Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Two Brothers Distributing Inc. v. Valero Marketing and Supply Co.

United States District Court, D. Arizona

November 25, 2015

Two Brothers Distributing Inc., et al., Plaintiffs,
v.
Valero Marketing and Supply Co., Defendant.

ORDER

DAVID G. CAMPBELL, UNITED STATES DISTRICT JUDGE.

Plaintiffs in this case include Two Brothers Distributing, Inc. (“Two Brothers”), an Arizona-based gasoline distributor, and ten associated gasoline retailers (the “Station Plaintiffs”). On August 31, 2015, Plaintiffs filed an amended complaint against Valero Marketing and Supply Company (“Valero”) asserting claims for breach of contract, fraud, tortious interference with contract, and violation of the Robinson-Patman Act. Doc. 12. Valero filed a motion to dismiss for failure to state a claim (Doc. 16), and Plaintiffs have filed a response (Doc. 24).[1] The Court has determined that oral argument will not aid in its decision, and Defendant’s request for oral argument is therefore denied. See Fed. R. Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). The Court will grant Defendant’s motion to dismiss with respect to Plaintiffs’ fraud and Robison-Patman Act claims, and deny Defendant’s motion with respect to the remaining claims.

I. Background.

Two Brothers is an Arizona-based corporation that distributes gasoline to third-party retailers in the Phoenix area. Doc. 12. The Station Plaintiffs are nine Arizona corporations and one foreign corporation that purchase gasoline from Two Brothers for retail. Valero is a foreign corporation that sells gasoline. Id. Prior to 2013, Valero sold gasoline both at the wholesale level and at its own retail stations. Id., ¶ 5. In 2013, Valero spun off all of its retail operations to CST Brands, Inc. (“CST”). Id.

In February 2007, Two Brothers entered a “Branded Distributor Marketing Agreement” with Valero (“Distributor Agreement”). Id., ¶ 26. Valero agreed to sell, and Two Brothers agreed to purchase, a minimum quantity of gasoline. Id. The agreement provided that the price would be fixed by Valero. Id., ¶ 80. Around the same time, Valero and Two Brothers entered “Brand Conversion Incentive Agreements” for each of the stations supplied by Two Brothers (“Brand Agreement”). Id., ¶ 27. Pursuant to these agreements, these stations became Valero-branded stations and were approved to purchase fuel from Two Brothers under the terms of the Distributor Agreement. Id.

Between consummation of the Distributor Agreement in February 2007 and August 2009, Two Brothers complained frequently to Valero about its pricing. Id., ¶ 51. The parties nonetheless executed two subsequent Distributor Agreements in July 2011 and July 2013. Id., ¶¶ 60, 61.

On May 20, 2015, Plaintiffs filed a complaint against Defendant in Maricopa County Superior Court. Doc. 1-1 at 6. Defendant removed the case to this Court under 28 U.S.C. § 1441. Doc. 1. On August 31, 2015, Plaintiffs filed an amended complaint asserting claims for breach of contract, fraud, tortious interference, and violation of the Robinson-Patman Act. Doc. 12. Each of these claims relates to Defendant’s pricing practices under its contracts with Two Brothers, which Plaintiffs allege were unfair and designed to drive Plaintiffs out of business. See id., ¶¶ 41, 47-48, 56-57, 65.

II. Legal Standard.

To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Well-pleaded factual allegations are taken as true and construed in the light most favorable to the plaintiff. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not entitled to a presumption of truth, Iqbal, 556 U.S. 662, 680 (2009), and are not sufficient to defeat a 12(b)(6) motion, In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010).

III. Contract Claims.

Plaintiffs allege that Defendant materially breached the 2007, 2010, and 2013 Distributor Agreements and the various Brand Agreements by setting prices in bad faith. Doc. 12, ¶¶ 76, 83-86, 92. Defendant argues that these claims are time-barred, Doc. 16 at 9, waived, id. at 15, and foreclosed by the integration clauses included in each contract and by the statute of frauds. Id. at 12, 16. Defendant also argues that the Station Plaintiffs lack standing to pursue any contract claims. Id. at 20.

1. Statute of Limitations.

In Arizona, contract claims are subject to a four-year statute of limitations. A.R.S. § 47-2725(A). The limitations period begins to run when the contract is breached. Baseline Fin. Servs. v. Madison, 278 P.3d 321, 322 (Ariz.Ct.App. 2012) (citing A.R.S. § 47-2725(B)). Because this case was filed on May 20, 2015, timely claims would include breaches after May 20, 2011.

Defendant contends that all contract claims are time-barred because the alleged breaches began in 2009. Doc. 16 at 9-10. Plaintiffs contend that none of their claims are barred because Defendant’s breach was ongoing until at least 2013. Doc. 24 at 2-3. Alternatively, Plaintiffs argue that their claims for breaches of the 2010 and 2013 Distributor Agreements survive.

The Court cannot grant Defendant’s motion on this issue. The motion seeks dismissal of all breach of contract claims, but Defendant does not explain how a 2013 Distributor Agreement could have been breached by actions that occurred before May 20, 2011. Nor does the Court have sufficient factual information regarding the alleged breaches to draw fine lines between timely and untimely breach claims. That level of factual detail must be provided in the context of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.