A Shell game? Former service station operator sues oil giants

MetroWest Daily News: A Shell game? Former service station operator sues oil giants

“Court filings at the U.S. District Court in Boston outline a pattern of deception and abuse by Suttill’s former bosses that allegedly violates the Petroleum Marketing Practices Act, a federal law that protects gasoline retailers from heavy-handed practices of powerful, multibillion-dollar oil suppliers.”: “Motiva is co-owned by Houston-based Shell Oil Co. and the state-owned Saudi Arabian Oil Co., the world’s largest oil producer”

By Craig M. Douglas / News Business Writer

Sunday, October 3, 2004

FRAMINGHAM — A Holliston man who once owned the Framingham Shell gas station on Franklin Street is trying to recover $130,000 from his former employer after he was unceremoniously fired from his business, according to court records.

Thomas Suttill Jr. claims his 4-year-old franchise agreement with Motiva Enterprises and Equiva Services, which are both owned by some of the largest oil producers in the world, was terminated without notice.

Court filings at the U.S. District Court in Boston outline a pattern of deception and abuse by Suttill’s former bosses that allegedly violates the Petroleum Marketing Practices Act, a federal law that protects gasoline retailers from heavy-handed practices of powerful, multibillion-dollar oil suppliers.

The suit was filed in June, roughly four months after Suttill was “ejected” from his business, according to his suit. In a court filing in July, Motiva and Equiva denied any wrongdoing.

Robert Resnick, the Motiva representative who terminated Suttill in February, describes how he personally delivered the termination agreement to Suttill, who then allegedly signed the document in his presence.

Prior to his firing, Suttill acknowledged in court documents and a June 2002 interview in the MetroWest Daily News that his business suffered in the aftermath of 9/11 and the 2001 recession. Those claims were recently backed by other local business owners who considered buying Framingham Shell’s assets earlier this year.

Attempts to contact Suttill for this story were unsuccessful. His attorney, Jennifer O’Brien of Davids & Schlesinger in Wellesley, declined repeated requests to comment on the suit.

After Suttill’s dismissal, Motiva hired ENT Inc. of Shrewsbury to manage the local gas station. Tony El Nemr, ENT’s owner, operates 38 other gas stations throughout the commonwealth, according to company officials.

Attempts to contact Motiva, Resnick and El Nemr for this story were unsuccessful.

Motiva is co-owned by Houston-based Shell Oil Co. and the state-owned Saudi Arabian Oil Co., the world’s largest oil producer. Motiva is the U.S. refinery and delivery arm of the Shell and Saudi Aramco partnership. Along with its sister company, Shell Oil Products U.S., formerly known as Equilon, Motiva co-owns Equiva Services, the other defendant in Suttill’s suit.

Suttill worked for many years as a mechanic at the Framingham Shell station. After buying the franchise for $120,000 in 2000 from Jon Snow, Suttill’s business “began to decline” after the terrorist attacks of Sept. 11, 2001, according to court documents. The drop in revenue prompted him to try and unload the local station last winter.

Suttill’s suit claims he was pushed out the door once Motiva learned about his desire to sell.

Michael Forman, an auto mechanic and the owner of Absolute Car Care in Framingham, was one of the potential buyers who once considered Suttill’s offer. After weeks of negotiations, Forman said he broke off talks after Suttill failed to produce the business’ financial records.

“I think there were multiple people in town who were interested in the property,” said Forman during a recent interview. “He’s a nice guy, just not a very sharp businessman. Based on what Tom presented to me… the station was basically worthless. There was no business to buy out.”

Under Suttill’s franchise agreement with Motiva and Equiva, the local station was expected to pay between $6,000 and $8,000 in royalty payments each month — “just an astronomical number,” Forman said.

Suttill was also responsible for the station’s lighting and repairs, while Motiva and Equiva took care of the property’s gasoline equipment and main building.

Forman said the station’s operating costs were “killing” Suttill, a situation that was worsened by the site’s underperforming auto-repair garage. The business’ repair revenues were around $40,000 a month, he said.

By comparison, revenue from Forman’s Absolute Car Care was around $100,000 per month at that time.

“Everybody’s business took a hit after 9/11,” he said. “We cut the fat and dug our heels in. Personally, I’m not really sure that happened over there.”

In the end, Forman said his offer was around “$80,000 less than (Suttill) was even thinking about taking.”

Despite his criticism of Suttill’s business savvy, Forman still thinks the former mechanic got a raw deal.

“This thing was premeditated. I think they (Motiva and Equiva) saw the handwriting on the wall and did what they needed to do,” he said. “(Suttill) was a nice, nice kid…But you’ve got to watch your back. There’s no loyalty in this business anymore.”

Suttill’s suit claims Motiva and Equiva changed their delivery and billing schedules once they learned of his intention to sell. He said the gasoline giants doubled the amount of product delivered to his station each week while forcing him to make up-front payments in full. In the past, Suttill said inventory payments were made after the gasoline was sold to customers.

The change left the cash-strapped Suttill without gas on at least two occasions, according to his suit. When he voiced concern over the change, Suttill said the delivery agent told him “to learn to deal with it.”

Suttill said he never received written notice that his franchise agreement would be terminated. His suit does not document whether Suttill ever signed a termination agreement.

Under the Petroleum Marketing Practices Act, such notification is required 90 days before a franchisee can be fired. Passed in 1978, the act was written to prevent gasoline suppliers from “arbitrary or discriminatory” termination of their franchise agreements.

In a request for an injunction against the oil giants, which was denied by the judge in July, Suttill’s attorney noted his dire financial situation.

“Without his business, including the ability to transfer his interest in that business to a new owner, Mr. Suttill now faces personal bankruptcy,” the lawyer stated in the filing.

The case’s pretrial hearing is scheduled for Jan. 5 before U.S. District Court Judge Rya Zobel.

(Craig Douglas can be reached at [email protected] or 508-626-3964.) )

http://www.metrowestdailynews.com/localRegional/view.bg?articleid=79551

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