Advertisement
YOU ARE HERE: LAT HomeCollections

Dealers Brace for Courtroom Battle on Exxon Pullout Plan : Business: A Thousand Oaks station operator says many are sure their suit will succeed. The company says it wants to leave the market to reduce costs.

August 15, 1993|CARLOS V. LOZANO | TIMES STAFF WRITER

When Majid Parvinjah acquired an Exxon dealership in Thousand Oaks 10 years ago, it was like striking oil.

"What could be better?" the newly arrived Iranian immigrant thought. He had a franchise with the largest oil company in the world in the largest oil-consuming region in the world: Southern California. His future was secure.

But then the unthinkable happened. Parvinjah and his business partner, Al Samimi, and more than 150 other dealers throughout the region were informed last year that Exxon was pulling out of the Southern California retail market.

"My concern is my life," said Parvinjah, 44. "I've been here 10 years. I'm getting too old to start another business."

The company offered dealers the first right to buy the franchises, but dealers say the stations were offered at inflated prices--even older properties like Parvinjah's that had been contaminated by gas leaks.

It was clear to dealers what was really happening. "We were being forced out," said Samimi, 48.

But the two partners were determined to hold onto their Thousand Oaks Boulevard station. They joined forces with 50 other dealers in Ventura, Los Angeles, Orange and San Bernardino counties and filed a lawsuit against Exxon Corp. last summer in an attempt to block the company's exodus.

"We told them we know you're violating the law, and we're going to fight you," Samimi said. "And they were telling us we have hundreds of lawyers and you guys can do nothing."

Farhad Monadjemi, 46, who operates an Exxon station about a mile away on Hampshire Road near the Ventura Freeway, said the dealers are certain they will win their case.

"We are trying to fight because we know we are right," said Monadjemi, who invested $300,000 to acquire his franchise from another dealer three years ago.

"They lied to me," he said. "They told me, 'We're going to make you the biggest station in Ventura County, 2,000 square feet minimum.' That's the reason I invested $300,000."

After months of legal wrangling, the dealers won an injunction last November that bars the oil company from terminating their leases with dealers until the lawsuit is settled. Trial is set for Oct. 19 in federal court in Los Angeles.

In their lawsuit, the dealers allege that Exxon Corp. is conspiring with other oil companies to divide up oil and gas markets around the country in violation of federal antitrust laws. They also charge that Exxon is trying to force them out of business by making it virtually impossible for dealers to buy their stations.

Exxon denies the allegations, saying it is pulling out of the market to reduce costs and improve the overall profitability of its marketing operations. The company until recently held only a 3.4% share of the Southern California market.

But since announcing its withdrawal from the region in May, 1992, nearly 100 of the remaining 156 stations in the region have either been closed, sold to other oil companies or are in the process of being sold, said Les Rogers, an Exxon spokesman in Houston. Sixteen stations have been sold to Exxon dealers, who are using new suppliers.

While Exxon officials are reluctant to comment on the pullout because of the pending lawsuit, some observers have speculated that Exxon is leaving the region in part because it does not have a refinery in the area.

Joseph M. Alioto, the San Francisco attorney representing the station dealers, said that argument doesn't make sense.

"Why did they come here?" Alioto asked. "They haven't had refineries from the beginning."

In the past year, Exxon has closed five of its 16 stations in Ventura County, officials said. Six stations have been sold to Mobil, one to Chevron and one to a non-brand-name operator.

Of the three remaining Exxon stations, two are in Thousand Oaks and one is in Oxnard.

The oil company, which does not own the land that Parvinjah and Samimi's station sits on, has offered to sell the dealership--which includes the building and equipment--for $200,000, three times what the partners said it is worth.

The two men said an independent appraisal found that the dealership is worth about $65,000, and only after its leaking underground gas tanks are replaced.

"Exxon's appraisals are not bona fide," Alioto said.

Even if they agreed to pay Exxon its asking price, Parvinjah and Samimi said they cannot get a loan because a bank will not provide financing for a station that is contaminated with gas seepage.

"They put dealers in a Catch-22 situation," Alioto said. "On the one hand they are offering the dealers a chance to buy their stations. But in order to buy the stations they have to be ecologically clean."

Alioto said what the oil companies are really doing is trying to eliminate the overall number of stations in the area.

"The fewer stations, the less competition and the higher the prices," he said.

Advertisement
Los Angeles Times Articles
|
|
|