Dealers Brace for Courtroom Battle on Exxon Pullout Plan : Business: A Thousand Oaks station operator says many are sure their suit will succeed. The company says it wants to leave the market to reduce costs.

When Majid Parvinjah acquired an Exxon dealership in Thousand Oaks 10 years ago, it was like striking oil.

“What could be better?” the newly arrived Iranian immigrant thought. He had a franchise with the largest oil company in the world in the largest oil-consuming region in the world: Southern California. His future was secure.

But then the unthinkable happened. Parvinjah and his business partner, Al Samimi, and more than 150 other dealers throughout the region were informed last year that Exxon was pulling out of the Southern California retail market.

“My concern is my life,” said Parvinjah, 44. “I’ve been here 10 years. I’m getting too old to start another business.”

The company offered dealers the first right to buy the franchises, but dealers say the stations were offered at inflated prices--even older properties like Parvinjah’s that had been contaminated by gas leaks.

It was clear to dealers what was really happening. “We were being forced out,” said Samimi, 48.

But the two partners were determined to hold onto their Thousand Oaks Boulevard station. They joined forces with 50 other dealers in Ventura, Los Angeles, Orange and San Bernardino counties and filed a lawsuit against Exxon Corp. last summer in an attempt to block the company’s exodus.

“We told them we know you’re violating the law, and we’re going to fight you,” Samimi said. “And they were telling us we have hundreds of lawyers and you guys can do nothing.”

Farhad Monadjemi, 46, who operates an Exxon station about a mile away on Hampshire Road near the Ventura Freeway, said the dealers are certain they will win their case.

“We are trying to fight because we know we are right,” said Monadjemi, who invested $300,000 to acquire his franchise from another dealer three years ago.

“They lied to me,” he said. “They told me, ‘We’re going to make you the biggest station in Ventura County, 2,000 square feet minimum.’ That’s the reason I invested $300,000.”

After months of legal wrangling, the dealers won an injunction last November that bars the oil company from terminating their leases with dealers until the lawsuit is settled. Trial is set for Oct. 19 in federal court in Los Angeles.

In their lawsuit, the dealers allege that Exxon Corp. is conspiring with other oil companies to divide up oil and gas markets around the country in violation of federal antitrust laws. They also charge that Exxon is trying to force them out of business by making it virtually impossible for dealers to buy their stations.

Exxon denies the allegations, saying it is pulling out of the market to reduce costs and improve the overall profitability of its marketing operations. The company until recently held only a 3.4% share of the Southern California market.

But since announcing its withdrawal from the region in May, 1992, nearly 100 of the remaining 156 stations in the region have either been closed, sold to other oil companies or are in the process of being sold, said Les Rogers, an Exxon spokesman in Houston. Sixteen stations have been sold to Exxon dealers, who are using new suppliers.

While Exxon officials are reluctant to comment on the pullout because of the pending lawsuit, some observers have speculated that Exxon is leaving the region in part because it does not have a refinery in the area.

Joseph M. Alioto, the San Francisco attorney representing the station dealers, said that argument doesn’t make sense.

“Why did they come here?” Alioto asked. “They haven’t had refineries from the beginning.”

In the past year, Exxon has closed five of its 16 stations in Ventura County, officials said. Six stations have been sold to Mobil, one to Chevron and one to a non-brand-name operator.

Of the three remaining Exxon stations, two are in Thousand Oaks and one is in Oxnard.

The oil company, which does not own the land that Parvinjah and Samimi’s station sits on, has offered to sell the dealership--which includes the building and equipment--for $200,000, three times what the partners said it is worth.

The two men said an independent appraisal found that the dealership is worth about $65,000, and only after its leaking underground gas tanks are replaced.

“Exxon’s appraisals are not bona fide,” Alioto said.

Even if they agreed to pay Exxon its asking price, Parvinjah and Samimi said they cannot get a loan because a bank will not provide financing for a station that is contaminated with gas seepage.

“They put dealers in a Catch-22 situation,” Alioto said. “On the one hand they are offering the dealers a chance to buy their stations. But in order to buy the stations they have to be ecologically clean.”

Alioto said what the oil companies are really doing is trying to eliminate the overall number of stations in the area.

“The fewer stations, the less competition and the higher the prices,” he said.

Alioto said Chevron USA has also been named in the lawsuit because it struck a deal with Exxon to buy 22 stations, including one in Simi Valley, before Exxon announced to its own dealers that it was moving out of Southern California.

“What the gas companies are doing is getting together and dividing up the whole country, region by region, among themselves,” Samimi said. “And the one that’s really being hurt is the consumer.”

Exxon attorney Robert Abrahams, based in Washington, D.C., could not be reached for comment.

As for its cleanup plans, Exxon spokesman Les Rogers said only that the company’s “offers to sell included provisions with respect to remediation of properties” but would not elaborate.

Samimi and Monadjemi said Exxon would prefer to shut down its stations, remove its gasoline tanks and clean up any contamination so it can be free of any liability. They said if dealers buy stations that later produce gas seepage from Exxon tanks, the oil company would be liable.

“They want to pull out clean,” Samimi said. “They don’t want to have any responsibility once they leave.” The problem, he said, is that leaves dealers out in the cold.

Samimi said it would probably cost $100,000 to $200,000 to clean up some of the existing gasoline contamination at his station.

Exxon has offered to buy out lease holders to help them recoup some of their investment. But the company’s offers, ranging from $50,000 to $65,000, are far too low, dealers said.

“We are putting our lives into the business every day,” said Samimi, who along with Parvinjah has invested more than $100,000 in their business. “We just want fairness from them. If you want to get out of market, fine. But give us fairness.”

To help make its pullout from the market easier, Exxon is allowing dealers to buy and sell non-brand name gasoline in place of its own fuels. The dealers have taken up the company on its offer because the alternative gasoline is usually 5 to 10 cents cheaper per gallon than Exxon gas.

Still, dealers said that since the controversy erupted over Exxon’s pullout, they have lost some of their business because customers are wary of buying products or having their cars repaired at stations that may fold.

In the meantime, Samimi and Monadjemi said that Exxon continues to harass dealers even while it says it is willing to sell them the stations.

Monadjemi said a hoist used for car repairs at his station recently broke down and that it was a month before Exxon fixed it. He said in the past Exxon would have given him a break on his $4,000-a-month rent until the repairs were made, but that there was no such compensation this time.

“They don’t want to do any maintenance,” he said. “They want you to go out of business.”

Unlike the station operated by Parvinjah and Samimi, Monadjemi said his station is on land owned by Exxon.

He said Exxon has offered to sell the station for $720,000, even though he has had it appraised for $410,000. However, Rogers of Exxon said the station had been offered at “approximately $615,000.”

Monadjemi said that is still unreasonable. He said he feels betrayed by the company because it promised to remodel the station when he acquired the dealership.

He said he found out later that three months before he took over the station, Exxon had sent a letter to the city of Thousand Oaks stating it no longer had any intention of remodeling the station and would be dropping its plans to seek permits for the work.

“They knew what was going on and they lied to me,” Monadjemi said.

The Thousand Oaks dealers said they are barely able to stay in business. Parvinjah said in the last eight years his rent has soared from $900 a month to $3,000 a month. Monadjemi said his rent has also skyrocketed, going from $2,000 a month three years ago to $4,000.

The dealers said they have also paid about $15,000 each to fund their share of the lawsuit, which they said could end up in the U.S. Supreme Court.

Still, they are not about to give up.

“We will win,” said Monadjemi, whose station employs four people. “I’m thinking maybe there’s a law in the United States that can prove to even giant companies that you cannot do what you want with people.”

Samimi said he also has faith that the court will side with the dealers.

“A lot of people have already lost hope,” he said. “They’ve gone out of business. They say, ‘Well, if the guy is big, if he is the biggest oil company in the world, he can crush you.’

“But we’re going to stay and fight. If I have to sell my car to finance the lawsuit, I will do that. If I have to go and borrow money, I will do that. We are ready for our fair share. We put our life in this (business). I cannot get my life back.”

At Your Service Leading service station operators in Ventura County

NumberOperator: of stations Chevron: 34Mobil: 32Shell: 18Arco: 16Texaco: 14Exxon: 3Source: Oil companies