenewal provisions of section 2802 of the PMPA. See 15 U.S.C.A. § 2803(b)(1)(D)(iii); Freeman v. BP Oil, Inc., 855 F.2d 801, 802 (11th Cir. 1988). Nevertheless, given Amoco's clear intention to sell the property, the parties agreed that the company would comply with the notice requirements contained in section 2802(b)(3)(d) in the event that it reached a deal with a prospective buyer. See Exhibit #F to Defendant's Motion for Summary Judgment. Under this agreement, Razavi would be afforded forty-five days to match any offer which Amoco received for the property.
On May 30, 1991 Amoco signed a real estate contract with a third party to sell its property at 500 New Jersey Avenue, N.W. This contract clearly stated Amoco's obligation to offer Razavi the opportunity to purchase the property on the same terms as those offered the third party. The contract stated that a decision by Razavi to purchase the property would void the deal reached between Amoco and the third party, an entity known as 500 NJ Associates.
On June 21, 1991, nine days before the June 30, 1991 end of the lease, Amoco notified the plaintiff that the trial franchise would not be renewed because Amoco had decided to sell the property. Amoco further stated that the effective date of the nonrenewal would be September 21, 1991, ninety-two days after the June 21, 1991 letter. And the letter also advised Razavi of his right of first refusal with respect to the offer Amoco had received for the property. By the terms of the PMPA, Razavi had forty-five days to accept the terms of the contract signed by the third party.
See 15 U.S.C.A. § 2802(b)(3)(D).
At the time Razavi's right of first refusal expired on August 16, 1991, he had not taken any steps to accept the terms of the purchase and sale agreement. Amoco agreed to extend the period of time within which Razavi could exercise his right of first refusal to September 30, 1991. Amoco also prolonged the effective date of nonrenewal of Razavi's trial franchise to October 15, 1991. On September 19, 1991 the plaintiff filed a complaint alleging that Amoco's attempt to sell the property was illegal. By agreement of the parties, Razavi has continued to operate an Amoco station at this location during the pendency of this action. See Exhibit #M to Defendant's Motion for Summary Judgment.
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). "Where the evidence presented on a dispositive issue is subject to conflicting interpretations, or reasonable persons might differ as to its significance," summary judgment should not be granted. Greenberg v. Food and Drug Admin., 256 U.S. App. D.C. 135, 803 F.2d 1213, 1216 (D.C. Cir. 1986) (citations omitted). "Moreover, because summary judgment is a drastic remedy, courts should grant it with caution so that no person will be deprived of his or her day in court" on a contested issue. Id.
In opposing a motion for summary judgment a party may not rely on "mere allegations" but instead "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). The Supreme Court requires that the "nonmoving party... go beyond the pleadings" and demonstrate a triable issue through affidavits, depositions, answers to interrogatories or admissions on file. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
However, in assessing the factual record before the court at the summary judgment stage, "the district court... must assume the truth of the non-movant's evidence, and draw all justifiable inferences in that party's favor." Bayer v. Department of Treasury, 294 U.S. App. D.C. 44, 956 F.2d 330, 333 (D.C. Cir. 1992) (citations omitted). After viewing the evidence presented to the court in such a light, summary judgment should be granted only where the "evidence is such that a reasonable jury could not return a verdict for the nonmoving party." Anderson, supra, 477 U.S. at 248.
In undertaking this analysis courts should be mindful not only of the rights of parties to have factual issues resolved by a jury, but also the rights of litigants "to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis." Celotex, supra, 477 U.S. at 327.
Each party has moved for summary judgment on the question of whether Amoco complied with the notice provisions contained in the PMPA when it informed Razavi, on June 21, 1991, that it would not be renewing his trial franchise. According to section 2804(a) of the PMPA, Amoco ...