MEMORANDUM DECISION AND ORDER Plaintiff is the long-time operator of a Shell gasoline station located on Long Island. Defendants are the suppliers or franchisors. There are no claimed breaches by either to the relationship agreement. Rather, this case arises out of Defendants’ attempted nonrenewal of the franchise agreement, and Plaintiff’s efforts to stave off the nonrenewal and termination. Before the Court at this threshold stage is Plaintiff’s motion for a preliminary injunction to stay the nonrenewal. This action was brought under the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. §2801 et seq., to enforce Plaintiff’s rights under certain lease and franchise agreements to sell, as a “retailer”, Shell-branded gasoline and operate a convenience store at 100 W. Merrick Road, Valley Stream, New York 11580 (“Premises”). On June 7, 2022, Plaintiff moved by Order to Show Cause to stop the non-renewal and termination process (DE 4). On June 9, 2022, the Court scheduled a telephone conference to set a briefing schedule and to address the request for a temporary restraining order (Electronic Order dated June 9, 2022). The conference, which was ultimately held on June 13, 2022,1 led to an agreement between the parties to extend the non-renewal/termination dates to June 30, 2022, without prejudice to either waiving any arguments (DE 14).2 A briefing schedule was adopted and hearing set for June 27. (Id.) By joint letter dated June 22, 2022, the parties advised the Court that neither party considered that fact issues existed that would necessitate an evidentiary hearing and instead sought oral argument on the return date (DE 18). Defendants answered, denied all material allegations and asserted counterclaims (DE 17). They also filed opposition to the motion and in turn, submitted an Order to Show Cause seeking a declaration, a permanent injunction and judgment of eviction.3 On June 27, 2022, counsel appeared before the Court for the hearing on the motion for a preliminary injunction (see Transcript of Hearing, DE 29). The Court reserved decision, affording the parties the opportunity to submit letter-briefs on the issue of whether (and to what extent) security or a bond should be considered by the Court if a preliminary injunction were to be granted (DE 22). The parties have since filed those letter briefs (see DE 25; DE 26; DE 27). Having considered the submissions of the parties, including argument on the hearing date, the following constitutes the Court’s findings of fact and conclusions of law, see Fed. R. Civ. P. 65(d) and 52(a); see also Weitzman v. Stein, 897 F.2d 653, 658 (2d Cir.1990), and the Court grants Plaintiff’s motion for a preliminary injunction as set forth below. I. BACKGROUND a. The Governing Agreements Since 1996, Plaintiff Gurcharan Brothers Oil Co., Inc. aka Gurcharan and Brothers Oil Company Inc. (“GBOC”) operated a Shell service station at the Premises, which includes a gas station and a convenience store. (DE 4-3 at 1-2.) GBOC is a “retailer” of Shell-branded gasoline pursuant to 15 U.S.C. §2801(7) of the PMPA, and a “franchisee” of Defendants SEI Fuel Services, Inc. and 7-Eleven, Inc. (DE 4-2 at 1; DE 21 at p.5.) The Franchise Agreement consists of (1) a Retail Facility Lease dated December 12, 2013, eff. January 1, 2014 (Pltfs. Ex. 7 at DE 4-7) and (2) a Retail Sales Agreement4 also dated December 12, 2013 (Pltfs. Ex. 8 at DE 4-8; Defs. Ex. 2 at DE 21-3; Defs. Ex. 1 at DE 21-1). Plaintiff had originally entered into these two agreements with Apache Oil Co., Inc. (“Apache”) (DE 21 at p. 5.) GBOC agreed to purchase Shell products from Apache at the Premises. Id. The Apache documents, to the extent they exist, are less than clear.5 Neither party provided the Court with the underlying Master Lease (“ML”) to the Premises, although references to that ML are made in a document entitled “Agreement Extending and Amending Lease” dated August 29, 2007 (DE 4-9), another document entitled “First Addendum to retail Facility Lease Agreement” (which is undated, and only an incomplete and unsigned version submitted to Court (id. at p. 5), and in the Declaration of Neil Duffy, Northeast Wholesale Fuels Market Manager for SEI Fuel Services, Inc. (DE 21-9). Both agreements were submitted by GBOC in support of the motion, and both would appear to support, or at least raise serious questions, about the lease agreement being extended to June 30, 2027.6 (see also DE 27 and 27-1.) On June 25, 2019, Apache and Defendant 7-Eleven entered into a sublease of the Premises which, under the terms of the sublease, ends June 30, 2022 (see DE 21-4). That Sublease refers to and incorporates by reference, the ML, “including all amendments.” (Id.) The Sublease term refers to the ML expiration as being “June 30, 2022 with one renewal option of five years each.” (See Sublease 9, DE 21-4.) On that same date, namely, June 25, 2019, Apache assigned all of its rights and interest in the Lease and Supply Agreements which, according to Defendants’ counsel, expired on December 31, 2016, and since then the parties have continued operating under both agreements on a month-to-month basis. (DE 21 at p. 5.)7 b. The Nonrenewal Notice and Mutual Termination Agreement Defendants sent Plaintiff a Notice of Nonrenewal dated March 18, 2022, advising that pursuant to 15 U.S.C. §2802(b)(3)(D)(i)(IV), Defendants determined, in good faith and in the normal course of business, that it is uneconomical to renew the Franchise. (DE 4-4.) Defendants claim that rent concessions and the low volume of motor fuel sales have resulted in minimal profits. (Id.) The Notice did not base nonrenewal on any other ground. The Court notes that the Notice did not seek nonrenewal based upon the expiration of the supplier’s underlying lease (DE 29, at p. 26, lines 12-15). See also 15 U.S.C. §2802(c)(4) (“loss of the franchisor’s right to grant possession of the leased marketing premises through expiration of an underlying lease”). Further, at the hearing, counsel made clear that the nonrenewal was based upon “non-renewing [Defendants'] month-to-month franchise relationship with the tenant, which is the retail facility lease.” (DE 29, at p.59, lines 16-18). The Notice further advised Plaintiff that “your right to occupy the Premises will also terminate on June 16, 2022, and you must vacate the Premises no later than that date.” (Id.) Shortly thereafter, on March 22, 2022, Defendants provided GBOC with a proposed Mutual Termination Agreement (“MTA”) (see Everson Decl.
4,5 7, at DE 21-7), requesting GBOC to sign, which it did on that date (DE 4-9). Defendants then sent GBOC the fully executed MTA on May 18, 2022. (Id.) Two days later, GBOC sent a repudiation of the MTA by certified mail to Defendants (DE 4-6). Pursuant to 15 U.S.C. §2802(b)(3)(D)(iii)(I), Defendants made [what they assert to be] a bona fide offer to sell the equipment and leasehold rights — by email dated June 7, 2022, and letter dated June 10, 2022. (DE 21 at 11; DE 21-5.) The parties agreed to extend the Lease and Supply Agreement until June 30, 2022 (the date which Defendants’ rights in the Premises terminates), but no agreement has been reached as to the offer. (DE 21 at p. 6.) c. The Parties’ Positions GBOC seeks a preliminary injunction enjoining Defendants from non-renewing and/or terminating the franchise relationship with Defendants. The arguments are as follows: First, the nonrenewal of the Franchise Agreement is not valid because the determination not to renew was not made in good faith or in the normal course of business since no reasonable changes were proposed; that Defendants’ offer was not a “bona fide” offer; and that GBOC is “ready, willing and able” to continue to purchase Defendants’ interest. GBOC argues it will suffer irreparable injury absent injunctive relief, the balance of the hardships weigh in its favor, and there are sufficiently serious questions on the merits. GBOC separately argues that the MTA was timely repudiated under 15 U.S.C. §2802(b)(2)(D)(iii) of the PMPA, and is thus, null and void. Defendants oppose, arguing that both the Notice on Nonrenewal and the MTA are valid and binding, that the balance of hardships weigh in their favor since they will be harmed if the injunction is granted, and that there is a substantial likelihood that Defendants will prevail on the merits. II. DISCUSSION a. The Relevant PMPA Provisions There is no dispute that the relationship between the parties is governed by the PMPA, since GBOC is a “retailer” of motor fuels (defined in 15 U.S.C. §2801(7)); a “franchisee” of Defendants (defined in 15 U.S.C. §2801(4)); Defendants are a “franchisor” of GBOC (defined in 15 U.S.C. §2801(3)); and the parties have a franchise relationship (defined in 15 U.S.C. §2801(2)). There is also no dispute that the Premises are a leased marketing premises (defined in 15 U.S.C. §2801 (9)). The PMPA “was enacted to establish ‘minimum Federal standards governing the termination and nonrenewal of franchise relationships for the sale of motor fuel by the franchisor or supplier of such fuel.’” Roleco Serv. Stations, Inc. v. Getty Refining and Mktg. Co., 839 F.2d 88, 91 (2d Cir. 1988) (emphasis in original) (citing S.Rep. No. 731, 95th Cong., 2d Sess. 15, reprinted in 1978 U.S.Code Cong. & Admin.News 873). The intent of the Act was to prevent franchisees from a disparity in bargaining power by prohibiting the franchisor from terminating or failing to renew a franchise without proper notice and specified information. Id. The statute was intended to combat the perceived imbalance of bargaining power between suppliers (oil companies) and retailers (service station dealers). See Kessler v. Amoco Oil Co., 670 F. Supp. 853, 856 (E.D. Mo. 1987). The PMPA was enacted in 1978 in response to the Arab oil embargo and ensuing energy crisis in the early 1970s that caused increases in gasoline pricing, tightening of oil supply and increased supply costs which, in turn, led to franchise terminations and conversions to company-owned retail outlets. See Janet H. Pumphrey, Trade Regulation — The “Bona Fide Offer” of Sale Requirement in the Petroleum Marketing Practices Act: Slatky v. Amoco Oil Co., 11 W. New Eng. L. Rev. 389, 392-93 (1989) (“Pumphrey, Trade Regulation”). b. The Standard for a Preliminary Injunction in a PMPA Case The Court must grant an injunction preventing nonrenewal or termination if certain conditions are met. The standard for preliminary injunctive relief under the PMPA differ from the traditional standards. That is, a court “shall” grant a preliminary injunction if: (A) the franchisee shows: (i) the franchise of which he is a party has been terminated or the franchise relationship of which he is a party has not been renewed, and (ii) there exist sufficiently serious questions going to the merits to make such questions a fair ground for litigation; and (B) the Court determines that, on balance, the hardships imposed upon the franchisor by the issuance of such preliminary injunctive relief will be less than the hardship which would be imposed upon such franchisee if such preliminary injunctive relief were not granted.8 See 15 U.S.C. §2805(b)(2); see also Persaud v. Exxon Corp., 867 F. Supp. 128, 136-37 (E.D.N.Y Oct. 31, 1994) (stating that §2805(b)(2) “directs the entry of a preliminary injunction if [the] three-part showing has been made”). “A franchisee’s burden of proof under section 2805(b)(2)(A)(ii) is less severe than is generally required under Rule 65 [of the Federal Rules of Civil Procedure].” Nassau Blvd. Shell Serv. Station, Inc. v. Shell Oil Co., 875 F.2d 359, 363 (2d Cir. 1989) (alteration in original) (internal quotation marks and citation omitted). While Rule 65 of the Federal Rules of Civil Procedure requires the movant to show a strong or reasonable likelihood of success, the PMPA only requires a franchisee to show a reasonable chance of success on the merits. Id. “The standard for granting preliminary injunctive relief under the PMPA is a more liberal version of the alternative general equity standard of the Second Circuit, hence the granting of an injunction turns primarily on a balancing of hardships.” Wisser Co. v. Texaco, Inc., 529 F. Supp 727, 735 (S.D.N.Y. 1981) (internal citation omitted) (finding that the balance of hardships favored franchisee over franchisor where cutting off supply would risk undermining franchisee’s supply/lease agreements and pose a grave risk to franchisee’s livelihood, and such injunctive relief would only cause franchisor to continue giving a three and three-quarter cent per gallon discount on gasoline). It is against this backdrop that the Court considers GBOC’s application. c. Whether the Franchise Relationship has Been Terminated or Not Renewed i. The MTA and Repudiation 15 U.S.C §2802(b)(2)(D) provides: (2) For purposes of this subsection, the following are grounds for termination of a franchise or nonrenewal of a franchise relationship: (D) An agreement, in writing, between the franchisor and the franchisee to terminate the franchise or not to renew the franchise relationship, if — (i) such agreement is entered into not more than 180 days prior to the date of such termination or, in the case of nonrenewal, not more than 180 days prior to the conclusion of the term, or the expiration date, stated in the franchise; (ii) the franchisee is promptly provided with a copy of such agreement, together with the summary statement described in section 2804(d) of this title; and (iii) within 7 days after the date on which the franchisee is provided a copy of such agreement, the franchisee has not posted by certified mail a written notice to the franchisor repudiating such agreement. 15 U.S.C §2802(b)(2)(D). On March 18, 2022, Defendant provided Plaintiff with written notice of non-renewal of the Franchise Relationship. (DE 21 at 10; DE 21, Ex. 4.) On March 22, 2022, Defendants hand delivered a copy of the proposed unsigned Mutual Termination to Ekam Cattry, President of GBOC. (DE 21-7.) Cattry signed two copies and Everson took one of the originally signed Mutual Terminations and left one with Cattry. (Id.) On March 23, 2022, David Goodrum (Wholesale Operations Director of SEIF) counter-signed the Mutual Termination using DocuSign. (Id.) Via email on May 4, 2022, Cattry requested a copy of the fully executed Mutual Termination. (Id.) Everson sent a copy to Cattry on May 18, 2022. (Id.) On May 20, 2022, Cattry sent a repudiation letter to Defendants. (Id.) To fulfill the requirements of 2802(b)(2)(D), there must be an “agreement, in writing, between the franchisor and the franchisee to terminate the franchise or not to renew the franchise relationship.” 15 U.S.C. §2802(b)(2)(D). Here, the writing requirement is satisfied as the terms set forth were in writing. (DE 4, Ex. 5.) Furthermore, it is also necessary that “such agreement is entered into not more than 180 days prior to the date of such termination or, in the case of nonrenewal, not more than 180 days prior to the conclusion of the term, or the expiration date, stated in the franchise[.]” Here, the time requirement is satisfied as the agreement was entered into less than 180 days prior to the conclusion of term. Notice of Non-Renewal was sent on March 18, 2022, and the conclusion of the term would be June 16, 2022, extended to June 30, 2022, well within the 180-day time limit. (DE 4 Ex. 4.) Regardless of whether the MTA was entered into on March 22, 2022 (when only Cattry signed) or March 23, 2022 (when Goodrum also signed), the MTA also falls within the 180-day time limit. That, however, does not end the inquiry since the final question — sharply disputed by the parties — is whether the MTA was repudiated timely by GBOC. A franchisor may terminate or not renew if certain preconditions are met. If the nonrenewal is based upon an MTA, then the franchisee has a 7-day period from the time it receives the “agreement” to repudiate. The statute provides that termination is effective, unless repudiated by the franchisee as follows: (D)An agreement, in writing, between the franchisor and the franchisee to terminate the franchise or not to renew the franchise relationship, if — (i) such agreement is entered into not more than 180 days prior to the date of such termination or, in the case of nonrenewal, not more than 180 days prior to the conclusion of the term, or the expiration date, stated in the franchise; (ii) the franchisee is promptly provided with a copy of such agreement, together with the summary statement described in section 2804(d) of this title; and (iii) within 7 days after the date on which the franchisee is provided a copy of such agreement, the franchisee has not posted by certified mail a written notice to the franchisor repudiating such agreement. 15 U.S.C. §2802(b)(2)(D) (emphasis added). Defendants claim “such agreement” was provided to GBOC on March 18. GBOC, on the other hand, claims that “such agreement” was only provided May 18, since that was the first and only time that a fully executed agreement was provided. This raises the question of when GBOC was “provided with a copy of such agreement” as required by the statute and at what point the seven-day window for the franchisee to repudiate would begin. Put simply, the question is whether the phrase “such agreement” in subclause (iii) refers to a proposed agreement or one executed. Subdivision (D) begins with clarity: “An agreement, in writing, between the franchisor and the franchisee to terminate the franchise or not to renew the franchise relationship…” Id. The subclauses that follow use the phrase “such agreement” consistently, and unmistakably refer to “an agreement, in writing, between” both parties. It says nothing about a proposed, suggested, draft or unsigned agreement. Undefined in the statute, Black’s Law Dictionary defines an “agreement” as “a manifestation of mutual assent by two or more persons.” BLACK’S LAW DICTIONARY (11th ed. 2019). “The conduct manifesting such assent may be words or silence, action or inaction, but ‘[t]he conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents.’” Schnabel v. Trilegiant Corp., 697 F.3d 110, 120 (2d Cir. 2012) (internal quotation marks omitted) (citing Restatement (Second) of Contracts §19(2) (Am. L. Inst. 1979)). Here, Defendants provided GBOC with an unsigned proposed MTA on March 18, 2022. There is nothing in the record to indicate that the parties had agreed to the terms beforehand. (see Everson Decl.
