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John R. Caputo v. Bp West Coast Products

September 25, 2012



Plaintiff, a franchisee of defendant, has filed suit against BP West Coast Products (BPWCP) under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. §§ 2804, et seq., alleging violations of the act stemming from defendant's intent to sell the gas station currently operated by plaintiff to third parties.

Defendant has filed a motion for summary judgment, contending that its effort to sell the gas station complied with the PMPA and that the terms of the operative Right of First Refusal (ROFR) did not violate the PMPA. The court has sealed a number of documents relating to the third party buyers and some internal business decisions and will refer to the buyers throughout this order as Buyer One and Buyer Two, or simply "Buyers."

The court heard argument on the motion on March 9, 2012. Jeffrey Hamerling and Alissa Pleau-Fuller appeared for defendant; Peter Lagarias appeared for plaintiff. For the reasons explained below, defendant's motion is GRANTED.


Plaintiff John R. Caputo operates an ARCO-branded retail service station facility and an am/pm mini-market located at 2933 65th Street, Sacramento, California ("Facility").

P.'s Response to BPWCP's Statement of Undisputed Facts*fn1 ECF No. 43-1 ¶ 1. This real property is owned by BPWCP. Id. In 2010, after conducting a thorough review of its retail service station facilities, including am/pm convenience stores in a number of West Coast metropolitan markets, and carefully considering various economic, financial, and competitive factors, BPWCP made a business decision to sell the underlying real estate and equipment at 28 facilities, some of which included am/pm stores in a number of those markets. Id. ¶ 3

On September 28, 2010, BPWCP notified plaintiff in writing that it had tentatively identified the Facility as one that "might be better operated as a dealer-owned facility instead of the company-owned facility that it is today." Id. ¶ 5. BPWCP retained an appraiser to determine the approximate market value of the Facility for the purpose of determining the minimum bid amount it would set. Id. ¶¶ 7-8; Declaration of Gary S. Heitlauf, ECF No. 30-4 ¶¶ 4-5.*fn2

BPWCP retained a real estate marketing firm, NRC Realty & Capital Advisors, LLC ("NRC"), as its agent for the purposes of obtaining sealed third-party bids for the Facility and other BPWCP facilities. Id. ¶ 10. NRC marketed the facilities to potential buyers. Id. ¶ 11. Before submitting their bids, all potential buyers pre-qualified following pre-established NRC procedures, by attending a NRC-conducted bid webinar and providing information regarding their business background, credit history and financial resources. Id.

NRC conducted the bidding process in December 2010. The Buyers, who were pre-qualified, submitted a signed purchase agreement and provided a deposit of 2.5% of the proposed purchase price with their bids as required by the NRC bid procedures. ECF No. 43-1 at ¶ 21. In December 2010, NRC sent a letter accepting a $1.12 million offer on the Facility from a third Buyer on behalf of BPWCP. Id. ¶ 15. Upon BPWCP's acceptance of their bid, Buyers increased their deposit to 5% in accordance with the NRC bid procedures. Id. ¶ 22.

On or about January 5, 2011, BPWCP sent plaintiff a "Notice of Non-renewal" of Plaintiff's Franchise Agreement ("Notice"), citing specific portions of the PMPA, effective once it expired on its own terms on January 1, 2012, and also enclosed a summary statement of the PMPA with the Notice. Id. ¶ 23. The Notice also offered to Plaintiff a right of first refusal ("ROFR") that allowed plaintiff to purchase the Facility. Id. ¶ 25.*fn3

On or about February 16, 2011, plaintiff notified BPWCP that he intended to purchase the Facility and was exercising the ROFR "under protest." Id. ¶ 27. The purchase agreement signed by plaintiff -- the Bid Real Estate Sale Agreement -- obligates BPWCP to "assess, monitor, and perform corrective action . . . to levels appropriate for gasoline station use . . . on any Pre-Closing Contamination" as required by the appropriate environmental regulatory agency, among other things. Id. at ¶ 28; Real Estate Settlement Agreement, ECF No. 30-9

¶¶ 12.1-12.2.*fn4 Following plaintiff's acceptance of the ROFR, BPWCP cancelled the purchase agreement with Buyers. Id. at ¶ 29.


A court will grant summary judgment "if . . . there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). The "threshold inquiry" is whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved ...

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