Akparewa v. Amoco Oil Co.

KENNEY, Judge. This appeal was taken from a decision by the Circuit Court for Baltimore City granting summary judgment in favor of appellee, Amoco Oil Company (“Amoco”), and against appellant, Gabriel Akparewa (“Akparewa”), and from the decision dismissing appellant, Vaga, Inc. (“Vaga”). Akparewa raises three issues on appeal, which we have reworded as follows, and Vaga raises one: 1. When Amoco’s violations of the statutory disclosure requirements under § 11-803 of the Commercial Law Article were not in dispute, did the trial court err in granting Amoco, rather than appellant, summary judgment? 2.

Did the trial court err in granting Amoco summary judgment on the Dealer Act claim related to Miller and Hartman? 3. Did the trial court err in granting Amoco summary judgment on the negligent misrepresentation claim? 4. Did the trial court err in dismissing appellant Vaga, Inc. for lack of standing? We find that there was a genuine material dispute of fact such that the grant of summary judgment was inappropriate, but we affirm the circuit court’s decision that Vaga, Inc. had no standing. ³⁵⁵ FACTUAL BACKGROUND Akparewa emigrated from Nigeria to the United States in 1977.

He graduated from Alabama A & M University in 1980 with a B.S. degree in business administration and received an M.B.A. from Morgan State University in 1983. In early 1996, Akparewa was seeking a business opportunity. After speaking with gasoline dealers who said that the business was profitable, he concentrated his efforts on acquiring a gasoline dealership. Akparewa would visit a station and subsequently contact the owner to inquire if it was for sale and for what price.

The Park Circle Amoco Akparewa eventually contacted the owner of the Park Circle Amoco gasoline station and convenience store, located at 3312 Reistertown Drive in Baltimore City (“Park Circle Amoco”). Amoco owns Park Circle Amoco and leases it to franchisees. The franchisee at the time of Akparewa’s initial inquiries, David Farhat (“Farhat”), indicated at first that he did not want to sell, but told Akparewa to check back. Farhat had been the franchisee since May 9, 1994.

Prior to Farhat, the franchisee of the Park Circle Amoco was Owen Ray, who had operated the station for approximately twenty years before transferring it to Farhat. After some negotiation, Farhat agreed to sell his interest in the Park Circle Amoco for $170,000. Akparewa had done his own market research by evaluating the prices dealers would accept for their stations, the location of the station, whether a convenience store was attached, and the impact of traffic patterns on the location. Akparewa apparently did not ask to see Farhat’s books and records and never inquired into the sales figures or other performance indicators from the Park Circle Amoco. 1 ³⁵⁶ The Akparewa/Farhat Contract Akparewa’s attorney drew up a contract for the sale of the Park Circle Amoco, and he and Farhat signed it on February 5, 1997.

Pursuant to the agreement, Akparewa agreed to purchase the business goodwill of the Park Circle Amoco, the equipment, the inventory, and “all right, title and interest in the lease rights between [Farhat] and Amoco.” Akparewa paid $10,000 down and was to pay an additional $100,000 at closing. Farhat financed the additional $60,000 of the purchase price. Closing was contingent upon Amoco’s consent to the assignment of the franchise: 2 “Closing -will only take place after Amoco has finally approved the sale of the business from [Farhat] to Buyer.” Farhat was to deliver, at closing, the following document: “the consent by Amoco Oil Company (“Amoco”) to the assignment to Gabriel Akparewa by and between Amoco and David M. Farhat on terms satisfactory to the Buyer.” After concluding the contract with Farhat, Akparewa contacted his cousin, Valentine Korie, and asked if he would be interested in becoming a co-owner of the business. Korie agreed, and they formed a corporation, Vaga, to operate the business.

Akparewa/Amoco Disclosure Akparewa delivered a copy of the contract with Farhat to Amoeo’s offices in Towson. Amoco responded by sending Akparewa a dealer application, a blank business plan, and a disclosure statement. Amoco’s disclosure statement provided information about the Park Circle Amoco and the contemplated franchise. 3 In particular, the disclosure statement provided Park Circle Amoco’s gallonage history for only the two most recent calendar years, that is, 1995 and 1996. It did not include the ³⁵⁷ gallonage for 1994.

It provided Farhat’s name and address, but not that of the prior franchisee, Owen Ray. Amoco’s disclosure statement also indicated that it retained the right to “encourage” Akparewa to use particular vendors but that he would not be obligated by contract to use those vendors. After Amoco approved Akparewa’s dealer application and business plan, Akparewa closed on the Farhat contract. He signed Amoco’s one year trial franchise contract (the “Agreement”) on or about July 15,1997.

Vaga was not a party to the Agreement, which specifically named Akparewa as the lessee/franchisee. The Agreement also provided that it could not be assigned without Amoco’s prior written consent. Akparewa’s Operation of the Park Circle Amoco Akparewa began operating Park Circle Amoco on or about July 15, 1997. Akparewa had purchased the existing inventory of the store as part of the transaction with Farhat, and he purchased subsequent inventory on an as-needed basis from various vendors.

During the course of the year, Akparewa worked with Amoco’s representative, Stephen Brown, who periodically checked on the operation of the Park Circle Amoco. Amoco also employed “mystery shoppers” to evaluate the store’s operation. No negative evaluations were given by the mystery shoppers, but Brown was not satisfied with the manner in which Akparewa was running his store. Brown noted several problems with the store; for example, the store was not clean, shelves were empty, merchandise was not placed on the shelves facing the customer, and merchandise was not labeled with a price.

Akparewa contends that Brown kept telling him to “re-merchandise” and that he do so through an entity identified as Miller & Hartman, a vendor with which Brown was familiar. Akparewa initially declined to do so. On September 19, 1997, Brown visited the store and discussed ongoing problems with Akparewa. He also wrote a note stating that the store should be re-merchandised and that the “lease is in jeopardy of being canceled.” Akparewa then ³⁵⁸ agreed to use Miller & Hartman.

To do so, Akparewa had to order a week’s supply of inventory in advance, rather than purchasing on an as-needed basis. Akparewa contends that purchasing inventory in this manner ended up being costlier than his earlier system, which, in turn, caused his automatic gasoline payments to Amoco to be returned for insufficient funds (“NSF”). Akparewa had a total of eight NSF drafts on the gasoline account. In addition to the problems with the convenience store operation, Brown advised that Akparewa generally “didn’t have a handle on the gasoline end of the business.” For example, Akparewa apparently was not completing daily inventory reconciliation sheets, a requirement under the franchise agreement.

Akparewa eventually straightened out the NSF problem, but Amoco, upon Brown’s recommendation, declined to renew the trial franchise. Amoco did allow Akparewa to continue operating the store until October 30, 1998, approximately three and a half months after the expiration of the trial franchise on July 14, 1998. Akparewa contends that when he presented Amoco with a buyer for the business, Amoco rejected the buyer, causing Akparewa to lose his investment in the business. Procedural History Akparewa filed a complaint against Amoco on September 28, 1998, in the Circuit Court for Baltimore City.

His complaint, alleging breach of the Agreement, requested one million dollars in damages and that Amoco be enjoined from terminating the Agreement. 4 A first amended complaint was filed on January 21, 1999. That complaint alleged that Amoco violated the Maryland Gasohol and Gasoline Products Marketing Act, committed fraud through concealment, and committed constructive fraud. Akparewa filed a second amended com ³⁵⁹ plaint on October 25,1999, adding a claim of negligent misrepresentation. On February 19, 1999, Amoco filed both an answer to the amended complaint and counterclaims for negligent or intentional fraud or misrepresentation and for indemnification.

On August 5, 1999, Amoco subsequently amended its counterclaims to include an allegation of breach of contract. Both Akparewa and Amoco filed motions for summary judgment on December 2, 1999. On March 3, 2000, the court, after a hearing, entered an order granting summary judgment in favor of Amoco on all counts of Akparewa’s complaint and on Amoco’s counterclaim for breach of contract. The court then set the matter for a trial on damages only on Amoco’s breach of contract claim.

The trial on damages took place on May 23, 2000. The jury awarded Amoco the sum of $8,006.09, and a judgment in that amount was entered the same day. 5 Both parties filed timely appeals. Amoco has subsequently dismissed its cross-appeal. Discussion Standard of Review A summary judgment motion is not a substitute for trial.

Rather it is used to dispose of cases when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. The standard for appellate review of a trial court’s grant of summary judgment is whether the trial judge was legally correct in his or her rulings. In granting a motion for summary judgment, the trial judge may not resolve factual disputes, but instead is limited to ruling on matters of law.... If any inferences ³⁶⁰ may be drawn from the well-plead facts, the trial court must construe those inferences in the light most favorable to the non-moving party.

The existence of a dispute as to some non-material fact will not defeat an otherwise properly supported motion for summary judgment, but if there is evidence upon which the jury could reasonably find for the non-moving party or material facts in dispute, the grant of summary judgment is improper. Okwa v. Harper, 360 Md. 161, 178 , 757 A.2d 118 (2000) (citations omitted). The Gasohol and Gasoline Products Marketing Act In the early 1970s, gasoline shortages were occurring and oil companies were moving from “crude oil production, transportation, refining, and wholesale marketing” of oil into marketing their own products at retail. Comment, Gasoline Marketing Practices and “Meeting Competition” Under the Robinson-Patman Act: Maryland’s Response to Direct Retail Marketing by Oil Companies, 37 Md. L.Rev. 323 (1977).

In 1973, the General Assembly passed The Gasohol and Gasoline Products Marketing Act (“PMA”), Md.Code (1975, 1990 RepLVol., 1999 Supp.), § 11-301 et seq. of the Commercial Law Article, because of its concerns “about the distribution and sale through marketing arrangements of petroleum products in” Maryland. Becker v. Crown Central Petroleum Corp., 26 Md.App. 596, 598 , 340 A.2d 324 (1975). See also Ellen R. Jordan, Unconscionability at the Gas Station, 62 Minn. L.Rev. 813 (1978). “The 1973 law addressed what the General Assembly evidently saw as an imbalance of economic power between the oil companies and their dealers that it believed was detrimental to the State and in need of redress.” Comptroller of the Treasury v. Crown Cent.

Petroleum Carp., 52 Md.App. 581, 583 , 451 A.2d 347 (1982). The General Assembly found “that since the distribution and sale through marketing arrangements of petroleum products in the State vitally affect the economy of the State, and its public interest, welfare, and transportation, it is necessary to define the relationships and responsibilities of the parties to ³⁶¹ certain agreements pertaining to these marketing arrangements.” PMA § 11-302. The PMA, in overview, defines certain terms, § 11-301; requires distributors to give certain specific information to its dealers, § 11-303; sets out provisions to which marketing agreements are subject, § 11-304; specifies defenses to the termination or cancellation of a marketing agreement, § 11-305; requires that written notice of the intent to terminate or cancel the agreement be given, § 11-306; and designates remedies for a violation of the agreement, § 11-307. Neither party disputes the applicability of the PMA to the instant case. /.

Section 11-303(1) & (2) of the PMA The first provision of the PMA implicated in this case pertains to disclosure: Before any marketing agreement is concluded, a distributor shall disclose fully to a prospective dealer the following information: (1) Any gallonage history of the location under negotiation for the shorter of: (i) The three-year period immediately past; or (ii) The entire period during which the location has been supplied by the distributor; (2) The name, last known address, and reason for the termination of the marketing agreement of each person who was a dealer at the location during: (i) The five-year period immediately past; or (ii) The entire period during which the location has been supplied by the distributor; (3) Any commitment for the sale, demolition, or other disposition of the location; (4) Any training program and any specific goods and services which the distributor will provide for and to the dealer; (5) Any obligation which will be required of the dealer; (6) Any restriction on the sale, transfer, and termination of the agreement; and ³⁶² (7) The total amount of any cash deposit required, any amount of interest to be paid on the deposit, and the conditions for the return of the deposit. PMA § 11-303. The purpose behind the required disclosure was to enable prospective dealers “to make an intelligent and considered decision on whether to enter into an agreement.” Becker , 26 Md App. at 599, 340 A.2d 324 . It is undisputed that Amoco failed to provide all of the required information under § 11-303(1) and (2).

In particular, Amoco provided the gallonage history for two rather than three years prior to the contract. Furthermore, Amoco failed to provide Akparewa with information about Owen Ray, the franchisee prior to Farhat. Akparewa argues that Amoco’s failure to comply with the disclosure requirements of the PMA results in per se liability because the legislation creates an irrebuttable presumption of reliance. Akparewa contends that the operative “material fact” in this case is Amoco’s failure to disclose the prior franchisee and the required gallonage history of Park Circle Amoco.

Because Amoco conceded that it failed to provide some of the required information, there was no dispute of material fact and summary judgment should have been granted for Akparewa. Amoco argues that the PMA raises, at most, a rebuttable presumption of reliance and that, in any event, Akparewa must prove that he was actually damaged by the insufficient disclosure before Amoco is subject to liability. Amoco argues that, because Akparewa did not rely upon Amoco’s disclosures, he could not have been damaged by any failure to disclose. In Amoco’s view, the operative “material fact” is Akparewa’s reliance, if any, on Amoco’s disclosures of failure to disclose.

At this point, we find it useful to review the rules of statutory interpretation: The object of statutory construction is to effectuate, after discerning, the real intention of the Legislature. The search for legislative intent begins, and ordinarily ends, with the words of the statute under review. Where, giving the words of the statute their ordinary and common meaning, ³⁶³ the statute is clear and unambiguous, it usually is unnecessary to go further. We may, however, confirm the meaning reached by reference to the words of the statute by considering the purpose, goal or context of the statute.

This means that we are required to interpret the statute as a whole, and, if appropriate, in the context of the entire statutory scheme of which it is a part. Moreover, no word in the statute or no portion of the statutory scheme should be read “so as to render the other, or any portion of it, meaningless, surplusage, superfluous or nugatory.” Prince George’s County v. Vieira, 340 Md. 651, 658 , 667 A.2d 898 (1995) (citations omitted). PMA § 11-303 sets out the information that must be disclosed to a prospective dealer. Because the information required to be disclosed is specific and well-delineated, we believe that the General Assembly deemed the information to be material information that a reasonable potential franchisee would wish to know prior to entering into a contract.

Becker, 26 Md.App. at 599 , 340 A.2d 324 . There is no express language in this provision, however, that creates a presumption, either of reliance or of liability, arising out of a failure to comply with the disclosure provision. A search of the legislative history of the PMA revealed no information from which we might infer that the General Assembly intended a failure to disclose would give rise to per se liability. Moreover, the “remedies” provision of the PMA states: “Any person who violates any provision of this subtitle is liable for damages caused by the violation and is subject to the other legal or equitable remedies available to the party injured by the violation.” PMA § 11-307.

This provision provides liability only for damages caused by the violation. Although case law on this issue is scarce, prior interpretations of this provision have found that it “enabled a prospective dealer to make an intelligent and considered decision on whether to enter into an agreement.” Becker, 26 Md.App. at 599 , 340 A.2d 324 . Because one