Independent Dealers Sue Texaco Claiming Unfair Prices : Gasoline: A group of mostly San Diego gas station owners allege that the oil firm favors company-owned stations and is gouging others.

By KATHY McDONALD

Sept. 2, 1992 12 AM PT

SPECIAL TO THE TIMES

Nineteen independent Texaco service station dealers filed suit Tuesday in San Diego County Superior Court against Texaco Refining and Marketing, alleging that Texaco has gouged them on wholesale prices and rents, giving company-owned stations an unfair advantage.

Texaco’s pricing policy is a breach of contract that has resulted in independent dealers sometimes paying more for wholesale gasoline than company-owned stations are charging motorists, the suit contends.

For example, last Nov. 20, some Texaco company stations were selling gasoline for 95.9 cents per gallon retail, while the dealers were being charged 101.9 cents per gallon wholesale, said Wayne Konitshek, a consultant to the Southern California Service Station Assn.

The independent dealers must pass on their costs to the consumer, averaging about 8 cents a gallon over the last four years, Konitshek said.

“Texaco’s our biggest competition and that shouldn’t be,” said John Rulon, owner of Mission Valley Texaco and a plaintiff in the case. “They’ve got us where they want us.”

Konitshek added: “Basically Texaco doesn’t want (independent) dealers anymore.” Texaco is “economically evicting them” through a three-fold policy of high rents, high wholesale prices and “predatory” lower pricing for company-owned stations, Konitshek contended.

Barbara Kornylo, a spokeswoman at Texaco’s western regional headquarters in Universal City, said the opposite is true because Texaco is switching some of its company-owned stations over to independent ownership.

She said she had not received a copy of the suit, which she called “most unfortunate and unproductive,” but denied Texaco has charged independent dealers either unfair rents or wholesale prices higher than those paid by company-owned stations. The November pricing difference involved leaded gasoline that was being phased out, she added.

The suit, which seeks unspecified actual and punitive damages, also claims that Texaco has intimidated wholesale distributors from selling Texaco gasoline on the open market, where it is allegedly cheaper than direct Texaco purchases, to independent Texaco dealers. One such distributor, Ochs Oil Inc. of San Marcos, is named as a defendant for allegedly refusing to sell Texaco gasoline to independent dealers.

Gary Ochs, manager of the company owned by his father, said he was unaware of the suit. But, he added, the dealers’ supply agreements are strictly through Texaco, and his contract with Texaco allows him only to sell to the mostly rural dealers with whom he has a specific supply agreement.

“They (the plaintiffs) are not our accounts. . . . I’m sorry to see that the dealers have problems. If they do, they obviously need to work them out with Texaco,” Ochs said.

Also named were W. T. Hicks, Texaco’s San Diego area manager, and C. T. Trammell, Texaco’s Los Angeles division manager, who allegedly intimidated dealers and Ochs from doing business.

Spokeswoman Kornylo agreed that Texaco’s contracts with distributors are specific to particular sites. “We don’t intimidate them,” she added.

The suit seeks an injunction forcing Texaco to allow Ochs and other wholesalers to sell to the dealers.

Sixteen of the 19 plaintiffs are located in San Diego County; two are in Orange County and one in Hollywood. Texaco’s policies are similar nationwide, Konitshek said, “but I’ve never seen it to this magnitude.”