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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 1 of 32

IN THE UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF PUERTO RICO

TOTAL PETROLEUM PUERTO RICO CIVIL NO. 11-1083


CORPORATION

Plaintiff RE:

v. TRADEMARK INFRINGEMENT;
TRADEMARK DILUTION;
EFRAIN CLAUDIO CRUZ TERMINATION UNDER PETROLEUM
MARKETING PRACTICES ACT;
Defendant INJUNCTION; DECLARATORY
JUDGMENT; DISPOSSESSION;
COLLECTION OF MONEYS; AND
DAMAGES

VERIFIED COMPLAINT

TO THE HONORABLE COURT:

COMES NOW plaintiff, Total Petroleum Puerto Rico

Corporation (“TPPRC”), through the undersigned counsels, and

respectfully states, alleges and prays as follows:

I
JURISDICTION AND VENUE

1. This Honorable Court has original federal question

jurisdiction over the instant action pursuant to 28 U.S.C. §§

1331 and 1338(a) and (b), as this case involves substantial

claims arising under the Lanham Act, 15 U.S.C. § 1051, et seq.

It also has federal question jurisdiction over the claims

arising under the Petroleum Marketing Practices Act, 15 U.S.C.

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§§ 2801, et seq., (“P.M.P.A.”) and supplemental jurisdiction

over the Puerto Rico law claims pursuant to 28 U.S.C. §1367(a).

2. Venue is proper in this Court pursuant to 28 U.S.C. §

1391 (b) and (c), given that Defendant Efrain Claudio Cruz,

(“Defendant and/or Claudio”) is a citizen and is doing business

in the Commonwealth of Puerto Rico and the claims alleged in

this Complaint arose in this district.

II
NATURE OF THE ACTION

3. This is a civil action for trademark infringement in

violation of Section 32(1) of the Lanham Act, 15 U.S.C. §

1114(1); for violation of Section 43(a) of the Lanham Act, 15

U.S.C. § 1125(a) and for trademark dilution in violation of

Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c).

4. TPPRC also seeks a preliminary injunction and a

permanent injunction to enjoin Defendant from continuing to

illegally exhibit the TOTAL MARKS at gasoline service station

number 115635 located at Montebrisas urbanization, Street E

intersection Street B, Fajardo, Puerto Rico, since Defendant’s

acts disparage, dilute or otherwise damage the value of the

TOTAL MARKS, because Defendant was terminated as a TPPRC dealer

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pursuant to the P.M.P.A. and is no longer authorized to use such

marks nor operate the gasoline service station.

5. TPPRC seeks a preliminary injunction and a permanent

injunction, pursuant to Rule 65 of the Federal Rules of Civil

Procedure, instructing Defendant to immediately surrender the

leased premises since it was validly terminated as a TPPRC

dealer pursuant to the P.M.P.A., and thus have no right to

retain possession over the gasoline service station.

6. TPPRC also seeks declaratory relief which may be

granted under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-

2202, and Rule 57 of the Federal Rules of Civil Procedure.

7. TPPRC seeks to recover all amounts owed by Defendant

totaling $22,564.06, and damages for breach of contract in an

amount of no less than $672,000.00, plus interest.

8. TPPRC seeks to judicially dispossess Defendant of the

premises were the gasoline service station is located.

III
THE PARTIES

9. TPPRC is a corporation organized under the laws of the

Commonwealth of Puerto Rico, duly authorized to do, and in fact

doing business in Puerto Rico, with its principal place of

business located at Galeria San Patricio, Tabonuco B-5, Suite

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202, Guaynabo, Puerto Rico and postal address PO Box 362916, San

Juan, Puerto Rico 00936-2916. TPPRC is a “franchisor” as the

term is defined by Article 101(3) of the P.M.P.A., 15 U.S.C. §

2801(3). TPPRC is the owner of the gasoline service station

number 115635 located at Montebrisas urbanization, Street E

intersection Street B, Fajardo, Puerto Rico.

10. Defendant Efrain Claudio Cruz, with postal address PO

Box 420, Fajardo, P.R. 00738, was the individual authorized to

operate gasoline service station number 115635 located at

Montebrisas urbanization, Street E intersection Street B,

Fajardo, Puerto Rico. (“Station”) Defendant is a “franchisee” as

the term is defined by Article 101(4) of the P.M.P.A., 15 U.S.C.

§ 2801(4).

IV
STATEMENT OF FACTS

A. The Lease Agreement

11. On October 28, 2008, Defendant entered into a Lease

Agreement (“Lease”) with TPPRC for the use of certain real

property located at Montebrisas urbanization, Street E at

intersection Street B, Fajardo, Puerto Rico, in order to operate

a gasoline service station. TPPRC is the owner of the

aforementioned real estate. [Exhibit 1, Lease]

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12. The Lease had duration of three (3) years, starting on

November 1, 2008. [Exhibit 1 at p. 3, Article 3.1]

13. The Lease expressly provides that the operation of a

gasoline service station and all associated services was the

main consideration at the moment of entering such agreement.

[Exhibit 1 at p. 1-2, Parr. D]

14. The Lease also provides that Defendant expressly

recognized that at the moment the agreement was entered, the

property was fully equipped and qualified to be used as a

gasoline service station. [Exhibit 1 at p. 7, Article 8.1]

15. Defendant recognized that all structures, facilities

and certain additional equipment used for the operation of the

gasoline service station and which are located at said premises

are property of TPPRC. [Exhibit 1 at p. 1, Parr. A]

16. The Lease provides that Defendant would pay TPPRC a

monthly rent of two thousand nine hundred seventy four dollars

($2,974.00) for the use of the aforementioned real state. The

Lease provides that the rent is payable during the first five

(5) days of each month. [Exhibit 1 at p. 3, Article 4.1]

17. The Lease provides that Defendant would use the

property as a gasoline service station in order to sell Total

branded petroleum products, merchandise and services normally

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rendered in TPPRC’s gasoline and service stations. [Exhibit 1 at

p. 7, Article 8.1]

18. The Lease provides that in the event that Defendant

failed to comply with any of its duties under such agreement,

TPPRC is entitled to terminate the same. [Exhibit 1 at p. 18,

Article 15.1 (b)]

19. The Lease authorizes the termination of the agreement

under the following circumstances, among others: the occurrence

of an event which constitutes a breach of contract; if the

dealer fails to make his best effort to comply with the

provisions of such agreement; in the event the dealer fails to

pay any amounts owed under such agreement; in the event the

dealer violates TPPRC’s trademarks; in the event the dealer

fails to operate the Station for seven (7) consecutive days or

any lesser period unreasonable under the circumstances; or for

any termination grounds available under applicable law. [Exhibit

1, at p. 18-20 Article 15.1 (b)(iv), (c), (d), (i), (q)]

B. The Sales and Supply Agreement

20. On October 28, 2008, TPPRC and Defendant entered into

a Sales and Supply Agreement (“Supply Agreement”) pursuant to

which Defendant was granted the right to buy and resale Total

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branded petroleum products and to operate the Station under such

trademark. [Exhibit 2, Supply Agreement, at p. 1, Parr. D]

21. The Supply Agreement has duration of three (3) years,

starting on November 1, 2008. [Exhibit 2 at p 5, Article 4.1]

22. Article Three (3) of the Supply Agreement provides

that Defendant will pay each delivery of Total petroleum

products on a COD basis. [Exhibit 2 at p. 3, Article 3.3(b)]

23. Article Nine (9) provides that Defendant would only

use the marks, registered marks, trademarks, names, service

distinctions, and/or color patterns that TPPRC may authorize the

dealer to use as part of the operation of the Station. [Exhibit

2 at p. 8]

24. Article Twelve (12) of the Supply Agreement provides

that Defendant would comply with any and all applicable

environmental laws and regulations. [Exhibit 2 at p. 10]

25. These contract provisions are designed to facilitate

TPPRC’s compliance with applicable federal and state

environmental laws, rules and regulations, which require

compliance with strict monitoring and record keeping programs.

26. Article Seven (7) of the Supply Agreement provides

that in the event Defendant failed to comply with any of its

duties under such agreement, TPPRC is entitled to suspend the

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delivery of petroleum products and terminate the agreement.

[Exhibit 2 at p. 6, Article 7.7(b)]

27. Article Sixteen (16) authorizes the termination of

said agreement under the following circumstances, among others:

the occurrence of an event which constitutes a breach of

contract; if the dealer fails to make his best effort to comply

with the provisions of such agreement; in the event the dealer

fails to make promt payments of any monies owed to TPPRC, in the

event the dealer claims insolvency or files for bankruptcy; in

the event the dealer violates the Total trademarks; or for any

termination grounds available under applicable law. [Exhibit 2

at p. 12, Article 16.1 (b), (c), (d), (e), (p)]

C. Commodatum Provisions of the Supply Agreement

28. The Supply Agreement grants Defendant the right to

use, in commodatum, the underground storage tanks and other

equipment for the storage and sale of petroleum products located

and/or installed at the Station owned by TPPRC. (“Commodatum

Articles”) [Exhibit 2, p. 18-20, Article 20]

29. The Commodatum Articles incorporate an express

recognition by Defendant to the effect that the underground

storage tanks and the equipment for the storage and sale of

petroleum products located at the Station are property of TPPRC.

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Defendant also recognized that all the structures, facilities

and certain additional equipment, such as the gasoline pumps,

tanks, electrical and office equipment, patio lamps, and others

used for the operation of the gasoline service station which are

located at the Station are property of TPPRC. [Exhibit 2, p.

18, Article 20.1, Attachment B]

30. Article Twenty (20) expressly states that the

equipment for the storage and sale of petroleum products, and

all other equipment under the Commodatum Articles could only be

used for the storage and sale of petroleum products under the

TOTAL MARKS. [Exhibit 2 at p. 18, Article 20.2]

31. The Commodatum Articles provide that Defendant has a

duty to perform tests on a daily basis in order to verify that

there has been no loss of product, aside from normal

evaporation, and to detect any leaks in the tanks. Defendant has

a duty to keep records of such tests and inspections, and to

allow the inspection of such records at any time by TPPRC and/or

any government entity. [Exhibit 2, p. 19, Article 20.7,

Attachment C]

32. The aforementioned contract provisions are designed to

facilitate TPPRC’s compliance with applicable federal and state

environmental laws, rules and regulations, which require

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compliance with a strict monitoring and record keeping programs.

[See Exhibit 2, p. 19, Article 20.7, Attachment C]

33. The Commodatum Articles also provide that Defendant

may not remove, eliminate or relocate the equipment received in

commodatum from TPPRC from the places where they are located

and/or installed at the Station without the prior written

authorization of TPPRC, which will be given at TPPRC’s absolute

discretion. [Exhibit 2 at p. 20, Article 20.9]

34. The Supply Agreement provides that, in the event of a

termination, TPPRC would be entitled to repossess the

aforementioned equipment. [Exhibit 2 at p. 14, Article 16.2 (d)]

D. Events of Default Leading to the Termination

35. The Lease provides that Defendant shall make rent

payments during the first five (5) days of each month by means

of U.S. currency. [Exhibit 1 at p. 3, Article 4.1]

36. The Supply Agreement provides that the dealer shall

purchase from TPPRC a monthly minimal amount of gasoline

products of 19,000 gallons and 75 gallons of oil and lubricants

[Exhibit 2, p. 3, Article 3.1, 3.3(b)]

37. The Lease provides that the failure to operate the

Station for a period of more than seven (7) consecutive days, or

any shorter period that may be unreasonable under the

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circumstances, is sufficient cause to terminate the agreement.

[Exhibit 1, p. 18-19, Article 15.1(i)]

38. Furthermore, the Lease and Supply Agreements contain

cross default provisions which provide for the termination of

all the aforementioned agreements in the event of a breach of

any of them. [Exhibit 1, at p. 19, Article 15.1 (g); Exhibit 2,

at p. 13, Article 16.1 (g)]

39. In order to ensure prompt payment of any amounts to

TPPRC, Defendant authorized direct payment to TPPRC through

electronic transactions between TPPRC and Defendant’s bank.

(“ACH Debit”) [Exhibit 3, Authorization for Direct Payment]

40. During the parties’ business relationship, Defendant

has repeatedly breached the essential obligations of the

aforementioned agreements. Defendant has failed, on numerous

occasions, to pay rent invoiced by TPPRC in relation to the

Station causing him to owe TPPRC significant amounts. TPPRC has

been forced to deal with Defendant’s reiterated refusal to pay

rent and gasoline products.

41. On April 24, 2009, TPPRC sent a letter to Defendant

requesting payment of $13,263.93 corresponding to Defendant’s

outstanding rent payments for the months of November 2008, when

the parties entered into the Lease Agreement, through March

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2009. Defendant was advised that rent payments were an essential

element of the contracts between the parties. [Exhibit 4, Letter

of April 24, 2009]

42. On August 11, 2009, TPPRC sent a letter to Defendant

reminding him of the payment plan approved by TPPRC during the

month of May 2009, were Defendant agreed to make weekly payments

of $500.00 in order to pay the amounts owed to TPPRC, and

continue making timely rent payments the following months. Since

Defendant did not comply with said arrangement, TPPRC requested

immediate payment of the outstanding rent and other charges,

which at the time totaled $20,663.40. TPPRC also advised

Defendant to comply with the agreements since his continuous

failure to comply with his obligations, especially the monthly

rent payments, were sufficient cause to terminate the franchise

relationship. [Exhibit 5, Letter of August 11, 2009]

43. TPPRC’s requests for payment to Defendant were to no

avail. On December 14, 2009, TPPRC sent another letter to

Defendant in an effort to collect amounts owed for rent and

other charges totaling $15,991.60. Once again TPPRC advised

Defendant that his behavior exposed him to the termination of

the franchise relationship, in accordance with the Lease

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Agreement and the applicable law. [Exhibit 6, Letter of December

14, 2009]

44. On April 16, 2010, TPPRC delivered gasoline products

to Defendant for a total of $17,394.69. Defendant failed to pay

TPPRC for such product since the ACH Debit was returned by

Defendant’s bank due to insufficient funds. [Exhibit 7, TPPRC’s

notice of return of ACH debit for insufficient funds; Exhibit 8,

TPPRC invoice number 40078417]

45. On May 13, 2010, TPPRC delivered gasoline products to

Defendant for a total of $10,400.83. Defendant failed to pay

TPPRC for such product. Once again, Defendant’s bank returned

TPPRC’s ACH Debit due to insufficient funds. [Exhibit 9, TPPRC

invoice number 40081110; Exhibit 10, TPPRC’s notice of return of

ACH debit for insufficient funds; Exhibit 11, Letter of June 2,

2010 requesting payment due to ACH return]

46. By July 2010 Defendant was not selling Total petroleum

products at the Station. In fact, he had not sold regular

gasoline since June 4, 2010 and premium gasoline since January

4, 2010. On July 6, 2010, TPPRC sent a letter to Defendant

through certified mail informing him that his failure to buy and

sell petroleum products at the Station rendered the Station

closed for contractual purposes because the main consideration

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of the franchise relationship is the selling of Total branded

petroleum products to consumers. TPPRC advised Defendant that if

the Station was not open and fully operational on or before July

16, 2010, the franchise relationship would be terminated due to

Defendant’s failure to operate the Station for more that seven

(7) consecutive days. [Exhibit 12-Letter of July 6, 2010]

47. On July 29, 2010, TPPRC and Defendant entered into a

written agreement for the payment of the amounts owed by

Defendant for rent, lubricants, petroleum products sold and

delivered and other charges. By virtue of said agreement,

Defendant admitted that as of July 19, 2010, he owed TPPRC

significant amounts. Defendant also admitted that this situation

was not attributable to TPPRC. [Exhibit 13-Private Payment

Agreement (Filed under seal)]

48. Defendant is currently in default and owes TPPRC

$22,564.06 for rent and other charges. [Exhibit 14, Account

statement]

49. Defendant has openly disregarded his main obligations

under the Lease and Supply Agreements, which are, among others,

the uninterrupted operation of the Station and the purchase and

prompt payment of TPPRC’s products and prompt payment of rent.

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Defendant has failed to operate the Station since June 4, 2010;

that is, for more than seven (7) consecutive months.

50. In order to workout a solution to this situation,

TPPRC repeatedly provided accommodations to Defendant in order

to facilitate the payment of the amounts owed and the renewal of

operations to avoid the termination of the parties’ business

relationship.

51. TPPRC met with Defendant on several occasions and

extended proposals and payment plans to Defendant, as discussed

above, to no avail.

52. Defendant made no efforts to comply with TPPRC’s

request and continues to maintain the operations closed to

consumers and the amounts due are still pending, among other

contractual violations.

E. The Termination Notice

53. Given all the above serious breaches of contracts and

trust of the established relationship, on November 9, 2010,

TPPRC sent Defendant a written notice, through certified mail,

stating that the franchise relationship between the parties was

being terminated, effective immediately, due to Defendant’s

repeated failure to pay TPPRC amounts owed under the Lease

Agreement; failure to comply with the written payment plan

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entered into with TPPRC; failure to timely pay amounts owed for

products sold and delivered and other service charges; failure

to buy TPPRC’s petroleum products and sell them to consumers;

and failure to operate the Station for over seven (7)

consecutive days, in violation of the aforementioned agreements

between the parties and the P.M.P.A., 15 U.S.C. §§ 2802, et seq.

The termination notice included a “Summary Statement” prepared

by the Secretary of Energy, as required by Article 104(c)(3)(c)

of the P.M.P.A., 15 U.S.C. § 2804(c)(3)(c), and requested

Defendant to turn over the Station to TPPRC. [Exhibit 15,

Termination letter of November 9, 2010]

54. At the moment, Defendant continues to retain

possession over the Station, refuses to pay the outstanding

amounts owed to TPPRC, and maintains the operations closed to

consumers. [Exhibit 16-A through 16-J, Photographs of the

Station]

F. Post-Termination Obligations

55. Upon termination of the existing agreements, Defendant

ceased to be an authorized TPPRC franchisee and, therefore, had

the obligation to surrender the Station and all equipment

property of TPPRC in the same condition as it was received and

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to discontinue its unauthorized use and exhibition of the TOTAL

MARKS. [Exhibit 1, p. 20, Article 15.2 (a) and (b)]

56. Defendant also has the obligation to immediately pay

all amounts owed to TPPRC, amounts owed to other suppliers and

public utilities, plus the payment of all damages to TPPRC.

[Exhibit 1, p. 21, Article 15.2 (d); Exhibit 2, p. 15, Article

17.1]

G. Breach of Post-Termination Obligations

57. As of today, Defendant has failed to comply with the

abovementioned ongoing obligations of the terminated agreements,

has retained possession of the Station and has continued to

illegally exhibit the TOTAL MARKS while the Station remains

closed to consumers. Moreover, other businesses, such as a car

wash and an inspection center, continue to operate on the

Station’s premises. [Exhibit 16-A through 16-J]

58. Furthermore, Defendant’s actions simply ignore his

contractual and legal obligations towards TPPRC, and exposes

TPPRC to potential liability under applicable environmental

laws, rules and regulations, without allowing TPPRC to take

appropriate measures to supervise and ensure compliance.

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V
FIRST CLAIM FOR RELIEF
VIOLATION OF THE FEDERAL
TRADEMARK DILUTION ACT OF 1995

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

59. Defendant is using the TOTAL MARKS; is representing

himself to be a Total franchisee; and is promoting and

advertising his business with the TOTAL MARKS, among other

unauthorized acts.

60. The use of the TOTAL MARKS and color patterns is

causing confusion or mistake and is deceiving consumers as to

the origin, the licensing, and the endorsing by TPPRC of

Defendant’s operation, which at this time is closed to

consumers.

61. Defendant’s aforesaid acts constitute trademark

infringement in violation of Section 32(1) of the Lanham Act, 15

U.S.C. § 1114(1). Said acts tarnish and dilute the TOTAL MARKS.

62. Defendant’s aforesaid acts have caused TPPRC to suffer

injury and damages of such a nature that monetary damages alone

cannot adequately compensate TPPRC for the loss suffered.

63. The aforesaid acts of Defendant are greatly and

irreparably damaging to TPPRC and will continue to be greatly

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and irreparably damaging to TPPRC unless enjoined by this Court

since TPPRC is without an adequate remedy at law.

64. Defendants have caused and will likely continue to

cause substantial injury to the public and TPPRC, and TPPRC is

entitled to a preliminary and permanent injunction and to

recover Defendants’ profits, actual damages, costs, and

reasonable attorneys’ fees under 15 U.S.C. §§ 1114(1) in an

amount not less than $100,000.00.

VI
SECOND CLAIM FOR RELIEF
TRADEMARK INFRINGEMENT IN VIOLATION OF
SECTION 43(a) OF THE LANHAM ACT

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

65. Defendant continues to use and exhibit the TOTAL

MARKS; continues to represent himself to be a TPPRC franchisee;

and continues to promote and advertise his business with the

TOTAL MARKS, among other unauthorized acts.

66. Defendant’s aforesaid acts tend to represent falsely

that Defendant’s services and products are legitimately approved

by TPPRC which constitute a violation of Section 43(a) of the

Lanham Act, 15 U.S.C. § 1125(a). The continued operation of

other businesses within the Station while the same is not

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selling petroleum products to consumers and at the same time

exhibiting the TOTAL MARKS constitutes an infringement of the

TOTAL MARKS.

67. The aforesaid acts of Defendant are greatly and

irreparably damaging to TPPRC and will continue to be greatly

and irreparably damaging to TPPRC unless enjoined by this Court

since TPPRC is without an adequate remedy at law.

68. Defendant’s conduct has caused, and is likely to

continue causing substantial injury to TPPRC, and TPPRC is

entitled to injunctive relief, and to recover all available

damages under trademark law, pursuant to 15 U.S.C. § 1125(a), in

an amount not less than $100,000.00.

VII
THIRD CLAIM FOR RELIEF
VIOLATION OF THE FEDERAL TRADEMARK DILUTION ACT OF 1995

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

69. Defendant ceased operations of the Station and at the

same time exhibits the color patterns that identify a TPPRC

Station and which are part of the TOTAL MARKS and continues to

exhibit the TOTAL MARKS since the same are still clearly visible

to the public.

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70. This depiction of the Station and the TOTAL MARKS in

such a negative way constitutes dilution, disparagement,

tarnishment and diminishment of the TOTAL trademarks, service

marks, and products lines—all proscribed by Section 43 (c) of

the Lanham Act.

71. Defendant’s acts have caused and will continue to

cause dilution, disparagement, diminution, and other damage to

the value of the goodwill represented by, and of the

distinctiveness of the TOTAL MARKS, in violation of Section 43

(c) of the Lanham Act.

72. Defendant’s aforesaid acts have caused TPPRC to suffer

injury and damages of such a nature that they could not be

adequately compensated by an award of monetary damages alone.

73. The aforesaid acts of Defendant are greatly and

irreparably damaging to TPPRC and will continue to cause great

and irreparable damages to TPPRC unless enjoined by this Court.

74. Because an award of monetary damages cannot fully and

adequately compensate TPPRC for its losses, TPPRC is without an

adequate remedy at law.

75. TPPRC is therefore entitled to preliminary injunction,

to be made permanent upon entry of final judgment, preventing

Defendants’ further infringement and to recover all available

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damages under trademark law in an amount not less than

$100,000.00.

VIII
FOURTH CLAIM FOR RELIEF
PRELIMINARY AND PERMANENT INJUNCTION INSTRUCTING DEFENDANT TO
SURRENDER THE STATION AND THE EQUIPMENT TO TPPRC

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

76. The P.M.P.A. was enacted to protect the franchised

retailers (“franchisees”) of motor fuel in their relationships

with their franchisors and to provide a uniform set of rules to

be used throughout the United States. The statute specifically

prohibits the enforcement of state and local laws which differ

from it. 15 U.S.C. § 2806.

77. Under the P.M.P.A., the protection of franchisees is

achieved by delineating the circumstances under which

termination or non renewal of the franchise relationship is

permissible and the procedure a franchisor must follow for such

termination or non renewal.

78. However, at the same time, Congress also fully

recognized the legitimate needs of a franchisor to be able to

terminate or not renew a franchise relationship based upon

certain actions of the franchisee.

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79. Under Article 102(b)(2)(c) of the P.M.P.A., 15 U.S.C.

§ 2802(b)(2)(c), a franchisor, such as TPPRC, may ground a

termination and/or non renewal on “the occurrence of an event

which is relevant to the franchise relationship and as a result

of which termination or non renewal of the franchise is

reasonable”. (Emphasis ours) Article 102(c)(8) of the P.M.P.A.

specifically includes as one of those “events” which justify

termination the “failure by the franchisee to pay the franchisor

in a timely manner when due all sums to which the franchisor is

legally entitled”. (Emphasis ours) 15 U.S.C. §2802(C)(8).

Article 102 (c)(9) also includes as an event which justify

termination, the “failure by the franchisee to operate the

marketing premises for 7 consecutive days, or such lesser period

which under the circumstances constitutes and unreasonable

period of time.” 15 U.S.C. § 2802(C)(9).

80. Article 104 of the P.M.P.A., 15 U.S.C. § 2809,

requires the furnishing of effective written notice to the

franchisee of a termination or non renewal, at least ninety (90)

days prior to the effective date of such termination or non

renewal, or within any lesser period when, under the

circumstances, it would be unreasonable to furnish 90-day

notice.

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81. On November 9, 2010, TPPRC was forced to notify the

immediate termination of the franchise relationship established

by virtue of the Lease and Sales and Supply Agreements, in order

to avoid further defaults by Defendant. The termination was

prompted by Defendant’s failure to operate the Station and his

failure to pay TPPRC outstanding quantities for rent.

82. Therefore, considering the above detailed facts,

TPPRC’s termination of the franchise relationship which existed

between itself and Defendant was valid, legal and enforceable,

effective as of the termination date, and in compliance with the

applicable provisions of the P.M.P.A.

83. Nonetheless, Defendant has refused to surrender the

Station and all equipment necessary for the operation of the

business in violation of the P.M.P.A. Furthermore, Defendant is

currently maintaining the Station closed to consumers and at the

same time is exhibiting the TOTAL MARKS.

84. Defendant’s aforesaid acts have caused TPPRC to suffer

injury and damages of such a nature that they could not be

adequately compensated by an award of monetary damages alone.

85. The aforesaid acts of Defendant are greatly and

irreparably damaging to TPPRC and will continue to cause great

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 25 of 32

and irreparable damages to TPPRC unless enjoined by this Court,

pursuant to Rule 65 of the Federal Rules of Civil Procedure.

86. Because an award of monetary damages cannot fully

and adequately compensate TPPRC for its losses, TPPRC is without

an adequate remedy at law and a preliminary and permanent

injunction should be issued.

IX
FIFTH CLAIM FOR RELIEF
DECLARATORY JUDGMENT

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

87. In the present case, TPPRC was forced to notify the

immediate termination of the franchise relationship with

Defendant in order to avoid further defaults and the continued

breach of his duty to pay the amounts owed and operate the

Station uninterruptedly.

88. Therefore, considering the above detailed facts,

TPPRC’s termination of the franchise relationship which existed

between itself and Defendant should be declared valid, legal and

enforceable, effective as of termination date, and in compliance

with the applicable provisions of the P.M.P.A., as authorized by

Rule 57 of the Federal Rules of Civil Procedure.

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 26 of 32

SIXTH CLAIM FOR RELIEF


DISPOSSESSION OF PREMISES AND EQUIPMENT

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

89. A lessor may judicially dispossess the lessee for

default in the payment of the rental price agreed upon and/or

the infraction of any of the conditions stipulated in the

contract and/or failing to use the leased object for the uses or

services stipulated in the contract.

90. Pursuant to the above detailed actions by Defendant,

TPPRC has a right to judicially dispossess Defendant from the

premises of the Station object of the now terminated franchise

relationship established by virtue of the Lease and other

Agreements.

XI
SEVENTH CLAIM FOR RELIEF
COLLECTION OF MONIES AND BREACH OF CONTRACT

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

91. TPPRC is entitled to recover from Defendant an amount

not less than $22,564.06, plus interest, from the date the debt

was incurred until full payment thereof.

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 27 of 32

92. In addition, TPPRC is entitled to recover damages in

an amount not less than $672,000.00 for Defendant’s breach of

the franchise for the sale of petroleum products and the

underlying contracts, and which has resulted in TPPRC’s

inability to sell its products from the gasoline service station

or in a reduction of the same.

XII
EIGHTH CLAIM FOR RELIEF
INDEMNIFICATION AND DAMAGES

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

93. If TPPRC is made a party to any lawsuit or any legal

action as a result of any act of Defendant or as a result of

Defendant’s continued possession of the Station, Defendant must

indemnify and hold harmless TPPRC from all expenses, fines,

suits, proceedings, claims, losses, damages, liabilities or

actions of any kind or nature, including, but not limited to,

costs and attorneys’ fees.

94. TPPRC currently has no control of the Station, nor can

it monitor any acts and/or omissions of Defendant as to the

management of hazardous fuel products, for which TPPRC may be

liable under federal and state environmental laws, rules and

regulations, among others.

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 28 of 32

95. Defendant must be made liable for any expense, cost,

loss or damage sustained by TPPRC as a consequence of any claim

made by any person or entity as a result of Defendant’s

deceptive and illegal acts, including, but not limited to,

gasoline spills, leaks from the tanks, fires, explosions, slip

and falls, and the like.

XIII
NINTH CLAIM FOR RELIEF
DAMAGES, ATTORNEYS’ FEES, AND EXPENSES

Plaintiff incorporates by reference all previous paragraphs

of the Verified Complaint.

96. As a result of Defendant’s willful and malicious

conduct, TPPRC is entitled to recover from Defendant TPPRC’s

damages and the attorneys' fees and the expenses it has incurred

in bringing this action.

97. Since Defendant has breached its contractual duties in

an intentional and willful manner, TPPRC is entitled to recover

any and all damages resulting from said breach and which include

all attorneys’ fees to be incurred to prosecute this case and

which are estimated in an amount not less that $100,000.00.

WHEREFORE, TPPRC respectfully requests that this Honorable

Court enters a preliminary and permanent injunction order and a

judgment:

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 29 of 32

1. Instructing Defendant to surrender possession of the

Station and all equipment immediately to TPPRC;

2. Instructing Defendant to file with the Court and serve

upon TPPRC, within five (5) days after service on Defendant of

the injunction sought, a report in writing, under oath, setting

forth, in detail, the manner and form in which Defendant has

complied with said order, and a report of any petroleum product

sales, if any, since the date of the termination until

surrendering of the premises;

3. Instructing Defendant, their agents, servants,

employees, representatives, and all others in active concert or

participation with them be enjoined and restrained during the

pendency of this action and permanently thereafter from using

the TOTAL MARKS, altering or covering the TOTAL MARKS, promoting

or advertising that Defendant was formerly a TPPRC franchisee,

using the TPPRC’s operating manuals, training manuals, sales

manuals and aids, advertising and promotional materials, and all

trade secret and confidential and proprietary material delivered

to Defendant pursuant to the franchise relationship; instructing

Defendant to stop diluting and tarnishing TOTAL trademark,

goodwill, and reputation; instructing Defendant to immediately

surrender to TPPRC all stationery, letterheads, forms, manuals,

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 30 of 32

printed material, films, books, cassettes, videotapes, licensed

software and advertising containing the TOTAL MARKS, including,

but not limited to, the proprietary mark TOTAL;

4. Instructing Defendant to immediately stop or refrain

from tarnishing, obliterating, and disparaging all TOTAL signs

at the gasoline service station which contain the TOTAL MARKS or

other identifying marks;

5. TPPRC also requests that this Honorable Court orders a

speedy hearing of this action and advance it on the calendar in

accordance with Rule 57 of the Federal Rules of Civil Procedure,

in as much as it involves only issues of law on undisputed or

relatively undisputed facts and that an order be entered

instructing Defendant to immediately surrender the Station and

the equipment therein located to TPPRC;

6. TPPRC requests that this Court determines that the

termination of the Lease and Sales and Supply between TPPRC and

Defendant was valid and effective under the provisions of the

P.M.P.A.;

7. That Defendant be ordered to compensate TPPRC for all

amounts owed in an amount not less than $22,564.06, plus

interest;

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 31 of 32

8. That Defendant be ordered to compensate TPPRC for its

loss of income for the period prior to the termination date that

the Station has not sold petroleum products and for the period

after the termination date that he refused to surrender the

Station, and for all damages herein claimed due to non-optimized

sales volumes in an amount not less than $672,000.00, and

attorneys’ fees and other expenses in an amount not less than

$100,000.00;

9. TPPRC requests the entry of a declaratory judgment

whereby Defendant is required to indemnify, reimburse and/or

compensate TPPRC for all expenses, losses, damages or

liabilities, including but not limited to, costs and attorneys’

fees, that TPPRC sustains or could sustain as a consequence of

any act or omission of Defendant which may have caused or may

cause harm to third parties; and

10. TPPRC be awarded such other and further relief as is

just and equitable, and the payment of costs, interest, and

attorney fees.

UNSWORN STATEMENT UNDER PENALTY OF PERJURY

I, Edgar Ramírez, of legal age, married, Retail Supervisor

of Total Petroleum Puerto Rico Corporation, and resident of

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Case 3:11-cv-01083-FAB Document 1 Filed 01/25/11 Page 32 of 32

Gurabo, Puerto Rico, hereby state under penalty of perjury,

pursuant to the Laws of the United States of America, 28 U.S.C.

§ 1746, that I have read the foregoing Verified Complaint and

its supporting exhibits and that, to the best of my knowledge

and belief and/or pursuant to the information and documents in

possession of TPPRC or its employees, all allegations herein

contained are true and correct.

_______________________
Edgar Ramírez

Executed in San Juan, Puerto Rico, on January 25, 2011.

SEPULVADO & MALDONADO, LLP


ATTORNEYS & COUNSELORS AT LAW
Counsels for Plaintiff
Citibank Tower, 19th Floor
252 Ave. Ponce De León
San Juan, P.R. 00918
Tel. 787.765.4949
Fax. 787.294.0073

S/Lee Sepulvado Ramos


Lee Sepulvado-Ramos
USDC-PR No. 211912
leesepulvado@gmail.com

S/Jenyfer Garcia-Soto
Jenyfer García-Soto
USDC-PR No. 222209
jgarcia@slawpr.com

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