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Anil Enterprises v. Getty Petroleum Marketing

February 23, 2009

ANIL ENTERPRISES, PLAINTIFF,
v.
GETTY PETROLEUM MARKETING, INC. AND LUKOIL AMERICAS CORPORATION, DEFENDANTS.



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

OPINION

Before the Court is defendant Getty Petroleum Marketing Inc.'s ("Getty") converted motion for summary judgment. For the reasons expressed below, Getty's motion is granted.

I. BACKGROUND

The history of this case was recited at length in this Court's Opinions entered on April 11, 2008 and August 27, 2008 and will not be repeated here. Rather, a brief summary of the procedural posture of this case will be provided for purposes of deciding this motion.

Plaintiff, a franchisee operator of a gasoline service station that was converted from a Mobil station to a Lukoil station, filed a three count complaint alleging that the conversion of its station from Mobil to Lukoil was a constructive termination of its franchise agreement violative of the Petroleum Marketing Practices Act ("PMPA") and the New Jersey Franchise Practices Act ("NJFPA"), and that defendants*fn1 breached their contract under New Jersey law. Defendants filed a motion to dismiss that was converted into one for summary judgment.*fn2 In response to the converted motion for summary judgment, plaintiff did not dispute the dismissal of the three claims plead in its complaint but rather requested leave to file an amended complaint to assert a claim for breach of the implied covenant of good faith and fair dealing on the ground that the breach of implied covenant claim was inadvertently omitted from its complaint. Defendants opposed amending the complaint on the ground that such amendment would be futile.

The Court continued defendants' motion for summary judgment for thirty days, permitting plaintiff two weeks to file its response to defendants' argument that amending the complaint would be futile, and defendants two weeks to respond to plaintiff's submission.*fn3 The parties have filed their respective briefs and this matter is now ready for decision.

II. STANDARD

Under Fed.R.Civ.P. 15(a)(2), the Court should freely grant leave to amend where justice so requires. See Fed.R.Civ.P. 15(a)(2). "In the absence of any apparent or declared reason -such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. - the leave sought should, as the rules require, be 'freely given.'" Foman v. Davis, 371 U.S. 178, 183 (1962). The grant or denial of leave to amend is within the discretion of the District Court. Id. (stating that outright refusal without any justifying reason is an abuse of discretion).

If allowing the complaint to be amended would not cure the problem with the initial complaint, then amending the complaint is considered futile. See Mash v. Township Of Haverford Dept. Of Codes Enforcement, No. 07-3642, 2008 WL 4748211, at *1 (3d Cir. Oct. 30, 2008); Scruggs v. AIG Personal Lines Claims, No. 08-2071, 2008 WL 4149996, at *1 (3d Cir. Sept. 10, 2008) (finding District Court did not abuse discretion by denying opportunity to amend complaint since such an act would have been an exercise in futility) (citing Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002)).

Here, Getty filed a motion to dismiss that was converted to a motion for summary judgment. After a motion for summary judgment has been filed, it is appropriate to consider the evidence submitted by the parties in determining whether amending the complaint would be futile. See, e.g., Capilli v. Whitesell Const. Co., No. 04-5777 (JHR), 2006 WL 1722354, at *7 (D.N.J. June 21, 2006) (denying plaintiff's motion to amend made in the alternative to its opposition to summary judgment because Court found summary judgment appropriate); Morley v. Philadelphia Police Dept., No. 03-880, 2004 WL 1527829, at *10 (E.D.Pa. July 7, 2004) (denying plaintiff's motion to amend in response to summary judgment motion partly because plaintiff did not prove the absence of probable cause regarding his malicious prosecution claim); see Engel v. Minissale, No. 90-4400, 1994 WL 444717, at *2-3 (E.D.Pa. Aug. 16, 1994) (considering responses to interrogatories and granting motion to amend in response to summary judgment); 27A Fed. Proc., L.Ed. § 62:270 § 62:270 (stating that "[t]he bar for a plaintiff tendering an amended complaint is higher after a motion for summary judgment has been filed, as the plaintiff must demonstrate that the proposed amendments are supported by substantial and convincing evidence.").

III. DISCUSSION

In its proposed amended complaint, plaintiff asserts four factual basis in support of its claim of breach of the duty of good faith and fair dealing: (1) pricing Lukoil fuel at Mobil fuel prices; (2) loss of "Speedpass;" (3) loss of volume; and (4) loss of value. The loss of "Speedpass" and loss of value arguments were previously addressed and found unavailing by this Court in an earlier Opinion*fn4 and will not be repeated here. The Court addresses the two other basis for its claim, pricing and loss of volume.

Plaintiff argues that it should be granted leave to amend to add a claim for breach of the implied duty of good faith and fair dealing because the defendants violated this duty by charging unreasonable dealer tank wagon ("DTW") prices for Lukoil branded gasoline. Plaintiff states that from August 2005 until July 2006, the sales volume at plaintiff's gasoline station was 926,665 gallons but that in the year after conversion of the brand in August 2006, the sales volume dropped by 36,603 gallons to 890,062 gallons. Plaintiff also states that during those same two years its "weighted average margin" dropped from $.087 per gallon to $.0695 per gallon, and its credit card fees rose by over $8,000.00.

Plaintiff also argues that it was injured when it was forced to lower its gasoline price in order to lure former customers back and build loyalty, but had to continue to pay the high wholesale prices charged by defendants. Plaintiffs admit that its gasoline sales volume did increase in certain months after conversion from Mobile to Lukoil, but argue that it only did so in response ...


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