Abe & Nahed Inc. v. Global Companies LLC

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS AND MOTION TO STRIKE

          F. Dennis Saylor IV United States District Judge.

         This is an action for declaratory relief arising out of a contract dispute. Plaintiff Abe & Nahed, Inc. (“Sudbury”) operates a gas station in Sudbury, Massachusetts. It has leased the property from defendants Global Companies LLC and Global Montello Group Corp. (collectively, “Global”) for the last eight years. In October 2018, Global notified Sudbury that it planned to sell its interest in the property to a third-party buyer. Pursuant to Sudbury's franchise agreement, Sudbury had a right of first refusal to purchase the interest. Although Sudbury exercised that right, it also filed suit, alleging that two sections of the sale contract violate the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. § 2801 et seq.

         Global has moved to dismiss the complaint for mootness, lack of standing, and failure to state a claim. It has also moved to strike an affidavit plaintiff attached to its opposition memorandum. For the following reasons, the motion to strike will be granted, and the motion to dismiss will be denied.

         I. Background

         A. Factual Background

         The facts are set forth as described in the complaint and attached exhibits.

         Sudbury has leased a gas station at 432 Boston Post Road in Sudbury, Massachusetts (the “Property”) for approximately 30 years. (Compl. ¶ 1). For the first 22 years, Sudbury leased the Property from ExxonMobil Oil Corporation. (Id. ¶ 5). In 2010, ExxonMobil transferred the Property to Global. (Id. ¶¶ 5-6, 9). After the transfer, Sudbury entered into a franchise agreement under the PMPA with Global. (Id. ¶ 10). The current agreement will expire on July 31, 2019. (Id. ¶ 12).

         On October 2, 2018, Global delivered a Notice of Nonrenewal to Sudbury stating that it had entered into a Purchase and Sale Agreement to sell the Property to a third party. (Id. ¶ 13). The notice further stated that under the PMPA, Sudbury had 45 days (that is, until November 21, 2018), to exercise its right of first refusal to purchase the Property on the same terms and conditions as detailed in the Purchase and Sale Agreement. (Compl. Ex. 1 at 1-2).

         Section 18 of the Purchase and Sale Agreement provides the buyer a 90-day period to conduct due diligence. (Compl. ¶ 15). It further provides the buyer up to three additional 30-day extensions of the due diligence period. (Id.). However, to exercise each 30-day extension, the buyer must make a non-refundable $5, 000 deposit with a title insurance company. (Id. ¶ 16).^[1]

         Section 18 also states the following:

In the event that Buyer is not in any respect satisfied with the results of its due diligence for any reason, then, in Buyer's sole and absolute discretion, at any time during the Due Diligence Period, Buyer may, at Buyer's option, on or before expiration of the Due Diligence Period withdraw from this transaction . . . and the Deposit shall be refunded to the Buyer forthwith.

(Compl. Ex. 1 at 13).

         Section 20 of the Purchase and Sale Agreement addresses environmental considerations. (Compl. ¶ 20). Subsection (b) concerns Underground Storage Tanks (“USTs”) and specifies that within 120 days of closing, Global shall, at its sole cost and expense, remove all USTs located on the Property. (Compl. Ex. 1 at 17). It further states:

Should the Buyer determine that the UST Removal Activities should not be completed by Seller or if the Premises, or any portion thereof, is used for the storage, sale, transfer and/or distribution of petroleum products within fifty (50) years of the Closing, Buyer agrees that the petroleum products sold from the Premises shall be supplied by Seller . . . pursuant to Seller's standard form Fuel Supply ...