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GLENSIDE WEST CORP. v. EXXON CO.

April 8, 1991

GLENSIDE WEST CORPORATION, PLAINTIFF,
v.
EXXON COMPANY, U.S.A., A DIVISION OF EXXON CORPORATION, DEFENDANT. EXXON COMPANY, U.S.A., A DIVISION OF EXXON CORPORATION, COUNTERCLAIMANT, V. GLENSIDE WEST CORPORATION, COUNTERDEFENDANT.



The opinion of the court was delivered by: Lechner, District Judge.

  OPINION

This is an action brought by plaintiff Glenside West Corporation ("Glenside") against Exxon Company, U.S.A., a Division of Exxon Corporation ("Exxon"), and counterclaims brought by Exxon against Glenside arising out of the decision by Exxon to terminate the retail motor fuel service station franchise of Glenside (Glenside and Exxon are collectively referred to as the "Parties"). Glenside alleges jurisdiction pursuant to the Petroleum Marketing Practices Act (the "PMPA"), 15 U.S.C. § 2805.*fn1 Exxon alleges federal question jurisdiction pursuant to 28 U.S.C. § 1331 and jurisdiction pursuant to 28 U.S.C. § 1337.

On 13 February 1991, Exxon filed a motion for a temporary restraining order and a preliminary injunction to restrain and enjoin Glenside from continuing to conduct its service station business on Exxon's property located at 2591 Route 22, Scotch Plains, New Jersey (the "Service Station"), from continuing to maintain possession of the Service Station, from communicating with or coming within close proximity to Exxon employees Anthony Luciano ("Luciano") and William Cruikshank ("Cruikshank") and from coming within close proximity of the Service Station and Exxon's Linden, New Jersey offices and facilities (the "Linden Offices"). In addition, Exxon moved to supplement its counterclaims to include the criminal convictions of Robert E. Lee, Jr. ("Lee"), the president and sole shareholder of Glenside, as a ground for terminating the franchise relationship under the PMPA, 15 U.S.C. § 2802.

Oral argument on Exxon's motion for injunctive relief and to supplement counterclaims was held on 25 February 1991.*fn2 In a decision announced from the bench on that date, the Exxon request to enjoin Glenside from continuing to conduct the Service Station business and from continuing to maintain possession of the Service Station was rejected. It was determined such injunctive relief was not appropriate at that time because it would effectively dispose of the case on the merits by terminating the franchise business. The parties were advised such injunctive relief was more appropriately the subject of a motion for summary judgment.

The Exxon motion for an injunction restraining Lee, the president and sole shareholder of Glenside, from coming within one hundred yards of the Linden Offices, the Service Station and Exxon employees Luciano and Cruikshank was granted. See Oral Arg. Tr. at 2-9. In addition, Exxon was permitted to supplement its counterclaims pursuant to Fed.R.Civ.P. 15(d) to include the convictions of Lee as a ground for termination under the PMPA. Id. See also 26 February 1991 Order; 28 February 1991 Order.

Exxon now moves for partial summary judgment on the issue of the lawfulness of Exxon's termination of the Franchise Agreement under the PMPA, 15 U.S.C. § 2802. In addition, Exxon renews its application for injunctive relief to enjoin Glenside from operating and from maintaining possession over the Service Station, as requested in its counterclaims.*fn3 Oral argument on Exxon's motion for partial summary judgment and on its application for permanent injunctive relief was held on 22 March 1991 (the "22 March 1991 Oral Argument").

For the reasons which follow, the motions for partial summary judgment and for permanent injunctive relief are granted. In addition, the reasons for the 25 February 1991 determination enjoining Lee from approaching the Service Station, the Linden Offices and Luciano and Cruikshank and permitting Exxon to supplement its counterclaims are set forth. Finally, the preliminary injunction enjoining Lee from approaching the Service Station, the Linden Offices and Luciano and Cruikshank is converted to a permanent injunction.

Facts*fn4

Glenside, through Lee, entered into a franchise relationship with Exxon sometime around April 1985 for the operation of the Service Station. Amended Complaint at 5-6. The franchise relationship was based on a lease agreement (the "Lease Agreement") and retail sales agreement (the "Sales Agreement") between the Parties which authorized Glenside to use Exxon's trade mark in connection with the sale, consignment or distribution of gasoline, motor oil and related products (the Lease Agreement and Sales Agreement are collectively referred to as the "Franchise Agreement"). Amended Complaint at 6. The Parties renewed the Franchise Agreement on or about 27 September 1987 for the period 1 January 1988 to 1 January 1991. Amended Complaint at 8.

On or around 4 January 1990, Glenside received notice from Exxon of Exxon's intention to terminate and not renew the Franchise Agreement effective 15 April 1990. Amended Complaint at 2. Exxon based its decision to terminate on Glenside's failure to make timely rental payments for October and November 1989 and on Lee's alleged threat to injure Exxon's personnel and damage its property. Amended Complaint.

On 3 April 1990, Glenside filed its Complaint for Preliminary and Permanent Injunction, seeking to enjoin Exxon from terminating the Franchise Agreement. See Complaint for Preliminary and Permanent Injunction (the "Complaint"). It withdrew its request for a preliminary injunction on 31 May 1990 and filed the Amended Complaint on 10 August 1990. See Amended Complaint. The Amended Complaint now contains six counts.*fn5 Count One alleges Exxon seeks to terminate the Franchise Agreement with Glenside in violation of the PMPA, 15 U.S.C. § 2802. The remaining counts appear to be based on violations of New Jersey law.*fn6

Exxon filed its Answer and Counterclaim on 30 April 1990, its Answer to Amended Complaint and Counterclaims on 31 August 1990, and, with the consent of Glenside, the Supplemental Answer to Amended Complaint and Counterclaims on 28 December 1990 (the "Supplemental Counterclaims"). In Count I (the "First Counterclaim") of the Supplemental Counterclaims, Exxon alleges the failure of Glenside to make timely rental payments for the months September 1988 and April, October and November 1989, August, September, October, November and December 1990 and threats by Glenside against Exxon's personnel and property constitute grounds for termination and nonrenewal pursuant to 15 U.S.C. § 2802(b)(2)(A), 2802(b)(2)(B) and/or 2802(b)(2)(C) and 2802(c)(8). In Count II (the "Second Counterclaim"), Exxon alleges it was entitled to possess the Service Station on 15 June 1990 under the terms of the Lease Agreement and seeks of eviction of Glenside pursuant to its terms. In Count III, Exxon alleges Glenside owes Exxon in excess of $13,000 for rent and other items. Exxon seeks declaratory relief that its termination and nonrenewal of the Franchise Agreement were lawful under the PMPA, injunctive relief enjoining Glenside from continuing to occupy and refusing to vacate the Service Station, a judgment against Glenside for the amounts due and owing and legal costs and attorneys' fees.

The allegation of threats by Lee against Exxon's personnel and property is partly based on threats made by Lee in a telephone conversation with Sharon Haggerty ("Haggerty"), the office manager for the office of Luciano, the Exxon district manager for the Linden district. Supplemental Counterclaims, ¶ 13. On 25 October 1989, Lee telephoned Luciano's office "clearly in a rage" and requested to speak with him. Haggerty Dec., ¶ 2. Haggerty informed Lee that Luciano was unavailable. Lee stated "he wanted to resolve his problems with Exxon and that if the problems were not resolved he would blow up Exxon's Linden plant and kill Exxon personnel, including Cruikshank, his business counselor, and Luciano." Id. Lee further informed Haggerty that he had run his wife and two children out of his house and that he had then destroyed everything in the house. Id. Haggerty spoke with Lee approximately thirty to forty minutes as she attempted, unsuccessfully, to calm Lee down. Id.*fn7

In his deposition testimony, Lee did not deny having made such threats to Haggerty during that telephone conversation. Rather, he stated he did not remember the content of that conversation because he was "drunk, intoxicated" at the time, having drunk "[a] lot" of "beer, whiskey, everything . . ." over a full day. R. Lee Dep. Tr. at 46. In her deposition testimony, Dorothy Lee, Lee's spouse, testified Lee admitted to her the day following the 25 October 1989 telephone conversation he had threatened to blow up Linden's Exxon plant:

  Q. You testified that the day after the October
  25, 1989 phone call, Mr. Lee told you what he said
  to Exxon; correct?

A. Correct.

  Q. And he told you that he had said that he was
  going to blow up Exxon's Linden, New Jersey,
  plant; correct?

A. Correct.

  Q. Did Mr. Lee express my [sic] remorse about
  having made that telephone call?
  A. Yes. He said that he shouldn't have said that,
  that he said it because he was mad, and plus he
  had the drinks in him, and he shouldn't have said
  that, and I said it too, "You shouldn't have said
  that," and he also said, "Why did I say that? That
  was a stupid thing for me to say."

D. Lee Dep. Tr. at 73.*fn8 Exxon served Glenside with a second notice of termination after it learned that Lee had been convicted on a three-count indictment on 7 February 1991. Following an incident unrelated to the operation of the Service Station, Lee was tried and convicted after a jury trial before the Hon. Betty J. Lester of the Superior Court of New Jersey, County of Essex, for third degree aggravated assault, possession of a weapon and possession of a weapon for an unlawful purpose. Herman Cert., ¶ 2.*fn9

It appears the conviction of Lee arises from events occurring on 15 December 1989 at the Fireside Inn, a tavern owned by Lee's father and located in Newark, New Jersey. Second Lee Cert., ¶ 3. According to Carl J. Herman ("Herman"), counsel for Lee in the criminal proceedings, Lee was convicted based on the testimony of Rosalie Marrone ("Marrone"), a patron of the tavern, as to an altercation between a patron of the tavern, Frank Giacone ("Giacone"), Lee's brother, Billy Lee ("Billy"), and Lee. Herman Cert., ¶ 5. Herman states Marrone "testified essentially that Mr. Lee kicked Mr. Giacone once in the body and further hit him once with a pipe in the body area when Mr. Giacone was lying in a prone position on the floor after being assaulted by Billy Lee."

Herman Cert., ¶ 5. Herman attaches to his certification the statement Marrone gave the police, in which Marrone stated:

  [Giacone] then went down on the first blow to the
  head. Billy was ranting "I'll kill, I'll kill, Do
  you want to see me go crazy. I'll go crazy." As he
  was ready to hit Frank Giacone for the second time
  I tried to get up and help him . . . I saw Billy
  hit Frank for the second time. Billy was then
  ready to hit him for the third time when I leaped
  towards Billy to stop him from hitting Frank, and
  the bat hit me. Then when I was leaning down to
  see Frank, Billy hit him for a third time in the
  head. . . . There was so much commotion going on.
  . . . Bobby, Jr. [Lee] then walked over to where
  [Giacone] was lying and hit his body with a pipe
  and kicked him and called him a ". . . jerk off."
  Then they proceeded to leave the scene of the
  crime.

See Marrone Statement. Counsel for Exxon represents that testimony at trial included testimony from Giacone's doctor that "as a result of the attack, Mr. Giacone has suffered severe and permanent injuries." Exxon PI Moving Brief at 5. Counsel for Glenside did not deny at the 22 March 1991 Oral Argument that such medical testimony took ...


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