Snappy's vs. Sheetz

Noncompete clause at center of suit

Published in CSP Daily News

STATE COLLEGE, Pa. -- J.J. Powell Inc., parent company of Snappy's convenience stores, has filed a lawsuit alleging that despite a 2008 court ruling enforcing a noncompete clause in its lease, developers have continued to advance a project that would include construction of a Sheetz station with six gasoline pumps, a Northwest Savings Bank branch, and a multiretail space, reported The Centre Daily Times.

The suit claims the Smith-Pletcher American Legion Post 779 and a group led by State College, Pa., developer Bob Poole have conspired to intentionally circumvent [image-nocss] the noncompete clause in Snappy's lease.

A judge ruled in a 2008 lawsuit the noncompete clause was legitimate, said the report, but Dave Putnam, adjutant for the American Legion post, argued that the clause prevents the post from
leasing the land to a competing business, but does not prevent it from selling the land. Putnam said his group entered into an option agreement with Poole to sell a 4.64-acre plot on the south corner of state Route 45 and state Route 144 in Old Fort for $1 million in January. While the option has not yet been exercised, Putnam said, "we're planning on closing the deal."

The lawsuit argues the way the deal is structured creates an arrangement "akin to a lease," and so the noncompete clause should apply, the report said.

It also contends that Snappy's paid $75,000 for upgrades to that location, the Times added, and $1 million for a canopy and other facility updates after being assured it would remain the sole gas station in that area.

Putnam said the Snappy's lease dates to 1982. It was originally drawn up by Snappy's and agreed to by the previous owner of the land. Snappy's amended several sections of the lease for its 2002 renewal that were not brought to the attention of the American Legion, Putnam said, and it also was signed by a group member who was not authorized to do so. Furthermore, he said Snappy's was paying less to lease their parcel than is fair.

Putnam said the group would also consider selling additional portions of the 70 to 80 acres its owns in the Old Fort area.

Altoona, Pa.-based Sheetz Inc. operates more than 360 convenience locations throughout Pennsylvania, West Virginia, Maryland, Virginia, Ohio and North Carolina.

Philipsburg , Pa.-based J.J.Powell operates the Snappy's, as well as Pacific Pride locations. It also offers heating oil and heating and cooling products and services.