Settlement Amount:
$5.2 million

Case Name:
EASTRIDGE v. (1) SHELL OIL COMPANY (2) THOMAS LACKLAND

Case Number and Date:
398862 ORANGE COUNTY SUPERIOR COURT 1/23/85

Plaintiffs:
Eastridge

Defendants:
Shell Oil Co.

Facts and Background:
In 1980, the Plaintiff, age 62, decided to retire because of
fatigue and his wife's poor health. He owned a Shell Station (for
20 years) adjacent to the San Diego Freeway in San Juan
Capistrano in one of the busiest areas between Los Angeles and
San Diego. The Shell Oil franchise agreement required that the
Plaintiff submit all potential acceptable buyers to Shell Oil for
approval. Plaintiff found a buyer willing to pay $125,000 for
Plaintiff's goodwill. The buyer met with Tom Lackland, the Shell
Oil territory manager. Lackland refused consent claiming the
buyer was not sound financially and unable to stock the station
with adequate tires, batteries and accessories, when in fact,
evidence at trial showed the station was required to be operated
strictly as a self-serve station with no stock of any kind.

Plaintiff brought 11 other buyers to Lackland. All were rejected.
The asking price of $125,000 was lowered with each denial about
$5,000. Defendants made comments that the price was too high and
projected negative cash flows. Evidence at trial showed twice the
monthly sales volume and a profit easily attained. One buyer was
rejected because he lacked "professionalism" when in fact he was
honored in the past two years with Shell's own highest award for
professionalism while operating another station.

In late 1982, Shell Oil offered to buy out the Plaintiff for
$25,000. Plaintiff rejected the "goodwill" offer and threatened
legal action. In February 1983, Plaintiff's asking price had been
lowered to $50,000. He presented a buyer, then a second buyer
appeared and offered the exact terms as buyer #1. This second
buyer was a friend of Lackland and operated three other stations
in another county. Shell accepted buyer #2 and rejected buyer #1.
By this time, Plaintiff was desperate and reluctantly agreed to
the sale. He signed a release without advising his attorney. Suit
was filed a day before the release was signed.

Plaintiff's Contentions:
Shell Oil wanted to buy the station at a fraction of its value. A
former Shell employee testified he was asked to buy out dealers
at high volume locations for low prices. Then at trial, this
employee was instructed to "talk for hours and say nothing." He
refused, resigned and went to Georgia.

Defendant's Contentions:
Defendant argued Plaintiff signed a release, their conduct was
justified, privileged, and reasonable. Editor's Note: Shell
advised Plaintiff's counsel that the Plaintiff would not live to
see the end of this case. They intended to tie the case up on
appeal. Shell intended to spend enough to make the Plaintiff wish
he had never brought suit.

Damages:
Emotional Distress. Loss of potential buyers, income and
interest on investment.