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August 5, 1996

A.W. ANDERSON, et al., Plaintiffs,
CHEVRON CORPORATION and CHEVRON, U.S.A., INC., Defendants, CHEVRON U.S.A., INC., Counterclaim-Plaintiff, v. A.W. ANDERSON, et al., Counterclaim-Defendants, CHEVRON U.S.A., INC., Third Party Plaintiff, v. JAMES C. PAYNE, et al., Third Party Defendants.

The opinion of the court was delivered by: LAMBERTH

 This matter comes before the court on a motion for summary judgment filed by defendant Chevron with respect the following: (1) plaintiffs' claims under the Petroleum Marketing Practices Act (the "PMPA"), 15 U.S.C. §§ 2801-2841; (2) plaintiffs' common law claims; and (3) defendant's counterclaims against certain named plaintiffs and third-party defendants. *fn1" Upon consideration of filings of counsel, defendant's motion for summary judgment shall be granted with respect to plaintiffs' statutory claims, plaintiffs' common law claims, and defendant's counterclaims. The court's reasoning is set forth below.


 A. The Parties

 Defendant Chevron is a refiner and marketer of petroleum products. On October 14, 1992, Chevron entered an agreement with Exxon Corporation ("Exxon") to exchange certain Chevron service stations in the Baltimore, Maryland, Washington, D.C., and Norfolk, Virginia areas ("collectively, the "Mid-Atlantic Area") for certain Exxon service stations in southern Florida. This exchange of assets between Chevron and Exxon represented Chevron's near complete withdrawal from the Mid-Atlantic petroleum market.

 Plaintiffs are twelve service stations dealers *fn2" who leased their stations or purchased motor fuel from Chevron at the time of the exchange. Plaintiffs allege that Chevron renewed or entered into franchise agreements with each plaintiff after Chevron had decided to withdraw from the Mid-Atlantic area, and after "the occurrence of changes in relevant facts and circumstances" upon which Chevron based its determination to withdraw, in violation of the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2802(b)(2)(E)(i). *fn3" In the present motion, defendant Chevron seeks summary judgment with respect to these claims.

 Four of these plaintiffs -- Charles W. Blanchard, Diversified Business Co., Inc., JCP, Inc., and Harry M. Land, Jr. -- also allege that Chevron committed common-law fraud based on misrepresentations made by Chevron employees regarding Chevron's long-term marketing plans in the Mid-Atlantic area. In their complaint, these four plaintiffs also claimed that Chevron's actions violated an implied covenant of good faith and fair dealing. Recently, however, the Virginia Supreme Court in Mahoney v. NationsBank of Virginia, N.A., 249 Va. 216, 455 S.E.2d 5 (Va. 1995), ruled that a person cannot have violated the implied covenant of good faith and fair dealing where that person acted in a manner specifically provided for by the express terms of a subsequent written agreement. See id. at 221-22. Plaintiffs concede that this case is dispositive, and that in light of this decision, their implied covenant claims must fail. Accordingly, the court shall enter summary judgment for defendant on the implied covenant claim, and consider only whether plaintiffs' common law fraud claims survive defendant Chevron's motion for summary judgment.

 Finally, defendant Chevron filed counterclaims against six plaintiffs -- A.W. Anderson, Wilson Beach, Charles W. Blanchard, Diversified Business Co., Inc., JCP, Inc., and Harry M. Land, Jr. -- who allegedly refused to honor their contractual obligations to pay Chevron for rent, motor fuel and other products. In addition, Chevron has named the guarantors of two the plaintiffs' obligations -- James C. Payne, Jr., as guarantor for JCP, Inc., and Emmitt Short, as guarantor for Diversified Business Co., Inc. -- as third-party defendants. Defendant also moves for summary judgment with respect to these third-party claims.

 B. Defendant Chevron's Withdrawal From the Mid-Atlantic Market

 According to plaintiffs, defendant Chevron first began to explore the possibility of withdrawal from the Mid-Atlantic market area in the mid-1980's. In October of 1985, Chevron received a bid from Mobil for its Mid-Atlantic assets. Chevron, however, rejected Mobil's bid, and chose to remain in the Mid-Atlantic market area.

 In July of 1991, Chevron again began to explore the possibility of a sale or exchange of its Mid-Atlantic assets. Chevron conducted a number of studies to determine the feasibility of market strategy that would include market withdrawal from the Mid-Atlantic area. *fn4" On July 18, 1991, Chevron's Executive Committee authorized Chevron's Marketing Department to determine the market value of Chevron's Mid-Atlantic assets and to explore the possibility of whether an attractive exchange might be available.

 A planning group within Chevron's Marketing Department subsequently analyzed the company's options, and on October 17, 1991, recommended to the Chairman of Chevron's Board of Directors that Chevron test the feasibility of trading its Mid-Atlantic assets for similar assets in Florida. *fn5" It is undisputed that, at this time, Chevron's Mid-Atlantic assets were operating profitably, and that Chevron would continue its operations in this area in the event that Chevron was unable to find a suitable buyer or exchange party.

 Chevron approached Mobil in October 1991 to determine whether Mobil had any interest in discussing the possibility of an exchange of assets. In December 1991 -- while Chevron awaited a response from Mobil representatives -- Exxon inquired whether Chevron would be interested in an exchange of Chevron's Mid-Atlantic assets for similar Exxon assets in southern Florida. Chevron declined to pursue discussions with Exxon in light of its ongoing discussions with Mobil. On January 16, 1992, however, Mobil advised Chevron that it was not interested in exchanging assets. As a result, Chevron's planning group resumed discussions with Exxon.

 On February 6, 1992, Chevron sent Exxon a list of all Chevron assets in the Mid-Atlantic area to assist Exxon in its determination whether to present an exchange offer to Chevron. On February 14, 1992, Exxon sent Chevron a list of all its Florida assets, and the parties entered into a confidentiality agreement on February 27, 1992.

 Although Exxon had not yet made an offer to Chevron, the parties continued to evaluate internally their interests in the proposed exchange. Finally, on or about July 10, 1992, Exxon proposed an exchange of approximately sixty Exxon stations in southern Florida for sixty Chevron stations in the Mid-Atlantic area. Over the next few days, Chevron's planning group and Marketing Department reviewed the Exxon proposal, and made a preliminary determination to present the Exxon offer to Chevron's Board of Directors. On July 13, 1992, Chevron stopped renewing or entering into agreements with dealers in the Mid-Atlantic area.

 Negotiations between Chevron and Exxon continued throughout the remainder of the month, and on August 6, 1992, the working Exxon proposal was presented to Chevron's Executive Committee. Chevron's Executive Committee authorized further negotiations, and on October 1, 1992, the Board authorized the final negotiation and execution of the proposed exchange agreement. The exchange agreement was executed on October 14, 1992.

 At the time of execution of the exchange agreement, all of the plaintiffs, with the exception of Richard Moore, *fn6" were Chevron licensees operating under three-year franchise agreements that were identical in all relevant respects. Moreover, all the franchise agreements between plaintiffs and defendant Chevron, with the exception of Richard Moore, were entered into or renewed on or before May 20, 1992. *fn7"


 A. Standard of Review

 Summary judgment is appropriate where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Inferences drawn from the facts must be viewed in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970). If summary judgment is to be denied, there must be evidence on which the jury could reasonably find for the non-moving party. Anderson v. Liberty Lobby, 477 U.S. 242, 252, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). If the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial," summary judgment may be granted. Celotex, 477 U.S. at 322.

 B. Alleged Violation of the Market Withdrawal ...

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