Interstate Petroleum Corporation v. Robert C. Morgan, d/b/a Green Acres Gas

ON REHEARING EN BANC
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 INTERSTATE PETROLEUM CORPORATION,
Plaintiff-Appellee,
v.
ROBERT C. MORGAN, d/b/a Green
Acres Gas and Grocery; VICKIE L. No. 97-1409 MORGAN, d/b/a Green Acres Gas
and Grocery,
Defendants-Appellants.
CHEVRON U.S.A. INCORPORATED,
Amicus Curiae. 
 INTERSTATE PETROLEUM CORPORATION,
Plaintiff-Appellant,
v.
ROBERT C. MORGAN, d/b/a Green
Acres Gas and Grocery; VICKIE L. No. 97-1481 MORGAN, d/b/a Green Acres Gas
and Grocery,
Defendants-Appellees.
CHEVRON U.S.A. INCORPORATED,
Amicus Curiae. 
Appeals from the United States District Court
for the Northern District of West Virginia, at Wheeling.
Frederick P. Stamp, Jr., District Judge.
(CA-95-2-5)

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Argued: January 23, 2001
Decided: May 1, 2001
Before WILKINSON, Chief Judge, WIDENER, WILKINS,
NIEMEYER, WILLIAMS, MICHAEL, MOTZ, TRAXLER, KING,
and GREGORY, Circuit Judges.
Vacated and remanded with instructions. Judge Widener delivered the
opinion of the court, in which Chief Judge Wilkinson and Judges Nie-
meyer, Michael, King, and Gregory joined. Judge Niemeyer wrote a
concurring opinion. Judge Wilkins wrote a dissenting opinion, in
which Judges Williams, Motz, and Traxler joined.
COUNSEL
ARGUED: Alan Gordon McGonigal, BAILEY, RILEY, BUCH &
HARMAN, L.C., Wheeling, West Virginia, for Appellants. Steven
William Zoffer, DICKIE, MCCAMEY & CHILCOTE, Wheeling,
West Virginia, for Appellee. ON BRIEF: Arch W. Riley, Sr., BAI-
LEY, RILEY, BUCH & HARMAN, L.C., Wheeling, West Virginia,
for Appellants.
OPINION
WIDENER, Circuit Judge:
This appeal arises from judgment on a jury verdict in favor of
Interstate Petroleum Corporation (Interstate). Robert C. Morgan and
Vickie L. Morgan appeal, asserting that the district court lacked sub-
ject matter jurisdiction over the case. In addition, the Morgans con-
tend that Interstate’s claim for money damages should not have been
presented to the jury. Interstate cross-appeals the district court’s
denial of its motion for attorney’s fees. On September 8, 2000,
because it found that the district court lacked subject matter jurisdic-
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tion to decide this case, a divided panel of this court decided to vacate
the judgment and remand the case for dismissal. Interstate Petroleum
v. Morgan, 228 F.3d 331 (4th Cir. 2000). The panel decision was
vacated and rehearing en banc granted on November 9, 2000. Because
the district court did not have subject matter jurisdiction to decide the
case, we vacate the judgment of the district court and remand for dis-
missal. We have jurisdiction pursuant to 28 U.S.C. § 1291 and do not
address the Morgans’ damages argument or Interstate’s cross-appeal
for attorney’s fees.
I.
On April 29, 1993, Interstate and the Morgans, d/b/a Green Acres
Gas and Grocery, entered a franchise agreement whereby Interstate,
as franchisor, agreed to sell British Petroleum (BP) brand gasoline
and petroleum products to the Morgans, as franchisees. The terms of
the agreement also allowed the Morgans to operate their service sta-
tion under the BP logo and required the Morgans to obtain a $31,500
irrevocable letter of credit from which Interstate could draw amounts
due and unpaid under the contract. Despite nine requests over the next
18 months, the Morgans failed to obtain the required letter of credit,
and on December 5, 1994, Interstate notified the Morgans of its intent
to terminate the franchise agreement based on their nonperformance.
Instead, Interstate apparently gave the Morgans another chance to
keep the franchise. This last chance was embodied in a letter contract,
dated December 12, 1994,1 in which the Morgans agreed to consent
to the termination of the franchise should they fail either to begin
making monthly payments to Interstate in satisfaction of an earlier
note or fail to deliver a $20,000 letter of credit to Interstate by January
4th, 1995.
After the Morgans failed to comply with the terms of the letter
agreement of December 12th, Interstate brought suit in federal court,
claiming breach of contract.2 Interstate’s complaint, filed on January
11, 1995, alleged federal question subject matter jurisdiction under 28
1The letter agreement is referred to in the Special Verdict as a Termi-
nation Agreement.
2Interstate sought injunctive relief to enjoin the Morgans from display-
ing the BP logo and also sought damages, attorney’s fees, and costs.
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U.S.C. § 1331, and the Petroleum Marketing Practices Act (PMPA or
the Act), 15 U.S.C. §§ 2801-2841. The Morgans, on January 11,
1995, filed a separate suit in the district court based on state contract
law, a suit which they later voluntarily dismissed on May 21, 1996.
The district court granted Interstate’s motion for injunctive relief,
requiring the Morgans not to display the BP logo. The Morgans, on
November 21, 1995, filed a motion to dismiss under Federal Rule of
Civil Procedure 12(h)(3),3 asserting that the district court lacked sub-
ject matter jurisdiction because the PMPA did not authorize actions
brought by a franchisor against a franchisee.4 The district court
denied the Morgans’ motion to dismiss and their subsequent motion
for partial dismissal, and the case proceeded to trial. Following trial,
the jury awarded Interstate $42,901.50 in damages. The Morgans then
made several post-trial motions, including another motion to dismiss
for want of jurisdiction under Rule 12(h)(3). The district court denied
the motion to dismiss, and the Morgans appealed.
II.
Interstate’s complaint alleged that the Act gave the court subject
matter jurisdiction pursuant to 28 U.S.C. § 1331.5 The Morgans’ pre-
trial motion to dismiss argued that the district court had no federal
question jurisdiction over Interstate’s suit because the PMPA does not
authorize franchisors to maintain a cause of action against fran-
chisees. The Morgans repeated this argument in their post-trial motion
to dismiss and repeat it again on appeal.
The Supreme Court has stated that it is the "special obligation" of
appellate courts to evaluate not only their own subject matter jurisdic-
3Federal Rule of Civil Procedure 12(h)(3) provides that: "[w]henever
it appears by suggestion of the parties or otherwise that the court lacks
jurisdiction of the subject matter, the court shall dismiss the action." Fed.
R. Civ. Proc. 12(h)(3).
4In relevant part, section 2805(a) of the PMPA provides: "[i]f a
franchisor fails to comply with the requirements of section 2802 or 2803
of this title, the franchisee may maintain a civil action against such
franchisor." 15 U.S.C. § 2805(a) (emphasis added).
5Neither party contends that the facts of this case support an exercise
of the court’s diversity jurisdiction.
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tion "but also [the jurisdiction] of the lower courts in a cause under
review, even though the parties are prepared to concede it." Bender
v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986) (internal
quote omitted). In fact, we must consider questions regarding jurisdic-
tion whenever they are raised, and even sua sponte. Plyler v. Moore,
129 F.3d 728, 731 n.6 (4th Cir. 1997), cert. denied, 524 U.S. 945
(1998). Accordingly, this case must be dismissed if we conclude that
the district court lacked subject matter jurisdiction.
Absent diversity, a district court has subject matter jurisdiction in
a case such as this only if the action arose under the Constitution,
laws, or treaties of the United States. 28 U.S.C. § 1331. The Court’s
recent articulation of "arising under" jurisdiction found in Franchise
Tax Bd. v. Const. Laborers Vacation Trust, 463 U.S. 1 (1983), con-
trols our inquiry into whether the district court had jurisdiction over
Interstate’s claims. Congress has given the lower federal courts juris-
diction to hear "only those cases in which a well-pleaded complaint
establishes either that federal law creates the cause of action or that
the plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal law." Franchise Tax Bd., 463 U.S. at
27. Interstate has argued throughout the litigation, and the district
court agreed, that Interstate’s breach of contract claim and request for
injunctive relief state federal questions under the Act.
Interstate contends that "federal subject matter jurisdiction is
proper . . . pursuant to 28 U.S.C. § 1331 and . . . 15 U.S.C. § 2801."
Brief, p.15. The argument goes that since § 2805(a) provides for a suit
by a "franchisee . . . against [a] franchisor" who fails to comply with
the statute that a "majority of courts presiding over the issue have
held that the Act implicitly authorizes the franchisor to maintain the
same cause of action and, . . . pursue the same remedies against a
franchisee in a federal court as a franchisee can maintain against a
franchisor." Br. p.16. That proposition was accepted by the Morgans,
Interstate argues, to sustain jurisdiction. Such position, however, is
not well taken for three reasons. First, Coyne & Delany Co. v. Blue
Cross & Blue Shield, Inc., 102 F.3d 712, 714 (4th Cir. 1996), is con-
trolling in its holding that the grant of jurisdiction by a statute to one
party to a transaction does not imply jurisdiction to other parties. So
conferring jurisdiction in terms on a franchisee under § 2805(a) does
not implicitly confer jurisdiction on a franchisor. Second, Hagans v.
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Lavine, 415 U.S. 528, 533-535, n.5 (1974), is controlling as to deci-
sions of other courts which, as here, have "presid[ed] over" cases
involving similar parties without deciding whether or not they have
jurisdiction. These are not holdings by the presiding courts that they
have jurisdiction. Third, American Fire & Cas. Co. v. Finn, 341 U.S.
6, 18 (1951), is controlling so that even if a party agrees that a court
has subject matter jurisdiction, such agreement is not binding on a
court or on the party. In connection with these questions, none of the
federal courts of appeals have held, under the same or similar facts
which exist here, that federal question jurisdiction exists under the
Petroleum Marketing Practice Act, 15 U.S.C. §§ 2801, et seq. The
district courts are divided on the subject, with, in our opinion, the bet-
ter reasoned decisions of those courts denying jurisdiction.
Having concluded that the Petroleum Marketing Practices Act, nei-
ther directly nor by implication, confers jurisdiction upon Interstate,
the franchisor, the claim of federal question jurisdiction in this case
by Interstate then calls for an examination of whether Interstate’s
"right to relief necessarily depends on resolution of a substantial ques-
tion of federal law," as shown by "a well pleaded complaint." Fran-
chise Tax Board, 463 U.S. at 13. The way to ascertain the proper
answer to this question is by an examination of the complaint, a copy
of which is appended to this opinion as Exhibit A.
The first mention of the Petroleum Marketing Practices Act in the
complaint is on the first page thereof under a section called "JURIS-
DICTION AND VENUE," the pertinent parts of which are quoted as
follows: "The court has subject matter jurisdiction under this Act
based upon federal question jurisdiction pursuant to 28 U.S.C. § 1331
and the Petroleum Marketing Practices Act, 15 U.S.C. § 2801, et seq."
The only other mention of the Act in the complaint is on page 3
thereof, paragraph 12, which is, in pertinent part: "Plaintiff advised
the defendants of its intent to terminate its contract as a result of
defendants’ continued non-performance and breach of the contract
pursuant to the Petroleum Marketing Practices Act, 15 U.S.C. § 2801,
et seq."
No other mention by the PMPA is made in the complaint. Neither
is there any paraphrase of the statute or of any part of the statute, and
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the only substantive reference to the statute is in paragraph 12, just
mentioned, which paragraph 12 is under COUNT I. - BREACH OF
CONTRACT. No claim is made that either the Morgans or Interstate
has violated any provision of the statute or is holding the other
accountable for such a violation.
A fair reading of the complaint shows only a prayer for damages
and injunctive relief because of a claim that the Morgans did not com-
ply with the terms of a contract of April 29, 1993 which had been
amended by an agreement to terminate the same, dated December 12,
1994. No terms or provisions of the statute are mentioned in the com-
plaint, except as recited above, and the judgment in this case, filed
June 6, 1996, attached to this opinion as Exhibit B, is only for a
money judgment in the amount of $42,901.50 plus a stipulated
amount of $1,562.05, for certain charges on account of credit cards.
We are of opinion that the complaint states nothing more than a
complaint for breach of contract under state law, and, indeed, we are
so bold as to suggest that Interstate’s claim of federal question juris-
diction may well be nothing more than an attempt to bring this breach
of contract case in a federal, rather than a state, forum when neither
the jurisdictional amount ($50,000) nor the citizenship requirements
could be met.
Even the prayer of the complaint, as best considered, is only for
injunctive relief and for a money judgment for breach of contract, nei-
ther having anything to do with the provisions of the statute.6
6An item-by-item analysis of the complaint reveals nothing to the con-
trary.
On the first page the paragraph called COMPLAINT states only
that the parties are Interstate and the Morgans.
The item called JURISDICTION AND VENUE on the first and
second pages states only the claim of federal question jurisdic-
tion recited before in the body of this opinion and the claim of
venue in the Northern District of West Virginia, with the addi-
tion that some of the defendants’ conduct was accomplished by
instrumentalities of interstate commerce, including mail, facsim-
ile, telephone, and motor vehicle use or transportation.
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In its brief, Interstate argues that its complaint requests a declara-
tion from the district court that its termination of the franchise was
proper. Br. p.21. Since an examination of the complaint, which was
never amended, shows that such is not the fact, any such implicit
request would have had to have come under Fed. R. Civ. P. 15(b).7
The next item called PARTIES, on page 2, is a slightly more
detailed description of Interstate and the Morgans.
The next item, called GENERAL AVERMENTS, on pages 2 and
3, is a recitation of the facts on which Interstate relies with
respect to its contract of sale, which it claims was breached. The
statute, the PMPA, is nowhere mentioned under GENERAL
AVERMENTS.
The next item, COUNT I - BREACH OF CONTRACT, on pages
3, 4, 5 and 6 of the complaint, repeats the averments described
above under PARTIES and GENERAL AVERMENTS and contin-
ues with a statement of the facts upon which Interstate relies for
its sought-for money judgment and injunctive relief. That item
contains only additional facts relied on by Interstate as its claim
for judgment and injunctive relief and mentions the PMPA only
as follows: "Plaintiff advised the Defendants of its intent to ter-
minate its contract as a result of Defendants’ continued non-
performance and breach of the Contract pursuant to the Petro-
leum Marketing Practices Act, 15 U.S.C. § 2801, et sec [sic]."
The next item appearing on pages 6 and 7 of the complaint is
called COUNT II - PRAYER FOR INJUNCTIVE RELIEF. This
item repeats the matters stated under items PARTIES, GENERAL
AVERMENTS, and COUNT I - BREACH OF CONTRACT and
states facts claimed upon which injunctive relief is justified and
the conclusion that irreparable harm would result unless the
Morgans are forbidden from using the BP brand.
Nothing else appears in the complaint.
7Of course, a claim under the Declaratory Judgment Act, even if made,
does not confer jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339
U.S. 667, 671 (1950). And the case was not tried as a request for declara-
tory relief or on account of the construction of a statute. The answer, jury
instructions, and special verdict are attached as Exhibits C, D, and E.
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Rule 15(b) provides, "When issues not raised by the pleadings are
tried by express or implied consent of the parties, they shall be treated
in all respects as if they had been raised in the pleadings." Fed. R.
Civ. P. 15(b) (emphasis added). It is true that a question of declara-
tory relief was discussed on occasion during the course of this case;
however, it is clear from the record, including the complaint, answer,
all the other various motions and orders, the jury instructions, the very
form of the special verdict, and the absence of an order by the district
court granting or denying declaratory relief, that the question of
whether Interstate had complied with the PMPA in terminating the
franchise was never tried.
An examination of the entire record reveals only that the case is
nothing more or less than a dispute under state law over a claimed
breach of contract. That only was claimed by Interstate, and that only
was defended by the Morgans. Neither side sought the construction
of any federal statute, the plaintiff claimed only that the contract was
breached, and the defendants denied that it was. Neither side stated
a federal question.
Even though West Virginia contract law created Interstate’s cause
of action, the case might still be one "arising under" the laws of the
United States if Interstate’s well-pleaded complaint established that
its right to relief under state law necessarily required "resolution of
a substantial question of federal law in dispute between the parties."
Franchise Tax Bd., 463 U.S. at 13. In this regard, Interstate asserted
at oral argument that the PMPA was construed at trial because the
jury’s finding of liability against the Morgans also necessarily
embodied a finding that Interstate had not violated the PMPA in ter-
minating the franchise. We disagree.
It is clear from the record that Interstate established its right to
relief to the satisfaction of the jury by proving its breach of contract
claim under state law and without reference to any provision of the
PMPA. At trial, neither the pleadings, nor the orders, nor the jury
instructions nor the special verdict form made any mention of any
provisions of the PMPA. Instead, the jury was merely instructed to
find whether the Morgans had breached either the original franchise
agreement or the Termination Agreement and, if so, to determine
damages. Neither did the district court construe any provision of the
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PMPA when it granted injunctive relief, nor did the judgment of the
district court mention or depend upon any provision of the PMPA, or
any other provision of federal law. The Morgans never denied Inter-
state’s right to terminate the franchise if the contract was breached;
they did deny that the contract was breached.
Thus, the PMPA did not create Interstate’s cause of action, nor was
there a disputed question of federal law that was a necessary element
of Interstate’s claim. Even if Interstate intended to rely on the PMPA
as a defense to a counterclaim by the Morgans, or if Interstate antici-
pated that the Morgans would somehow use the PMPA to defend
against Interstate’s contract claims, the well-pleaded complaint rule,
of course, precludes finding "arising under" jurisdiction on such
grounds. See Gully v. First Nat’l Bank, 299 U.S. 109, 112-14 (1936)
(discussing well-pleaded complaint rule and explaining that jurisdic-
tion will not be found in an anticipated defense).
In sum, "[a] suit arises under the law that creates the cause of
action." American Well Works Co. v. Layne & Bowler Co., 241 U.S.
247, 260 (1916). The cause of action in this case was created under
the law of West Virginia, so the suit arises under that law, not federal
law.8
III.
We are thus of opinion that the district court was without subject
matter jurisdiction in Interstate’s action against the Morgans. Accord-
ingly, the judgment of the district court must be vacated, and the case
remanded to the district court with directions to dismiss the case with-
out prejudice for lack of subject matter jurisdiction.
VACATED AND REMANDED WITH INSTRUCTIONS
8The dissent does not take issue with the rule of decision in Franchise
Tax Board, 463 U.S. at 27, that "the plaintiff’s right to relief necessarily
depends on resolution of a substantial question of federal law." In that
respect, the dissent does not call attention to any "substantial question of
federal law" that was involved in this case. The undisputed fact remains
that the Morgans never denied Interstate’s right to terminate the franchise
if the contract was breached, but they did deny that the contract was
breached. And that question of state law was the only question in the
case, as Exhibits A through E demonstrate.
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NIEMEYER, Circuit Judge, concurring:
Despite the lawyers’ obfuscating advocacy, the question in this
case is straightforward: Does Interstate Petroleum’s complaint, or any
amendment of it, constructive or otherwise, seek to vindicate or
resolve a federal right for which Congress provided subject matter
jurisdiction in the district court? The record indicates that no such
right was ever at issue and therefore that the district court did not
have subject matter jurisdiction over this case.
This jurisdictional issue does not concern whether a declaratory
judgment action can be brought under the Petroleum Marketing Prac-
tices Act ("PMPA") or whether Interstate Petroleum constructively
amended its complaint. The question, rather, is whether Interstate
Petroleum’s oral suggestion that it was seeking a declaratory judg-
ment under the PMPA, without identifying any PMPA issue sought
to be resolved, could justify the federal jurisdiction conferred by the
PMPA even if we can assume that any such issue was pled, tried, or
decided in this case. To me, the answer is clearly no.
While Morgan, d/b/a Green Acres Gas & Grocery ("Morgan"), was
a franchisee, as that term is defined by the PMPA, see 15 U.S.C.
§ 2801(4), and Interstate Petroleum was similarly a franchisor, see id.
§ 2801(3), the dispute between them that was presented to the district
court and decided by it was not one arising under the PMPA. Rather,
as I demonstrate, the dispute was a garden variety breach-of-contract
claim under state law over which the district court did not have sub-
ject matter jurisdiction.
At the outset, it is important to understand the scope of the PMPA
and the scope of the federal interest protected by that Act. The PMPA
was enacted "to protect petroleum franchisees from arbitrary or dis-
criminatory terminations and nonrenewals." Mobil Oil Corp. v. Va.
Gasoline Marketers & Auto. Repair Ass’n, 34 F.3d 220, 223 (4th Cir.
1994). It fulfilled its purpose by establishing "minimum Federal stan-
dards governing the termination and nonrenewal of franchise relation-
ships for the sale of motor fuel by the franchisor or supplier of such
fuel . . . [by prohibiting] a franchisor from terminating or failing to
renew a franchise without satisfying certain notice provisions and
without stating a reason for termination sanctioned by the act."
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Checkrite Petroleum, Inc. v. Amoco Oil Co., 678 F.2d 5, 7 (2d Cir.
1982) (internal quotation marks and citations omitted). In Checkrite
Petroleum, the plaintiff, who was a petroleum broker acting in the
marketing chain between Amoco and Amoco’s dealers, sought to
assert rights under the PMPA when it was terminated by Amoco. In
concluding that the broker was not a "distributor" or "retailer" as used
in the PMPA’s definition of "franchisee," the court denied the broker
a remedy, noting that the Act should be construed strictly because
"the statute in question is in derogation of common law rights." Id.
at 8. The court observed that the legislative history of the Act
expresses "no congressional intent to go beyond [its] plain terms." Id.
at 10.
It is only for vindication of the limited rights protected in 15 U.S.C.
§§ 2802 and 2803 that the PMPA confers subject matter jurisdiction
on district courts. Section 2805 authorizes a franchisee to "maintain
a civil action against [a] franchisor [who violates 15 U.S.C. § 2802 or
§ 2803] . . . in the district court[s] of the United States." 15 U.S.C.
§ 2805(a).
The facts in this case do not present a case or controversy arising
under the PMPA. Interstate Petroleum, by a contract with Morgan,
dated April 29, 1993, agreed to sell Morgan gasoline on credit, pro-
vided that Morgan obtain a $31,500 irrevocable letter of credit. When
Morgan failed to deliver the letter of credit and to satisfy its ongoing
indebtedness to Interstate Petroleum, the parties entered into a "Mu-
tual Consent to Termination Agreement," dated December 12, 1994.
In this second agreement, Morgan again agreed to make monthly pay-
ments against its indebtedness to Interstate Petroleum and to obtain
a letter of credit, this time by January 1995. Again, Morgan breached
its contractual undertakings, and Interstate commenced this action for
breach of both contracts.
Even though Interstate Petroleum sought to rely on the PMPA for
federal jurisdiction, no provision under the PMPA supported Inter-
state Petroleum’s claims for breach of contract. The PMPA provides
limited rights to a franchisee who is terminated discriminatorily or
without statutorily required notice. Moreover, in its complaint, Inter-
state Petroleum did not seek to resolve any claim that Morgan, as
franchisee, had asserted under the PMPA. On the contrary, the plead-
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ings indicate that the parties mutually agreed to terminate the relation-
ship, rendering moot any PMPA issue, if one had ever been alive.
Thus, the entire dispute between the parties in this case centered on
Interstate Petroleum’s efforts to enforce its contractual rights in the
two contracts with Morgan and to require Morgan to honor its finan-
cial commitments. It is therefore understandable that this case was
commenced as a breach of contract claim, tried as a breach of contract
claim, and decided as a breach of contract claim — facts that are con-
clusively established by the record.
First, in its complaint, Interstate Petroleum asserted solely a breach
of contract claim, asking for damages and injunctive relief "as a direct
and proximate result of Defendants’ breach of the Contract of Sale
and continuous failure to specifically perform thereunder." The com-
plaint makes no reference to any PMPA right that had been asserted
by Morgan and that Interstate Petroleum was trying to resolve. More-
over, Interstate Petroleum never filed a motion to amend its complaint
to make such a reference. This is not surprising because there was no
issue ever raised between the parties that the PMPA had been vio-
lated.
Second, when Interstate Petroleum presented the case to the jury,
counsel for Interstate Petroleum described the nature of the action to
the jury, describing it as a simple contract case:
When you go up to begin your deliberations, you will have
with you a special verdict slip, which ultimately will be the
papers that will reflect what you have decided to be your
verdict in this case. There will be a series of a few questions
for you to decide. The first question to you will be whether
you find that the defendants, Robert and Vickie Morgan,
breached their contract of sale with Interstate Petroleum,
dated [April] 29, 1993. That was Exhibit 2 and you will
have that to look at; and, also, whether they breached the
subsequent termination agreement that the parties entered
into. And you will recall the Morgans having executed that
on December 12, 1994, and that is Exhibit Number 16.
(Emphasis added). In explaining to the jury its burden of proof, Inter-
state said that it must prove three things in order to recover, "That
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there was a contract, that the Morgans in this case breached a term
or requirement of that contract, and we also have to prove Interstate’s
losses and expenses, what in law is known as the damages in this
case." After completing his closing argument, counsel for Interstate
Petroleum concluded with the same theme:
[O]n behalf of my clients, I would request that you enter
your verdict in this case in favor of Interstate Petroleum, the
plaintiff in this case, in an amount — after you find the
breach of contract has occurred, in an amount that you find
to be fair and reasonable to compensate my clients for the
breach of promise and for their losses that they have sus-
tained. Thank you very much, Ladies and Gentlemen.
(Emphasis added).
Third, in requesting jury instructions, Interstate Petroleum submit-
ted requests to the court only on a breach-of-contract theory under
West Virginia law. Its first request is typical:
You are instructed to assume that the defendants’ failure to
provide an irrevocable letter of credit in this case constituted
a material breach of their contract with the plaintiff, Inter-
state Petroleum Corporation. Accordingly, your sole task
will be to determine the amount of damages which you find
to be fair and reasonable in order to compensate Plaintiff,
Interstate, for its losses, expenses and lost profits.
(Emphasis added).
Fourth, when the district court actually instructed the jury, it did so
only on the common law of contracts. And, consistently, when it sub-
mitted the case to the jury, it gave the jury only one question to
answer on liability, that for breach of contract:
Do you find that Robert C. Morgan and Vickie L. Morgan,
d/b/a Green Acres Gas & Grocery, breached the Contract of
Sale dated April 29, 1993, or the Termination Agreement
dated December 12, 1994?
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(Emphasis added).
Finally, the jury returned a verdict deciding only that Morgan had
breached its contracts and awarding damages, and that verdict became
the judgment in the case.
In short, any PMPA claim that Morgan may have had or that Inter-
state Petroleum may have said it wanted to resolve through a declara-
tory judgment was never pled in any complaint or amended
complaint, never tried to the jury, never decided by the jury, and
never reflected in any judgment. From beginning to end, the case was
a state common-law breach-of-contract case.
The dissenting opinion suggests that the parties reached an agree-
ment to amend the pleadings and try the case as a declaratory judg-
ment action under the PMPA. While there can be no doubt that the
parties discussed a declaratory judgment under the PMPA and even
agreed that Interstate Petroleum could have a PMPA issue resolved
in the case, presumably in an attempt to agree on subject matter juris-
diction, no such issue under the PMPA was ever articulated; indeed
none existed for articulation. There simply was no PMPA case or con-
troversy. And even if there were such a controversy, the discussions
between counsel and the court never matured into anything more than
just talk. And their talk is all that the dissenting opinion parades. Crit-
ically absent from the dissent’s discussion about whether this was a
federal case is the articulation of a viable issue under the PMPA.
Even then, none was ever pleaded, tried, argued, or decided. Any fed-
eral claim suggested by the dissent is therefore a phantom claim based
on an unknown issue.
This case does not involve a case or controversy under federal law,
nor does it have the clear invocation of federal subject matter jurisdic-
tion that we require. There is no statement of a claim or dispute over
a claim relating to any violation by Interstate Petroleum of 15 U.S.C.
§ 2802 or § 2803, the only claims over which the PMPA gives federal
courts jurisdiction. See 15 U.S.C. § 2805(a). Because there was no
claim arising under the PMPA, the district court never had federal
jurisdiction, and it could not have entered the judgment in this case.
Accordingly, I concur in the majority opinion and judgment.
15 INTERSTATE PETROLEUM CORP. v. MORGAN

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WILKINS, Circuit Judge, dissenting:
The majority devotes most of its opinion to four propositions with
which no member of this court disagrees: first, that subject matter
jurisdiction cannot be created by agreement of the parties; second,
that a franchisor cannot sue a franchisee under the Petroleum Market-
ing Practices Act (PMPA), see 15 U.S.C.A. §§ 2801-2841 (West
1998); third, that Interstate’s complaint as originally filed did not seek
a declaration that Interstate did not violate the PMPA in terminating
the franchise agreement with the Morgans; and fourth, that this case
involved no "substantial question of federal law."
None of this, however, addresses the central issue before us:
whether the parties, pursuant to Federal Rule of Civil Procedure
15(b), agreed that Interstate was in fact seeking a declaratory judg-
ment that it did not violate the PMPA in terminating the franchise
agreement. A review of the record compels the conclusion that such
an agreement was clearly made, repeatedly acknowledged by the
Morgans, and unequivocally recognized by the district court. These
repeated acknowledgments that Interstate sought declaratory relief
effected a constructive amendment of the pleadings and thereby
relieved Interstate of any responsibility to formally amend its com-
plaint. And, Interstate’s request for a declaration of the Morgans’ fed-
eral rights created a federal question that was the basis for the subject
matter jurisdiction of the district court.
Having presented their defense to a jury in federal court and lost,
the Morgans now are attempting to eliminate the basis for federal
court jurisdiction by repudiating their numerous previous acknowl-
edgments. Of course, the law does not allow a party to escape a judg-
ment against it with such a self-serving, post hoc change of position.
Because the majority’s decision enables the Morgans to do just that,
I respectfully dissent.
I.
Before considering the question of whether Interstate’s complaint
was constructively amended to include a request for a declaratory
judgment that it terminated the franchise agreement in accordance
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with the PMPA, the jurisdictional significance of that issue should be
addressed.
Under the Declaratory Judgment Act, a federal court "may declare
the rights and other legal relations of any interested party seeking
such declaration." 28 U.S.C.A. § 2201(a) (West 1994). Although the
Declaratory Judgment Act "does not broaden federal jurisdiction, see,
e.g., Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671
(1950), it does allow parties to precipitate suits that otherwise might
need to wait for the declaratory relief defendant to bring a coercive
action." Gulf States Paper Corp. v. Ingram, 811 F.2d 1464, 1467
(11th Cir. 1987) (parallel citations omitted); see Franchise Tax Bd. v.
Constr. Laborers Vacation Trust, 463 U.S. 1, 19 & n.19 (1983);
Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937).
That the federal right actually litigated when declaratory relief is
sought may belong to the declaratory judgment defendant rather than
to the declaratory judgment plaintiff does not change the fact that the
action arises under federal law. See Columbia Gas Transmission
Corp. v. Drain, 237 F.3d 366, 370 (4th Cir. 2001); Lowe v. Ingalls
Shipbuilding, 723 F.2d 1173, 1179 (5th Cir. 1984); see also Gulf
States Paper, 811 F.2d at 1467 (explaining that the declaratory judg-
ment remedy "allows a party to bootstrap its way into federal court
by bringing a federal suit that corresponds to one the opposing party
might have brought" (internal quotation marks omitted)). Accord-
ingly, "[a] person may seek declaratory relief in federal court if the
one against whom he brings his action could have asserted his own
rights there." Standard Ins. Co. v. Saklad, 127 F.3d 1179, 1181 (9th
Cir. 1997); see Columbia Gas Transmission, 237 F.3d at 370
(explaining that under certain circumstances "the proper jurisdictional
question is whether the complaint alleges a claim arising under fed-
eral law that the declaratory judgment defendant could affirmatively
bring against the declaratory judgment plaintiff"); Hunter Douglas
Inc. v. Sheet Metal Workers Int’l Ass’n, Local 159, 714 F.2d 342, 345
(4th Cir. 1983) (explaining, in context of removal from state court,
that whether a district court has subject matter jurisdiction over a
declaratory judgment action is determined "by reference to the char-
acter of the threatened action").
Here, unquestionably an action initiated by the Morgans alleging
that Interstate’s termination of the franchise agreement violated the
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PMPA would arise under federal law because the PMPA creates such
a cause of action. See American Well Works Co. v. Layne & Bowler
Co., 241 U.S. 257, 260 (1916) (explaining that "[a] suit arises under
the law that creates the cause of action"). It follows that the district
court would also have had jurisdiction to hear an action seeking a dec-
laration that Interstate did not violate the Morgans’ rights under the
PMPA.1
II.
I now turn to the central issue of whether Interstate’s complaint
was constructively amended. "It is well-settled that the parties may
constructively amend the complaint by agreeing, even implicitly, to
litigate fully an issue not raised in the original pleadings." Stemler v.
City of Florence, 126 F.3d 856, 872 (6th Cir. 1997); see Fed. R. Civ.
P. 15(b). A constructive amendment occurs when "the parties recog-
nize[ ] that an issue not presented by the pleadings entered the case
at trial." 6A Charles Alan Wright et al., Federal Practice and Proce-
dure § 1493, at 19 (2d ed. 1990); see Estate of Dietrich v. Burrows,
167 F.3d 1007, 1013 (6th Cir. 1999) (holding that complaint was con-
structively amended when defendants treated complaint as having
been amended even though plaintiffs never actually filed an amended
complaint after having been granted leave to do so); Whitaker v. T.J.
Snow Co., 151 F.3d 661, 663 (7th Cir. 1998) (explaining that
"[b]ecause both parties squarely addressed the strict liability theory in
their summary judgment briefs, the complaint was constructively
amended to include that claim"); Suiter v. Mitchell Motor Coach
Sales, Inc., 151 F.3d 1275, 1279-80 (10th Cir. 1998) (holding that
defendant’s answer was constructively amended to add an unpled
affirmative defense when the defense was asserted in a motion for
1Of course the majority is correct to state in its footnote 8 that I do not
maintain that this suit involved a "substantial question of federal law."
However, because federal law created the PMPA cause of action at issue
in the declaratory judgment claim, no such "substantial question of fed-
eral law" was required to establish federal question jurisdiction. See
Franchise Tax Bd., 463 U.S. 27-28 (explaining that district courts have
federal question jurisdiction over cases either when "the plaintiff’s right
to relief necessarily depends on resolution of a substantial question of
federal law" or when "federal law creates the cause of action").
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judgment as a matter of law and plaintiff treated the defense as if it
had been properly pled); Rodriguez v. Doral Mortgage Corp., 57 F.3d
1168, 1172 (1st Cir. 1995) (stating that a complaint may be construc-
tively amended when a claim is introduced outside of a complaint
"and then treated by the opposing party as having been pleaded");
Walton v. Jennings Cmty. Hosp., Inc., 875 F.2d 1317, 1320 & n.3 (7th
Cir. 1989) (holding that the pleadings were constructively amended
when the district court sua sponte injected an unpled cause of action
into the case in denying defendant’s motion for summary judgment
and both parties proceeded to prepare for trial on the new issue).
Interstate did not request a declaratory judgment in its complaint.
Nevertheless, subsequent to Interstate’s filing of its complaint, the
parties explicitly agreed on numerous occasions that Interstate’s enti-
tlement to declaratory relief was part of this lawsuit. Interstate’s com-
plaint alleges that Interstate advised the Morgans of its intent to
terminate the franchise agreement in accordance with the PMPA. See
J.A. 12. The Morgans denied that allegation in their answer and on
the same day filed their own suit in federal district court through their
company, B&V Enterprises, Inc., seeking to enjoin Interstate from
debranding their business and requesting specific performance of the
franchise agreement.2 Considering that the parties were not diverse
and that the PMPA specifically forbids termination of petroleum fran-
chise agreements except under specified circumstances, see 15
U.S.C.A. § 2802, it would appear that the Morgans intended to assert
that Interstate violated the PMPA by terminating the franchise agree-
ment, thus providing a basis for federal question jurisdiction.
The Morgans then moved to dismiss Interstate’s action, contending
that federal question jurisdiction did not exist because Interstate could
not bring a cause of action under the PMPA. See Mem. in Supp. of
Def.’s Mot. to Dismiss Civil Action No. 5:95:CV2, at 3-4. In its
opposition to the Morgans’ motion, Interstate asserted that federal
question jurisdiction exists when "the franchisor seeks an adjudication
of federal claims that the franchisee may threaten to assert against
him." Br. in Opp’n to Def.’s Mot. to Dismiss Pursuant to Rule 12(b)
2This suit was consolidated with Interstate’s and remained viable for
more than 16 months. The Morgans moved successfully to voluntarily
dismiss the suit without prejudice only two weeks prior to trial.
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of the Fed.R.C.P., at 5. Applying this rule, Interstate stated that it "an-
ticipate[d] that [the Morgans would] attempt to use the PMPA as a
defense to the action asserted against [them] as well as a basis for
[their] claim that [their] right[s] as a franchisee were not properly ter-
minated." Id.
Before the district court ruled on the motion to dismiss, the Mor-
gans filed a motion for "partial dismissal" in which they sought dis-
missal only of Interstate’s action to the extent that it sought damages.
See Defs. [sic] Mot. for Partial Dismissal. In a memorandum support-
ing this motion, they stated, "[Interstate] filed a complaint in this
action asking for Declaratory Judgment as to its termination of the
franchise agreement between it and the [Morgans]." Defs.’ Mem. in
Supp. of Mot. for Partial Dismissal, at 1. The Morgans also asserted
that "the Court can determine the rights of the parties under [the
PMPA]." Id. at 3. The Morgans argued nevertheless that Interstate’s
damage claim should be dismissed because Interstate was not entitled
to damages under the Declaratory Judgment Act. See id. The district
court denied the Morgans’ motions for dismissal, erroneously reason-
ing that Interstate could bring an action under the PMPA; it also ruled
that Interstate could bring a damages claim in conjunction with the
declaratory judgment action that the Morgans had acknowledged
existed. See Order Denying Robert C. Morgan’s & Vickie L. Mor-
gan’s Mots. to Dismiss, at 2-4. Subsequently, in a memorandum sup-
porting a motion in limine, the Morgans again stated that the case was
"a suit to construe a federal statute," that Interstate sought a "declar[a-
tion] that its termination of the franchise agreement was valid," and
that "[t]he only jurisdiction this Court has is to interpret the [PMPA]."
Mem. in Supp. of Defs. [sic] Mot. in Limine, at 1-2.
Interstate’s suit then proceeded to trial. Throughout the course of
the trial, the district judge referred to the fact that Interstate was seek-
ing a declaratory judgment although it had not requested such relief
in the complaint:
• "I have ruled on the fact that [Interstate] may recover damages
under the Act or under a declaratory judgment." Tr. 123.
• "[The Morgans] have raised the fact that damages are being sought
under [the] Declaratory Judgment Act." Id. at 126.
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• "I think that there is federal question jurisdiction under the Declar-
atory Judgment Act . . . ." J.A. 22.
• "The question . . . is whether or not in a declaratory judgment,
which you did not plead in your complaint, which I have deter-
mined exists in the complaint . . . damages may be recovered . . . ."
Id. at 23-24.
• "This is a case in which I think [Interstate] clearly has a right
under the Declaratory Judgment Act to obtain a declaratory judg-
ment as to its right to terminate under the [PMPA]." Tr. 287.
Also, in its post-trial order, the district court recognized that the pres-
ence of the declaratory judgment claim was the basis for federal ques-
tion jurisdiction:
• "This Court’s earlier determinations that subject matter jurisdic-
tion under the PMPA existed were premised upon the Morgans’
concession that the complaint sought a declaration of rights under
the federal law." J.A. 62.
Interstate also offered the declaratory judgment claim as a basis for
its request for an award of attorneys’ fees. See id. at 29. For their part,
the Morgans, prior to the jury finding against them, never retreated
from their position that Interstate’s entitlement to declaratory relief
was an issue in the case. Indeed, the Morgans’ counsel stated,
"[T]here is no question in my mind that the Declaratory Judgment Act
. . . allows the construction of a federal statute, which the [PMPA] is;
so as far as termination is concerned, [Interstate] was properly before
this Court." Id. at 30-31.
In light of all of this, there can be little doubt that the parties
explicitly recognized that the issue of Interstate’s entitlement to
declaratory relief had entered the case and therefore that the com-
plaint had been constructively amended. The amended complaint
clearly presented a federal question, and the district court therefore
had federal question jurisdiction.3
3In addition to contending that there was no federal question here, the
Morgans maintain that because the PMPA provides a remedy of money
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III.
The concurrence concludes that no case or controversy existed
regarding Interstate’s request for a declaration that it did not violate
the PMPA in terminating the franchise agreement.4
In order to establish an Article III case or controversy regarding a
declaratory judgment claim, a plaintiff must demonstrate that "there
is a substantial controversy, between parties having adverse legal
interests, of sufficient immediacy and reality to warrant the issuance
of a declaratory judgment." Maryland Cas. Co. v. Pac. Coal & Oil
Co., 312 U.S. 270, 273 (1941).
For the reasons I have already discussed, the district court and the
parties clearly understood that Interstate had violated the PMPA in
terminating the franchise agreement unless the Morgans breached that
agreement. See 15 U.S.C.A. § 2802. Moreover, whether the Morgans
breached the agreement (and thus whether a violation of the PMPA
occurred) has been hotly disputed by the parties throughout this case.
The concurrence incorrectly concludes that "the pleadings indicate
that the parties mutually agreed to terminate the relationship, render-
ing moot any PMPA issue." Ante, at 13 (emphasis added). The termi-
nation agreement to which the concurrence refers was dated
December 12, 1994. Yet, one month later, on January 11, 1995, the
Morgans, through their company B&V Enterprises, brought suit
against Interstate in federal court contending that Interstate had no
right to terminate the franchise agreement and seeking specific per-
formance of the agreement. See Supp. J.A. 68-71. Moreover, the Mor-
damages only for franchisees and because the PMPA is the sole basis for
federal jurisdiction, the district court erred in allowing the jury to con-
sider Interstate’s damages claim. However, once the court had jurisdic-
tion over the question of whether Interstate violated the PMPA in
terminating the contract, it gained supplemental jurisdiction over Inter-
state’s state-law claim for breach of contract. See 28 U.S.C.A. § 1367
(West 1993).
4While of course not dispositive, at no point previous to, during, or
after the trial or on appeal to the panel or the en banc court have the Mor-
gans ever contended that a case or controversy did not exist.
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gans answered Interstate’s complaint on March 14, 1995, asserting
that the termination agreement was void because Interstate had
engaged in an anticipatory breach of that agreement. It is also worth
repeating that the Morgans’ suit alleging wrongful termination
remained viable for more than 16 months, with the Morgans moving
to dismiss the suit without prejudice only two weeks prior to trial. The
dispute concerning whether Interstate was justified in terminating the
franchise agreement continued throughout the trial. Accordingly,
when the parties and the district court agreed that Interstate sought a
declaration that it did not violate the Morgans’ federal rights under
the PMPA in terminating the franchise agreement, the pleadings were
constructively amended to include a federal question about which
there was a real case or controversy.5
The concurrence refers to events subsequent to this constructive
amendment as if those events could somehow erase the existence of
the federal question jurisdiction that had already been established. It
states that although Interstate proved that the Morgans breached the
franchise agreement, Interstate failed to take the steps necessary at the
end of the trial to obtain a declaration that the breach justified its ter-
mination of the franchise agreement under the PMPA. However, the
special verdict by the jury that the Morgans breached the franchise
agreement essentially decided the PMPA issue against the Morgans.
Indeed, on this basis, Interstate’s counsel explained at oral argument
that he believed the special verdict actually constituted a declaration
that Interstate had not violated the PMPA. Whether Interstate is cor-
rect that it actually obtained the declaratory judgment that it had
sought or whether Interstate failed at the end of the trial to take the
steps necessary to obtain such relief presents at most an academic
issue, not one of jurisdictional significance.
5The concurrence refers to the repeated representations by the Morgans
that they agreed that Interstate was seeking a declaration that it had not
violated the PMPA as "just talk." Ante, at 15. But a close reading demon-
strates that these representations were far more. The "talk" was counsel
for the Morgans representing to the court on the record that he under-
stood that the complaint had been constructively amended to include a
claim by which Interstate was seeking a declaration that it had not vio-
lated the PMPA.
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In sum, the parties here recognized that the issue of whether the
Morgans breached the franchise agreement affected both Interstate’s
state law contract rights and the Morgans’ federal rights under the
PMPA. The parties orally agreed, unequivocally, to litigate the Mor-
gans’ federal PMPA rights, thereby eliminating the need for any for-
mal amendment of the pleadings. They then proceeded to litigate the
question of whether the franchise agreement had been breached,
reconfirming many times during the trial that the Morgans’ PMPA
rights were at issue. In the end, the jury rejected, in a special verdict,
the premise of the Morgans’ anticipated PMPA claims, thereby
resolving once and for all the controversy of whether Interstate was
liable under the PMPA for terminating the franchise agreement.
IV.
Absent the Morgans’ repeated and unequivocal position before and
during the trial that Interstate was seeking declaratory relief, Interstate
might have sought to amend its complaint, or at least could have pur-
sued its breach of contract claim in state court. Allowing the Mor-
gans, now that the jury has ruled against them, to disavow the very
acknowledgments they made that kept this lawsuit in federal court in
the first place enables them to avoid liability for their breach by
"playing fast and loose" with the district court. Lowery v. Stovall, 92
F.3d 219, 223 (4th Cir. 1996) (internal quotation marks omitted). I do
not favor this result, nor does the law allow it.
V.
For all of these reasons, I respectfully dissent.6
6Because I would not vacate the judgment on jurisdictional grounds,
I will briefly address Interstate’s contention on cross-appeal. Interstate
argues that the district court erred in ruling that Interstate was not entitled
to recover reasonable attorneys’ fees. I would find no error. A successful
party in a declaratory judgment action may recover attorneys’ fees only
when the fees "are recoverable under non-declaratory judgment circum-
stances," such as when the substantive law permits an award of attor-
neys’ fees. Mercantile Nat’l Bank v. Bradford Trust Co., 850 F.2d 215,
216 (5th Cir. 1988). Under the PMPA, a franchisor is entitled to attor-
neys’ fees only when a frivolous action is brought against it. See 15
U.S.C.A. § 2805(d)(3). Because Interstate filed this action, it is not enti-
tled to recover attorneys’ fees.
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Judge Williams, Judge Motz, and Judge Traxler have asked to be
shown as joining in this dissenting opinion.
25 INTERSTATE PETROLEUM CORP. v. MORGAN

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APPENDIX TO OPINION
COMPLAINT ..................................................................... Exhibit A
JUDGMENT ....................................................................... Exhibit B
ANSWER TO COMPLAINT ............................................ Exhibit C
FINAL CIVIL JURY INSTRUCTIONS ........................... Exhibit D
SPECIAL VERDICT .......................................................... Exhibit E
26 INTERSTATE PETROLEUM CORP. v. MORGAN

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EXHIBIT A
District Court
Filed at Wheeling, WV
JAN 11 1995
Northern District of WV
Office of the Clerk
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
INTERSTATE PETROLEUM : Case No.: 5:95CV2
CORPORATION :
P.O. Box 4006 :
N. 27th and Vance Avenue :
Wheeling, WV 26003 :
:
v. :
:
ROBERT C. MORGAN and :
VICKIE L. MORGAN, d/b/a :
GREEN ACRES GAS AND GROCER :
U.S. 250 and S.R. 7 :
P.O. Box 940 :
Hundred, WV 26575 :
COMPLAINT
AND NOW, COMES THE PLAINTIFF, Interstate Petroleum Cor-
poration, by and through its attorneys, Dickie, McCamey & Chilcote
and John W. Lewis, II, Esq., and files the within Complaint against
the Defendants, Robert C. Morgan and Vickie L. Morgan, d/b/a Green
Acres Gas and Grocery and in support thereof, avers as follows:
JURISDICTION AND VENUE
The Court has subject matter jurisdiction over this action based
upon federal question jurisdiction pursuant to 28 U.S.C. § 1331 and
the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq.
27 INTERSTATE PETROLEUM CORP. v. MORGAN

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The venue is proper in this District because significant acts and
conduct of the Defendants has occurred in the Northern District of
West Virginia, mainly the subject gas station owned by the Defen-
dants is located in Hundred, West Virginia in the Northern District.
Further, some of the Defendants’ conduct herein have been accom-
plished by various means and instrumentalities of interstate commerce
including the use of the United States mail, facsimile transmissions,
telephones and motor vehicle transportation into and from the North-
ern District of West Virginia.
PARTIES
1. The Plaintiff, Interstate Petroleum Corporation, is a West Vir-
ginia corporation with its principal place of business located at P.O.
Box 4006, North 27th and Vance Avenue, Wheeling, West Virginia
26003.
2. Defendants Robert C. Morgan and Vickie L. Morgan are mar-
ried individuals doing business as "Green Acres Gas and Grocery"
having their principal place of business located at U.S. 250 and S.R.
7, P.O. Box 940, Hundred, West Virginia 26575.
GENERAL AVERMENTS
3. At all times relevant hereto, Plaintiff was a licensed distributor
of "BP" branded gasoline and petroleum products.
4. On April 29, 1993, the parties hereto entered into a Contract
of Sale for BP branded gasoline and BP petroleum products. The
Contract of Sale dated April 29, 1993, attached hereto as Exhibit "A",
became effective on March 1, 1993.
5. Thereafter, the Defendants began displaying the "BP" logo and
proceeded to operate their business as a BP station.
6. Between March 1, 1993 and the present, Defendants’ place of
business displayed the BP logo on gasoline pumps, signs, canopies,
credit receipts and the like.
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7. Pursuant to the April 29, 1993 Contract of Sale, the Plaintiffs
made a loan totaling $6,500 to the Defendants which, upon informa-
tion and belief, was used by the Defendants to facilitate the conver-
sion of Defendants’ gas station to a "BP gas station".
8. Pursuant to the April 29, 1993 Contract of Sale, the Defen-
dants agreed to provide the Plaintiff with a $31,500 irrevocable Letter
of Credit drawn upon a qualified lending institution. Contract at P. 18.
9. Pursuant to the Contract of Sale entered into between the par-
ties, Plaintiffs supplied on a regular and continuous basis BP branded
products to the Defendants from March 1, 1993 through January 4,
1995.
COUNT I. — BREACH OF CONTRACT
10. The averments set forth in Paragraph 1 through 9 of the
within Complaint are incorporated as if more fully set forth herein.
11. Plaintiff made repeated requests in writing on nine (9) sepa-
rate occasions that Defendants comply with the terms of the April 29,
1993 Contract of Sale and provide the Letter of Credit required under
the terms of the Contract.
12. Thereafter, upon Defendants’ refusal to comply with the
terms of the Contract of Sale, Plaintiff advised the Defendants of its
intent to terminate its Contract as a result of Defendants’ continued
nonperformance and breach of the Contract pursuant to the Petroleum
Marketing Practices Act, 15 U.S.C. § 2801 et seq.
13. Despite Defendants’ regular assurances and promises that the
requisite Letter of Credit would be provided, no such Letter of Credit
was timely provided by the Defendants.
14. Thereafter, several accommodations were made to the Defen-
dants by the Plaintiff which included a reduction of the amount of the
agreed irrevocable Letter of Credit from $31,500 to $25,000.
15. In further attempts to make reasonable accommodations to
the Defendants an extension of time to secure the required Letter of
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Credit was extended to the Plaintiffs until October 28, 1994. In doing
so, however, Plaintiff indicated and Defendants agreed that time was
of the essence.
16. As of October 28, 1994, Defendants had still failed to provide
the agreed Letter of Credit.
17. Accordingly, the Plaintiffs advised the Defendants of its
intention to terminate the contract between the parties due to Defen-
dants’ continued failure to deliver the agreed Letter of Credit and oth-
erwise comply with the express terms of the April 29, 1993 Contract
of Sale.
18. On December 12, 1994 Defendants signed a Mutual Consent
to Termination Agreement in which Defendants agreed that Defen-
dants would begin $400 per month payments to satisfy the initial
$6,500 loan made by the Plaintiff to the Defendants with the first pay-
ment to commence on December 31, 1994.
19. The signed Mutual Consent to Termination Agreement also
provided that Defendants would provide a Letter of Credit for
$20,000 by January 4, 1995 at 5:00 p.m. and again, time was speci-
fied to be of the essence. The Mutual Consent to Termination Agree-
ment dated December 12, 1994 is attached hereto as Exhibit "B".
20. On December 31, 1994, Defendants, contrary to their Decem-
ber 12, 1994 agreement, failed to make the agreed initial $400 pay-
ment.
21. Similarly, on January 4, 1995, Defendants failed to produce
the Letter of Credit required by the terms of the Contract of Sale, as
reduced by the Plaintiff.
22. Accordingly, Defendants are in breach of the April 29, 1993
Contract of Sale.
23. As a direct and proximate result of Defendants’ breach of the
Contract of Sale and continuous failure to specifically perform there-
under, Plaintiff lost the benefit of said Contract and caused irreparable
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injury to the Plaintiff and placed it in the position of being in breach
of its own contractual obligations to the BP Oil Company.
WHEREFORE, Interstate Petroleum Corporation respects that this
Honorable Court enter judgment in favor of granting injunctive relief
including enjoining Defendants from continued display of the "BP"
logo by signs, credit receipts, stickers, layout or the design or in any
other way holding themselves out as a British Petroleum or BP fuel-
ing "gas" station. It is further requested that this Court enjoin Defen-
dants from in any way inhibiting Interstate Petroleum Corporation’s
or its agent’s efforts to debrand the filling station and acquire posses-
sion of those materials, signs, stickers, etc. indicating the "BP" logo.
Further, Plaintiff requests that it be granted such other relief as this
Court deems just and proper, including damages, attorneys’ fees,
costs and interest thereon.
COUNT II. — PRAYER FOR INJUNCTIVE RELIEF
24. The averments set forth in Paragraph 1 through 24 of the
within Complaint are incorporated as if more fully set forth herein.
25. Plaintiff will suffer immediate, continuing and irreparable
harm which cannot be computed in money damages if relief is not
granted with respect to the conduct of Defendants, Robert C. Morgan
and Vickie L. Morgan d/b/a Green Acres Gas and Grocery. Such
immediate, continuing and irreparable harm includes:
(a) wrongful and continued display of the "BP" logo signs,
printed receipts, stickers, layout, canopy and/or design at the subject
gas station;
(b) wrongfully interfering with Plaintiff’s debranding of
Defendants’ place of business;
(c) damage to Plaintiff’s business relationships;
(d) loss of value of the April 29, 1993 Contract of Sale.
26. As a direct and proximate cause of such immediate, continu-
ing and irreparable harm, Plaintiff, Interstate Petroleum Corporation,
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respectfully requests that this Honorable Court enter a preliminary
and permanent injunction directing as follows:
(a) Defendants are enjoined from displaying the "BP" logo
by signs, printed receipts, stickers, layout or design or in any other
way holding themselves out as a British Petroleum or BP fueling gas
station;
(b) Defendants are enjoined from inhibiting, in any way,
Interstate Petroleum Corporation’s or its agent’s efforts to debrand
Defendants’ filling station and acquire possession and control of those
materials, signs, stickers, etc. indicating the "BP" logo;
(c) Defendants are enjoined from destroying, removing,
altering or otherwise disposing of or utilizing the aforesaid materials,
signs, stickers, etc. indicating the "BP" logo.
(d) and that Defendants cease and desist any further opera-
tion of their gas station as a "BP" gas station.
WHEREFORE, Interstate Petroleum Corporation respectfully
request that this Honorable Court enter judgment in its favor granting
the injunctive relief requested herein and such other relief as this
Honorable Court deems just and proper, including damages, attor-
neys’ fees, costs and interest thereon.
Dated: January 11, 1995 Respectfully submitted,
DICKIE, McCAMEY & CHILCOTE
By: /s/John W. Lewis
John W. Lewis, II, Esq.
W.V. ID #: 2198
Attorneys for Plaintiff,
Interstate Petroleum
Corporation
1233 Main Street
Suite 2002
Wheeling, WV 26003
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EXHIBIT B
AO 450 (Rev. 5/85) Judgment In a Civil Case
District Court
Filed at Wheeling, WV
JUN 6 1995
Northern District of WV
Office of the Clerk
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF WEST VIRGINIA
INTERSTATE PETROLEUM CORPORATION,
Plaintiff, JUDGMENT IN A CIVIL CASE
V.
ROBERT C. MORGAN and VICKIE L. MORGAN,
d/b/a Green Acres Gas & Grocery, CASE NUMBER: 5:95-cv-2
Defendants.
X Jury Verdict. This action came before the Court for a trial by
jury. The issues have been tried and the jury has rendered its ver-
dict.
and
X Decision by Court. This action came to trial or hearing before
the Court. The issues have been tried or heard and a decision has
been rendered.
IT IS ORDERED AND ADJUDGED that Plaintiff, Interstate
Petroleum Corporation, recover from the Defendants, Robert C. Mor-
gan and Vickie L. Morgan, d/b/a Green Acres Gas & Grocery, the
amount of $42,901.50 awarded by the jury; and it is further
ADJUDGED pursuant to stipulation by the parties that Plaintiff
shall recover the additional amount of $1,562.05; and it is further
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ORDERED that this case be dismissed and stricken from the
docket of this Court.
June 6, 1996 WALLY EDGELL, Ph.D.
Date Clerk
/s/ Sue O. Abraham
(By) Deputy Clerk
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EXHIBIT C
O R I G I N A L
U.S. DISTRICT COURT
FILED AT WHEELING, WV
MAR 14 1995
NORTHERN DISTRICT OF WV
OFFICE OF THE CLERK
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
INTERSTATE PETROLEUM CORPORATION
P.O. Box 4006
N. 27th and Vance Avenue
Wheeling, WV 26003
v. Case No. 5:95-CV-2
ROBERT C. MORGAN and
VICKIE L. MORGAN, d/b/a
GREEN ACRES GAS AND GROCERY
U.S. 250 and S.R. 7
P.O. Box 940
Hundred, WV 26575
ANSWER TO COMPLAINT
Comes now the Defendant, Robert C. Morgan and Vickie L. Mor-
gan, d/b/a Green Acres Gas and Grocery, by and through its counsel
Geary M. Battistelli, and without waiving the fact that the Plaintiff
has failed to complete service of process upon the Defendant, does
hereby answer the Plaintiff’s complaint in this matter.
1. Defendant admits the allegations contained in paragraph one of
the Complaint.
2. Defendant admits the allegations contained in paragraph two
of the Complaint.
3. Defendant admits the allegations contained in paragraph three
of the Complaint.
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4. Defendant admits the allegations contained in paragraph four
of the Complaint.
5. Defendant admits the allegations contained in paragraph five
of the Complaint.
6. Defendant admits the allegations contained in paragraph six of
the Complaint.
7. Defendant admits in part and denies in part the allegations con-
tained in paragraph seven of the Complaint.
8. Defendant denies the allegations contained in paragraph eight
of the Complaint.
9. Defendant denies the allegations contained in paragraph nine
of the Complaint.
10. Defendant denies the allegations contained in paragraph ten
of the Complaint to the extent specified above.
11. Defendant denies the allegations contained in paragraph
eleven of the Complaint.
12. Defendant denies the allegations contained in paragraph
twelve of the Complaint.
13. Defendant denies the allegations contained in paragraph thir-
teen of the Complaint.
14. Defendant denies the allegations contained in paragraph four-
teen of the Complaint.
15. Defendant denies the allegations contained in paragraph fif-
teen of the Complaint.
16. Defendant denies the allegations contained in paragraph six-
teen of the Complaint.
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17. Defendant admits in part and denies in part the allegations in
paragraph seventeen of the Complaint.
18. Defendant admits in part and denies in part the allegations in
paragraph eighteen of the Complaint.
19. Defendant admits in part and denies in part the allegations in
paragraph nineteen of the Complaint.
20. Defendant admits in part and denies in part the allegations
contained in paragraph twenty of the Complaint.
21. Defendant admits in part and denies in part the allegations
contained in paragraph twenty-one of the Complaint.
22. Defendant denies the allegations contained in paragraph
twenty-two of the Complaint.
23. Defendant denies the allegations contained in paragraph
twenty-three of the Complaint.
24. Defendant denies the allegations contained in paragraph
twenty-four of the Complaint to the extent as specified above.
25. Defendant denies the allegations contained in paragraph
twenty-five of the Complaint.
26. Defendant denies the allegations contained in paragraph
twenty-six of the Complaint.
FIRST AFFIRMATIVE DEFENSE
The Plaintiffs have failed to complete service of process upon the
Defendant.
SECOND AFFIRMATIVE DEFENSE
This court lacks federal subject matter jurisdiction over the Plain-
tiffs action.
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THIRD AFFIRMATIVE DEFENSE
The Plaintiff have failed to state a claim upon which relief can be
granted.
FOURTH AFFIRMATIVE DEFENSE
The Plaintiff has itself engaged in breaches of the original contract
between the parties and the amended contract and mutual termination
agreement.
FIFTH AFFIRMATIVE DEFENSE
The mutual termination agreement between the parties is void
because the Plaintiff engaged in an anticipatory breach of said agree-
ment and the Plaintiff had no intention of living up to the terms and
conditions of the mutual termination agreement.
WHEREFORE, Defendant respectfully requests that this court dis-
miss the Complaint in this matter; that the Defendant be awarded all
reasonable attorney fees incurred in the defense of this matter, plus
all court costs, plus whatever other relief the court may deem just.
ROBERT C. MORGAN and
VICKIE L. MORGAN, d/b/a
GREEN ACRES GAS and
GROCERY, DEFENDANT
/s/Geary M. Battistelli
Of Counsel
GEARY M. BATTISTELLI, ESQUIRE
708 Central Union Building
Wheeling, West Virginia 26003
232-4980
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EXHIBIT D
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
INTERSTATE PETROLEUM CORPORATION,
Plaintiff,
v. Civil Action No. 5:95CV2
(STAMP)
ROBERT C. MORGAN and VICKIE L. MORGAN,
d/b/a GREEN ACRES GAS & GROCERY,
Defendants.
FINAL CIVIL JURY INSTRUCTIONS
Now that you have heard all of the evidence and the closing state-
ments by the lawyers, it is my job as judge to tell you about the laws
that apply to this case. As jurors, you have two jobs: First, you must
determine from the evidence what the facts of this case are. Then you
must apply the rules of law that I will give you to those facts in order
to determine whether the defendants, Robert Morgan and Vickie Mor-
gan, are liable to the plaintiff, Interstate Petroleum Corporation, and
if so what damages, if any, Interstate Petroleum is entitled to recover.
I will permit you to take these instructions with you to the jury
room. However, you must not single out one instruction alone as stat-
ing the law, but must consider the instructions as a whole.
Neither are you to be concerned with the wisdom of any rule of law
stated by the Court. Regardless of any opinion you may have as to
what you believe the law ought to be, it would be a violation of your
sworn duty as a juror to base your verdict upon any view of the law
other than that given in the instructions; just as you realize it would
be a violation of your sworn duty, as judges of the facts of this case,
to base your verdict upon anything but the evidence in the case.
Justice through trial by jury must always depend upon the willing-
ness of each individual juror to seek the truth as to the facts from the
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same evidence presented to all of the jurors; and to arrive at a verdict
by applying the same rules of law, as given in the Court’s instruc-
tions.
You have been chosen and sworn as jurors in this case to try the
issues of fact presented by the allegations of the complaint of the
plaintiff and the answer thereto of the defendants. You must perform
your duty without any bias or prejudice as to any party. Our system
of law does not permit jurors to be governed by sympathy, prejudice
or public opinion. The parties and the public expect that you will
carefully and impartially consider all of the evidence in the case, fol-
low the law as stated by the Court’s instructions, and then reach a just
verdict, regardless of the consequences.
At the pame time, the case before you must be decided by you as
an action between persons of equal standing and worth in the commu-
nity. By that, I mean that a corporation such as Interstate Petroleum
Corporation is entitled to the same fair trial in your hands as a private
individual. All persons, including corporations or partnerships, stand
equal before the law and are to be dealt with as equal in a court of
justice.
A. Burden of Proof
The burden is on the plaintiff asserting a claim in a civil action,
such as this, to prove every essential element of its claim by a prepon-
derance of the evidence. So, if the proof should fail to establish any
essential element of the plaintiff’s claim by a preponderance of the
evidence in the case, or if the proof is evenly balanced, then the plain-
tiff has failed in establishing its burden of proof and you must find
for the defendants.
To establish by a preponderance of the evidence means to prove
that something is more likely so than not so. In other words, a prepon-
derance of the evidence in the case means such evidence as, when
considered and compared with that opposed to it, has more convinc-
ing force and produces in your minds belief that what is sought to be
proved is more likely true than not true. Although the burden is on
the party who asserts the affirmative of an issue to prove that claim
by a preponderance of the evidence in the case, this rule does not, of
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course, require proof to an absolute certainty, since proof to an abso-
lute certainty is seldom possible in any case.
In determining whether any fact in issue has been proved by a pre-
ponderance of the evidence in this case, the jury may, unless other-
wise instructed, consider the testimony of all witnesses, regardless of
who may have called them, and all exhibits received in evidence,
regardless of who may have produced them.
The burden is on plaintiff Interstate Petroleum to prove every
essential element of its claim by a preponderance of the evidence.
This means that Interstate Petroleum must prove the existence of a
contract, that the Morgans breached certain terms or provisions of that
contract or a single term or provision thereof, that Interstate Petro-
leum was damaged by such breach, and the amount of damage result-
ing from such breach.
B. Definition of Contract
A contract is an agreement between two or more persons to do or
not to do a particular thing. It gives rise to an obligation or legal duty,
enforceable in an action at law. A contract is a promise or a set of
promises for the breach of which the law gives a remedy, or the per-
formance of which the law in some way recognizes as a duty.
Unambiguous written contracts are presumed to express the entire
and exact meaning of the parties and every part of their agreement.
The language of a contract must be accorded its plain meaning, and
such language must be given full effect.
C. Breach of Contract
You must first determine whether defendants Morgan breached the
contract of sale with Interstate Petroleum before awarding any dam-
ages. The party claiming a breach of contract must prove by a prepon-
derance of the evidence that the other party has breached a certain
term or provision of that contract. If you find by a preponderance of
the evidence that the Morgans materially breached the contract, then
you must find in favor of Interstate Petroleum. However, if you find
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by a preponderance of the evidence and under these instructions that
the Morgans did not materially breach any such contract, then you
must find for the Morgans as to that claim.
In this case, you have heard that the plaintiff Interstate Petroleum
terminated the contract of sale. In order for you to find that Interstate
Petroleum was entitled to terminate the contract, you must find that
the defendants Morgan materially breached the contract.
A material breach occurs when a party, without just cause, fails or
refuses to perform its portion of the agreement, even though the other
party has performed or is willing to perform its obligations under the
contract.
The following circumstances should be considered in determining
whether the breach is "material":
1. The extent to which the breach will deprive the plaintiff of the
benefit which it reasonably expected;
2. The extent to which the plaintiff can be adequately compen-
sated for the part of the benefit of which it has been deprived due to
the breach;
3. The extent to which the defendants will suffer forfeiture as a
result of the breach;
4. The likelihood that the defendants could have and would have
cured the breach; and
5. The extent to which the defendants’ behavior in breaching the
contract comports with standards of good faith and fair dealing.
The purpose of any contract is to secure the parties’ expectation of
an exchange of performances. An important circumstance in deter-
mining whether a breach is material is the extent to which the injured
party will be deprived of the benefit which it reasonably expected
from the exchange.
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If you determine that the Morgans’ failure to provide a letter of
credit by January 4, 1995 was a material breach of the parties’ con-
tract, you must find that Interstate Petroleum was entitled to terminate
the contract, and you must enter a verdict for Interstate Petroleum. In
determining whether the failure of the Morgans to obtain a letter of
credit was a breach of contract, you can consider whether Interstate
Petroleum played a part in the inability of the Morgans to procure a
letter of credit such as underestimating the construction costs and the
gallonage to be sold.
If you find that "time was of the essence" in the performance of the
parties’ contract, and that the Morgans delayed in the performance of
the contract beyond the period specified in the contract, you must find
that this is a material breach and that Interstate Petroleum was entitled
to terminate the contract, and you must enter a verdict for Interstate
Petroleum, unless you find that Interstate Petroleum caused the delay
in performance or waived the time period in which the Morgans had
to perform the contract. Whether time is of the essence of a contract
is determined from the language used in the instrument and the cir-
cumstances surrounding, and the principal object is to determine the
intention of the parties.
Paragraph 11 on page 4 of the contract provides that if there is a
delay or failure of performance by either party that such failure of
performance or delay in performance shall not constitute default
under the contract if such failure or delay in performance was beyond
the control of the party. However, in order for this provision to apply,
there must be prompt written notice of such delay or failure to per-
form by defendants Morgan to plaintiff Interstate Petroleum. There-
fore, you must find for the Morgans if you believe that the Morgans
exercised due diligence in pursuing a letter of credit with a bank as
required by the contract, but that because of the additional construc-
tion costs and sales below projection caused by the plaintiff, they
were unable to procure a letter of credit and that written notice of the
same was given. This, coupled with the payment for all products via
electronic transfer before delivery of the products by the plaintiff to
the defendants, would not constitute a breach of contract.
A party to a contract which alleges, as the Morgans have in this
case, that they are unable to perform a requirement of their contract,
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is nevertheless, not excused from their contractual obligation if the
party claiming such an inability solely placed themselves in a position
which made their performance under the contract difficult or impossi-
ble. Accordingly, if you find that the defendants in this case, Robert
and Vickie Morgan, solely placed themselves in a position which
made it difficult or impossible for them to obtain a letter of credit as
required by the contract, they are nevertheless liable to Interstate
Petroleum for the damages which you find were incurred by Interstate
Petroleum as a result of the breach of the contract.
D. Damages
If you find by a preponderance of the evidence that the Morgans
materially breached the contract, then you must determine the amount
of damages to which Interstate Petroleum is entitled. Plaintiff Inter-
state Petroleum bears the burden of proving any and all damages it
claims to have sustained by a preponderance of the evidence. Your
award must be based upon the facts in this case and must not be based
upon sympathy, conjecture, speculation or guesswork. Similarly, your
verdict should not be inspired by prejudice against any party.
The claims of Interstate Petroleum are premised on breach of con-
tract. Therefore, Interstate Petroleum may recover only those damages
as may fairly and reasonably be considered as arising naturally that
is, according to the usual course of things from the alleged breach of
the contract itself, or such as may reasonably be supposed to have
been within the contemplation of the parties at the time they made the
contract. In other words, the damages claimed by Interstate Petroleum
must have been proximately caused by the breach. If you decide that
plaintiff Interstate Petroleum is entitled to damages, it is your duty to
determine the amount of money which reasonably, fairly and ade-
quately compensates Interstate Petroleum for injuries as are the direct,
natural and proximate result of the breach of contract; that is, to put
Interstate Petroleum as the nonbreaching party, in as good a position
as that party would have been if the promised performance had been
rendered.
Damages that are remote, conjectural or speculative cannot be
recovered and in order to sustain a recovery for damages, there must
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be proof that furnishes reasonable certainty of damages and the
amount of those damages.
Where economic loss is alleged to have occurred, it is incumbent
upon the party claiming such loss to produce evidence that will take
that element beyond the realm of surmise and conjecture. Any evi-
dence of economic loss must be proved to a reasonable degree of cer-
tainty.
To recover consequential damages arising from a breach of a con-
tract, the injured party must show that at the time the contract was
made the parties could reasonably have anticipated that these dam-
ages would be the probable result of a breach.
Damages are ordinarily based upon the injured parties’ expectation
interest and are intended to give them the benefit of the bargain by
awarding a sum of money that will, to the extent possible, put them
in as good a position as they would have been had the contract been
performed. Stated another way, the measure of damages is the actual
loss sustained by reason of the breach which includes the loss of the
profits which Interstate Petroleum would have received if the contract
had been performed, less any proper deductions.
You are never to presume damages.
When one sustains a damage because of an alleged breach of con-
tract then that person must act in a reasonable way to mitigate these
damages.
Interstate Petroleum makes the following claims for damages. First,
plaintiff Interstate Petroleum maintains that it is entitled to recover as
consequential damages from the breach of the contract of sale dam-
ages which have been proven by a preponderance of the evidence to
have been sustained by plaintiff Interstate Petroleum Corporation in
the form of loss of profits and costs incurred by plaintiff Interstate
Petroleum to obtain the "BP" brand for the Morgans including costs
to obtain trademark approval, costs to conduct market surveys, costs
to prepare bank loan requests, costs of design work, costs of assisting
the Morgans with construction requirements and analysis of construc-
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tion quotations, costs of acquiring equipment for the Morgans’ dealer-
ship, costs of complying with branding requirements, and costs of
sign installation. Second, plaintiff Interstate Petroleum contends that
it is entitled to recover as damages those costs reasonably incurred
due to defendants’ breach of the contract of sale including the
accounts receivable balance and "debranding costs." If you find that
the plaintiff Interstate Petroleum has proven any or all of the above
claimed damages by a preponderance of the evidence and to a reason-
able certainty, then you may award such damages to plaintiff Inter-
state Petroleum for the breach by the Morgans of its contract of sale.
The parties have stipulated that plaintiff Interstate Petroleum is
entitled to recover from defendants (1) the accounts receivable bal-
ance covering credit card processing fees, and charge backs amount-
ing to $770.59 and (2) the note receivable balance less the credit card
payables, amounting to $791.46. Therefore, you should not consider
those amounts in determining any damages.
Any loss of profits to Interstate Petroleum for future business must
be determined based on a reasonable certainty of the profits being
generated by the plaintiff. You may consider the events in paragraph
23 of the contract of sale dealing with termination in determining
whether loss of profits asked by the plaintiff are speculative.
If you do not consider loss of future profits as being speculative,
then loss of profits for future years may be determined. Loss of profits
for future years must be discounted to present dollars.
This Court has made a determination as a matter of law regarding
the claims of the plaintiff Interstate Petroleum for attorney’s fees and
court bond premiums paid by plaintiff Interstate Petroleum and there-
fore you shall not consider those matters in your determination of
damages, if any.
The mere fact that I have given you these instructions on the law
of the recoverability of damages does not imply or suggest that the
Court believes that any damages are due. Whether or not damages are
due is for you to decide. Instructions as to the measure of damages
are only given for your guidance, in the event that you should find in
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favor of the plaintiff, Interstate Petroleum Corporation, from a pre-
ponderance of the evidence in the case.
E. General Instructions
As I’ve previously told you at the start of this trial, there are, gener-
ally speaking, two types of evidence from which you the jury may
properly find the truth as to the facts of the case. One is direct evi-
dence such as the testimony of an eye witness. The other is indirect
or circumstantial evidence proof of a chain of circumstances pointing
to the existence or nonexistence of certain facts.
As a general rule, the law makes no distinction between direct and
circumstantial evidence, but simply requires that the jury find the
facts in accordance with the preponderance of all of the evidence in
the case, both direct and circumstantial.
Statements and arguments of counsel are not evidence in the case.
While counsel may during closing argument state his opinion as to
what amount the verdict should be, you are instructed that any dollar
figures mentioned by counsel do not constitute evidence but merely
represent argument which the jury may disregard in its deliberations.
When, however, counsel on both sides stipulate or agree to the
existence of a fact, or when the Court brings to your attention that cer-
tain facts are uncontroverted or undisputed, including admissions in
the pleadings, then the jury must, unless otherwise instructed, regard
those facts as proven. In such instances, any fact or facts agreed to or
stipulated are to be accepted by you as true and as proven, and addi-
tional proof is not necessary to establish such fact or facts.
Unless you are otherwise instructed, the evidence in this case con-
sists of the sworn testimony of the witnesses, regardless of who may
have called them; all exhibits received in evidence, regardless of who
may have produced them; all facts which may have been admitted or
stipulated; and all facts which have been brought to your attention as
facts that are uncontroverted and undisputed; and all applicable pre-
sumptions dtated in these instructions.
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You have heard expert witness testimony or evidence in this case
from Edward Coyne, Jr. An expert witness is allowed to express his
opinion on those matters about which he has special knowledge and
training. Expert testimony is presented to you on the theory that
someone who is experienced in the field can assist you in understand-
ing the evidence or in reaching an independent decision on the facts.
In weighing the expert’s testimony, you may consider the expert’s
qualifications, his opinions, his reasons for testifying, as well as all
the other considerations that ordinarily apply when you are deciding
whether or not to believe a witness’ testimony. You may give the
expert testimony whatever weight, if any, you find it deserves in light
of all the evidence in this case. You should not, however, accept this
witness’ testimony merely because he is an expert. Nor should you
substitute it for your own reason, judgment, and common sense. The
determination of the facts in this case rests solely with you.
Any evidence to which an objection was sustained by the Court
during the course of trial, and any evidence ordered stricken by the
Court, must be entirely disregarded by you in your deliberations.
Anything you may have seen or heard outside the courtroom is not
evidence and must be entirely disregarded by you.
You are to consider only the evidence in the case, but in your con-
sideration of the evidence, you are not limited to the mere statements
of the witnesses. In other words, you are not limited solely to what
you have seen and heard the witnesses testify to. You are permitted
to draw, from the facts which you find have been proved, such rea-
sonable inferences as seem justified in the light of your experience.
An inference is a deduction or conclusion which reason and com-
mon sense lead the jury to draw from the facts which have been estab-
lished from the evidence in the case.
A presumption is a deduction or conclusion which the law requires
the jury to make under certain circumstances, in the absence of evi-
dence in the case which leads the jury to a different or contrary con-
clusion.
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You, as jurors in this case, are the sole judges of the credibility of
the witnesses, and the weight and value their testimony deserves. You
may be guided by the appearance and conduct of the witness, or by
the manner in which the witness testifies, or by the character of the
testimony given, or by evidence contrary to the testimony of the wit-
ness.
You should carefully scrutinize all of the testimony given, the cir-
cumstances under which each witness testified, and every matter in
evidence which tends to show whether a witness is worthy of belief.
Consider each witness’ intelligence, motive and state of mind, and
demeanor and manner while on the stand. Consider each witness’
ability to observe the matters to which the witness has testified, and
whether each witness impresses you as having an accurate recollec-
tion of these matters. Consider also any relation the witness may bear
to either side of the case. Consider the manner in which each witness
might be affected by the verdict, if at all, and the extent to which, if
at all, the testimony of each witness is either supported or contra-
dicted by other evidence in the case.
Inconsistencies or discrepancies in the testimony of a witness or
between the testimony of different witnesses may or may not cause
you as jurors to discredit the witness’ testimony. Two or more persons
witnessing an incident or transaction may see it or hear it differently.
Innocent misrecollection, like failure of recollection, is not an uncom-
mon experience. In weighing the effect of a discrepancy, always con-
sider whether it pertains to a matter of importance, or an unimportant
detail, and whether the discrepancy results from innocent error or
from intentional falsehood.
A witness, whether or not a party, may be discredited or impeached
by contradictory evidence; or by evidence that at other times the wit-
ness may have made statements which are inconsistent with the wit-
ness’ testimony.
If you believe a witness has been impeached or if a witness has
been shown to have knowingly testified falsely concerning any mate-
rial matter, you have a right to distrust such witness’ testimony in all
other particulars; and you may reject all the testimony of that witness
or give it just such credibility as you may think it deserves.
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After making your own judgment, you will then give the testimony
of each witness in this case just such weight, if any, you think it
deserves.
No statement or ruling which I have made during this trial was
intended to indicate my opinion as to how you should decide the case
or to influence you in any way in your determination of the facts.
Some of you have taken notes during the trial. If you chose not to
take notes, remember it is your own individual responsibility to recol-
lect the evidence. You should not rely on the notes of others to deter-
mine the facts in this case. We depend upon the judgment of all
members of the jury; you must all remember the evidence in this case.
You have noticed that we do have an official court reporter making
a record of the trial. However, as I mentioned earlier, we will not have
typewritten transcripts of this record available for use in reaching
your decision in this case.
Your verdict must represent the considered judgment of each juror.
In order to return a verdict, it is necessary that each juror agree
thereto. Your verdict must be unanimous.
It is your duty, as jurors, to consult with one another, and to delib-
erate with a view to reaching an agreement if you can do so without
violence to individual judgment. You must decide the case for your-
self, but only after an impartial consideration of the evidence in the
case with your fellow jurors. In the course of your deliberations, do
not hesitate to reexamine your own views, and change your opinion,
if convinced it is erroneous. But do not surrender your honest convic-
tion as to the weight or effect of evidence solely because of the opin-
ion of your fellow jurors, or for the mere purpose of returning a
verdict.
Remember at all times that you are not partisans. You are judges;
judges of the facts of this case. Your sole interest in serving as jurors
in this case is to seek the truth from the evidence in the case.
Upon retiring to the jury room, select one of your number to act
as your foreperson. The foreperson will preside over your delibera-
tions and will be your spokesperson in Court.
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You will take the verdict form prepared for you to the jury room
and, when you have reached unanimous agreement as to your verdict,
you will have your foreperson complete the appropriate form stating
the verdict upon which you unanimously agree. The foreperson will
then sign and date the form and the jury will then return with your
verdict to the courtroom.
A form of verdict has been prepared for your convenience. [Review
verdict form.]
If you should desire to communicate with the Court at any time,
please write down your message or question and pass the note to the
marshal who will bring it to my attention. I will then respond as
promptly as possible, either in writing or by having you return to the
courtroom so that I can address you orally. I caution you, however,
with regard to any message or question you might send, that you
should not tell me your numerical division at the time.
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EXHIBIT E
U.S. DISTRICT COURT
FILED AT WHEELING, WV
MAY 31 1996
NORTHERN DISTRICT OF WV
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
INTERSTATE PETROLEUM CORPORATION,
Plaintiff,
v. Civil Action No. 5:95CV2
(STAMP)
ROBERT C. MORGAN and VICKIE L. MORGAN,
d/b/a GREEN ACRES GAS & GROCERY,
Defendants.
SPECIAL VERDICT
1. Do you find that Robert C. Morgan and Vickie L. Morgan,
d/b/a Green Acres Gas & Grocery, breached the Contract of Sale
dated April 29, 1993 or the Termination Agreement dated December
12, 1994?
Yes No 3
[If your answer is "no," you should not answer any further questions
but your foreperson should sign and date the verdict form and you
should return to the courtroom.]
2. Do you find that the Morgans’ breach of the Contract of Sale
or the Termination Agreement caused damages to Interstate Petro-
leum Corporation?
Yes No 3
[If you answered "yes," you should answer the following questions
and enter a verdict in a monetary amount in favor of Interstate Petro-
leum Corporation.]
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3. What is the total amount of damages which you find will fairly
compensate Interstate Petroleum so that Interstate Petroleum is in the
same position as it would have been if the Morgans had fulfilled their
obligations under the contract?
$ 42,901.50
4. Of the total amount of damages you have set forth in your
answer to Question No. 3, please set forth below the amounts of dam-
ages attributable to the following categories:
(1) Loss of profits $ 40,500
(2) Costs due to breach
of contract $ 2,401.50
5-31-96 /s/ ___________
Date Foreperson
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