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D.C. Oil, Inc. v. Exxonmobil Oil Corp.

October 29, 2010

D.C. OIL, INC., PLAINTIFF,
v.
EXXONMOBIL OIL CORPORATION ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document No.: 15

MEMORANDUM OPINION

GRANTING IN PART AND DENYING IN PART THE EXXONMOBIL DEFENDANTS' MOTION TO DISMISS

I. INTRODUCTION

The plaintiff, D.C. Oil, Inc., is the operator of an Exxon-branded retail gas station in the District of Columbia. Defendants ExxonMobil Corporation ("ExxonMobil") and ExxonMobil Oil Corporation ("ExxonMobil Oil" and, together with ExxonMobil, "the ExxonMobil defendants") are engaged in the business of oil production and refining. Until June 2009, the plaintiff leased the property on which its gas station is located from ExxonMobil and operated the station pursuant to a franchise agreement with ExxonMobil Oil. In June 2009, the ExxonMobil defendants executed a contract to sell the station property to defendant Anacostia Realty, LLC ("Anacostia"), a gasoline distributor that owns and supplies several retail gas station properties in the District of Columbia. The plaintiff alleges that the sale violated the District of Columbia Retail Service Station Amendment Act of 2009 ("RSSA"), D.C. CODE §§ 36-304.11 et seq., and has asserted claims of civil conspiracy and promissory estoppel.

The matter is now before the court on the ExxonMobil defendants' motion to dismiss the plaintiff's claims for failure to state a claim for which relief can be granted. Because the court cannot conclude based on the parties' submissions to date that the RSSA does not apply to the sale of the station property at issue, the court denies the ExxonMobil defendants' motion to dismiss the plaintiff's RSSA claim. Because, however, the plaintiff has not asserted a viable claim of civil conspiracy or promissory estoppel against the ExxonMobil defendants, the court dismisses these claims as to those defendants.

II. FACTUAL & PROCEDURAL BACKGROUND

The plaintiff operated an Exxon-branded service station and convenience store located at 2150 M Street N.W. in the District of Columbia. Compl. ¶¶ 3, 7. The plaintiff leased the service station premises from ExxonMobil and was supplied with Exxon-branded motor fuel through a long-term franchise agreement with ExxonMobil Oil. Id. ¶ 8. The plaintiff's convenience store was located in the first floor of a condominium building located on the property. Id. ¶ 7. The convenience store premises were subject to a lease between ExxonMobil and the condominium building association. Id.

In 2008, the ExxonMobil defendants began divesting themselves from the retail gas station market, selling gas station properties and assigning franchise agreements to distributors. Id. ¶ 9. In June 2009, ExxonMobil and Anacostia executed contracts for the sale of several Exxon-branded service stations located in the District of Columbia, including the one operated by the plaintiff. Id. ¶¶ 18-19. ExxonMobil and Anacostia signed a Special Warranty Deed for the sale of the plaintiff's service station premises on June 11, 2009 ("the Deed"). Id.

The plaintiff contends that the sale of the plaintiff's service station premises did not close until August 6, 2009. Id. More specifically, the complaint states that on June 17, 2009, the plaintiff's principal shareholder, Raj Gupta, was advised by an Exxon representative that ExxonMobil's lease for the plaintiff's convenience store included a requirement that the condominium association be given advance notice of any proposed assignment of the lease and a right of first refusal. Id. ¶ 20. Because the condominium association had not been provided notice of the proposed sale in a sufficiently timely manner, the sale to Anacostia could not close until early August. Id. Gupta was allegedly advised by Anacostia's principal, Eyob Mamo, that the plaintiff would continue to receive motor fuel product directly from ExxonMobil Oil and would continue to pay rent directly to ExxonMobil until the plaintiff's premises were transferred to Anacostia. Id.

The plaintiff alleges that through early August 2009, it continued to deal directly with the ExxonMobil defendants as its lessor and supplier of motor fuel. Id. ¶ 21. According to the complaint, on August 6, 2009, the station premises were finally transferred to Anacostia, as reflected in the Deed recorded with the Office of the Recorder of Deeds. Id.

The date of the transfer is potentially significant because it may be relevant to whether the RSSA applies to the transaction. The RSSA requires that a supplier offer its franchisor a right of first refusal before selling service station property to a third party. D.C. CODE § 36-304.12. Accordingly, if the RSSA applies here, the plaintiff should have been given the right to purchase the service station property before it was sold to Anacostia. See id. The RSSA became effective on July 18, 2009, one month after ExxonMobil and Anacostia executed a contract for the sale of the premises but three weeks before the plaintiff alleges the transfer took effect. See Compl. ¶¶ 18-21.

In June 2010, the plaintiff commenced this action against the ExxonMobil defendants and Anacostia. See generally Compl. The plaintiff alleges that the defendants violated the RSSA by depriving the plaintiff of its right of first refusal guaranteed by the provision. Id. ¶¶ 29-30. The plaintiff also alleges that the defendants conspired to violate the RSSA. Id. ¶¶ 31-32. Lastly, the plaintiff has asserted a claim of promissory estoppel against the ExxonMobil defendants, alleging that it reasonably relied on the ExxonMobil defendants' promise that they would only sell to a reputable distributor with the infrastructure and technology in place to support the dealers as well as Exxon had done. Id. ¶¶ 33-36. On July 9, 2010, the ExxonMobil defendants moved to dismiss the claims against them ...


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