United States District Court, D. Connecticut
RULING ON PLAINTIFF'S APPLICATION FOR PREJUDGMENT
A. Richardson United States Magistrate Judge.
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. 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
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.
Statement of the Facts
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.
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).
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,
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
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). 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).
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).
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.
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.
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).
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.”
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).
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).
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.
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.
Interpreting the Agreement
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.
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).
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. ...