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Gles Inc v. MK Real Estate Developer & Tra, 11-2438 (2013)

Court: Court of Appeals for the Third Circuit Number: 11-2438 Visitors: 11
Filed: Jan. 23, 2013
Latest Update: Feb. 12, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 11-2438 _ GLES INC, f/t/a/ Sweet Oil Company v. MK REAL ESTATE DEVELOPER & TRADE COMPANY; MANINDER KOHLI; HARMEET KOHLI, Maninder Kohli; Harmeet Kohli, Appellants _ Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 08-cv-01447) Magistrate Judge: Honorable Karen M. Williams _ Submitted Pursuant to Third Circuit LAR 34.1(a) January 22, 2013 Before: RENDELL, FISHER and GARTH, Circui
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                                                                NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                      No. 11-2438
                                      ___________

                                       GLES INC,
                               f/t/a/ Sweet Oil Company

                                           v.

              MK REAL ESTATE DEVELOPER & TRADE COMPANY;
                   MANINDER KOHLI; HARMEET KOHLI,

                           Maninder Kohli; Harmeet Kohli,
                                    Appellants
                      ____________________________________

                     Appeal from the United States District Court
                             for the District of New Jersey
                             (D.C. Civil No. 08-cv-01447)
                    Magistrate Judge: Honorable Karen M. Williams
                     ____________________________________

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                   January 22, 2013

               Before: RENDELL, FISHER and GARTH, Circuit Judges

                            (Opinion filed: January 23, 2013)
                                     ___________

                              OPINION OF THE COURT
                                   ___________

PER CURIAM

      Appellants, Maninder Kohli and Harmeet Kohli (the “Kohlis”), a husband and

wife who operate retail gasoline businesses, appeal pro se a judgment entered against
them in a breach of contract action brought by GLeS, Inc., d/b/a Sweet Oil Company

(“Sweet Oil”), a gasoline wholesale distributor. For the reasons that follow, we will

affirm.

          The parties are familiar with the facts, so we will only briefly revisit them here. In

December 2005, after approximately one year of negotiations, Sweet Oil and the Kohlis

entered into a Sales Agreement. That Agreement, which stated that it was to be

“governed and construed in accordance with Delaware law,” required that the Kohlis

purchase a minimum quantity of gas from Sweet Oil over a 10 year period.1 The Sales

Agreement included an Addendum, which provided that the Kohlis would convert two

gas stations, located in Swedesboro and Pole Tavern, New Jersey, to the “BP” brand. As

part of the agreement, the Kohlis would “receive from BP” a “branding incentive” of

$30,000 per site, plus 2 cents per gallon of gas purchased during the first 36 months of

the Sales Agreement. The Kohlis were required to pay for all materials used in the

rebranding, but Sweet Oil was responsible for ordering the branding materials and paying

for the installation costs.




1
  The parties to the Sales Agreement were Sweet Oil and MK Real Estate Developer &
Trade Company, which is owned solely by the Kohlis. Under the Agreement, the Kohlis
personally guaranteed all obligations of MK Real Estate. Although MK Real Estate was
named as a defendant in the underlying complaint, it has been dismissed as a party to this
appeal because no attorney entered an appearance on its behalf. Simbraw v. United
States, 
367 F.2d 373
(3d Cir. 1966) (per curiam) (noting that a corporation must be
represented by a licensed attorney).

                                                2
       In March 2008, Sweet Oil filed a complaint in the United States District Court for

the District of New Jersey, alleging that the Kohlis failed to pay several invoices for

gasoline purchases and branding costs. The Kohlis filed a counterclaim, asserting that

Sweet Oil did not properly credit them with the branding incentives and did not

reimburse them for labor expenses associated with the installation of rebranding

materials. In response, Sweet Oil denied that a branding incentive agreement existed

between it and the Kohlis, and claimed that BP had notified the Kohlis that they were

ineligible for the incentives because they failed to fully brand their gas stations. The

attorneys for the parties consented to proceed before a Magistrate Judge. See Frank v.

Cnty. of Hudson, 
962 F. Supp. 41
, 43 (D.N.J. 1997) (stating that an “attorney‟s consent to

proceed before a magistrate judge is sufficient under the statute.”). Following a bench

trial, the Magistrate Judge entered judgment in favor of Sweet Oil in the amount of

$244,210.97, which represented the outstanding invoices plus interest, and ruled against

the Kohlis on their counterclaim. Gles, Inc. v. MK Real Estate Developer & Trade Co.,

2011 WL 1769818
(D.N.J. May 6, 2011) (not precedential). The Kohlis appealed.

       We have jurisdiction pursuant to 28 U.S.C. §§ 636(c)(3) and 1291. In general, we

review a District Court‟s findings of fact following a bench trial for clear error, but we

exercise “plenary review over [the][D]istrict [C]ourt‟s conclusions of law” and its

“choice and interpretation of legal precepts.” Am. Soc‟y for Testing & Materials v.

Corrpro Cos., 
478 F.3d 557
, 566 (3d Cir. 2007) (quotation marks omitted).


                                              3
       The Kohlis challenge the rejection of their counterclaim. In particular, the Kohlis

assert that they were entitled to “an up-front, lump sum $60,000 branding incentive and a

3-year, 2 cent per gallon credit−promised by [Sweet Oil] in its contract with the

[Kohlis].” The Addendum to the Sales Agreement provides that the Kohlis “will re-

brand the Swedesboro Mobil & Pole Tavern Mobil locations to BP effective January 1,

2006” and “will pay for all materials to be used in re-branding the 2 Mobile sites to BP.”

Paragraph 4 of the Addendum states that the Kohlis “will receive from BP $30,000.00 per

site for branding incentive, plus 2 cents per gallon of gasoline purchased for the first 36

months of the Sales Agreement (to be paid as per BP‟s JOIP program)[.]”2 Prior to trial,

the Kohlis stipulated to their understanding that “[i]f [they] met the image requirements

as established by BP as the national franchise whose „brand‟ [they] were to represent,

Branding Incentives would entitle [them] to $30,000 for each of the two stations being re-

branded and a $.02 cent per gallon rebate of all gallons sold during the first 36 months of

the agreement.” The Kohlis also stipulated that, other than paragraph 4 of the

Addendum, the only evidence that they were entitled to the branding incentives, and that

Sweet Oil had the responsibility to provide those incentives, was “based on past

relations.”



2
  JOIP stands for Jobber Outlet Incentive Program and provides incentives for retailers to
acquire and maintain BP gas stations. Details about the JOIP program were not included
in the Sales Agreement.


                                              4
       Importantly, because BP was not a party to the Sales Agreement, and there was no

evidence indicating that BP had an agency relationship with Sweet Oil, BP cannot be

held liable under the contract. See Chrysler Corp. v. Airtemp Corp., 
426 A.2d 845
, 855-

56 (Del. Super. Ct. 1980) (holding that “where a contract exists „no person can be sued

for breach of contract who has not contracted either in person or by an agent‟”) (quoting

Roman Mosaic & Tile Co., Inc. v. Vollrath, 
313 A.2d 305
, 307 (Pa. Super. Ct. 1973)).

The Kohlis also claim that Paragraph 4 of the Addendum is ambiguous, and therefore

should have been interpreted in light of the parties‟ prior conduct and industry practice. 3

As Sweet Oil notes, however, the Kohlis did not raise this argument in the District Court.

See Corn Plus Coop. v. Cont‟l Cas. Co., 
516 F.3d 674
, 680 (8th Cir. 2008) (holding that

the failure to raise before the District Court an argument that an insurance contract

provision is ambiguous results in waiver of that argument on appeal). In any event, the

Magistrate Judge properly concluded that the Kohlis were not entitled to the incentives

because their stations were never fully branded as BP stations. In particular, the

Magistrate Judge found that Sweet Oil employees had repeatedly informed the Kohlis


3
 The Kohlis assert that “[o]il companies pay incentives „up front‟ to jobbers for the
conversion of gasoline stations to their brands.” The Magistrate Judge found “no need to
deviate from the express wording contained in the Agreement” and concluded that the
Kohlis‟ “past agreements with [Sweet Oil] are irrelevant since the testimony and
evidence firmly establish that by way of this Agreement [the parties] were entering into
an entirely different business arrangement.” These determinations were not erroneous.
See In re Explorer Pipeline Co., 
781 A.2d 705
, 713-14 (Del. Ch. 2001) (“[u]nless the
contract language is ambiguous, extrinsic evidence may not be used to interpret the intent
of the parties, to vary the terms of the contract or to create an ambiguity.”) (quotations

                                              5
about their failure to install and comply with required BP identifiers, such as the Helios

sign logo, point of sale material, curb color, canopy lighting, valances for the gas pumps,

and uniforms.

       The Kohlis also challenge the Magistrate Judge‟s conclusion that they failed to

show that Sweet Oil breached the Sales Agreement by failing to reimburse them for the

cost of installing branding material. The Addendum provided that Sweet Oil “will supply

all labor to install branding material.” While the Kohlis were negotiating the Sales

Agreement with Sweet Oil, they elected to make improvements to the gas pumps at the

Swedesboro and Pole Ridge stations. In particular, the Kohlis paid Monridge

Construction Company (“Monridge”) a total of $68,210 for installation of new gas

pumps, which included work on piping and blacktop replacement. The Magistrate Judge

found that Sweet Oil was not responsible for these costs because the work done by

Monridge was not “branding specific” and because the Kohlis “continue to utilize the

equipment installed by Monridge at [their] existing stations[,] unlike any BP branding

materials which have been removed.” We agree.

       Finally, we note that the Kohlis have submitted numerous requests to supplement

the record with evidence that was not presented in the District Court. In particular, the

Kohlis seek to submit documents allegedly demonstrating that they were not responsible

for the cost of the branding materials, that their stations were in compliance with the


and citations omitted).

                                             6
branding requirements, and that Sweet Oil failed to reveal that it had been doing business

since 2005 under another corporate name, GPM Investments, LLC. Federal Rule of

Appellate Procedure Rule 10(e) permits correction or modification of the record “[i]f

anything material to either party is omitted from . . . the record by error or accident . . . .”

In this case, we conclude that there is no reason to employ Rule 10(e) or any equitable

power we may have to include the evidence identified in the Kohlis‟ motions, because

that evidence was either previously available or not material to their claims. See In re

Cmty. Bank of N. Va., 
418 F.3d 277
, 317 n.32 (3d Cir. 2005). Accordingly, the Kohlis‟

motions to supplement the record, their request for leave to file a supplemental appendix,

and all pending motions, are denied.

         For the foregoing reasons, we will affirm the judgment of the District Court.




                                               7

Source:  CourtListener

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