Puerto Rico Energy sues franchisee over gas station contract breach
The company alleges environmental violations, unpaid fines and unauthorized use of trademarks.
Puerto Rico Energy LLC has filed a federal lawsuit against franchise operator Antonio Juan León and two affiliated companies, citing breach of contract, environmental noncompliance and unauthorized use of trademarks following the termination of multiple gas station franchise agreements.
The complaint, filed in the U.S. District Court for the District of Puerto Rico, seeks declaratory judgment, injunctive relief and more than $367,000 in damages.
Puerto Rico Energy is a fuel distributor that supplies gasoline and diesel to independently owned stations under brands such as Puma and Texaco.
According to the lawsuit, the company terminated its agreements with León, CJL Investment LLC and Los Juanes Investment Corp. due to repeated failures to make payments, noncompliance with underground storage tank (UST) regulations and continued use of company branding after the contracts ended.
The distributor also alleges that León failed to reimburse it for environmental fines paid to the Puerto Rico Department of Natural and Environmental Resources (DNER) for violations at stations formerly operating under the Puma and Texaco names.
“These amounts are liquid, outstanding and due,” the complaint states. “Each day that the dealer fails to pay constitutes a new event relevant to the franchise relationship, making termination reasonable under the Petroleum Marketing Practices Act,” which sets federal guidelines for terminating fuel distribution franchise agreements.
León operated three active stations in Ponce under the Puma and Texaco banners, which included Shop Express, Super7 and Star Mart convenience stores. He also managed two former locations in Juana Díaz, where the DNER cited multiple violations, including operating without UST permits.
Puerto Rico Energy said it paid $15,000 in environmental fines and incurred additional legal and compliance costs, bringing total damages to $67,345.37. The company noted that franchisees are contractually responsible for obtaining permits and maintaining compliance.
“Franchisees assumed all risk and liability and agreed to indemnify Puerto Rico Energy,” the filing states. “This duty survives the expiration of the agreements.”
The distributor is also seeking to recover possession of the properties and prohibit the defendants from using brand names including Puma, Texaco, Shop Express, Super7 and Star Mart.
“Defendants continue to illegally use identifying marks and sell products under those brands, misleading the public and passing off as authorized dealers,” the lawsuit alleges.
Puerto Rico Energy says that although it issued a formal termination notice on April 14, the defendants have not vacated the properties.
“To this day, the franchisees continue to retain holdover possession,” the complaint states, adding that the continued use of trademarks constitutes infringement and dilution under the Lanham Act.
The company is requesting immediate repossession of the stations and damages including $300,000 in estimated losses from being unable to sell fuel at the affected locations while awaiting new franchisees.
Puerto Rico Energy said it made multiple attempts to resolve the issue through payment plans and other means but received no response.
“Despite good faith efforts, Puerto Rico Energy failed to receive payment or acknowledgment of the debt,” the lawsuit concludes.
The case has been assigned to Judge María Antongiorgi-Jordan.
