PMPA Franchise Agreement Disavowing Plaintiff's Claim to an Exclusive Market and Geographic Territory Trumps Alleged Oral Commitment

Partner v. ExxonMobil Oil Corp., 08-1590 (6th Cir. May 4, 2009)

In 2000, plaintiff Partner & Partner, Inc. entered into a lease/franchise agreement with ExxonMobil to operate a Mobil-branded gasoline station. The lease was pursuant to an ExxonMobil Petroleum Marketing Practices Act (PMPA) franchise agreement, 15 USC Sections 2801-2806. The agreement expressly provided that it did not grant plaintiff an exclusive market or geographic area to sell branded gasoline, or to conduct related businesses. ExxonMobil expressly reserved the right to open or continue stations, franchises, or related businesses at locations of its choice.

In 2004, however, ExxonMobil exited the “direct serve” market and moved to a “distributor served” model. It planned to terminate its direct dealer relationships, including its franchise agreement with plaintiff. It offered to allow its direct-served dealers, including plaintiff, to purchase the leased gasoline stations, and to continue to sell branded gasoline under a new PMPA agreement with one of three approved distributors. Plaintiff purchased the leased station, and entered into a 2004 “sales agreement” with ExxonMobil, and executed a new PMPA Motor Fuels Dealer Franchise Agreement with the ExxonMobil approved distributor, McPherson Oil Company. The PMPA agreement between ExxonMobil and plaintiff’s distributor included ExxonMobil’s expressed reservation of the right to approve or not approve the branding of a new station at locations of its choice.

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