Shell Shocked : Oil Giant Told to Pay $5.1 Million to an Ex-Dealer for ‘Sabotage’

A Dana Point man won more than $5.1 million in a jury verdict Wednesday on his claim that Shell Oil Co. sabotaged his efforts to sell his service station at a reasonable price.

Carl W. Eastridge, 62, saying he was “very happy” with the outcome, thanked the jurors for their unanimous verdict, shaking hands with them as they left the courtroom after the 12-day trial.

“We did what we thought was right,” one juror said as he left. Another juror said the panel had been swayed by testimony about Shell’s efforts to evade answers in pretrial proceedings and by “evasive” answers a company employee gave at the trial.

Meantime, attorneys for Shell and for one of its employees, Thomas E. Lackland, appeared stunned by the verdict. They and Lackland declined to talk about the case, except to say an appeal was likely.

Later, Eastridge, in a reflective mood, said he doubted he would ever see the money because of appeals that the Houston-based oil giant will probably file. “I don’t know what I’d do with it, anyway,” he said.

Veteran Manager

Eastridge had worked for Shell for 20 years, running three stations at different times in the Torrance area before opening a station in 1968 on Shell-owned land at Avery Parkway and Interstate 5 just north of San Juan Capistrano.

When both he and his wife, Ruth, 59, became ill in 1979, he decided to sell his station and retire. But a clause in a contract he had with Shell stipulated that the new buyer had to be approved by the company’s territorial manager --Lackland, at the time--according to Eastridge’s lawyer, Harris I. Steinberg of San Diego.

Shell and Lackland rejected offers as high as $125,000 from about a dozen prospective buyers for what Eastridge contended was one of the best locations in south Orange County.

Lackland had testified that he acted reasonably in rejecting the proposed deals because prospective buyers lacked various qualities that would make them successful station owners.

“Shell wanted to own the station or control it,” Steinberg said after the verdict. “It was grabbing up high-volume stations. It wanted even higher volume with self-service and fewer employees.”

Shell offered to buy out Eastridge for $25,000 but approved a sale for $50,000 in early 1983 to a man Eastridge claimed was willing to follow the company line in switching to self-service and limiting the number of employees.

In March, 1983, shortly after selling the station, Eastridge sued, claiming Shell had restrained his trade, interfered with his prospective economic advantage, inflicted emotional distress and dealt with him in bad faith.

Surprise Testimony

A key portion of the trial, according to juror Elmer Clark of Brea, was the surprise testimony of C. L. Jackson, who took over Lackland’s job. Lackland is now a real estate representative for Shell.

Jackson testified that he left Shell after 18 years of employment because he refused, as territorial manager, to try to buy properties below cost, according to Clark and Steinberg. Jackson also described how Shell executives told him to avoid answers or evade questions at pretrial depositions, they said.

Juror Clark said he also was influenced by what he considered evasiveness by Lackland during Lackland’s four days of testimony. Clark said he eventually decided to keep count of the questions Lackland did not answer.

“In two hours, Lackland said ‘I do not recall’ 75 times,” Clark said, showing his note pad indicating how he kept track. “You know when you’re getting evasive answers and you know when you’re getting straight answers.”

He said jurors agreed that Shell and Lackland were liable but spent about four of the five hours they deliberated trying to decide how much to award.

In the end, they gave Eastridge $147,000 for his lost profits and emotional distress and awarded him $5 million in punitive damages from Shell and $2,500 in punitive damages from Lackland.