Jul 15, 2019 - Franchise, Dealer & Antitrust Decisions in One Sentence by |

The United States District Court for the District of New Jersey rejected the petroleum franchisor’s request to dismiss on summary judgment the gasoline dealer franchisee’s case for wrongful termination because, according to the Court, the defendant bears the burden of proof in actions under the PMPA, and the bulk of defendant’s evidence was testimonial and thus subject to credibility determinations; material disputes existed regarding the following facts, going to the franchisor’s good faith in demanding changes to the renewal agreement:

(1) the existence of a formula for calculating increases in rent at Defendant’s franchises — although Defendant contended such a policy exists, it cited oral deposition, in-court testimony, or affidavits, uncorroborated by any written policy;

(2) whether the petroleum franchisor’s employees, Deakin and McGee, in fact warned plaintiff that rental values would increase when they initially met;

(3) whether the franchisor’s employees, Deakin and McGee, suggested, during that initial meeting, that plaintiff franchisee could operate a truck stop at the property;

(4) whether defendant failed to provide the franchisee dealer with training; whether the franchisee’s need for training was apparent; and whether the franchisor had a training program that was available;

(5) whether the franchisor placed franchisee dealer’s account on COD status in retaliation for her request to operate the station as a commission;

(6) whether the franchisor defendant had a motive not to renew the agreement, as shown by the strained relationship between Sathu, Deakin, and McGee;

(7) defendant franchisor received an offer from Tim Horton’s to open a franchise at the location; and

(8) the substantial increase in rent, which the Court noted was not conclusive of bad faith on the part of Defendant but was nonetheless relevant.

Four S Shell, LLC v. PMG, LLC, Civil Action No. 3:16-cv-5701 (PGS) (TJB), 2019 U.S. Dist. LEXIS 115034 (D.N.J. July 11, 2019)

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