Atlantis Petroleum, LLC [II] v. Getty Petroleum Marketing, Inc., 2011 U.S. Dist. LEXIS 105437 (E.D. Pa. 9-16-11)
Summary judgment granted to franchisor based upon franchisee's failure to timely pay sums due. Although franchisor had worked with franchisee over several years with respect to franchisee's financial difficulties, this did not prevent franchisor from finally deciding to terminate franchisee's Distributor Agreement. In addition, franchisor was entitled to terminate franchisee's Sublease pursuant to a cross-default provision, even though franchisee was current on rent payments and not otherwise in default under the Sublease.
The court also rejected franchisee's argument that the termination was pretextual: "Neither 15 U.S.C. § 2802(b)(2)(A) nor 15 U.S.C. § 2802(b)(2)(C) – the two provisions that Defendant relies upon – mentions good faith or motive. . . . Since Defendant has established a ground for termination found in the PMPA based on the conduct of Plaintiff, we need not evaluate Defendant's subjective intentions."
Notices of less than 90 days were reasonable under the circumstances. A 30-day notice of termination was reasonable given the longstanding nature of franchisee's large arrearages. A subsequent notice, which provided for immediate termination, was also reasonable because franchisor had grounds to believe that franchisee was preparing to file for bankruptcy. The notices were issued in a timely manner, even though franchisor had been aware of the arrearages for more than 120 days, because franchisee's failure to pay was an ongoing default within the statutory period.