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SERIANNI v. GULF OIL CORP.

May 22, 1986

LOUIS A. SERIANNI
v.
GULF OIL CORPORATION



The opinion of the court was delivered by: POLLAK

 Plaintiff Louis Serianni owns and operates a gasoline service station in Oreland, Pennsylvania. He brings this suit against defendant Gulf Oil Corporation (Gulf), alleging that defendant's decision not to renew its contract with plaintiff was improper under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. § 2805 (1985).

 Defendant has moved for summary judgment, and plaintiff has responded. Oral argument was held on the motion, and further submissions requested. These submissions having been made, the motion is now ripe for disposition.

 Factual Background

 The parties have submitted a joint pretrial memorandum, in which the following facts are described as undisputed. Plaintiff and defendant first entered into a contract about April 3, 1972, in which defendant agreed to deliver Gulf petroleum products. This agreement was periodically renewed without modification of the terms, and remained in effect until May 3, 1983. On March 4, 1983, defendant's manager of retail sales, Daniel Macedo, forwarded a letter to plaintiff notifying him that his contract would not be renewed automatically for another term. The letter stated in part:

 Plaintiff did not sign the mutual cancellation form enclosed with the letter. Instead, after agreeing to extend the existing contract for one month (until May 3, 1983), defendant proposed a new contract which included a requirement that plaintiff purchase 20,000 gallons of gasoline from defendant each month.

 This provision, known as a "minimum volume requirement," would require plaintiff to sell roughly three times as much gasoline per month as he had been selling. Plaintiff's monthly sales declined steadily during the 1980's: In 1980, plaintiff averaged 10,609 gallons per month; in 1981, he averaged 7,835 gallons per month; in 1982, he averaged 6,671; over the first four months of 1983, he averaged 6,000 gallons per month.

 To arrive at the minimum gallon requirement of 20,000 gallons, defendant's sales representative in charge of plaintiff's station, Arnold Sampson, evaluated another service station in plaintiff's area which he deemed similar to plaintiff's. This station, located in Wyndmoor, Pennsylvania, had more gasoline pumps and islands than did plaintiffs.

 Plaintiff agreed in June, 1983, to accept the new contract. In the ensuing months, however, plaintiff was unable to meet the minimum gallon requirement. His average monthly purchases from May 1, 1983 to January 1, 1984, were 6,003 gallons per month, and he did not purchase the minimum amount in any single month. On January 11, 1984, defendant sent a letter to plaintiff advising him that he had not met the requirement. Plaintiff continued to do business as usual, not changing his pricing structure, hours of operation, advertising policies, or the physical appearance of the station. From January through March, 1984, plaintiff's average monthly purchases were 5,334 gallons per month.

 On March 21, 1984, defendant sent plaintiff a letter informing him of defendant's decision to terminate the agreement. The letter stated, in part, that "all of your [Serianni's] agreements with Gulf . . . will be nonrenewed effective at midnight on July 2, 1984, because you have failed to purchase the minimum volumes of fuel required by your agreements. . . ." On June 18, 1984, plaintiff filed this lawsuit.

 In addition to its relationship with plaintiff, defendant also maintains contractual relations with two other service stations in plaintiff's area. One is the station at Wyndmoor, which defendant used as a basis for calculating plaintiff's minimum volume requirement. Although Gulf charges the owner of the Wyndmoor station the same price for gasoline as it charges plaintiff, it has given Wyndmoor, from May 1983 until the present time, a $.02 per gallon special allowance rebate. The other Gulf station in plaintiff's area is located in North Hills, Pennsylvania. This station also pays the same price for gasoline as does defendant. Like Wyndmoor, however, it has also received a $.02 per gallon rebate since May, 1983. Although eligible for volume rebates, plaintiff did not receive a rebate from defendant after May, 1983.

 Plaintiff prices his gasoline at 22 or 23 cents per gallon over the price charged by defendant. The North Hills station, which does a significantly higher volume of business than does plaintiff, charges at its self-service pumps a price that is within $.01 to $.02 per gallon of defendant's pre-rebate price. Prices at the self-service ...


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