ELR Citation: ELR 21210
No(s). 90-1682 (1st Cir. Apr 18, 1991)

The court holds that franchise contracts between a gasoline station proprietor and his franchisor bar state claims by the proprietor's estate against the franchisor for reimbursement of cleanup and underground tank removal costs and for contribution and indemnification of cleanup costs. The franchisor sold four underground tanks and related piping located at the station to the proprietor's lessee for $26.25. After the lessee subsequently ceased operations, the city ordered the franchisee's estate to remove the tanks. Soil contamination was discovered upon removal of the tanks. The court first holds that the provision of the franchise contracts barring claims brought against the franchisor more than 12 months after the event to which the claims related was sufficiently broad to encompass the estate's claims that the sale of the tanks and the piping for $26.25 violated Massachusetts statutory law prohibiting unfair and deceptive business practices. The court also holds that there was no evidence that a one-year limitations period was contrary to Massachusetts public policy. Applying the holding of the Massachusetts Supreme Judicial Court in Hazen Paper Co. v. United States Fidelity and Guaranty Co., 20 ELR 21457, the court next holds that the cleanup efforts undertaken at the gas station were in response to actual damage and were therefore covered under the terms of the indemnity clause of the franchise contracts. The court vacated and remanded that portion of the district court's ruling relating to tank removal costs, holding that the record before the district court, and the district court's ruling on that record, did not differentiate in sufficient detail between the factual contexts of the cleanup and removal costs to permit the court to responsibly conclude that the Hazen holding was applicable to the present case.

Counsel for Appellant
Robert F. Corliss
Katz, Fanger & Greeley
75 Federal St., Boston MA 02110
(617) 482-0200

Counsel for Appellee
Robert M. Gault, Rosemary M. Allen
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo
One Financial Center, Boston MA 02111
(617) 542-6000

Before TORRUELLA and SELYA, Circuit Judges, and POLLAK,^* Senior District Judge.