PASADENA, Calif. -- A California Circuit Court has ruled that BP West Coast Products LLC acted in good faith and in the normal course of business when it sold two of its franchised am/pm Mini Marts in northern Nevada four years ago.
Former site lessee dealers Raymond May and Sharanjeet Ghumman argued their Petroleum Marketing Practices Act (PMPA) rights were violated when BP sold its interests in the two gasoline stations/convenience stores in August 2002.
The franchisees claimed BP deliberately advertised confidential convenience [image-nocss] store sales and gasoline volumes of its franchisees for third-party bidders to consider in their bid, according to court documents. They also argued, among other things, that BP created an incentive for third parties to bid higher values by providing for a break-up fee' based on a percentage of the overall bid price.
While BP did allow May and Ghumman the right of first refusal to purchase the stores they were operating, they claim the added incentives for a third party to bid higher made it difficult for them to match or beat those bids. May and Ghumman also obtained appraisals that showed the bids made for the sites were 36% (for May's site) and 117% (for Ghumman's site) more than their actual values.
BP sold the sites through a sealed-bid process conducted by the National Real Estate Clearinghouse (now NRC Realty Advisors), Scottsdale, Ariz. This was the first time BP used a sealed-bid process, according to court documents. The process has since become a standard practice. Judge Robert E. Cowen, in writing the ruling in favor of BP in May, noted that BP acted in compliance with the PMPA.
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