Opinion
X03HHDCV106016873S
08-02-2018
ALDIN ASSOCIATES LIMITED PARTNERSHIP v. HESS CORPORATION
UNPUBLISHED OPINION
OPINION
Ingrid L. Moll, Judge of the Superior Court
Before the court is defendant Hess Corporation’s motion for summary judgment dated December 8, 2017 (motion) (# 291.00), which is directed to plaintiff Aldin Associates Limited Partnership’s amended complaint dated December 5, 2011 (complaint) (# 151.00). The court heard oral argument on April 4, 2018. Having considered the motion, all related submissions, and the arguments of counsel, the court denies the motion.
I
Background
The following facts are undisputed. At all relevant times (i.e., the period 2000 to 2011), the plaintiff was a franchisee, wholesale supplier, and lessee dealer of the defendant, a franchisor, refiner and/or distributor of motor fuel. In addition to its operations as a distributor, the plaintiff also operated four Hess-branded gasoline stations (in New Haven, East Haven, West Haven, and Groton), which it acquired during the period 2000 to 2002. The plaintiff operated such stations pursuant to written agreements entitled "Dealer Agreement Gasoline Station" (dealer agreements).
Each dealer agreement required the plaintiff to purchase, exclusively from the defendant, gasoline and other products, which would be sold by the plaintiff to the public at retail prices. Each dealer agreement during the period 2000 to 2011 contains the following pricing term, requiring the defendant to sell gasoline to the plaintiff at "dealer tankwagon prices" (sometimes referred to as "DTW" pricing):
Prices to Dealer will be ... for motor fuel and kerosene, Hess’s dealer tankwagon prices in the marketing area of the Station, as determined by Hess, for the grades and quantities delivered, in effect at the time of delivery ...
Additional facts will be set forth as necessary.
The relevant procedural background, as recited by the Appellate Court, is as follows. "The plaintiff commenced this lawsuit in December 2010, alleging that, around 2005, the defendant began charging dealer tankwagon prices that were arbitrary, unreasonable, and substantially more expensive than the wholesale gasoline prices it was charging to the plaintiff’s competitors. The plaintiff asserted that the increases to dealer tankwagon prices put each of its four stations at a substantial competitive disadvantage because, with higher wholesale prices, the stations could no longer profitably charge retail prices that were cheap enough relative to their competitors’ prices to attract customers. The improper pricing, the plaintiff asserted, caused it to incur losses in sales volumes and profits. The plaintiff’s three-count amended complaint alleged that the defendant’s conduct violated several provisions of the Connecticut Petroleum Product Franchise Act, specifically, General Statutes § 42-1331(f)(5), (6), and (7), the implied covenant of good faith and fair dealing, and CUTPA ...
"The court[, Miller, J.,] conducted a bench trial that commenced on December 11, 2012, and concluded on December 10, 2013. Following the parties’ submissions of post-trial briefs and proposed findings of fact, the court issued a memorandum of decision on July 20, 2015, finding for the defendant on all counts of the complaint. Specifically, the court found that the plaintiff failed to prove damages with a sufficient degree of certainty. The court rendered a judgment in accordance with that decision, and [an] appeal followed." Aldin Associates Ltd. Partnership v. Hess Corp., 176 Conn.App. 461, 465-67, 170 A.3d 682 (2017). On appeal, the Appellate Court concluded that the trial court’s "finding that the plaintiff failed to prove damages with the requisite degree of certainty was clearly erroneous." Id. at 464. Thereupon, the Appellate Court "reverse[d] the judgment of the trial court and remanded] the case for further proceedings." Id.
On remand, Hess requested the court’s permission to file a motion for summary judgment, despite not having filed such a motion prior to the trial described above. Over plaintiff’s objection, the court permitted Hess to file a motion for summary judgment.
On December 8, 2017, Hess filed the instant motion, a supporting memorandum of law, an appendix of unreported cases, as well as the affidavit of Attorney Karen Staib and exhibits thereto. (## 291.00-297.00.) On December 22, 2017, to comply with the court’s order regarding page limitations (# 290.86), Hess filed a revised memorandum of law in support of its motion, a revised appendix of unreported cases, as well as a revised affidavit of Attorney Karen Staib and exhibits thereto. (## 301.00-306.00.) On January 30, 2018, the plaintiff filed its memorandum in opposition and the affidavit of David Savin and exhibits appended thereto. (## 310.00-311.00.) On February 13, 2018, Hess filed its reply. (# 312.00.) The court heard oral argument on April 4, 2018. Trial is scheduled to commence before Judge Budzik on August 13, 2018.
II
Standard of Review
"The motion for summary judgment is designed to eliminate the delay and expense of litigating an issue when there is no real issue to be tried." Wilson v. New Haven, 213 Conn. 277, 279, 567 A.2d 829 (1989). Practice Book § 17-49 provides that summary judgment "shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party ... The party seeking summary judgment has the burden of showing the absence of any genuine issue of material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law ... and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Internal quotation marks omitted.) Liberty Mut. Ins. Co. v. Lone Star Indus., Inc., 290 Conn. 767, 787, 967 A.2d 1 (2009).
"It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact ... are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court in support of a motion for summary judgment." (Internal quotation marks omitted.) Home Ins. Co. v. Aetna Life & Cas. Co., 235 Conn. 185, 202, 663 A.2d 1001 (1995). "A party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Buell Indus., Inc. v. Greater New York Mut. Ins. Co., 259 Conn. 527, 558, 791 A.2d 489 (2002). "A party opposing a motion for summary judgment must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." Barlow v. Palmer, 96 Conn.App. 88, 92, 898 A.2d 835 (2006). "[O]nly evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment." (Internal quotation marks omitted.) Taylor v. Barberino, 136 Conn.App. 283, 289, 44 A.3d 875 (2012) (affirming summary judgment in favor of defendant where plaintiffs failed to satisfy burden, following burden shift, to demonstrate existence of issue of material fact). "The rules would be meaningless if they could be circumvented by filing unauthenticated documents in support of or in opposition to summary judgment ... [T]here must be a preliminary showing of the document’s genuineness, i.e., that the proffered item of evidence is what its proponent claims it to be. The requirement of authentication applies to all types of evidence, including writings." (Citation omitted; internal quotation marks omitted.) City of New Haven v. Pantani, 89 Conn.App. 675, 678, 874 A.2d 849 (2005).
"The existence of the genuine issue of material fact must be demonstrated by counteraffidavits and concrete evidence. Kasowitz v. Mutual Construction Co., 154 Conn. 607, 613, 228 A.2d 149 (1967). A material issue of fact is one that will affect the outcome of the case. United Oil Co. v. Urban Redevelopment Commission, 158 Conn. 364, 379, 260 A.2d 596 (1969)." 2830 Whitney Ave. Corp. v. Heritage Canal Dev. Assocs., Inc., 33 Conn.App. 563, 567, 636 A.2d 1377 (1994). "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto." Practice Book § 17-46.
III
Analysis
A
As a threshold matter, the court denies the defendant’s motion as procedurally infirm. When the court granted the defendant’s highly unusual request to file a motion for summary judgment after a remand following an appeal from a judgment rendered after trial, the court based it on the court’s understanding that discreet legal issues were raised, but not resolved, prior to the bench trial conducted before Judge Miller. Specifically, this court had the belief that the resolution of such a motion could serve the very purpose of such a motion, namely, potentially eliminating the delay and expense of litigating an issue when a party is entitled to judgment as a matter of law. However, the motion submitted was not in the nature of the one expected by the court. Instead, the defendant’s motion would have this court sit essentially as a court of review, opining on the quality of the evidence presented by the plaintiff during trial. In this regard, the defendant’s memorandum is replete with citations to the trial transcript and repeatedly calls into question the "competence" of such evidence. (See, e.g., # 301.00 at 5, 7, 16, 17.) It is not this court’s role to render what would be, in essence, the judgment that the defendant had hoped to obtain from Judge Miller, based on an analysis provided to him in post-trial briefs. Accordingly, the motion is denied.
Although the court concludes that a post-remand motion for summary judgment should not be used in such a manner, the court stresses that it is not suggesting that defendant’s counsel misled the court in making its request. After much consideration, however, the court cannot ignore its conclusion that the motion is procedurally infirm for the reasons stated above.
B
In the alternative, the court addresses the defendant’s motion on the merits and denies it as a substantive matter. The defendant moves for summary judgment on all three counts of the complaint, claiming it is entitled to judgment as a matter of law. The defendant makes two principal arguments.
The defendant first contends that no genuine issue of material fact exists as to the issue of its good faith pricing because the plaintiff failed to present any evidence to prove that the defendant did not price in good faith under applicable law. Distilled to its essence, the defendant’s argument goes as follows: The dealer agreements are governed by the Connecticut UCC because they are contracts for the sale of goods. The dealer tankwagon pricing provision in the dealer agreements is an "open price term." As an open price term, the only requirement is that the defendant’s pricing be commercially reasonable. There exists a presumption of commercial reasonableness that may only be rebutted by evidence of other market prices. Because the plaintiff did not put on evidence of other prices in the market, the defendant’s prices are deemed reasonable under the Connecticut UCC. The Connecticut UCC provision governing "open price term[s]," General Statutes § 42a-2-305(2), applies to each of the counts in the complaint. Accordingly, the defendant is entitled to judgment as a matter of law. In response, the plaintiff argues that the parties’ understanding of the dealer tankwagon pricing provision creates a genuine issue of material fact that cannot be resolved on summary judgment. The court agrees.
General Statutes § 42a-2-305(2) provides: "A price to be fixed by the seller or by the buyer means a price for him to fix in good faith."
As stated above, the plaintiff’s complaint contains three counts, alleging violations of the Connecticut Petroleum Product Franchise Act, the covenant of good faith and fair dealing, and violations of CUTPA. The cornerstone of each count is that the defendant engaged in improper pricing of dealer tankwagon prices. The dealer agreements set forth the following pricing term:
Prices to Dealer will be ... for motor fuel and kerosene, Hess’s dealer tankwagon prices in the marketing area of the Station, as determined by Hess, for the grades and quantities delivered, in effect at the time of delivery ...
"Dealer tankwagon price" is not a defined term in the dealer agreements. According to the plaintiff, while negotiating the dealer agreements, the defendant represented that DTW pricing would be determined by the so-called "street back pricing" method, requiring the defendant to consider the retail gasoline prices that the plaintiff’s competitors were charging in the market areas relevant to each of the plaintiff’s four stations and then charging the plaintiff a DTW price of eight cents per gallon fewer than the lowest price in the market. (This method is described more precisely below.) The plaintiff has submitted evidence that the parties engaged in this course of dealing for a few years, i.e., until 2005, when, according to the plaintiff, the defendant abandoned the "street back pricing" method. According to the plaintiff, the resulting prices charged to the plaintiff were arbitrary and unreasonable, as the competitors’ retail prices remained relatively constant while the defendant’s prices charged to the plaintiff increased. While the defendants cite numerous cases from other jurisdictions to support its position that the DTW pricing term in the dealer agreements reflects a common pricing method in the petroleum industry, whereby the franchisor sets an open price at delivery, the record before the court requires the conclusion that there remains a genuine issue of material fact concerning the meaning of the DTW provision in the parties’ dealer agreements.
"In ruling on a motion for summary judgment, the court’s function is not to decide issues of material fact ... but rather to determine whether any such issues exist ... [I]ssue-finding, rather than issue-determination, is the key to the procedure ... In summary judgment, the court’s role is not to weigh the credibility of the parties, which falls within the province of the finder of fact ... When a court, in ruling on a motion for summary judgment, is confronted with conflicting facts, resolution and interpretation of which would require determinations of credibility, summary judgment is not appropriate." (Citations omitted; internal quotation marks omitted.) Windsor Federal Savings and Loan Association v. Reliable Mechanical Contractors, LLC, 175 Conn.App. 651, 659, 168 A.3d 586 (2017).
Here, the record is replete with examples of admissible evidence to support plaintiff’s position as to the meaning of the DTW pricing term. For example, in opposition to the defendant’s motion for summary judgment, the plaintiff submitted the affidavit of David Savin, the principal of the plaintiff, who stated in part: "[Michael] McAfee [Hess’s representative during negotiations] explained that the DTW price would be set in the market area of each station, that each station would supply a daily survey to the defendant of the competitive stations identified and agreed to by the parties, that the surveys reflected retail prices of the competitors in the marketing area of each of the stations and that the defendant would establish the DTW price such that plaintiff could realize a net margin, after credit card costs and after rebates, of .08 cents per gallon while pricing at the bottom of the market." Savin further averred that McAfee’s "DTW explanation of street back pricing ... was utilized and employed by defendant for the first four years that plaintiff did business with Hess ... When charged a DTW based on street back pricing of an .08 cent net margin, plaintiff was able to charge a retail price at the bottom of the market."
Indeed, when this case was on appeal from the trial court’s judgment following the first trial, the Appellate Court described "the defendant’s pricing of wholesale gasoline [as] a hotly contested issue throughout this case." Aldin, 176 Conn.App. at 465.
Because the court cannot conclude, as a matter of law, that the parties’ DTW pricing provision is an "open price term" governed by the Connecticut UCC, the defendant’s motion largely fails on this ground. The disputed issues of material fact on this issue will have to be decided in the context of the retrial. Only then can the court decide whether the open price term provision of the Connecticut UCC applies, and whether the subjective or objective test should apply thereto.
The court has also considered the defendant’s argument relating to the "integration clause" in the dealer agreements and finds such argument unavailing.
The defendant next argues that there is no genuine issue of material fact as to causation. The court is not persuaded. In order to adopt the defendant’s argument regarding causation, the court would have to reject the probative value of the Savin affidavit, in which it is averred that Connecticut gasoline sales remained constant, local markets did not change during the relevant time period, the plaintiff’s and other stations’ operations were consistent, and the only relevant change was the defendant’s DTW pricing. It is for the trier of fact, and not the undersigned, to decide how much weight, if any, to give such evidence.
In sum, the defendant’s motion for summary judgment is denied.
IV
Conclusion
For the foregoing reasons, Hess’s motion for summary judgment (# 291.00) is denied.