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MURPHY v. TEXACO

June 21, 1983

ROBERT MURPHY, WILLIAM LEO AND PAUL WASZAK, PLAINTIFFS,
v.
TEXACO, INC., DEFENDANT.



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

MEMORANDUM OPINION AND ORDER

Three lessees of gasoline stations owned by Texaco, Inc. ("Texaco") sued Texaco, challenging (under the Petroleum Marketing Practices Act, 15 U.S.C. § 2802, and perhaps under Illinois law as well) its termination of (and refusal to renew) their leases and franchises. In turn Texaco filed a four-count amended counterclaim. Counterclaim Count I ("Count I") asserts plaintiffs' liability under Illinois law for rent incurred during the post-termination period in which they have continued to occupy and operate their service stations. Texaco now moves under Fed.R.Civ.P. ("Rule") 56 for summary judgment on Count I. For the reasons stated in this memorandum opinion and order Texaco's motion is granted.

Facts*fn1

Some time during 1979 or 1980 each plaintiff signed the same standard lease form (the "Lease") and Agreement of Sale (both drafted by Texaco), entitling him to lease a service station, to market Texaco products under the Texaco brand name and to use the Texaco trademarks to promote such sales. Under Lease ¶ 2(a), Texaco was permitted to "terminate or fail to renew this Lease only for good cause and not in bad faith."

Each plaintiff began selling non-Texaco brand name products at some point during the term of his Lease. In late September or early October 1981 each plaintiff attempted to notify his customers of that practice by posting in the window of his service station the following sign:

   ATTENTION THIS STATION DOES NOT NECESSARILY SELL TEXACO PRODUCTS, ASK
                     ATTENDANT FOR FURTHER INFORMATION
Illinois Gasoline
Dealers Ass'n.                    The Management

Nonetheless each plaintiff continued to use Texaco's trademarks, including the large Texaco hexagonal sign and Texaco-trademarked gasoline pumps. Texaco objected to plaintiffs' practices as an abuse of each plaintiff's right to use Texaco trademarks and brand names and as a violation of his franchise obligations. Consequently Texaco gave advance notice to each plaintiff of its intention to terminate (and not renew) his Lease and franchise effective February 1, 1982.

Each plaintiff refused to vacate his service station on the designated termination date. Subsequently Texaco instituted eviction proceedings against at least one of the three plaintiffs under Illinois' forcible detainer laws. To date plaintiffs remain in possession of their stations.

Summary Judgment

Count I seeks damages and injunctive relief to remedy the injuries suffered by Texaco as a result of plaintiffs' possession of the gasoline stations since February 1, 1982. As for its damages element, Count I is apparently based on two alternative theories:

      1. If plaintiffs' continued possession of those
    facilities is wrongful, plaintiffs are liable for
    any resulting damages.
      2. If plaintiffs establish the Leases were still
    in force (by showing Texaco improperly terminated
    the Leases), plaintiffs are liable for the rent
    incurred since February 1, 1982.

Regardless of which theory is applicable, there is no factual dispute that defeats Texaco's entitlement as a matter of law to the same accrued amount, equal ...


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