AVP Metro Petroleum v. Sepahvand

Filing 47

OPINION AND ORDER by Judge Claire V Eagan , remanding case (terminates case) (Documents Terminated: 38 MOTION for Summary Judgment ) (djh, Dpty Clk)

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA

AVP METRO PETROLEUM, LLC
Plaintiff,

v.
MORAD SEPAHVAND d/b/a
MOE=S MART,

Defendant.

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Case No. 14-CV-0616-CVE-PJC

OPINION AND ORDER
Now before the Court is plaintiff=s motion for summary judgment and brief in support
(Dkt. ## 38, 39). Plaintiff seeks summary judgment on plaintiff=s claim that defendant breached
a fuel marketing agreement and defaulted on the accompanying note, arguing that the undisputed
facts show that defendant breached the agreement by failing to provide timely payment to
plaintiff.

Dkt. # 39, at 11-12.

Plaintiff also seeks summary judgment on defendant=s

counterclaim, arguing that the undisputed facts show that plaintiff did not violate the Petroleum
Marketing Practices Act (PMPA), 15 U.S.C. '' 2801 et seq., which defendant asserts governs
the contractual relationship between the parties, because plaintiff gave defendant proper written
notice of reasons for termination of the agreement. Id. at 14-15. Defendant responds that
several disputed factual issues exist regarding the alleged failure to pay for goods provided under
the contract, and that plaintiff=s assertion that no genuine issues of material facts exist is based on
the incorrect allegation that defendant failed to comply with discovery deadlines, thereby
admitting all allegations in plaintiff=s requests for admission. Dkt. # 40, at 5-6. Defendant

further asserts that disputed facts also exist regarding plaintiff=s compliance with the termination
provisions of the PMPA and asks the Court to deny plaintiff=s motion. Id. at 8.
I.
This collection action stems from an agreement between plaintiff, a petroleum distributor,
and defendant, an owner and operator of a gas station and convenience store, under which
plaintiff agreed to provide defendant with petroleum for his gas station. See Dkt. # 3-2, at 4.
The parties executed a motor fuel marketing agreement on February 7, 2007 and a promissory
note on January 16, 2013. Id. at 4, 14. Pursuant to the terms of the motor fuel marketing
agreement, plaintiff periodically provided defendant with petroleum for his gas station and
defendant compensated plaintiff for the petroleum delivered. Id. at 4. Plaintiff alleges that, on
March 14, 2014, defendant authorized plaintiff to submit an ACH draw or draft for a $10,000
payment and on March 15, 2014, defendant authorized plaintiff to submit an ACH draw or draft
for a $5,443 payment. Dkt. # 39, at 5. Both payments were returned by the drawee bank
because defendant=s account had been closed.

Id.

Plaintiff asserts that it subsequently

submitted a notice of termination of the agreement to defendant and made demand for the
accelerated amount due under the note, which totaled $53,400.17. Id. at 5-6. Plaintiff asserts
that defendant failed to remit any further payment to plaintiff. Id. at 7.
Plaintiff subsequently filed suit in Tulsa County District Court, asserting a claim of
breach of contract against defendant. Dkt. # 3-2.

Defendant asserted a counterclaim that

defendant violated the PMPA by failing to comply with the provisions of the PMPA regarding
termination of agreement. Dkt. # 3-4. Defendant then removed the case to this Court. Dkt. #

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3. Plaintiff now moves for summary judgment, arguing that the undisputed facts show that
plaintiff is entitled to judgment as a matter of law.
II.
Before the Court considers the merits of plaintiff=s motion, it must first address the issue
of subject matter jurisdiction. The Court will consider the issue of subject matter jurisdiction
sua sponte because the Court has a duty to consider the issue whenever it appears that subject
matter jurisdiction may be lacking. Fed. R. Civ. P. 12(h)(3). Federal courts are courts of
limited jurisdiction, and there is a presumption against the exercise of federal
jurisdiction. Merida Delgado v. Gonzales, 428 F.3d 916, 919 (10th Cir. 2005); Penteco Corp.
Ltd. P=ship-1985A v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir. 1991). The party
invoking federal jurisdiction has the burden to allege jurisdictional facts demonstrating the
presence of federal subject matter jurisdiction. McNutt v. Gen. Motors Acceptance Corp. of
Ind., Inc., 298 U.S. 178, 182 (1936) (AIt is incumbent upon the plaintiff properly to allege the
jurisdictional facts, according to the nature of the case.@); Montoya v. Chao, 296 F.3d 952, 955
(10th Cir. 2002) (AThe burden of establishing subject-matter jurisdiction is on the party asserting
jurisdiction.@). The Court has an obligation to consider whether subject matter jurisdiction
exists, even if the parties have not raised the issue. The Tenth Circuit has stated that A[f]ederal
courts >have an independent obligation to determine whether subject-matter jurisdiction exists,
even in the absence of a challenge from any party,= and thus a court may sua sponte raise the
question of whether there is subject matter jurisdiction >at any stage in the litigation.=@ 1mage
Software, Inc. v. Reynolds & Reynolds Co., 459 F.3d 1044, 1048 (10th Cir. 2006) (quoting
Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006)).

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Federal courts have subject matter jurisdiction to hear Aall civil actions arising under the
Constitution, laws or treaties of the United States.@ 28 U.S.C. ' 1331. In deciding whether a
case arises under federal law, the court must follow the well-pleaded complaint rule, Aunder
which a suit arises under federal law >only when the plaintiff=s statement of his own cause of
action shows that it is based= on federal law.@ Schmeling v. NORDAM, 97 F.3d 1336, 1339
(10th Cir. 1996) (quoting Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908)).
Federal courts do not have subject matter jurisdiction when a federal law issue arises only as a
defense to plaintiff=s claims. Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation
Trust for S. Cal., 463 U.S. 1, 10-11 (1983). A counterclaim arising under federal law also does
not provide a basis for removal of a case in which the plaintiff has alleged only state law claims.
Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145 F.3d 320, 326-27 (5th Cir. 1998). The
well-pleaded complaint rule Amakes the plaintiff the master of the claim; he or she may avoid
federal jurisdiction by exclusive reliance on state law.@ Caterpillar, Inc. v. Williams, 482 U.S.
386, 392 (1987). Removal statutes are construed narrowly and the defendant seeking to remove
the case to federal court bears the burden to prove the existence of federal subject matter
jurisdiction. Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1094-95 (10th Cir. 2005); Montoya,
296 F.3d at 955.
The court has reviewed the petition and the notice of removal, and there is no basis for
this

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Court to exercise federal question jurisdiction over this case.1 Although plaintiff=s complaint
does not explicitly identify the PMPA, defendant=s notice of removal asserts that plaintiff=s claim
arises under the PMPA because the PMPA governs the parties= contractual agreement. Dkt. # 3.
The primary purpose of the PMPA is Ato protect franchisees against arbitrary and discriminatory
terminations or nonrenewals@ of motor fuel franchise agreements. Ewing v. Amoco Oil Co.,
823 F.3d 1432, 1438 (10th Cir. 1987). And the enforcement provision of the PMPA allows only
a franchisee to assert a claim under this Act. See 15 U.S.C. ' 2805 (AIf a franchisor fails to
comply with the requirements of section 2802, 2803, or 2807 of this title, the franchisee may
maintain a civil action against such franchisor.@). Here, plaintiff is the franchisor and defendant
is the franchisee. Plaintiff=s claim is merely a collection action, and, although the PMPA
provides defendant with certain rights regarding the motor fuel marketing agreement, it does not
govern plaintiff=s attempt to collect the unpaid amount defendant owes under the terms of the

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The Court also notes that the petition and notice of removal provide no basis for diversity
jurisdiction. Diversity jurisdiction requires parties that are completely diverse and an
amount in controversy in excess of $75,000. 28 U.S.C. ' 1332. Plaintiff recites that it
is a limited liability company duly authorized to transact business within the state of
Oklahoma with headquarters in Tulsa, Oklahoma and defendant is an individual residing
in Tulsa, Oklahoma. Dkt. # 3-2. Without further information, the Court cannot find
that the parties are completely diverse. And the amount in controversy falls below the
requisite amount because plaintiff seeks only $53,400.17, plus interest and costs. Dkt. #
39-1, at 4. In considering whether an amount in controversy satisfies the requisite
amount, Apossible interest or costs that might be allowed in connection with the federal
action should not be considered.@ Farmers Ins. Co., Inc. v. McClain, 603 F.2d 821, 823
(10th Cir. 1979). Although plaintiff also seeks attorney fees, this request does not figure
into the amount in controversy because the statutory authority for such an award treats
attorney fees as costs. See Dkt. # 39, at 13; see also OKLA. STAT. tit. 12, ' 936 (allowing
recovery of Aa reasonable attorney fee . . . to be taxed and collected as costs@ to prevailing
party in action regarding a contract for the purchase or sale of goods).
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agreement and accompanying note. Plaintiff=s claim thus does not arise under the PMPA.
Defendant=s counterclaim that plaintiff did not comply with the PMPA provisions regarding
notice of termination is based on federal law, but, under the well-pleaded complaint rule, this
does not give rise to federal question jurisdiction over a case in which the plaintiff has alleged
state law claims only. The Court finds that this case should be remanded to Tulsa County
District Court for lack of subject matter jurisdiction.
IT IS THEREFORE ORDERED that the Court lacks jurisdiction over this case, and
the Court Clerk is directed to remand the case to Tulsa County District Court.
IT IS FURTHER ORDERED that plaintiff=s motion for summary judgment and brief in
support (Dkt. ## 38, 39) remains pending.
DATED this 9th day of February, 2016.

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