Limerick of the Week: The Franchise Cases

If you were looking for this weekly installment yestereday, when it usually appears, and were outraged that you could not find it, please sue American Airlines for all damages reflecting your disppointment, including pain and suffering of course.  Today’s Limerick is delayed because my return flight from Philadelphia was diverted to Indianapolis.  And when American Airlines tells you that the diversion of my flight was due to weather conditions beyond their control. don’t believe them!!  If it weren’t for a mechanical problem that delayed our take-off from Philly, we would have beat the front that hit O’Hare last night.

I will do my best to make things better, offering an almost unprecedented Limerick two-fer. The cases herein memorialized are actually tort cases and thus, to some extent, beneath the dignity of contracts profs and readers of the Contracts Profs Blog.  Still, the vital question at issue in both cases is whether an agency relationship arises from the typical franchise agreement between gas station franchisees and the oil companies with which they contract.  While the tort aspects of the case create the typical intellectual challenges posed by a prat-fall, the agency aspects of the cases, touching as they do on contractual relations, are complicated. 

Both cases involve accidents at service stations.  In the first (Humble Oil), a car is raised for servicing without the parking break engaged.  It rolls down a hill (comically no doubt) and then (less comically) mows down some innocent bystanders.  The question is whether Schneider, the franchisee, can be liable for the harm done to the bystanders.  In the second (Hoover), plaintiff was injured in a fire that erupted at the back of his car while it was being filled with gasoline (see Limerick for my theory as to how the fire might have started).  The question here is whether the franchisee Barone can be liable for plaintiff’s harm.  While the torts involved are different, the law and the legal framework governing the cases are similar.  Still, the cases come out differently, and both are wrongly decided IMHO.  The Limericks lay out the bases for the courts’ reasonsing, with some simplification:

Humble Oil v. Martin

To Humble must Schneider report,
Humble set the hours, so the court
Refused to remand.
The verdict must stand;
The franchisor’s liable in tort.

Hoover v. Sun Oil

In Hoover, the gas-filling bloke
Chose an unfortunate time for a smoke.
Sun Oil owned the station,
Equipment, location,
But Barone set the hours, now he’s broke.

[Jeremy Telman]