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IANNUZZI v. EXXON CO.

October 4, 1983

CAROLYN IANNUZZI, Individually and as Executrix of the Estate of CHARLES IANNUZZI, Deceased, Plaintiff,
v.
EXXON COMPANY, U.S.A., a Division Of Exxon Corporation, Defendant



The opinion of the court was delivered by: GERRY

 Plaintiff, Carolyn Iannuzzi, individually and as executrix of the Estate of Charles Iannuzzi, brought this action against defendant, Exxon Company, U.S.A., a division of Exxon Corporation ("Exxon") for an alleged wrongful termination of a franchise agreement between Charles Iannuzzi and/or Carolyn Iannuzzi and Exxon. Plaintiff contends that the termination violated both the Petroleum Marketing Practices Act (the "PMPA"), 15 U.S.C. §§ 2801-2806 (Supp. II 1978), and the New Jersey Franchise Practice Act (the "New Jersey Act"), N.J. Stat. Ann., 56:10-1 et seq. (West Supp. 1982), and also constituted a breach of contract under state common law. This action is before the court on Exxon's motion for summary judgment.

 I. Summary Judgment.

 On this motion for summary judgment, pursuant to F.R. Civ. P. 56, Exxon, the moving party, has the burden of demonstrating that there are no genuine issues as to any material facts and that it is entitled to judgment as a matter of law. See Van Houten Service, Inc. v. Shell Oil Co., 417 F. Supp. 523 (D. N.J. 1975), aff'd without opinion, 546 F.2d 421 (3d Cir. 1976). Accordingly, the evidence presented to the court will be construed in favor of Mrs. Iannuzzi, the party opposing the motion, Continental Insurance Co. v. Bodie, 682 F.2d 436 (3d Cir. 1982); Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402 (3d Cir. 1981); Mid-West Paper Products Co. v. Continental Group, Inc., 596 F.2d 573, 579 (3d Cir. 1979); and she will be given the benefit of all favorable inferences that can be drawn from it. Peterson v. Lehigh Valley District Council, United Brotherhood of Carpenters and Joiners, 676 F.2d 81 (3d Cir. 1982). Furthermore, any facts asserted by Mrs. Iannuzzi which are supported by affidavits or other evidentiary material are regarded as true. See Scott v. Plante, 532 F.2d 939 (3d Cir. 1976).

 Here, in addition to the presumption to which plaintiff is entitled, the facts as they appear in Mrs. Iannuzzi's "Statement of Facts of the Case on Which There Exists Genuine Issues" in her original brief in opposition to the motion were not controverted by Exxon. See Reply Memorandum of Defendant Exxon in Support of Its Motion for Summary Judgment at 5. Exxon does, of course, dispute Mrs. Iannuzzi's characterization of the legal effect of those facts.

 II. Background.

 Carolyn and Charles Iannuzzi owned property as tenants-in-common on which an Exxon service center was located in Malaga, New Jersey. (Deposition of Carolyn Iannuzzi, 12:1-4, 10-25.) During the first 15 years of the station's operation, which presumably began in 1948, Mrs. Iannuzzi's name appeared along with her husband's on several agreements. It also appeared more recently on a number of documents, including a "First Refusal Option to Buy" which continued in effect until the termination of the franchise (id. at 101:10-16; 106:1-16), a General Guaranty and a financial statement. Furthermore, her name appeared as owner-operator of the station on New Jersey sales licenses, joint income tax returns and checks used in the course of business operations.

 Furthermore, during Mr. Iannuzzi's lifetime and after his death, Mrs. Iannuzzi performed numerous duties associated with the operation of the service center including: ordering products, maintaining credit card use, banking, bookkeeping, preparing and filing returns, paying bills and fees, paying employees and checking inventory. (Deposition of Charles Iannuzzi, Esq., 7:18-25; 8:1-5; 11:23-25, 17:18-25, 18:6-9 19:12-14, 22:12-21 and 25:9-18; and Affidavit of Carolyn Iannuzzi.) For purposes of this motion, the service center was run by both Charles and Carolyn Iannuzzi, with Charles being responsible for outside operations and Carolyn being responsible for inside operations.

 Nonetheless, Mrs. Iannuzzi did not sign nor was she mentioned in the Sales Agreement entered into between Exxon and Charles Iannuzzi in February, 1976. Charles Iannuzzi and Exxon also entered into an Equipment Lease in June of that year. With the enactment of the PMPA in 1978, Mr. Iannuzzi was provided with statutory protection from arbitrary and discriminatory termination of his franchise by virtue of the Act.

 The Sales Agreement formed the basis of the franchise as that term is defined in the PMPA. It provided in pertinent part as follows:

 Breach and Termination: (a) It is agreed that if . . .

 
Buyer dies . . . then Seller may at any time thereafter (immediately or otherwise) terminate this contract by giving Buyer written notice of Seller's election to do so and this contract shall expire and come to an end on the date fixed in said notice as if said date were fixed herein for the expiration of the term thereof.

 (Emphasis added.)

 On June 16, 1980, Charles Iannuzzi died. Exxon was put on notice of his death no later than two weeks from the time of his death. (Deposition of Charles Iannuzzi, 37:5-22, 39:10-25, 40:1-8, 42:15-22, 44:20-25; Deposition of Carolyn Iannuzzi, 21:3-12, 109:1-5.) Exxon continued to deliver fuel products to the service station until May 4, 1981.

 On January 28, 1981, President Reagan issued Executive Order No. 12287 to exempt crude oil and refined petroleum products from price and allocation regulations. 46 Fed. Reg. 9,909, Jan. 30, 1981. The validity of the President's Executive Order was immediately challenged in the courts. See Metzenbaum v. Edwards, 510 F. Supp. 609 (D. D.C. 1981), (court denied plaintiff's motion for preliminary injunction seeking to halt enforcement of the Order). In response to the President's directive, the Economic Regulatory Administration revoked all of the price and allocation regulations made unnecessary by the Executive Order. 46 Fed. Reg. 20,508, April 3, 1931. Section 211.9 was removed effective March 30, 1981.

 In his affidavit in support of the motion, J.S. Carter, Manager of the Linden Retail District of Exxon, avers that "prior to the effective date of the removal of the DOE supply regulations, it was Linden Retail District's practice to continue to supply motor fuel to a service station following the termination of its franchise relationship with a dealer, by death or otherwise, where it had a DOE mandated supply obligation, even though Exxon had not yet entered into any franchise agreement with a new dealer." Neither Mrs. Iannuzzi nor her son Charles Iannuzzi, Esq., her attorney and representative, was informed that Exxon was continuing to supply the station because of the DOE regulations. (Deposition of Carolyn Iannuzzi, 102:10-18, 110:23-25, 111:1-3, and affidavit of Carolyn Iannuzzi.)

 Between Mr. Iannuzzi's death and Exxon's last delivery of fuel, a number of other incidents occurred. On or about February 13, 1981, two 2,000 gallon storage tanks which Exxon had leased to Charles Iannuzzi were taken out of service, because a customer who had purchased gasoline from those tanks had complained that the gasoline contained water. (Deposition of Carolyn Iannuzzi, 111:11-24, 132:18-21.) Exxon decided that the 25 year old tanks were not repairable and, as of April 20, 1981, decided not to replace them. See Letter dated April 20, 1981 from Richard V. Hansum, Esq. to Charles Iannuzzi, Esq. (Although replacement had earlier been recommended by J. S. Carter, one of Exxon's District Managers, see Internal Memorandum dated February 17, 1981 from D. J. Dragan to Ed.)

 In response to a previous telephone call from Charles Iannuzzi, Esq., T. M. Burns, Exxon's Field Sales Manager, sent him a letter dated March 6, 1981, in which he stated that Exxon would "prefer to negotiate a mutual cancellation of these documents [Sales Agreement and Equipment Lease]." (Emphasis added.) Between March 6, 1981 and April 20, 1981, Exxon and Charles Iannuzzi, Esq., exchanged correspondence regarding the supposed leak in the gasoline storage tanks, gasoline supply problems and the possibility of Exxon buying out the contracts for $6,000.00.

 Finally, by letter dated April 20, 1981, Richard Hansum notified Charles Iannuzzi, Esq., that Exxon deemed "the Sales Agreement, as well as any franchise relationship with respect [to the subject] location terminated effective May 8, 1981 for the reason that Exxon's dealer at this location has died." He also informed him, among other other things, that the letter itself was to constitute the five days' prior written notice which Exxon was required to give under the Equipment Lease in order to terminate it. He also encouraged Mr. Iannuzzi to accept $6,000.00 in return for a Mutual Termination and Release through May 8, 1981.

 Mr. Iannuzzi rejected the offer and informed Exxon that his mother considered it to have repudiated its agreements and would take steps to mitigate her damages. Certified Letter dated April 29, 1981, from ...


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