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Singh v. BP Products North America

January 31, 2006


The opinion of the court was delivered by: Honorable David H. Coar


Before this Court is Defendant BP North America, Inc.'s motion for summary judgment on Plaintiff's claims for violation of the Petroleum Marketing Practices Act, breach of contract, and equitable recoupment.


The undisputed facts, taken from the parties' Local Rule 56.1 submissions, are as follows. Plaintiff Pritpal Singh operates a BP service station at the corner of North Avenue and Randall Road in St. Charles, Illinois, under a Dealer Lease and Supply Agreement ("the Lease") dated April 8, 2002, between him and BP. The Lease was scheduled to begin on July 1, 2002 and terminate on June 30, 2005. The Lease and the resulting franchise relationship between Singh and BP are governed by the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. ("PMPA"). BP owns the real property and equipment at the location, which include a building with a mini-mart and an attached car wash, three pump islands perpendicular to North Avenue, two pump islands parallel to Randall Road, and three underground storage tanks located at the northwest corner of the MART building ("the Leased Premises"). The station has two full access driveways on North Avenue, measuring 26.5 feet and 38.5 feet in width, and two limited access driveways on Randall Road, measuring 34.5 feet and 27 feet in width.

The Lease sets forth specific criteria for termination of the Lease and the franchise relationship. Specifically, it states that

Lessor has the right at any time to terminate or non-renew this Agreement, all associated agreements and any applicable franchise relationship for any reason or ground permitted by the PMPA or other applicable federal, state or local law. Without limited the generality of the foregoing, Lessor has such right of termination or non-renewal upon the occurrence of any of the following:


(l) Condemnation or other taking, in whole or in part, of the Facility pursuant to the power of eminent domain or a conveyance in lieu thereof.

(Lease, at 10).

At some point before December 30, 2003, the Illinois Department of Transportation ("IDOT") informed BP that as part of a roadway improvement project, it was considering acquiring a portion of the Lease Premises. According to a civil engineering firm hired by BP to analyze the impact of the acquisition, the proposed taking encompassed a 7-foot wide strip of land along North Avenue, starting at the east property line, increasing in width at the northwest corner, and terminating at the west property line along Randall Road. In addition, IDOT indicated its intention to acquire a temporary easement along the Randall Road frontage for construction access, measuring between 5 and 14 feet in width. The roadway improvement project further required the elimination of one full access driveway on North Avenue, one limited access driveway on Randall Road, and the narrowing of the remaining driveway on North Avenue. Finally, the project included the construction of a concrete barrier median on North Avenue, converting the remaining North Avenue driveway from full access to limited access.

As part of its preparation for the project, IDOT commissioned at least three appraisal reports and two appraisal reviews. In addition, BP retained W-T Engineering, a civil engineering firm, to review the proposed taking and advise BP on how it would affect the circulation path of vehicles and the gasoline delivery tanker truck. W-T Engineering determined that the taking would restrict the gasoline delivery truck's circulation path and require it to travel between the pump islands along Randall Road, which would be impossible if cars were refueling at the pumps. The westernmost underground storage tank's fill pipe would be inaccessible after the taking and the truck would not be able to exit the property. Further, after the taking, there would no longer be sufficient room on the north side of the refueling area for automobiles to circulate, nor could a vehicle make a U-turn on the south side of the islands to exit the property. W-T Engineering therefore advised that the entire premises be razed and rebuilt.

BP and IDOT engaged in discussions regarding IDOT's plans to acquire part of the Leased Premises, including whether IDOT could alter its proposal so that it would impact the Leased Premises less. On December 30, 2003, however, IDOT sent BP a 60 day notice letter of its intent to commence formal eminent domain proceedings. BP sent Singh a letter on January 27, 2004, notifying him that IDOT had instituted eminent domain proceedings. The letter stated that "BP does hereby terminate and non-renew your Franchise and all related agreements and does hereby terminate and non-renew any attendant franchise relationship, effective ten (10) days prior to the date of condemnation or date of sale in lieu of condemnation ("the Effective Date")." (Compl., Exh. 2).

IDOT filed a Complaint to Condemn in Kane County, Illinois, on April 9, 2005. A "quick take" hearing took place on June 2, 2005, and the Kane County Circuit Court ordered that IDOT would be entitled to take title and possession of the property at issue, including the temporary easement, after deposit of $823,000 preliminary just compensation. On June 3, 2005, BP sent Singh a letter informing him of the result of the quick take hearing and advising him that "the time has come to effectuate the termination and non-renewal noticed on January 27, 2004." The letter stated that "the effective date of termination of the Agreement is June 17, 2005." (BP's L.R. 56.1(a)(3) Stmt., Exh. I). Singh filed a motion for preliminary injunction before this Court on ...

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