Free Declaration in Support - District Court of California - California

Case 5:07-cv-04808-JF

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Filed 07/03/2008

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EXHIBIT 6

Case 5:07-cv-04808-JF John G. Michael.
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Document 46-8 #106107

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BAKER, MANOCK & JENSEN
A PROFESSIONAL CORPORATION FIG GARDEN FINANCIAL CENTER

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5260 NORTH PALM AVENUE, FOURTH FLOOR

FRESNO, CALIFORNIA 937D4-2209
TELEPHONE (559) 432-5400
TELECOPIER (559) 432-5620

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Attorneys for

Defendants

UNITED STATES DISTRlCT COURT
NORTHERN DISTRlCT OF CALIFORNIA
..

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BP WEST COAST PRODUCTS LLC, a Delaware Limited Liability Company; and ATLANTIC RlCHFIELD COMPANY, a Delaware Corporation.,
Plaintiffs,

) ) ) )
)

Case No. 5:07-cv-04808 JF

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v.

) )
) )

DEFENDANT NAZIM FAQUIRY AN'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

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STTN ENTERPRlSES, INC., a California)

Corporation; NAZIM FAQUIRYAN, an ) individual; SAYED FAQUIRY AN, an )

individual; MAGHUL FAQUIRYAN, an )
individual; and A V A GLOBAL ENTERPRISE, )

LLC, a California limited liability company, )
Defendants.
) ) ) )

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PROPOUNDING PARTY:
RESPONDING PARTY:

Plaintiff, BP WEST COAST PRODUCTS
Defendant NAZIM FAQUIRYAN.

Defendant NAZIM F AQUIR Y AN responds to Plaintiff s Interrogatories to

Defendant Nazim Faquiryan, Set No. One, as follows:

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It should be noted that this responding par has not fully completed investigation of
the facts of this case, has not fully completed discovery in this action, and has not completed
preparation for triaL. All of

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the answers contained herein are based only upon such information and

documents as are presently available to and specifically known to this responding party, and
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DEFENDANT NAZIM F AQUIRY AN'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

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disclose only those contentions which presently occur to such responding party. It is anticipated
that fuher discovery, independent investigation, legal research and analysis will supply additional

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facts, add meaning to the known facts, and perhaps establish entirely new factual conclusions and

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legal contentions, all of which may lead to substantial additions to, changes in and variations from

the contentions herein set forth. The following interrogatory responses are given without prejudice
to responding party's right to produce evidence of any subsequently discovered fact or facts which
this responding party may later recall or uncover.
INTERROGATORY NO. 1:

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IDENTIFY the. percentage ownership interest YOU have or had in the STATION.
ANSWER:
51%
INTERROGATORY

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NO. 2:

IDENTIFY any and all other gasoline service station businesses in which YOU
have or had an ownership interest.

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ANSWER:
Responding Part objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the

discovery of admissible evidence. In addition, Responding Party objects that this interrogatory
seeks information protected by state and federal constitutional rights to privacy, is overly broad
and is vague and ambiguous as to time.
INTERROGATORY NO.3:

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IDENTIFY and all businesses, corporations, and/or fictitious business names (i.e.,
"dba") that are completely or parially owned by YOU and that deal with the business at the
..

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STATION.

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ANSWER:
A V A Global Enterprise, Inc.
INTERROGATORY

NO. 4:
lawsuits concerning any gasoline service stations in which
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IDENTIFY any and all

DEFENDANT NAZIM FAQUIRY AN'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

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YOU have or had an ownership interest.
ANSWER:
Responding Pary objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence.
INTERROGATORY

NO. 5:

IDENTIFY any and allCOMMUNICA TIONS between YOU and any other

gasoline company other than BPWCP concerning any gasoline service stations in which YOU
have or had an ownership interest.

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ANSWER:
Responding Pary objects that this inteITogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Party objects that this interrogatory

seeks information protected by state and federal constitutional rights to privacy, is overly broad
and is vague and ambiguous as to time.
INTERROGATORY

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NO. 6:

What is YOUR correct full

legal name, residence address, and residence telephone

number?

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ANSWER:

Nazim S.M. Faquiryan, 2585 Muirfield Way, Gilroy, CA 95020
INTERROGATORY NO.7:

What is YOUR Driver's License Number?
ANSWER:
Responding Pary objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Par objects that this interrogatory

seeks information protected by state and federal constitutional rights to privacy

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INTERROGATORY

NO. 8:

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What is YOUR Social Security Number?
ANSWER:
Responding Par objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory

seeks information protected by state and federal constitutional rights to privacy.
INTERROGATORY NO.9:

What is the date and place of YOUR birth?
ANSWER:

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Responding Party objects that this inteITogatory seeks information that is not

relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the

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discovery of admissible evidence. In addition, Responding Party objects that this interrogatory
seeks information protected by state and federal constitutional rights to privacy.
INTERROGATORY NO. 10:
If YOU own or have any interest in any real propert, state:

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( a)

the address of the propert;
the legal description;

(b)
(c)

when it was purchased;
for how much money;
the source of the money;

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(d)
(e)

(f)

the outstanding debts secured by the propert, i.e., mortgages, including

monthly payments, liens and encumbrances;
(g)
the curent market value;

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(h)
(i)
G)

YOUR equity

whether YOU claim this propert as YOUR Homestead; and
the correct name of

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documents.

the title owner as shown on the deed or other title

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ANSWER:
Responding Pary objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory

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seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.
INTERROGATORY

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NO. 11:

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If YOU own or have any interest in any vehicles, boats or airplanes, stated:
(a)
the year, make and model;

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(b) ( c) (d)

where it is located, garaged or kept;

when it was bought and for how much; the amount of outstanding debts or liens that are secured by the vehicle, boat

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or airplane;
(e)
(f)
the curent fair market value;

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YOUR equity;

(g) (h)

the correct name shown on the registration documents; and
the use YOU make of

this item.

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ANSWER:
Responding Par objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory

seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.

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INTERROGATORY NO. 12: If anyone owes YOU money for debts, notes or on accounts receivable, state:
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(a)

the name and address of

the person who owes YOU money;

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(b)
(c)

the amount due;
the date due;

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(d)
(e) (f)

the date of biling;
any special payment terms;

if YOU hold any security for such debt and, if so what; and
if there is any dispute about payment, describe it.

(g)

ANSWER:
Responding Part objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Par objects that this interrogatory

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seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.

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INTERROGATORY NO. 13:
If YOU have unbilled services completed forc 1 ients or customers, state the name,

address and amount of each.

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ANSWER:
Responding Part objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Pary objects that this interrogatory

seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.

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INTERROGATORY NO. 14:

If YOU are presently employed or in any business (including, but not limited to, a
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parnership, corporation, limited liability parnership, and/or limited liability corporation), for each
employer or business, state:
(a)
(b)

the name and address of any such employer or business;
YOUR salary and date of payment;

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( c)
(d)
(e) (f)

ownership (parnership or corporate) interest;
bonus;

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commissions;

any accrued but unpaid amount due; and
the amount of any arrears.

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(g)

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ANSWER:
Responding Par objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the

discovery of admissible evidence. In addition, Responding Party objects that this interrogatory
seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.
INTERROGATORY

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NO. 15:

If YOU have any furniture, fixtures, equipment, books or inventories, describe each
in detaiL.

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ANSWER:
Responding Par objects that this interrogatory seeks information that is not

relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory

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seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.

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INTERROGATORY NO. 16:

If YOU have any part-time employment, please explain, including any income
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derived therefrom.

ANSWER:
Responding Part objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory

seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.
INTERROGATORY

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NO. 17:

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If YOUR spouse is employed, state:
(a)

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the name and address of YOUR spouse's employer;

(b)
(c)

salary or compensation YOUR spouse receives;
date or time of

payments and amount YOUR spouse receives;

.

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(d)

where YOUR spouse's compensation is deposited; and

(e)

whether YOu. have any prenuptial or post-nuptial agreements which alter

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community propert rights.

ANSWER:
Responding Pary objects that this interrogatory seeks information that is not

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relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory
seeks information protected by state and federal constitutional rights to privacy. This inteITogatory

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appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.
INTERROGATORY

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NO. 18:

If YOU have any checking accounts, savings accounts, money market accounts,

stock accounts, credit union accounts or other deposit accounts in YOUR own name or jointly with any other PERSONS, state where the account is maintained, the address, the account number and

amount of present balance, and the name and address of any co-depositor.
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DEFENDANT NAZIM FAQUIRY AN'S RESPONSE TO
PI.A INTTFF'S TNTERROGA TORIES (SET NO. ONE)

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ANSWER:
Responding Par objects that this interrogatory seeks information that is not

relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Par objects that this interrogatory

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seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.
INTERROGATORY

NO. 19:

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If YOU maintain a safe deposit box, state the location, the number and the contents.

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ANSWER:
Responding Part objects that this inteITogatory seeks information that is not

relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. In addition, Responding Part objects that this interrogatory

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seeks information protected by state and federal constitutional rights to privacy time. This
interrogatory appears to be in the nature of a debtors examination and is apparently propounded for

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the purpose of harassment.
INTERROGATORY

NO. 20:

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State a full description, a statement as to the value of such asset, and the location of
the asset, of each of the following items YOU own:
(a)

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a stamp collection;
gun collection;
tool collection;

(b)
(c)
(d)

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coin collection;
precious metals;

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( e)
(f)

ar.,
antiques;
trusts;
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(i)
G)

commodity accounts or commodities;
notes secured by trust deeds;
certificates of deposit;
commercial paper;

(k)

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(l)

(m)
(n) (0)
(P)

options on real estate of personal propert;
pension plan;

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IRA or Keogh accounts;

40lk or other retirement accounts; and
any other property of

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(q)

value not otherwise mentioned?

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ANSWER:

Responding Party objects that this interrogatory seeks information that is not

relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the

discovery of admissible evidence. In addition, Responding Party objects that this interrogatory
seeks information protected by state and federal constitutional rights to privacy. This interrogatory
appears to be in the nature of a debtors examination and is apparently propounded for the purpose
of harassment.
INTERROGATORY

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NO. 21:

State any and all facts to support all denials in YOUR ANSWER.
ANSWER:

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Under the PMP A, a refiner/distributor such as BP can terminate a franchise

relationship only for the grounds specified in the PMP A. Moreover, even where suffcient
grounds exist to justify termination, the refiner/distributor must also provide notice in the form

specifically prescribed by the PMP A. If a termination is deficient as to either of these
requirements, the termination is deemed unlawful and the franchisee is entitled to a variety of

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remedies, including injunctive relief, damages, attorneys' fees, and punitive damages. Under the
PMP A, the burden is on the franchisor to establish that the termination of the franchise

relationship complied with the provisions of the PMP A.
For franchise agreements executed after June 19, 1978, there are four grounds
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permitting the franchisor to terminate the relationship, and two such grounds are implicated here.
First, if th1 franchisee fails to comply with any provision of the franchise agreement, the franchisor

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may terminate the agreement so long as the violated provision is both "reasonable" and "of
material significance to the franchise relationship." Significantly, under the PMP A, the term

"failure" does not include any failure that is only technical or unimportant to the franchise

relationship, any failure for a cause that is beyond the control ofthe franchisee, or any failure

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based on a provision that is ilegal or unenforceable. Second, the franchisor may terminate the
relationship upon the occurrence of some event which is relevant to the franchise relationship, and
as a result of

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the occurrence, termination is reasonable.

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Here, Plaintiffs cite two grounds for termination. First, Plaintiffs claim that
Defendants failed to have any fuel available for purchase to the motoring public for a period of

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seven consecutive days. However, there was fuel available during the period in question.
Moreover, to the extent that Defendants failed to have a certain grade of gasoline available, this
failure was due solely to Plaintiffs' own failure to comply with the various agreements, including
the loan and gasoline agreements. As such, Defendants did not fail to have any gasoline for sale
for seven consecutive days as envisioned by the PMP A.

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The second ground for termination cited by Plaintiffs was the Defendants alleged

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failure to timely pay all sums due. However, with the exception of a disputed invoice, Defendants
were current on all payment arrangements (C.O.D. with extra payments to amortize the balance

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owed) at the time oftermination. Moreover, Defendants had a cashiers' check ready to tender to
Plaintiffs upon their delivery of

fuel, but Plaintiffs simply refused to deliver anything. Finally,

..

STTN had offered to pay the balance through an escrow which would provide for simultaneous

loan funding, but BP failed to perform. Additionally, and to the extent that Defendants failed to
make any payments as scheduled, that failure was due solely to Plaintiffs' own breach of

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the

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various loan agreements. As such, Defendants did not fail to timely pay all sums due as defined by
the PMP A.

Since the failures cited by Plaintiffs are not failures as defined by the PMP A, they are not
proper grounds for termination. And since the grounds for termination do no satisfy the PMP A,
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the termination is clearly unlawfL.
A valid termination under the PMP A must also comply with the notice

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requirements. Typically, a franchisor must provide notice of at least 90 days and the notice must
be: (1) in writing; (2) sent via certified mail or personally delivered to the franchisee; and (3)

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contain a statement of intent to terminate the relationship and the reasons for the termination, the
effective date of the termination, and a summary statement of the rights and responsibilities of any
par under the PMP A. Franchisors may give less than 90 days notice in circumstances in which it
would not be reasonable. Significantly, if the notice of

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termination does not satisfy the

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requirements of

the PMP A, the termination is unlawfuL. Under the PMP A, BP was required to

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give at least 90 days notice of its intent to terminate unless it would not be reasonable for BP to

furnish 90 days notice. The 90 day notice provision is not lightly excused. The 90 day notice

requirement is not an all or nothing requirement that permits no notice at all when 90 days would be unreasonable. Indeed, the legislative history and Congressional hearings conducted in drafting

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the PMP A indicate that 2804(b)(1 )(A) was added to dispense with the lengthy notice requirement

where, for example, a franchisee committed seI'ous defaults of the franchise agreement, such as
misbranding.

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As noted above, BP terminated the franchise with no notice whatsoever. In its notice oftermination, BP states that it would not be reasonable for BPWCP to furnish notification
of 90 days prior to the date of termination because of the risk of confusion to the public as well as

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possible safety risks. While confusion to the public and safety risks mayor may not justify an
accelerated notice schedule in limited circumstances, there is no evidence in this case that there was any risk of confusion to the public, nor is there any evidence to suggest that the station was a

safety hazard. Indeed, BP terminated the agreement, in part, because there was allegedly no gas
being sold at the station. If Defendants were not selling gas, there would be little risk of confusion

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to the public. Nor do any cases addressing this issue recognize an immediate termination notice as

reasonable where the franchisee merely owed money. As such, BP's immediate termination of
the franchise relationship clearly violates the PMP A.
Plaintiffs breach of

the loan agreements prevented defendants' performance. In
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their First Amended Complaint, Plaintiffs present claims based on Defendants alleged breach of
various contracts. However, to the extent that the Defendants failed to comply with any material

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provision of the contract in question, that failure was the direct and proximate result of Plaintiffs

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own breach of the agreements. There is in every contract an implied covenant that neither pary
will do anything to destroy or injure the right of the other part to receive the benefits of

the

contract. This is known as the implied covenant of good faith and fair dealing. Under this
covenant, each part has a duty to do everyhing that the contract presupposes he or she will do to

accomplish the purpose of the contract and the duty not to prevent or hinder the performance by
the

other party. It follows that performance is excused when prevented or rendered impossible by

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the acts of the opposite party and similarly operates as a defense to an action for breach of contract.

In this case, the Gasoline and Mini-Market Agreements are silent as to the Loan Agreement.

However, it is well settled that all agreements should be considered together where the nature and
character of the agreements show that they were part of the same transaction, as is the case here

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Additionally, pursuant to the implied covenant of good faith and fair dealing, BP was under a duty
to not prevent STTN from performing under the Agreements. In spite of

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this covenant, Plaintiffs

breached their agreement to help finance the re-construction of the Station. Plaintiffs did so
knowing that Defendants had to undertake immediate construction and knowing that the

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contractors would demand payment. Indeed, Plaintiffs encouraged Defendants to continue construction despite Plaintiffs refusal to fund the loan: Moreover, Plaintiffs were to fund the gas

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loan according to the schedule attached to the loan. To date, Plaintiffs have failed to make all
required payments, despite the Stations completion and despite the agreed upon disbursement
schedule. Thus, to the extent that Defendants failed to comply with any of

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the contracts at issue

specifically the failure to pay money and to purchase gasoline that failure was solely the result of
Plaintiffs own breach of the loan agreements.

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Defendants have not infringed on plaintiffs' protected marks:lcRiRidfftral:rt
infringement against the defendants. A plaintiff asserting trademark infringement must establish
both (1) that it has a protectable ownership interest in the mark; and (2) that the defendants use of

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the mark is likely to cause consumer confusion, thereby infringing upon the (plaintiffs) rights to
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the mark. When a plaintiff has an unregistered trademark, the presumption of validity is
inapplicable, and the plaintiff must establish its protectable interest. Trademarks fall into five
categories: (1) generic; (2) descriptive; (3) suggestive; (4) arbitrar; and (5) fancifuL. The latter

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three are automatically entitled to protection, as they require a mental

leap between the mark and

the object referenced. By contrast, generic and descriptive terms refer( ) to the type or species of

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the product at issue. Trademark protection does not extend to generic marks, and only extends to

descriptivd marks that have acquired secondary meaning in the minds of consumers. Despite
Plaintiffs claims to the contrary, the simple fact is that, once the Station was wrongfully debranded, Defendants did not use any protected marks, aside from the display on the 6 inch

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computer screen on the pic machines for a short period of time until those were changed.
Plaintiffs claim proprietary rights to the following items, although the marks are unregistered. As
noted above, because the marks are unregistered, Plaintiffs must demonstrate that they have a

protectable interest in the marks in order to succeed in their claims. Plaintiffs cannot show that the
marks are protectable. The marks are simply generic marks that have not attained secondar

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meannng.

The Fil Smar" words on the pic machine pay screen actually is a protected mark,
but it is not registered to Plaintiffs. Instead, it is registered to Hallum, Inc., a corporation in

Flagstaff, Arizona. Moreover, Plaintiffs cannot demonstrate that the phrase has acquired
secondary meaning that relates to Plaintiffs goods or services. Thus, Plaintiffs have no protectable

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interest in the words Fill Smart" In fact, Plaintiffs use of this mark may be infringement. The
Crunch Cube graphics are also generic and Plaintiff canot show that the graphics have acquired

the secondar meaning entitling it to protection. Moreover, when BP de-branded the Station, it
painted over portions of the Crunch Cube graphics, but chose to leave the rest of

the graphics in

24 25

place. Clearly, BPs decision not to remove the rest of the graphics is an admission that they
graphics are not a protectable interest. The AM/PM Coffee Graphics is simply a coffee cup with
beans. Indeed, employees from BP painted over portions ofthe coffee graphics when they
conducted the de-brand, but elected to leave the rest of the coffee graphics intact. Clearly, if

26
27 28

the

coffee graphics constituted a protectable interest of BP, the individuals trained specifically to
365
II

14

DEFENDANT NAZIM FAQUIRY AN'S RESPONSE TO PT. TNTTFF'~ TNTF,RROC.A TORTES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 16 of 40

1

destroy BPs marks would have also painted over the rest of the cup. Their decision not to destroy

2
3

the graphics is an admission that the graphics are not a protectable interest. The "hamburger
graphic is nothing more than a hamburger painting. To qualify for protected status, Plaintiff must
show that the hamburger is more than a generic hamburger. In any event, the BP de-branding

4 5 6 7
8

squad elected to leave the hamburger in place. Presumably, if it was a protectable interest, they

would have painted it over it, as they did with other marks. Plaintiffs also claim a protectable
interest in the bllle light stripe on the fuel canopy. This is nothing more than a generic blue neon
light. It is similar to those used by other gasoline companies, such as Chevron, Marathon, and
countless other independent stations. Like the coffee and hamburger marks, this was left behind

9

10

after the BP employees de-branded the Station. And, as with the other marks, Plaintiffs cannot

11
12 13

make even a rudimentary showing that the mark is entitled to protection. Plaintiffs also claim protection over the orange neon light stripe on the convenience store. This light stripe is nothing
more than a generic orange neon light, similar to that used by other gasoline stations, including 76

14 15

and untold other independent stations. This light was also left behind by the BP employees, and
like the blue light, Plaintiffs cannot make even a rudimentar showing that the mark is entitled to

16
17 18

protection.

INTERROGATORY NO. 22:

State any and all facts to support all affrmative defenses in YOUR ANSWER.
ANSWER:
See response to Interrogatory No. 21.

19

20 21
22 23

INTERROGATORY NO. 23:
State any and all facts to support all denials in YOUR responses to any of

the

Requests for Admissions, Set One, served concurrently herewith.
ANSWER:

24 25 26 27 28

See response to Interrogatory No. 21.

INTERROGATORY NO. 24:
IDENTIFY any and all PERSONS with knowledge of any of

the facts stated in

YOUR responses to the preceding interrogatories.
366
15

DEFENDANT NAZIM FAQUIRY AN'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

~

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 17 of 40

..

1

ANSWER:

2 3 4

Sayed Faquiryan, Nazim Faquiryan, Mina Faquiryan, Al Fortune, Chris A. Johnson

of Omni Financial, Barbara Jones, Thomas Reeder, Brad Christensen, Don Strenk, Cheryl Heath,

Priscilla "Jean" Smith, Maria Wilson, Kenneth Wickerham, Cecile McDonald, Michael Hagar,
McClane Supply, FMI, DeRosa Sales, the debranding squad from BP, various contractors and

5
6 7 8

construction workers identified in the documents produced herewith.
INTERROGATORY NO. 25:

IDENTIFY any and all DOCUMENTS to support the facts stated in YOUR
responses to the preceding interrogatories.
ANSWER:

9

10

11
12
13 14

Pursuant to FRCP, Rule 33(d), Plaintiffs are directed to the purchase orders,
in~oices, cancelled checks and emails produced by responding party with it Response to request
for Production of Documents.
DATED: April ~, 2008.

15 16
17 18

BAKER, MANOCK & JENSEN

By ¡/
Johr. Michael

19

20 21
22 23 24

Attorney for Defendants and Counter Claimants STTNENTERPRlSES, INC., NAZIM FAQUIRYAN, SAYED FAQUIRYAN, MAGHUL FAQUIRYAN, and AVA GLOBAL ENTERPRlSE, LLC

(iPFDesktop\: :ODMA/MODMA/DMS;DMS;606041; 1
14366.0001

25 26 27 28
367
16

DEFENDANT NAZIM FAQUIRYAN'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 18 of 40
¡awi! l~6!1Áea ~upedi ~ 90: ~C:6 800ZIZIl ¿

VERIFICATION

STATE OF CALIFORNIA

COUNTY OF SAN BENITO

I have read the foregoing DEFENDANT NAZIM FAQUIRV AN'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO ONE) and know its
contents,

~CHECK APPLICABLE P AR.AGRAPHS
(gI am a par to this action. The matters stated in the foregoing document are true of

my

O','! knowledge except as to those matterS which are stated on information and belief, and as to those matterS I believe them to be true.

o

i am 0 an Offcer 0 a parer 0 a . of

, a par to this action, and am authorized to make this verification for and on their behalf, and I make this verification for tht reason. g I am informed and believe a.d on that

ground allege that the matters stated In the foregoing docwncnt are true. 0 The watters stated in the foregoing document arc true of my oWn knowledge except as to those matters which are stated on information and belief, and as to those matters I believe them to be true.

o I am one of the attorneys for ' a parr to
this action. Such parties are absent from the county of aforesaid where suoh atorneys have their
offces, and I make this verification for and on behaf of

these paries for that reason. I am

informed and believe and on that ground allege that the matters stated in the foregoing document
are true.

Executed on April -' 2008, at Fresno, California.
I d¿clare under penalty of perjur under the la.ws of

the State of Ca1ìfomia that the.

foregoing is true and correct.

Nazim Faauhyan

~r
368
t"¡t1A~rn()':.:

Signature

LB/2:B 3Ðt1d

52:SBE98LBL

1S : 12: 8B02: 11GlvB

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 19 of 40

1 2
3

PROOF OF SERVICE
CCP §§ 1011, 1013, 10l3a, 2015.5 FRCP 5(b)

STATE OF CALIFORNIA, COUNTY OF FRESNO

4 5
6

I am employed in the County of Fresno, State of California. I am over the age of 18 and not a part to the within action; my business address is 5260 North Palm Avenue, Suite 421, Fresno, California 93704-2209.
2, 2008, I served the document described as DEFENDANT NAZIM FAQUIRY AN'S On April RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE) on the interested parties in this action i: by placing the true copies thereof enclosed in sealed envelopes addressed as stated on the attached mailing list:
o by placing 0 the. original 0 a true copy thereof enclosed in sealed envelopes addressed as follows:

7
8 9

10 11
12
13

Ms. Deborah Y. Jones Weston, Benshoof, Rochefort, Rubalcava & MacCuish LLP 333 South Hope Street, Sixteenth Floor Los Angeles, California 90071 (213) 576-1000 Facsimile No. (213) 576-1100
i: BY MAIL
o I deposited such envelope in the mail

at Fresno, California. The envelope was mailed with

postage thereon fully prepaid.
i: As follows: I am "readily familiar" with the firm's practice of collection and processing

14

15
16

correspondence for mailing. Under that practice it would be deposited with U.S. postal service on that same day with postage thereon fully prepaid at Fresno, California in the ordinary course
of business. I am aware that on motion of the part served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in

affdavit.
o (BY PERSONAL SERVICE) I caused such envelope to be delivered by hand to the offces of

17
the addressee.

18

19

i: (BY FAX) I caused the above-referenced document to be tran.smitted by fax to the addressee(s) at the fax
number(s) shown.

20
21
22 23
t8 (State)

o (BY OVERNIGHT COURIER) I caused the above-referenced enve10pe(s) to be delivered to an overnight courier service for delivery to the addressee(s).
Executed on April 2, 2008, at Fresno, California.
I declare under penalty of perjury under the laws of the State of California that the above is true
and correct.
o (Federal)

24

25
26

1 declare under penalty of

the United States of America that the above perjury under the laws of is true and correct and that I am employed in the offce of a member of the bar of this Court at whose direction the service was made.

27 28
Lynda Phillips Signature
i!PFDesktop\: :ODMAlMHODMAlDMS ;DMS ;5822 96; i

'+~;h/L

369

15678,0003

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 20 of 40

EXHIBIT 7

Case 5:07-cv-04808-JF John G. Michael
1

Document 46-8 #106107

Filed 07/03/2008

Page 21 of 40

BAKER, MANOCK & JENSEN
A PROFESSIONAL CORPORATION FIG GARDEN FINANCIAL CENTER

2 3

5260 NORTH PALM AVENUE, FOURTH FLOOR

FRESNO, CALIFORNIA 93704.2209
TELEPHONE (559) 432.5400
TELECOPIER (559) 432.5620

4 5
6

Attorneys for

Defendants

7
8

UNITED STATES DISTRICT COURT NORTHERN DISTRlCT OF CALIFORNIA

9

10 11
12 13

BP WEST COAST PRODUCTS LLC, a Delaware Limited Liability Company; and ATLANTIC RlCHFIELD COMPANY, a Delaware Corporation.,
Plaintiffs,

14
v.

15 16 17 18

) ) ) ) ) ) ) ) )

Case No. 5:07-cv-04808 JF

DEFENDANT STTN ENTERPRISES, INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

STTN ENTERPRlSES, INC., a California)

Corporation; NAZIM FAQUIRYAN, an )
individual; SAYED F AQUIR Y AN, an )

individual; MAGHUL FAQUIRYAN, an )
individual; and AVA GLOBAL ENTERPRISE, ) LLC, a California limited liability company, )
Defendants.
) ) ) )

19

20 21
22 23 24

PROPOUNDING PARTY:

Plaintiff, BP WEST COAST PRODUCTS
Defendant STTN ENTERPRISES, INC.

RESPONDING PARTY:

Defendant STTN ENTERPRlSES, INC. responds to Plaintiffs Interrogatories to
Defendant STTN Enterprises, Set No. One, as follows:
It should be noted that this responding party has not fully completed investigation of
the facts of

25 26 27 28

this case, has not fully completed discovery in this action, and has not completed

preparation for triaL. All of the answers contained herein are based only upon such information and

documents as are presently available to and specifically known to this responding par, and
370
DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 22 of 40

1
2 3

disclose only those contentions which presently occur to such responding pary. It is anticipated

that furher discovery, independent investigation, legal research and analysis wil supply additional
facts, add meaning to the known facts, and perhaps establish entirely new factual conclusions and

4 5 6
7 8

legal contentions, all of which may lead to substantial additions to, changes in and variations from

the contentions herein set forth. The following interrogatory responses are given without prejudice

to responding part's right to produce evidence of any subsequently discovered fact or facts which
this responding par may later recall or uncover.

INTERROGATORY NO. 1:

9

IDENTIFY all PERSONS who work or have worked at the STATION.
ANSWER:

10
11
12 13 14

Objection, this inteITogatory is vague and ambiguous as to time. In addition, to the

extent that it seeks the identity of present employees who did not work at the station during the
relevant time period, this interrogatory seeks information that is not relevant to any claim or

defense in this lawsuit nor is it reasonable calculated to lead to the discovery of admissible
evidence. Without waiving the foregoing objections, the identities of

15
16 17 18

the people who worked at

the station

during the time period of April 1, 2006 through October 31, 2007 are as follows:

Francisco S. Ruiz

Alison C. Saber

19 20

Jose L. Gurola
Yadira Zandej as

21 22
23 24

Laura Drnelas

Mina Faquiryan Tamim S. Faquiryan

Mohammad Ali Sardar
Diana (last name to be provided)

25 26 27
28
371

Susana G. Leviro
Estella Gurrola

2

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 23 of 40

1

INTERROGATORY NO.2:

2
3 4 5 6

IDENTIFY any and all PERSONS, including but not limited to YOUR accountants,

bookkeepers, or financial advisors, who reviewed, kept, maintained, prepared, and/or revised any
financial records of

the STATION.

ANSWER:

Steven W. Schnur
3130 Impala Drive, Suite 101

7
8 9

San Jose, CA 95117
(408) 374-9410
INTERROGATORY

10

NO. 3:

11
12 13

IDENTIFY any and all PERSONS, including but not limited to YOUR general

contractors, sub-contractors, or architects, who performed any work on YOUR behalf at the
STATION in order to convert the STATION into an ARCO-branded gasoline station and an

14

arpm Mini market convenience store.
ANSWER:

15
16 17 18

Pursuant to FRCP, Rule 33(d), Plaintiffs are directed to the purchase orders,

invoices, cancelled checks and emails produced by responding part with it Response to request
for Production of Documents.
INTERROGATORY NO.4:

19 20

State any and all facts to support Y0l!R contention that BPWCP committed
"numerous delays and breaches. . . of

21
22 23

the agreements between the paries," as alleged at Paragraph

27 of YOUR ANSWER.
ANSWER:

24

Prior to July 2006, STTN, operated a Chevron-branded motor fuel station at 631

25 26 27
28

San Felipe Road, in Hollister, California (the "Station"). STTN profitably operated the Station
and enjoyed a good business relationship with Chevron. However, that relationship was coming to an end and STTN was looking to re-brand the station. At some point before May 2006, STTN was

approached by employees of BP, and/or ARCO (collectively "Plaintiffs"). During those
372
3
-

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 24 of 40

1

conversations, Plaintiffs asked to purchase the Station from STTN or for STTN to brand the

2
3

Station as an ARCO. Terms could not be agreed upon and STTN rejected the purchase offer and

agreed to re-brand the Station into an ARCO-branded station. To effectuate the transition to an
ARCO-branded motor fuel station, BP offered STTN a self-amortized loan package in the amount

4
5
6 7 8 9

of $475,000. In essence, so long as STTN sold a specified amount of product anually, a portion
of

the debt would deemed repaid each year by BP. On May 25,2006, BP provided a Commitment

Letter to STTN in the sum of$475,000.

On July 11, 2006, BP and STTN entered into two franchise agreements. The
purpose of these agreements was for STTN to sell ARCO-branded motor fuel as well as to operate

10 11 12
13 14

an AM/PM convenience store at the Station. The agreements required STTN to be operating as an

ARCO-branded motor fuel station by April 11, 2007. The parties agreed that the Station would be
operated as a "gas only" station starting October 10, 2006, until the Mini Market was completed.
In order to comply with the construction schedule promulgated by BP, STTN was

forced to begin reconstruction on the Station immediately. BP worked closely with STTN
throughout the construction phase by approving site plans, contractors, architects, and informing

15
16

STTN of deficiencies. BP also knew that the Station was a re-brand, not a new, ground-up facility.
STTN worked diligently to satisfy all ofBP's requirements. Indeed, STTN spent of$790,000 of
its own funds to remodel the Station. BP did not finalize its loan agreements until Februar 12,

17
18

19

2007. The loan was to be disbursed according to the various schedules accompanying the loan
documents, including the proposed budget and the disbursement schedule. Despite its close

20
21
22 23 24

involvement with the process, and despite having made a commitment to assist STTN in the
construction of

the Station, BP consistently refused to provide any loan funds to STTN.

As a result of BP's breach of its obligations under the loan agreements, while at the same time requiring STTN to continue construction and purchase motor fuel, STTN was unable to

25 26 27
28

pay some of its contractors on time. Mechanics liens were then filed by certain contractors.
However, as of July 7, 2007, STTN completely paid off all

liens on the Station. Still, BP refused

to comply with the loan agreements. During this same time period, because of STTN's working
capital was tied up in construction costs awaiting reimbursement from BP, STTN fell behind in its
373 4

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 25 of 40

1

payments for gasoline delivery and was put on a cash-on-delivery basis.
BP eventually paid $150,000.00 of

2 3
$250,000.00 of

the loan in July 2007. However, the remaining

the loan funds then due were not disbursed by BP. STTN demanded disbursement
the creditors ofthe project and replenish its working capital, but BP

4
5
6

of said funds to pay off

refused, claiming that it lacked all ofthe required documents. STTN asked for clarification as to

which documents were missing, and BP simply refused to inform STTN of the missing documents.
At the same time, BP demanded that STTN continue to purchase gasoline. Being forced to use its

7
8

operating capital to satisfy the construction debts due to BP's refusal to disburse the loan, STTN
asked that BP enter into an escrow agreement whereby STTN would place the remaining money

9

10 11
12 13

due for fuel into escrow and BP would similarly place the loan funds in escrow. BP initially
agreed to this request, but later failed to place the loan funds in escrow without explanation. Indeed, even as of August 31, 2007, BP offered STTN reassurances that all the information needed

to fund the loans was in BP's possession and the funds would be disbursed soon.
On August 31, 2007, BP sent seven notices of default to STTN, each alleging that

14

15 16 17 18 19

STTN failed to offer any grade of motor fuel for sale to the public on a specified date. However,

STTN sold 91 octane and diesel gasoline during the relevant dates cited by BP. Moreover, STTN
could not sell 87 and 89 octane gasoline for part of

the relevant period beëause BP refused to

deliver any motor fuel to the Station, despite STTN obtaining and offering a cashier's check to
tender upon delivery.
On September 6, 2007, BP terminated the franchise agreement. In so doing, it cited
(1) STTN's failure to offer any grade of motor fuel to the motoring public for a period of

20
21
22 23

seven

consecutive days and (2) STTN's failure to pay all sums when due. Rather than give the 90 days
notice that is typically required under the PMP A, and without any factual basis thereof, BP cited

24

risk of confusion to the public and safety risks as justifying an immediate termination of the

25 26
27 28

franchise agreement. As such, the franchise relationship was allegedly terminated on September 6,
2007.

On September 17 and 18, 2007, BP sent multiple agents to "de-brand" the Station.
As part of

the de-branding process, BP removed, destroyed, re-painted, or otherwise obliterated
374
5

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 26 of 40

1 2 3

any registered trademark or proprietar information belonging to BP. STTN, while maintaining
that the franchise agreement was terminated ilegally, cooperated with BP during the de-branding
process.
INTERROGATORY

4
5 6 7
8

NO. 5:

State any and all facts to support YOUR contention that "STTN was approached by

employees of (BPWCP) ... and/or (ARCOJ" and that BP\VCP "asked to purchase the Station from
STTN or for STTN to brand the Station as an ARCO," as alleged at Paragraph 162 of

the

COUNTERCLAIM.

9

ANSWER:

10 11
12
13

Prior to May of 2006, Ken Wickerham and Rima Thadha discussed the various

ways in which the station could be re-branded to Arco. During those conversations, Ken
Wickerham inquired whether STTN would be interested in selling the station to BP. Price was

discussed, but an agreement was not reached and STTN rejected the idea of a sale. Discussion
continued regarding a re-branding, resulting in the various agreements between the parties.
INTERROGATORY NO.6:

14

15
16 17 18

State any and all facts to support YOUR contention that YOU and BPWCP "orally
agreed that the Station would be operated as a 'gas only' station starting October 10, 2006, until the
Mini Market was completed," as alleged at Paragraph 165 of

the COUNTERCLAIM.

19

ANSWER:

20 21
22 23 24

This agreement was both oral and written. This was discussed between Sayed
Faquiryan and the woman who took Ken Wickerham's place when he retired and Brad Cristensen.
INTERROGATORY NO.7:

State any and all facts to support YOUR contention that YOU were "forced to begin
construction on the Station immediately," as alleged at Paragraph 166 of

the COUNTERCLAIM.

25 26 27 28

ANSWER:

In order to comply with the construction schedule promulgated by BP, STTN was

forced to begin reconstruction on the Station immediately. Ken Wickerham told Mr. Faquiryan

that the station must open on time and that construction must be started in January, 2007. He told
375
6

1\

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 27 of 40

1

Mr. Faquiryan to start construction and not to worr about the money, that BP would supply the

2
3

loans. Construction was started on January 2, 2007. Mr. Christensen and Mr. Wickerham were
present at the start of construction.
INTERROGATORY

4 5
6

NO. 8:

State any and all facts to support YOUR contention that YOU "worked diligently to

satisfy all ofBPWCP's requirements and spent over $790,000 of (YOUR) own funds to remodel
the Station," as alleged at Paragraph 167 of

7
8 9

the COUNTERCLAIM.

ANSWER:

From approximately May, 2006, when BP's commitment letter issued, STTN
started working with engineers on the conversion of

10 11
12 13 14

the station to an Arco station. From that point

forward, STTN worked with its general contractor, subcontractors, equipment dealers, and others to diligently complete the construction required for the conversion, eventually spending over
$790,000 of its own funds.
INTERROGATORY

NO. 9:

15
16 17 18

State any and all facts to support YOUR contention that BPWCP "consistently

refused to provide any loan funds to STTN," as alleged at Paragraph 169 of the
COUNTERCLAIM.

ANSWER:

19

BP refused to fund the loans until July,.2007, when it partially funded the amount

20

of$150,000.
INTERROGATORY

21
22 23 24

NO. 10:

State any and all facts to support YOUR contention that YOU asked for
clarification as to which documents were missing, and BPWCP "simply refused to inform STTN
of

the missing documents," as alleged at Paragraph 174 ofthe COUNTERCLAIM.
ANSWER:

25 26 27 28

STTN worked with Cile McDonald and Prescilla Smith to provide all

documentation required. When Mr. Faquiryan would inquire about whether anything was missing,
he was told "we'll

let you know." He was never given a list of any documentation that was still
7

376

II

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 28 of 40

1 2
3

needed to close the gas loan. In fact, he was told by Mike Hagar that all documentation had been
provided ahd the loan would fund in the near future.
INTERROGATORY NO. 11:

4 5
6 7 8

State any and all facts to support YOUR contention that BPWCP "initially agreed

to the escrow request, but later failed to place the loan funds in escrow without explanation," as
alleged at Paragraph 177 of

the COUNTERCLAIM.

ANSWER:

There was an agreement between Sayed Faquiryan and Tom Reeder and Mike

9

Hagar that BP would place the gas loan funds in escrow and that STTN would place the gas money

10

in the same escrow, which was to close upon both paries' deposits being received by the escrow
company. 'Mr. Faquiryan informed BP that STTN would be borrowing the necessary funds to pay
for the gas and that, due to previous delays by BP, STTN did not want to boITOW the money before

11
12 13 14

BP placed its funds in escrow, because then, those funds would be tied up and interest expense

would accrue. BP, however, never placed its funds into the escrow for the purported reason that
STTN did not deposit its funds..
INTERROGATORY

15
16 17 18 19

NO. 12:

State any and all facts to support YOUR contention that BPWCP "offered STTN reassurances that all the information needed to fund the loans was in (BPWCP's) possession and
the funds would be disbursed soon," as alleged at Paragraph 178 of

the COUNTERCLAIM.

20 21
22 23 24
agreements..

ANSWER:

Both Mike Hager and Jean Smith indicated this shortly before BP terminated the

INTERROGATORY

NO. 13:

State any and all facts to support YOUR contention that BPWCP "refused to deliver
any motor fuel to the Station, despite STTN obtaining and offering a cashier's check to tender upon
delivery," as alleged at Paragraph 190 of

25 26 27
28

the COUNTERCLAIM.

ANSWER:

On August 21, 2007, Mr, Faquiryan was told he needed to buy gas. Because nearly
377
8

DEFENDANT STTN ENTERPRISES INC.'S RESPONSE TO PLAINTIFF'S INTERROGATORIES (SET NO. ONE)

Case 5:07-cv-04808-JF

Document 46-8

Filed 07/03/2008

Page 29 of 40

1

all of his capital was tied up in construction costs due to the failure of BPWCP to fund the gas

2
3

loan, Mr. Faquiryan told Tom Reeder that he would have to find the money. Mr. Reeder told Mr.
Faquiryan that gas would be delivered if

he had a cashier's check. He told Mr. Faquiryan to fax a

4
5 6 7
8

copy of

the check to the terminal in L.A. Mr. Faquiryan did so, but no gas was delivered. When

Mr. Faquiryan inquired as to why there was no delivery, Mr. Christensen told him it was because

he was in breach because he did not have any gas. Mr. Christensen wpuld not allow STTN to cure
any purported breach.

INTERROGATORY NO. 14:

9

If YOU contend that YOU were not in default, pursuant to the Contract Gasoline
Dealer Agreement for failure to make available all grades of gasoline to the public for at least
seven consecutive days in August 2007, state any and all facts that support YOUR contention.
ANSWER:
See response to inteITogatory no. 4, above
INTERROGATORY

10

11
12
13

14

NO. 15:

15 16 17
18

IDENTIFY any and all other gasoline service station businesses in which YOU
have or had an ownership interest.

ANSWER:
Responding par objects that this interrogatory seeks information that is not

19 20

relevant to any claim or defense in this lawsuit nor is it reasonable calculated to lead to the
discovery of admissible evidence. INTERROGATORY NO. 16:

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IDENTIFY any and all businesses, corporations, and/or fictitious business names

23 24

(i.e., "dba") that are completely or parially owned by YOU and that deal with the business at the
STATION.

25
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378

ANSWER:
None.

INTERROGATORY NO. 17:

State any and all facts to support YOUR contention that BPWCP's termination of
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the ST A TI ON was not proper under the Petroleum Marketing Practices Act, 15 U. S. C. § 280, et
seq.

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3

ANSWER:
On September 6, 2007, BP terminated the franchise agreement. In so doing, it cited

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6 7
8

(1) STTN's failure to offer any grade of motor fuel to the motoring public for a period of seven

consecutive days and (2) STTN's failure to pay all sums when due. Rather than give the 90 days
notice that is typically required under the PMP A, and without any factual basis thereof, BP cited

risk of confusion to the public and safety risks as justifying an immediate termination of the

9

franchise agreement. There was fuel available during the period in question. Moreover, to the
extent that Defendants failed to have a certain grade of gasoline available, this failure was due
solely to Plaintiffs' own failure to comply with the various agreements, including the loan and

10

11
12 13 14

gasoline agreements and Plaintiffs refusal to sell gas to STTn even though it tendered a cashier's
check for the load it had ordered. As such, Defendants did not fail to have any gasoline for sale for
seven consecutive days as envisioned by the PMP A. The second ground for termination cited by
Plaintiffs was the Defendants' alleged failure tö timely pay all sums due. However, with the
exception of

15 16 17 18

a disputed invoice, Defendants were CUITent on all payment aITangements (C.O.D.

with extra payments to amortize the balance owed) at the time of

termination. Moreover,

Defendants had a cashiers' check ready to tender to Plaintiffs upon their delivery of fuel, but

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Plaintiffs simply refused to deliver anything. Finally, STTN had offered to pay the balance
through an escrow which would provide for simultaneous loan funding, but BP failed to perfOlID.

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Additionally, and to the extent that Defendants failed to make any payments as scheduled, that
failure was due solely to Plaintiffs' own breach of

the various loan agreements. As such,

Defendants did not fail to timely pay all sums due as defined by the PMP A. In addition, the notice
provided failed to comply with PMP A notice requirements.
INTERROGATORY

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379
II

NO. 18:

State any and all facts to support all denials in YOUR ANSWER.
ANSWER:
Under the PMP A, a refiner/distributor such as BP can terminate a franchise
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relationship only for the grounds specified in the PMP A. Moreover, even where sufficient

2
3

grounds exist to justify termination, the refiner/distributor must also provide notice in the form

specifically prescribed by the PMP A. If a termination is deficient as to either of these
requirements, the termination is deemed unlawful and the franchisee is entitled to a variety of

4 5
6

remedies, including injunctive relief, damages, attorneys' fees, and punitive damages. Under the
PMP A, the burden is on the franchisor to establish that the termination of the franchise

7
8

relationship complied with the provisions of the PMP A.
For franchise agreements executed after June 19, 1978, there are four grounds

9

permitting the franchisor to terminate the relationship, and two such grounds are implicated here.

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12 13

First, if the franchisee fails to comply with any provision ofthe franchise agreement, the franchisor

may terminate the agreement so long as the violated provision is both "reasonable" and "of
material significance to the franchise relationship." Significantly, under the PMP A, the term

"failure" does not include any failure that is only technical or unimportant to the franchise
relationship, any failure for a cause that is beyond the control of the franchisee, or any failure
based on a:provision that is illegal or unenforcèable. Second, the franchisor may terminate the

14

15
16 17

relationship upon the occurrence of some event which is relevant to the franchise relationship, and
as a result of the occurrence, termination is reasonable.

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Here, Plaintiffs cite two grounds for termination. First, Plaintiffs claim that
Defendants failed to have any fuel available for purchase to the motoring public for a period of

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22
23 24

seven consecutive days. However, there was fuel available during the period in question.
Moreover,

to the extent that Defendants failed to have a certain grade of gasoline available, this

failure was due solely to Plaintiffs' own failure to comply with the various agreements, including

the loan and gasoline agreements. As such, Defendants did not fail to have any gasoline for sale
for seven consecutive days as envisioned by the PMP A.

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The second ground for termination cited by Plaintiffs was the Defendants alleged

failure to timely pay all sums due. However, with the exception of a disputed invoice, Defendants
were current on all payment arrangements (C.O.D. with extra payments to amortize the

27
28

balance

owed) at the time of

termination. Moreover, Defendants had a cashiers' check ready to tender to
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Plaintiffs upon their delivery of fuel, but Plaintiffs simply refused to deliver anything. Finally,
STTN had offered to pay the balance through an escrow which would provide for simultaneous

2
3

loan funding, but BP failed to perform. Additionally, and to the extent that Defendants failed to
make any payments as scheduled, that failure was due solely to Plaintiffs' own breach of

4 5
6 7 8 9

the

various loan agreements. As such, Defendants did not fail to timely pay all sums due as defined by
the PMP A.

Since the failures cited by Plaintiffs are not failures as defined by the PMP A, they are not

proper grounds for termination. And since the grounds for termination do no satisfy the PMP A,
thetermination is clearly unlawfL.

10

A valid termination under the PMP A must also comply with the notice

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12 13

requirements. Typically, a franchisor must provide notice of at least 90 days and the notice must
be: (1) in writing; (2) sent via certified mail or personally delivered to the franchisee; and (3)

contain a statement of intent to terminate the relationship and the reasons for the termination, the
effective date of

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the termination, and a summar statement ofthe rights and responsibilities of any

part under the PMP A. Franchisors may give less than 90 days notice in circumstances in which it
would not be reasonable. Significantly, if the notice of

termination does not satisfy the

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requirements of the PMP A, the termination is unlawfL. Under the PMP A, BP was required to

give at least 90 days notice of its intent to terminate unless it would not be reasonable for BP to

19

furnish 90 days notice. The 90 day notice provision is. not lightly excused. The 90 day notice
requirement is not an all or nothing requirement that permits no notice at all when 90 days would

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be uneasonable. Indeed, the legislative history and Congressional hearings conducted in drafting

the PMP A indicate that 2804(b)(1 )(A) was added to dispense with the lengthy notice requirement

where, for example, a franchisee committed serious defaults of the franchise agreement, such as
misbranding.

24

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26
notice of

As noted above, BP terminated the franchise with no notice whatsoever. In its
termination, BP states that it would not be reasonable for BPWCP to furnish notification

27 28

of 90 days prior to the date of termination because of the risk of confusion to the public as well as
possible safety risks. While confusion to the public and safety risks mayor may not justify an
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accelerated notice schedule in limited circumstances, there is no evidence in this case that there was any risk of confusion to the public, nor is there any evidence to suggest that the station was a

2
3

safety hazard. Indeed, BP terminated the agreement, in part, because there was allegedly no gas

4
5 6 7
8

being sold at the station. If Defendants were not selling gas, there would be little risk of confusion

to the public. Nor do any cases addressing this issue recognize an immediate termination notice as

reasonable where the franchisee merely owed money. As such, BP's immediate termination of
the franchise relationship clearly violates the PMP A.
Plaintiffs breach of

the loan agreements prevented defendants' performance. In

9

their First Amended Complaint, Plaintiffs present claims based on Defendants alleged breach of
various contracts. However, to the extent that the Defendants failed to comply with any material

10 11
12 13 14

provision of the contract in question, that failure was the direct and proximate result of Plaintiffs

own breach of the agreements. There is in every contract an implied covenant that neither part
will do anything to destroy or injure the right of the other pary to receive the benefits of

the

contract. This is known as the implied covenant of good faith and fair dealing. Under this
covenant, each part has a duty to do everyhing that the contract presupposes he or she will do to

15

16
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accomplish the purpose of