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Exxon Mobil Oil Corp. v. Thomas

December 4, 2006

EXXON MOBIL OIL CORPORATION, PLAINTIFF,
v.
MICHAEL F. THOMAS, D/B/A FINISH LINE ENTERPRISES, DEFENDANT.



The opinion of the court was delivered by: Thomas A. Varlan United States District Judge

(VARLAN/SHIRLEY)

MEMORANDUM OPINION

This civil action is before the Court on plaintiff's Motion for Summary Judgment [Doc. 13], in which plaintiff seeks $187,292.86*fn1 on the grounds that there are no genuine issues of material fact as to defendant's breach of contract and plaintiff is therefore entitled to judgment as a matter of law. The Court has carefully considered the pending motion and supporting brief [Doc. 14] as well as the parties' response and reply memoranda [Docs. 20, 21, 28, 34, 35] in light of the applicable law. For the reasons set forth herein, plaintiff's motion for summary judgment will be granted.

I. Relevant Facts

On July 10, 2002, plaintiff Exxon Mobil Oil Corporation ("Exxon") and defendant Michael F. Thomas entered into a Supply Agreement [Doc. 14, Ex. 1 ("Supply Agreement")], through which Mr. Thomas agreed to purchase a minimum amount of lubricant products per year from Exxon for various locations of his business, Finish Line Enterprises. [Supply Agreement at 1]. On August 1, 2002, Exxon and Mr. Thomas entered into a Reimbursement Agreement [Doc. 14, Ex. 2 ("Reimbursement Agreement")], through which Exxon agreed to loan Mr. Thomas $295,000 to enable him to acquire equipment necessary for the handling, storing, and dispensing of the lubricant products purchased under the Supply Agreement. [Reimbursement Agreement at 1.] Like the Supply Agreement, the Reimbursement Agreement established a minimum amount of lubricant products Mr. Thomas was required to purchase each year and provided that the loan made to Mr. Thomas would be reduced by $0.702 for each gallon of lubricant purchased under either the Supply or Reimbursement Agreement. [Reimbursement Agreement at ¶¶ 2-3.] The Reimbursement Agreement further provided that Mr. Thomas would be required to reimburse Exxon for any funds not amortized through the purchase of lubricant products and that default under the Supply Agreement would result in default under the Reimbursement Agreement, thereby triggering immediate repayment of all sums owed under both agreements. [Id. at ¶¶ 3, 5.] Both of these agreements were subsequently amended by the parties on March 1, 2004 to reduce the amount of lubricants Mr. Thomas was required to purchased under each agreement. [Doc. 21 at ¶¶ 11-13.] Those amendments are not in dispute.

Also on March 1, 2004, the parties entered into a Three-Way Agreement [Doc. 14, Ex. 3 ("Three-Way Agreement")] with non-party Keene Financial Corporation ("Keene"). Through this agreement, Mr. Thomas agreed to release Keene from any contractual obligations related to the Finish Line premises located at 703 Parkway in Sevierville, Tennessee and Keene agreed to purchase lubricant products from Exxon. [Three-Way Agreement at 1.]

Exxon argues that Mr. Thomas defaulted under the Supply Agreement by failing to pay $37,466.50 for lubricant products supplied to him by Exxon. [Doc. 14 at 4.] Exxon further argues that, pursuant to paragraph 5 of the Reimbursement Agreement,*fn2 Mr. Thomas's breach of the Supply Agreement constitutes breach of the Reimbursement Agreement. [Id.] Mr. Thomas does not contest that he owes money under the Supply and Reimbursement Agreements, but argues that he is entitled to an off-set of $17,160.12 for amounts owed under the Supply Agreement [Doc. 21 at ¶ 15] and that "the balance is less than $100,000" for amounts owed under the Reimbursement Agreement [id. at ¶ 19].

Exxon filed suit in this Court on February 22, 2005, seeking to recover amounts owed to it under the Supply and Reimbursement Agreements. [Doc. 1.] On May 25, 2005, the Court entered an Agreed Conditional Order of Dismissal [Doc. 9], which dismissed this action conditioned upon Mr. Thomas's payment of certain amounts over a set period of time.

Mr. Thomas did not make all of the payments required by the Agreed Conditional Order of Dismissal and Exxon subsequently reopened this case.

II. Analysis

A. Standard of Review

Under Fed. R. Civ. P. 56(c), summary judgment is proper if "the pleadings, depositions, answers to interrogatories, admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." The burden of establishing there is no genuine issue of material fact lies upon the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 330 n.2 (1986). The court must view the facts and all inferences to be drawn therefrom in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 310 F.3d 937, 942 (6th Cir. 2002). To establish a genuine issue as to the existence of a particular element, the non-moving party must point to evidence in the record upon which a reasonable jury could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that might affect the outcome of the suit under the governing law. Id.

The judge's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper jury question, and not to weigh the evidence, judge the credibility of witnesses, and determine the truth of the matter. Id. at 249. Thus, "[t]he inquiry performed is the threshold inquiry of determining whether there is the need for trial -- whether, in other words, there are any genuine factual issues that ...


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