Citgo says reseller not paying for fuel, selling non-brand gas

CITGO Petroleum is suing over claims an oil reseller failed to pay for fuel purchases and sold non-brand fuel under the CITGO name.

CITGO Petroleum Corporation filed a lawsuit Oct. 14 in the Houston Division of the Southern District of Texas against Daibes Oil and Fred A. Daibes, citing breach of contract.

According to the complaint, on Feb. 16, 2012, CITGO entered a marketer franchise agreement with Daibes Oil in northern New Jersey, whereby Daibes would purchase and lift motor fuels from CITGO for resale under CITGO's brand name to consumers and retailers.

The lawsuit states Daibes Oil has failed to remit full payment to CITGO for fuel purchases totaling more than $359,000 made in January, and Daibes, who signed a guaranty for the agreement in 2013, has failed to comply with the terms of the contract.

CITGO says Daibes Oil also has failed to reimburse CITGO for more than $58,000 worth of branding materials furnished to service stations that debranded within the 60-month amortization period, which is a condition upon which the materials were provided. According to the lawsuit, CITGO has also learned that Daibes Oil sells non-branded motor fuels from stations bearing the CITGO trademark.

Daibes Oil is accused of breach of contract for failure to remit payment for fuel purchases and unamortized branding materials, selling non-CITGO motor fuels using CITGO branding materials, and trademark infringement. Daibes is accused of breach of the guaranty.

CITGO seeks damages, attorney fees, interest and costs of suit.

It is represented by attorneys Aaron R. Crane and Robert L. Pillow of Hogan Lovells in Houston.

Houston Division of the Southern District of Texas case number: 4:14-CV-02905