Judge drops gas station deed lawsuit

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The owner of a Milwaukee gas station would rather sell his business than continue to fight a deed that dictates what he can sell.

Ramkrishna Subedi, the owner of Johnson Creek-based Mt. Everest Real Estate Holding Co. LLC, which operates the Himalayan Oil station at 3515 S. 13th St., has been embroiled in a lawsuit with Findlay, Ohio-based Marathon Petroleum Co. LP since August. Marathon sued Subedi and his company after he allegedly violated a deed restriction by selling non-Marathon fuel at the station.

That case was dismissed June 18, and although Subedi maintains he did not violate the restriction, he said he plans to sell the gas station.

“Move on,” he said, “rather than monkey around with Marathon’s rules and regulations.”

Marathon’s attorney, Amy Johnston of Detroit-based Miller Canfield Paddock and Stone PLC, did not immediately respond to requests for comment Monday afternoon.

The gas station, which Subedi bought at a Milwaukee County sheriff’s sale in 2010 for $356,001, has a deed restriction stipulating that the property’s owner may sell only Marathon-branded fuel. That fuel can be “purchased either directly from Marathon,” according to the deed restriction, “or from a Marathon branded jobber.” A jobber is a third-party distributor.

Subedi said he has bought several properties through sheriff’s sales and always runs a title search and consults an attorney. So, he said, the restriction was not a surprise.

“It’s not like we went to the sheriff’s sale and did it without knowing anything about the property,” he said.

But, he said, he expected to buy his gas directly from Marathon, which he said he believed to be the previous owner’s arrangement.

Marathon, according to court documents, denied that arrangement. In fact, the company argued it does not sell directly to any gas stations in the Milwaukee area.

“That is not how Marathon runs its business,” according to court documents, “and is not how the industry works in general.”

After he bought the gas station, Subedi said, Marathon told him he would have to buy through a third-party distributor. In an affidavit filed in September, Subedi claimed buying fuel through such a distributor could cut his profit margin by as much as 60 percent.

According to court documents, Subedi acknowledged selling non-Marathon fuel after the company required he go to that third party.

He said Marathon violated its own deed restriction by refusing to sell to him directly.

“I know we have a very good case,” Subedi said, “but we don’t have money.”

U.S. District Judge Rudolph Randa dismissed Marathon’s lawsuit based on Subedi’s assurance he would abide by the deed restriction. The case had been scheduled to go to trial in December.

Randa dismissed the case without prejudice, meaning Marathon is free to revive the lawsuit anytime.

Subedi said he finally agreed to buy from a third-party distributor for two reasons. First, he said, Marathon won a preliminary injunction in 2012 forcing him to sell Marathon fuel while the lawsuit continued. Second, he said, court costs were adding up.

He said he has not approached a broker yet but wants to list the property soon. Mt. Everest has seven other gas stations, he said, and he can afford to walk away.

“I know they violated the law,” he said, “but everything has to come to an end because we could not pay thousands of dollars in legal fees.”