Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SEI Fuel Services, Inc. v. A&J Gas and Convenience, LLC

United States District Court, D. Connecticut

December 13, 2019

SEI Fuel Services, Inc, plaintiff,
v.
A&J Gas and Convenience, LLC., et al, defendants.

          RULING ON PLAINTIFF'S APPLICATION FOR PREJUDGMENT REMEDY

          Robert A. Richardson United States Magistrate Judge.

         The plaintiff, SEI Fuel Services, filed this breach of contract action against the defendants, A&J Gas and Convenience, LLC, Anis Ahmed M. Shaikh, Jabin A. Shaikh, Naeem Uddin, Faisal Khalid and Sana Adel, LLC.[1] On April 11, 2019, the plaintiff applied for a prejudgment remedy (“PJR”). On May 20, 2019, the defendants filed an opposition brief. On June 3, 2019, the plaintiff filed a reply brief and, on June 12, 2019, the defendants filed a sur-reply brief.

         The Court held a PJR hearing on August 6, 2019. During the hearing, the defendants noted that the agreement requires the Court to apply Massachusetts law. The defendants argued that the plaintiff cannot recover lost profits under Massachusetts law. On August 22, 2019, the parties submitted briefs on the damages issue and, on August 28, 2019, the defendants submitted a reply brief. After considering the evidence, arguments and briefs, the plaintiff's application for a prejudgment remedy is GRANTED.

         I. Statement of the Facts

         In addition to the evidence that was introduced during the PJR hearing, both parties included detailed facts in their briefs. The Court summarizes the facts below.

         On or about October 30, 2002, A&J Gas and Convenience, LLC (“A&J Gas”) entered into a Branded Sales and Security Agreement with Mutual Oil Co., Inc. (Plaintiff's Exh. 1). The agreement had an effective date of November 1, 2002 and related to the sale of petroleum products at the gas station located at 202 Main Street in Southington, Connecticut. (Plaintiff's Exh. 1). The agreement required A&J Gas to purchase petroleum products from Mutual Oil Co., Inc. (“Mutual Oil”) and operate a branded gas station using the Citgo trademark. (Plaintiff's Exh. 1, at p. 3). A&J Gas' obligations under the agreement were secured by a mortgage on the premises. (Plaintiff's Exh. 2, p. 2 at ¶12).

         On the same day that the parties entered into the Branded Sales and Security Agreement, the parties signed an Addendum to the agreement. (Plaintiff's Exh. 2). The Addendum provides that the term of the agreement is for ten years or 9, 000, 000 gallons whichever comes later. (Plaintiff's Exh. 2, at ¶2).

         In August of 2006, defendants Naeem Uddin and Faisal Khalid signed an Assumption Agreement and assumed the obligations of A&J Gas under the Branded Sales and Security Agreement. (Plaintiff's Exh. 4). The Assumption Agreement provides that

The supplier will continue to service the Buyer's location at 202 Main Street, Southington, Connecticut, pursuant to the Branded Sales and Security Agreement dated September 9, 2002 and the Addendum to the Sales and Security Agreement dated September 9, 2002…. The Buyer will be bound by and assume all responsibility under these agreements acknowledging that the agreements have an expiration date of October 31, 2012, or upon the purchase of 9, 000, 000 gallons of gasoline, whichever shall last occur.”

(Plaintiff's Exh. 4, at ¶1). The Assumption Agreement does not release Anis Ahmed M. Shaikh or Jabin A. Shaikh. (Plaintiff's Exh. 4, at ¶6).[2] George Souza, who is employed by the plaintiff, testified that, in March of 2015, Mutual Oil assigned all of its rights and obligations for the gas station to the plaintiff, SEI Fuel Services Inc (“SEIF”). (Plaintiff's Exh. 6).

         In August 2018, the defendants attempted to de-brand the gas station of all Citgo trademarks and stopped purchasing petroleum products from the plaintiff. “The concept of ‘debranding' essentially means taking down the logos, names and other reference to the supplier and starting up with a new supplier.” (Dkt. #55 at 2).

         In September 2018, the plaintiff filed the current lawsuit alleging breach of contract, violations of the Lanham Act, 15 U.S.C. §1114, et. Seq. and violations of the Trademark Dilution Revision Act of 2006, 15 U.S.C. §11051, et seq. Plaintiff's application for a prejudgment remedy (“PJR”) is predicated on the breach of contract claims raised in Counts Four through Seven.

         II. STANDARD

         Rule 64(a) of the Federal Rules of Civil Procedure provides that in a federal civil action “every remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment.” Fed.R.Civ.P. 64(a); see also Novafund Advisors, LLC v. Capitala Group, LLC, No. 3:18-cv-1023(MPS), 2019 WL 1438179, at *1 (D. Conn. Mar. 31, 2019). Thus, this Court must apply Connecticut's prejudgment remedy statute, Conn. Gen. Stat. §52-278a, et seq. Under that statute, a prejudgment remedy is available if the court finds “there is probable cause that a judgment in the amount of the prejudgment remedy sought, or in an amount greater than the amount of the prejudgment remedy sought, taking into account any defenses, counterclaims or set-offs, will be rendered in favor of the plaintiff. . . .” Conn. Gen. Stat. §52-278d(a)(1).

         At this stage, the “trial court's function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits.” Roberts v. Triplanet Partners, LLC, 950 F.Supp.2d. 418, 421 (D. Conn. 2013) (quoting Balzer v. Millward, No. 3:10-cv-1740(SRU)(HBF), 2011 WL 1547211, at *1 (D. Conn. Apr. 21, 2011) (internal quotation marks omitted). The court has “broad discretion to deny or grant a prejudgment remedy. . . .” State v. Ham, 253 Conn. 566, 568 (2000).

         The probable cause standard is modest, and “not as demanding as proof by a fair preponderance of the evidence.” TES Franchising LLC. v. Feldman, 286 Conn. 132, 137 (2008). “The legal idea of probable cause is a bona fide belief in the existence of facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence, and judgment, under the circumstances, in entertaining it.” Id.

         A probable cause determination requires the court to determine “the validity of the plaintiff's claim and the amount of the remedy sought.” TES Franchising, LLC, 286 Conn. at 145-46; Conn. Gen. Stat. §52-278d(a). In determining the amount of the remedy, “[d]amages need not be established with mathematical precision but must be based on evidence yielding a fair and reasonable estimate.” Triplanet Partners, 950 F.Supp.2d at 421 (citation and internal quotations omitted).

         III. LEGAL DISCUSSION

         The plaintiff argues that the defendants breached the Branded Sales and Security Agreement in multiple ways and that the plaintiff is entitled to recover four different categories of damages: (1) lost profits in the amount of $103, 106.40; (2) the cost of petroleum that was delivered to the defendants but never paid for, in the amount of $11, 732.05; (3) reasonable attorney's fees in the amount of $45, 809.44; and (4) the unamortized cost of the installed equipment in the amount of $7, 787.15. (Dkt. #48-1 at 4-5).

         The Sales and Security Agreement provides that “the interpretation and legal effect of [the] Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts.” (Plaintiff's Exh. 1, at ¶21). Therefore, the Court will apply Massachusetts law to the substantive arguments of the parties.[3]

         Under Massachusetts law, “[t]o succeed in a breach of contract action, a [plaintiff] must demonstrate (1) that the parties reached a valid and binding agreement, (2) that one party breached the terms of the agreement, and (3) that the other party suffered damages from the breach.” Yellin & Hyman, P.C. v. James N. Ellis & Assocs., P.C., 2001 Mass. Super. LEXIS 232, at *10 (May 16, 2001). The parties agree that a valid and binding agreement was formed. However, they argue over what the agreement requires and whether it was breached.

         A. Interpreting the Agreement

         The plaintiff argues that the Branded Sales and Security Agreement requires the defendants to purchase nine million gallons of gasoline. In support of this conclusion, the plaintiff relies on paragraph two of the Addendum, which states that “[t]he term of the contract will be for ten (10) years or 9, 000, 000 gallons, whichever comes later.” (Plaintiff's Exh. 2). The defendants disagree with this interpretation.

         In their initial brief, the defendants argued that the “[p]laintiff's entire claim is predicated upon the theory that the required minimum purchase is 900, 000 gallons per year.” (Dkt. #55 at 4-5). Based on this assumption, the defendants argued that plaintiff's theory is inconsistent with the plain language of the agreement. (Dkt. #55 at 5). The agreement provides that the maximum quantity to be delivered to the defendants each month is 75, 000 gallons of gasoline and the monthly minimum that the defendants are required to purchase is “90% of the maximum.” The defendants argued that these monthly requirements contradict plaintiff's theory that the defendants were required to buy a minimum of 900, 000 gallons of gasoline per year. (Dkt. #55 at 4; Plaintiff's Exh. 1, at p. 1).

         In response, the plaintiff alerted the Court that the defendants had misstated the plaintiff's theory. (Dkt. #56 at 2). The plaintiff contends that the agreement requires the defendants to purchase 9, 000, 000 gallons of gasoline but it does not require the defendants to purchase 75, 000 gallons each month or 900, 000 gallons each year. (Dkt. #56 at 2). Instead, the plaintiff contends that the defendants were required to purchase no less than ninety (90) percent of 75, 000 gallons each month. (Dkt. #56 at 2). Under plaintiff's construction, had the defendants purchased 75, 000 gallons of gasoline each month (or 900, 000 gallons each year), the defendants would have satisfied their obligation to purchase a total of 9, 000, 000 gallons within ten years but, if the defendants only purchased the monthly minimum (90% of 75, 000 gallons each month, which equals 67, 500 gallons per month), it would have taken more than ten years for the defendants to satisfy their obligation to purchase 9, 000, 000 gallons. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.