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Lawletter No. 169 Chevron loses fifth transfer fee case Yet another Chevron dealer has recouped a substantial portion of the transfer fee he paid when he sold his business. In the case of In the Matter of the Arbitration between Ronald Rowland, Claimant and Chevron U.S.A., Inc. a former Chevron dealer was awarded approximately $18,000 in damages, attorney fees, costs and interest. The dealer was represented by Association attorney Guy Gilbert. This is the fifth case we know of in which a dealer has successfully invoked the arbitration clause of the Chevron lease to recover part of the transfer fee paid when the business was sold. The clause provides for binding arbitration of any dispute related to the sale of the business. Surprisingly few Chevron dealers have taken advantage of the arbitration procedure, especially in light its low cost, speed and simplicity. The arbitration is conducted by the American Arbitration Association, as specified in the Chevron lease. There are no pretrial motions, hearings, depositions or other discovery procedures. The arbitrator's ruling is final--there are no appeals. Awards have gone as high as $113,000. In fact, Chevron has cited the fact that very few dealers have elected to arbitrate the transfer fee as evidence of its contention that the fee is "reasonable." So far, no less than five arbitrators have rejected this contention. For a detailed report on prior arbitration cases, see Lawletter Nos. 137, 145, 150. and 165. |
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