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BOEHM v. GULF OIL CO. OF PENNSYLVANIA

June 30, 1980

Edwin J. BOEHM
v.
GULF OIL COMPANY OF PENNSYLVANIA, INC.



The opinion of the court was delivered by: POLLAK

The plaintiff, Edwin J. Boehm, is a citizen of Pennsylvania and, since 1971 or 1972, has been engaged in the retail gasoline business in the Philadelphia area. The defendant is Gulf Oil Corporation (hereinafter referred to as "Gulf"), a Pennsylvania corporation engaged in the business, among other things, of refining and marketing motor fuels.

 Plaintiff's allegations against the defendant consist of two counts:

 In his first count, plaintiff has alleged that Gulf violated the Emergency Petroleum Allocation Act of 1973 ("EPAA"), 15 U.S.C. §§ 751, et seq. (1976), and the regulations promulgated thereunder, 10 C.F.R. §§ 210-214 (1980), by its failure to honor certain discounts or sales allowances on the price of gasoline during the period from January 1, 1974 through October 27, 1976. Specifically, plaintiff alleges that Gulf violated the regulations in that: (a) it charged the plaintiff a price for motor fuel in excess of the base price permitted under 10 C.F.R. § 212.83; (b) it charged the plaintiff a price for motor fuel in excess of the price it charged others in the same class of purchaser as the plaintiff; (c) it charged the plaintiff a price for motor fuel without taking into consideration the customary price differential extended to the class of purchasers which plaintiff was a member.

 In his second count, plaintiff has alleged that since June 1, 1973, defendant has failed to supply plaintiff with motor fuel at the price which defendant charged other purchasers in the same classification as plaintiff and that defendant's failure is contrary to the terms of an agreement between plaintiff and defendant entered into on or about April 12, 1973.

 As the result of defendant's alleged violations, plaintiff complains that he has suffered damages consisting of increased costs of motor fuel purchased since June 1, 1973, and resultant loss of patronage and profits, and that he continues to suffer such damages.

 
I am giving this affidavit to Gulf in order to induce Gulf to meet, in whole or in part, such competitive offer in the manner set forth below, knowing that Gulf intends to rely hereon:
 
. . . it being expressly understood that Gulf shall have the right to withdraw or discontinue such payments (in whole or in part) at any time or from time to time during the term of such contract without notice.

 On April 12, 1973, plaintiff and defendant entered into an agreement whereby effective April 1, 1973, defendant would supply plaintiff with plaintiff's requirement of No-Nox, Good Gulf and Gulftane gasolines. Prices and other terms were set forth in a "Contract of Sale" executed by the parties. The term of the Contract of Sale was five years from April 1, 1973, and the price basis specified was "Seller's scheduled price in effect at time and for place of delivery." Simultaneously with the execution of the Contract of Sale, plaintiff and defendant executed a letter agreement dated April 12, 1973, which provides as follows:

 
The Contract of Sale for a 5-year period effective April 1, 1973 between yourself (plaintiff) and Gulf Oil Company of Pennsylvania, which was entered into today 4/12/73 has been negotiated on the basis of a Sales Allowance of 2.75 cents per gallon on Good Gulf and No-Nox only. Gulf reserves the right to withdraw this Allowance upon written notice being given to you.
 
Since the basis for this new Supply Contract is this Allowance, we hereby give you the option to cancel the Contract in the event we withdraw the Allowance given to you today upon thirty (30) days written notice to Gulf.

 Gulf also agreed to install marketing equipment such as tanks, pumps, signs, lights, etc. at a cost of $ 32,210.00. A Provisional Payback Agreement generally required Mr. Boehm to purchase a minimum of six million gallons of Good Gulf and No-Nox gasolines between April 1, 1973 and March 31, 1978. In the event he did not purchase such minimum requirement, Mr. Boehm agreed to reimburse Gulf the installation expense of $ 32,210.00 reduced by the number of gallons actually purchased times .536 cents per gallon. The equipment would at all times be owned by Gulf.

 Following execution of the contract, Mr. Boehm purchased the site. Thereafter, construction of the gasoline station began. On May 22, 1973, while construction was going forward, plaintiff received a letter from defendant advising that Gulf was cancelling the sales allowance of 2.75 cents effective June 1, 1973, pursuant to the April 12, 1973 agreement. This action resulted from changed market conditions occasioned, at least in part, by the crude oil embargo imposed by various Arab states in early 1973. The construction of plaintiff's gasoline station was not completed until December, 1973, enabling plaintiff to purchase 5,000 gallons prior to December 31, 1973. Thereafter, plaintiff purchased 1.9 million gallons in 1974 and 1.35 million gallons in 1973, all at Gulf's dealer tank wagon price without the sales allowance of 2.75 cents.

  Plaintiff made oral requests to Gulf for payment of the sales allowances withheld by Gulf but no written claim was made by plaintiff. In or about September, 1975, a formal complaint was filed by the plaintiff with the Federal Energy Administration ("FEA"). *fn3" The FEA conducted an initial investigation and issued a Notice of Probable Violation ("NOPV") to Gulf on December 1, 1975. Gulf's response to this Notice was principally based on its assertion that the sales allowance issued to plaintiff was a "temporary allowance" as opposed to a "customary allowance," and, under applicable FEA rulings, could be withdrawn. The FEA Area Manager sustained Gulf's position and rescinded the NOPV on July 12, 1976.

 I.

 Before turning to the merits, it will be appropriate to take note of certain affirmative ...


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