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Note: Eagle Fuels, LLC (Seller) contracted with Ray Perrin, d/b/a Millennium Super Stop, LLC (Buyer), to supply Conoco/Phillips branded fuel products to Buyer's two convenience stores for ten years with an option for an additional five years at Seller's discretion and with a minimum purchase requirement. Seller had a right of first refusal to lease the property in the event it was re-leased. The contracts required that Buyer provide "a [USD] 60,000.00 [standby] letter of credit or motor fuel surety bond to guarantee payment of fuel purchases ... [as] a pre-condition of the contracts." Buyer also executed a separate landowner guaranty promising that any new lessee or new owner would be required to honor the fuel agreement.

When Buyer failed to provide the standby and subsequently leased the stores to Asif Kiayani's two companies, Rawal Rock, Inc. and 786 Enterprises, Inc. (Lessee) without requiring them to purchase fuel from Seller, Seller sued Buyer and Lessee, alleging that Buyer failed to purchase fuel as required by the contracts and to offer Seller a right of first refusal to lease the property and also that Lessee tortuously interfered with the contracts between Buyer and Seller. The U.S. District Court for Western Division of Missouri, Hays, Magistrate Judge, entered judgment for Seller and against Buyer and Lessee.

Buyer contended that "he was unable to meet the condition of a fuel bond or letter of credit, and thus, the contracts were never effected." The Judge ruled that Buyer breached a valid contract when he decided not to obtain a fuel bond or LC because of a better deal offered by Lessee. The Judge also stated that Buyer "did not seek any other companies to provide a fuel bond, ... had sufficient funds to obtain a letter of credit" but did not due to a high premium or significant collateral requirement, and neither contacted Seller about the issue nor asked for assistance from Seller.

Lessee contended that he could not have tortuously interfered with Buyer and Seller's contracts because Buyer, unable to get a bond or LC, had already decided not to perform the contracts before contracting with Lessee. The Judge ruled against the contention, concluding that "but for [Lessee's] offer to lease the stores, [Buyer] would have performed under the terms of the ... contracts" and eventually obtained a bond or LC.

[JL]

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