Attorney Joel Huotari recently prevailed in a trial in Winnebago County Circuit Court, winning a judgment for his client and defeating a counterclaim filed by the opposing parties. The case concerned a Motor Fuel Supply Agreement, which granted defendants a franchise to operate a gas station under a well-known, international petroleum brand.
The Agreement was only entered into once the defendants made a variety of representations and warranties, assuring the plaintiff that the defendants owned the gas station free and clear of any obligations to other Petroleum companies.
Once the contract was entered and his client began incurring costs and performing its duties, another distributor for a different international petroleum company asserted that a preexisting Motor Fuel Supply Agreement governed the site. This third party asserted that Defendants were contractually required to operate that gas station as an entirely different franchise, such that the Agreement the parties reached to rebrand the gas station was unenforceable.
Huotari’s client terminated the contract due to this third party’s contract, which was not previously disclosed by the defendants, and sued the defendants for the damages incurred in performing the contract. Defendants countersued, claiming that the plaintiff breached the contract by failing to deliver fuel to the site, notwithstanding the third party’s assertion of its right to supply the site to the exclusion of all other petroleum brands.
“Motor Fuel Supply Agreements like this one are governed by the Petroleum Marketing Practices Act (PMPA), and they can be tricky to enforce since franchises are highly regulated,” Huotari says. “Thankfully, in this case, the facts introduced at trial established that my client was justified when it terminated the contract, and it was thereby relieved of any duty to supply defendants with fuel.” The plaintiff, Huotari’s client, won compensatory damages to make it whole, as well as attorneys’ fees and costs incurred in litigating the case.
Joel Huotari is a partner in the firm’s litigation group and can be reached at jhuotari@wilmac.com or (815) 987-8982.
