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O'Boyle v. Jiffy Lube International Inc.

filed: January 25, 1989.

MARTIN E. O'BOYLE, APPELLANT,
v.
JIFFY LUBE INTERNATIONAL, INC.



On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 88-0220.

Seitz, Stapleton and Cowen, Circuit Judges.

Author: Cowen

Opinion OF THE COURT

COWEN, Circuit Judge.

This case arises from a dispute over the obligations created by a development agreement between Martin E. O'Boyle, a real estate developer, and Jiffy Lube International, Inc. ("Jiffy Lube"), a corporation engaged in the business of operating facilities which provide automotive oil change and lubrication services to consumers. The issues before us on appeal are one, whether the development agreement can be construed or interpreted to create obligations to O'Boyle which were allegedly breached by Jiffy Lube, and two, whether the complaint filed by O'Boyle adequately set forth claims that Jiffy Lube breached these obligations. Because we conclude that the district court erred in its construction of both the complaint and the agreement, we will reverse the order of the district court dismissing the bulk of the claims raised in the complaint.

I.

Jiffy Lube and O'Boyle agreed to the terms of a contract in November of 1985 which stated that Jiffy Lube would grant O'Boyle the right to develop ten minute oil change facilities having an aggregate value of $20,000,000 for Jiffy Lube.*fn1 In relevant part, the agreement provided:

DEVELOPMENT AGREEMENT

AGREEMENT made this 15th day of November, 1985 between JIFFY LUBE INTERNATIONAL, INC., a corporation formed under the laws of the State of Nevada ("Jiffy Lube") and MARTIN E. O'BOYLE ("O'Boyle").

WITNESSETH

Jiffy Lube desires to grant to O'Boyle the right, for a limited period of time, to build and lease facilities in the United States of America with a total aggregate cost of no less than Ten Million Dollars ($10,000,000.00) or Twenty Million Dollars ($20,000,000.00), as provided below.

O'Boyle desires to perform such services for Jiffy Lube.

NOW THEREFORE, the parties hereto, for and in consideration of the foregoing, the covenants set forth below, the sum of Ten Dollars ($10.00) paid by each party to the other, and intending legally to be bound hereby, agree as follows:

1. Definitions. For the purposes of this Agreement, the following terms shall have the meanings set forth below:

(e) "Development Amount" shall mean the sum of Ten Million Dollars ($10,000,000.00), unless O'Boyle shall timely exercise the Renewal Option, in which event "Development Amount" shall mean the sum of Twenty Million Dollars ($20,000,000.00).

(ff) "Term of this Agreement" shall mean the period commencing as of the date of this Agreement and ending on the sooner to occur of (i) the Term Ending Date and (ii) the date on which Jiffy Lube shall have entered into Lease(s) with Developer(s) under which the ...


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