Tomaino v. Concord Oil of Newport, Inc.

Joseph Tomaino (plaintiff) was vice president of Concord Oil Company (Concord) and president and director of subsidiary Concord Oil of Newport, Inc. (Concord/Newport) (defendant), which together supplied gas to over 30 New England gas stations. In 1978, Tomaino purchased three stations for Concord/Newport to operate. Tomaino purchased the land in one transaction and the buildings, pumps, and underground storage tanks in a separate transaction for $1. Gas distributors commonly owned underground tanks until environmental laws exposed owners and operators to liability for leaking tanks in the mid-1980s. Tomaino sold the pumps and tanks at each location to Concord/Newport for $5,000. In 1993, Concord/Newport stopped renting one station but refused to remove the tanks. Tomaino hired a broker to rent the property, but tenants refused to assume the potential liability the tanks created. Domino’s Pizza agreed to rent the property if the tanks were removed. Tomaino removed the tanks at significant expense. When Domino’s Pizza moved in, the property had been vacant nearly a year. Tomaino sued Concord/Newport to recover the expense and lost rent. Concord/Newport stopped renting the other two stations, again leaving the tanks behind, and the properties remained vacant when trial began. Concord/Newport requested judgment as a matter of law, arguing it could void its purchase of the tanks as an interested transaction with Tomaino that was unfair to Concord/Newport. The judge found factual questions remained for the jury to decide. Testimony established $5,000 was below market value for pumps and tanks in 1978 and less than what Concord and Concord/Newport paid elsewhere. The jury found the tanks belonged to Concord/Newport and awarded Tomaino $88,950 for removal costs and lost rent. Concord/Newport appealed, arguing it was entitled to judgment as a matter of law.