Getty Petroleum Corp. v. Shore Line Oil Co., Inc., CV 85-3911.

642 F. Supp. 203

GETTY PETROLEUM CORP., Plaintiff, v. SHORE LINE OIL COMPANY, INC., Anthony Mazzara and Sally Mazzara, Defendants.

No. CV 85-3911.

United States District Court, E.D. New York.

July 16, 1986.

Robert G. Del Gadio, Garden City, N.Y., for plaintiff.

Marcus, Ollman & Kommer, P.C., New Rochelle, N.Y., for defendants; John S. Kommer, of counsel.

MISHLER, District Judge.

Getty Petroleum Corp. ("Getty Petroleum") moves to punish defendant Shore Line Oil Company, Inc. ("Shore Line") and its president, Louis Capossela, for contempt in the violation of this court's permanent injunction order dated November 14, 1985 issued on consent of Shore Line in accordance with a stipulation of settlement dated November 7, 1985. The order provides in pertinent part:

that Shore Line Oil Company, its agents, servants, employees, attorneys and all persons in active concert or participation with it are hereby enjoined from any manner directly or indirectly, selling, transporting or delivering any gasoline or petroleum product to any gasoline station bearing the mark and designation GETTY.

The language is that to which Shore Line consented in the stipulation of settlement. Shore Line's response is that it understood that the injunctive provision covered only Getty-owned gasoline service stations and not stations individually owned.¹ Subsequent to November 14, 1985, Shore Line delivered non-branded gasoline to the following three gasoline service stations that are "individually owned" selling gasoline under the trademark "GETTY":

1. Eastchester Creek Gas Station, Inc., ("Eastchester Creek") 759 South Fulton Avenue, Mt. Vernon.

2. Dom's Service Station, ("Dom's") 268 Tarrytown Road, Greenburgh.

3. Auto Center, 43 Virginia Road, White Plains.

Shore Line moves to vacate and set aside the permanent injunction order.

The court conducted a hearing and finds: From November 9, 1985 to January 23, 1986, Shore Line made deliveries of gasoline totalling:

To Eastchester Creek
   Regular Unleaded           215,700 gals
   Super Unleaded             214,200
   Regular Leaded             187,500
To Dom's
   Regular Unleaded             2,504
   Super Unleaded              13,034
   Regular Leaded               9,492
To Auto Center
   Regular Unleaded             7,001
   Super Unleaded               4,000
   Regular Leaded               8,501

During the period approximately sixty-seven (67) deliveries were made by Shore Line to Eastchester Creek; six (6) deliveries to Dom's; and five (5) deliveries to Auto Center. Eastchester Creek also purchased unbranded gasoline from Dino Petroleum, a Shore Line competitor.

In February, 1985, Getty Petroleum's predecessor in title to the many franchised gasoline stations operating under the "GETTY" trademark was acquired by Getty Petroleum under a corporate name of Power Test.

Eastchester Creek operated as an individually owned gasoline station under a Getty franchise since 1970. On December 14, 1981, Eastchester entered into a franchise agreement (described as a "Dealer Contract") for a period of 3 years and 6 months with Getty Refining and Marketing Company ("Getty Refining"), predecessor to Power Test. The agreement, by its terms, was extended from year to year "provided, however, that Dealer franchisee may cancel this contract at any time so long as he gives Company franchisor at least ninety (90) days prior written notice to cancel same." The agreement provided that:

Company shall sell and deliver to Dealer and Dealer shall purchase and take from Company during the term hereof Dealer's requirements of Company's Gasolines, Motor Oils, Greases and inventory for resale at the above premises of Dealer.

Prior to 1981 and subsequent thereto Eastchester Creek purchased about one-third of its gasoline from sources other than Getty Refining. Some of the supply of gasoline was purchased on the "spot market" at a cost of 10¢ to 15¢ less than the cost of Getty gasoline. Getty Refining was fully aware of the practice and countenanced this deception practiced on the consuming public.

When Power Test succeeded to Getty Petroleum's rights as franchisors in February, 1985, Power Test was aware of the practice and acquiesed in the practice after it obtained control of the supply of the gasoline stations. The practice continued in and after July 1985, when Power Test changed its name to Getty Petroleum Corp.²

Since February 1985, the time of the takeover from Getty Refining, Power Test and Getty Petroleum did not supply regular leaded gasoline. Leaded regular gasoline was sold to the public under the GETTY trademark with the knowledge and acquiescence of Power Test and Getty Petroleum.

DISCUSSION

Claims to the exclusive use of trade marks and names and for infringement, of the right are subject to equitable defenses. Under Section 33(b)(3) of the Lanham Act, 15 U.S.C. § 1115(b)(3) the right to use a mark which has become incontestable (Section 15 of the Lanham Act, 15 U.S.C. § 1065) is subject to the defense

That the registered mark is being used, by or with the permission of the registrant, so as to misrepresent the source of the goods or services in connection with which the mark is used.

In Carl Zeiss Stiftung v. V.E.B. Carl Zeiss Jena, 293 F.Supp. 892, 917 (S.D.N.Y. 1968) (Mansfield, D.J.) distinguishing the defense of laches from acquiescence, held:

As distinguished from laches, acquiescence constitutes a ground for denial of relief only upon a finding of conduct on the plaintiff's part that amounted to an assurance to the defendant express or implied that the plaintiff

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