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Goodall Oil Co. v. Pilot Corporation

United States District Court, W.D. Wisconsin

October 16, 2019

GOODALL OIL COMPANY and MICHAEL RYAN, Plaintiff,
v.
PILOT CORPORATION and PILOT TRAVEL CENTERS LLC d/b/a PILOT FLYING J, Defendants.

          OPINION AND ORDER

          JAMES D. PETERSON DISTRICT JUDGE.

         Plaintiff Goodall Oil Company alleges that from 1989 to 2019, it had an agreement with defendant Pilot Corporation to haul fuel to one of Pilot's gas stations. According to the complaint, the relationship began to suffer when employees of defendant Pilot Travel Centers (PTC), which is owned in part by Pilot, began spreading false rumors that plaintiff Michael Ryan (Goodall's president) was going to retire and that PTC would take over hauling the gas. In May 2019, Pilot terminated its hauling agreement with Goodall and gave Goodall's hauling rights to PTC.

         Plaintiffs assert five claims in their complaint, all based on state law: (1) breach of contract (against Pilot); (2) breach of the implied duty of good faith and fair dealing (against Pilot); (3) intentional interference with contractual relations (against PTC); (4) intentional interference with prospective contractual relations (against PTC); and (5) defamation (against PTC). For the breach of contract claim, plaintiffs request specific performance of the hauling agreement and monetary damages. Plaintiffs also request punitive and compensatory damages on the defamation and intentional interference claims. The court has jurisdiction over the case because plaintiffs allege that they are citizens of Wisconsin and Virginia and that defendants are citizens of Tennessee and Delaware and because it is reasonable to infer that more than $75, 000 is in controversy. See 28 U.S.C. § 1332 (federal court may exercise jurisdiction when there is diversity of citizenship between the plaintiffs and defendants and the amount in controversy is more than $75, 000).

         Defendants move to dismiss some of plaintiffs' claims and requests for relief under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. Dkt. 10. Specifically, defendants move to dismiss: (1) the breach of the implied duty of good faith and fair dealing claim; (2) the intentional interference with prospective contractual relations claim; (3) the request for specific performance for the breach of contract claim; and (4) the request for punitive damages for the defamation and intentional interference claims. Defendants do not challenge the breach of contract claim, the intentional interference with contractual relations claim, the defamation claim, or plaintiffs' request for compensatory damages.

         The court will deny defendants' motion. Plaintiffs are entitled to proceed on theories of both breach of contract and breach of the duty of good faith and fair dealing at the same time. And Goodall has plausibly alleged that defendants intentionally interfered with two prospective contracts. It would be premature at the pleading stage to bar plaintiffs from seeking the remedies of specific performance and punitive damages. Plaintiffs haven't pleaded facts that would preclude either type of relief.

         ALLEGATIONS OF FACT

         The court draws the following factual allegations from plaintiffs' amended complaint, Dkt. 8, and the court accepts these factual allegations as true when deciding defendants' motion to dismiss. See Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1086 (7th Cir. 2016).

         In 1989, Goodall sold its rights to a gasoline service station to Pilot. As part of Pilot's consideration, Pilot gave Goodall the right to haul fuel to the gas station. This 1989 agreement between Goodall and Pilot did not specify when Goodall's hauling rights terminated.

         Michael Ryan became president of Goodall in 2013. Shortly after, Ryan heard rumors from Goodall truck drivers that PTC's managers told PTC truck drivers that PTC was going to take over hauling fuel to the service station. These rumors persisted through 2018.

         In 2019, new rumors began circulating from PTC that Michael Ryan had cancer and was going to end Goodall's business. Because of these rumors, Goodall contacted PTC to determine whether Pilot had interest in purchasing Goodall's hauling rights. When Goodall never received an offer from Pilot, Goodall began negotiating with Petro Tech Hauling and Manito Transit for the sale of the hauling rights. Both of these two businesses served as backup carriers for Goodall. Goodall notified PTC of the ongoing negotiations with other fuel transporters and again requested that Pilot make an offer for the hauling rights.

         Three days after Goodall notified PTC of the ongoing negotiations, Manito Transit contacted Goodall to end the negotiations because the sale was “too complicated.” Later that same day, PTC informed Goodall that there was a 2004 carrier hauling agreement, and PTC said that it would exercise its right to terminate Goodall's hauling rights under that agreement. Roughly one week later, Petro Tech Hauling notified Goodall that it would not make an offer for the hauling rights because of the anticipated difficulty of the transaction, based on the rumors involving PTC.

         In May 2019, PTC took over hauling fuel to the gas station. Hauling fuel to the station was Goodall's only business, so Goodall ceased operations.

         ANALYSIS

         Defendants move to dismiss some of Goodall's claims for failure to state a claim. (Because the parties do not distinguish between the two plaintiffs, the court will refer to plaintiffs collectively as “Goodall” except where noted.) The question under Federal Rule of Civil Procedure 12(b)(6) is “simply whether the complaint includes factual allegations that state a plausible claim for relief.” BBL, Inc. v. City of Angola, 809 F.3d 317, 325 (7th Cir. 2015). Plaintiffs must give defendants “fair notice of what the . . . claim is and the grounds upon which it rests” and include ...


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