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Gles, Inc v. Mk Real Estate Developer & Trade Company

May 6, 2011

GLES, INC., PLAINTIFF,
v.
MK REAL ESTATE DEVELOPER & TRADE COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Karen M. Williams United States Magistrate Judge

MEMORANDUM OF DECISION

This Memorandum of Decision serves as the Court's Findings of Fact and Conclusions of Law pursuant to Fed. R. Civ. P. 52 in connection with the parties' non-jury trial which occurred on January 10, 2011 and January 11, 2011. Pursuant to 28 U.S.C. §636(c), the parties consented to the jurisdiction of this Court to preside over the trial. Mark Greco, Michael Butler and Kevin Krowicki testified on behalf of Plaintiff, GLeS, Inc. f/t/a Sweet Oil Company. Maninder Kohli and Hermeet Kohli testified as, and on behalf of, Defendants.

Plaintiff, GLeS, Inc. f/t/a Sweet Oil Company ("GLeS"), a Delaware Corporation with a principal place of business in Turnersville, New Jersey, brought this action against MK Real Estate Developer & Trade Company ("MK Real Estate"), Maninder Kohli and Hermeet Kohli , husband and wife, for breach of contract. For many years, the parties had a business relationship whereby Plaintiff provided Defendants with fuel to operate its retail gasoline businesses. In or about 2005, the agreement between the parties expanded to include the branding of two (2) of Defendants' retail gasoline stations-the Swedesboro station and Pole Tavern station. By virtue of this lawsuit, Plaintiff is seeking to recover past due payments in the amount of $80,780.20 for six (6) fuel invoices and $71,306.02 for costs related to re-branding the Defendants' gas stations. Plaintiff also seeks interest, attorneys fees and costs. Defendants' Counterclaim for breach of contract relates to Plaintiff's alleged failure to pay branding incentives in the amount of $60,000 plus a two cent (.02) per gallon rebate in the amount of $147,563 for gasoline purchased by MK Real Estate. The case proceeded to trial on the merits in January 2011 and the parties submitted post-trial proposed Findings of Fact and Conclusions of Law. For the reasons that follow, the Court finds in favor of GleS, with exceptions, on its breach of contract claim. The Court finds for Plaintiff on Defendants' Counterclaim.

I. Findings of Fact

A. Background

1. Plaintiff, GLeS*fn1 , is a Delaware corporation that distributes major brand gasoline. (Stip. Facts*fn2 ¶ 1; Tr. 9).

2. MK Real Estate is a New Jersey corporation (Stip. Facts ¶2) and Maninder and Hermeet Kohli, husband and wife, are the owners. (Trial Tr. 192, Jan. 10, 2011).

3. Defendants have been in the retail gasoline business for twenty-four (24) years. (Stip. Facts ¶11).

4. Plaintiff and Defendants first had a business relationship whereby Plaintiff provided fuel to Defendants beginning around 2000 or 2001 at other stations operated by Defendants. (Stip. Facts ¶12). 5. On or about December 1, 2005, GLeS and MK Real Estate entered into a Sales Agreement ("Agreement"). (Exh. J3).

6. Maninder and Hermeet Kohli personally guaranteed the Agreement on behalf of MK Real Estate. (Stip. Facts ¶7).

7. On December 1, 2005, the parties also executed a "Termination Agreement" to end their prior contractual obligations. (Trial Tr. 2, 20, Jan. 11, 2011).

B. Fuel Invoices

8. On January 10, 2011, at the commencement of the trial, Defendants stipulated to the fuel invoices in the amount of $80,780.20.*fn3 (Trial Tr. 5-7).

9. On or about February 20,2007, Defendants received fuel product valued at $17,374.61 from Plaintiff, received invoice number 624184 for the fuel product, and did not pay the invoice. (Stip. Facts ¶12; Exh. P1). This invoice was initially presented to Defendants in February of 2007. (Trial Tr. 25-26).

10. On or about March 3, 2007, Defendants received fuel product valued at $6,535.26 from Plaintiff, received invoice number 157061 for the fuel product, and did not pay the invoice. (Stip. Facts ¶13; Exh. P3). Plaintiff first presented this invoice to Defendants at the end of June 2007. (Trial Tr. 72).

11. On or about September 19, 2006, Defendants received fuel product valued at $17,703.73 from Plaintiff and Plaintiff sought payment by way of bank draft for invoice number 582165. On February 23,2007, the draft was returned unpaid. (Stip. Facts ¶15; Exh. P5). Plaintiff first presented this invoice to Defendants in February 2007. (Trial Tr. 65).

12. On or about March 1, 2007, Defendants received fuel product valued at $19,606.44 from Plaintiff, received invoice number 6278443 for the fuel product, and did not pay the invoice. (Exh. P7). Plaintiff first presented this invoice to Defendants in August 2007. (Trial Tr. 71).

13. On or about March 3, 2007, Defendants received fuel product valued at $21,250.49 from Plaintiff, received invoice number 627978 for the fuel product, and did not pay the invoice.

(Exh. P9). Plaintiff first presented this invoice to Defendants in August 2007. (Trial Tr. 72).

14. On or about March 5, 2007, Defendants received fuel product valued at $7,682.45 from Plaintiff, received invoice number 157234B for the fuel product, and did not pay the invoice. (Exh. P11). Plaintiff first presented this invoice to Defendants at the end of June 2007. (Trial Tr. 72).

15. The six fuel invoices were admitted as accurate and owed by Defendants. (Trial Tr. 3-4, 5).

16. The six (6) invoices for fuel were never paid by the Defendants and have yet to be paid. Pursuant to the Agreement, Mark Greco would bill the fuel received by Defendants from the oil companies either electronically or by fax. The six (6) invoices were billed electronically, faxed to Defendants and even hand-delivered to Defendants. (Trial Tr. 25-26).

17. Plaintiff also paid the taxes associated with the sale of gallons of gasoline to Defendants. (Trial Tr. 17).

18. In addition to receiving a bill from the Plaintiff, Defendants would also receive a copy of the bill of laden from their own driver of the fuel delivery truck, Lee Transports. (Trial Tr. 27).

19. The six (6) invoices for fuel were presented to Defendants many times for payment by the Plaintiff. (Trial Tr. 31; Trial Tr. 153-158).

20. Pursuant to the Agreement, if the Defendants disputed a fuel invoice, they were required to notify the Plaintiff of their dispute in writing within 30 days of their receipt of the invoice. (Exh. J3). The Defendants never notified the Plaintiff, in writing or otherwise, of any dispute with any of the invoices. (Exh. J3 ¶4(g); Stip. Facts ¶16; Trial Tr. 31, 46-47). 21. The Agreement indicates that ...


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