Chevron files lawsuit, seeks to repossess LV service station

Grace Leong

Wednesday, Aug. 18, 1999 | 11:42 a.m.

Chevron USA Inc. is seeking to repossess a service station managed by Hayes Foodmart Inc.

The suit, filed in U.S. District Court, alleged the Las Vegas operation tried to hide its nonmotor fuel sales to defraud Chevron of rents owed under a dealer lease agreement.

Chevron said in the suit Hayes tampered with the electronic sales data equipment from which monthly rental payments at 5722 S. Eastern Ave., is calculated to reduce the amount of rents to be paid.

But Hayes disputes the allegations.

"What Chevron has alleged is completely incorrect," Lisa Faircloth, the manager at Hayes, said. "Why would my backup tax returns, office reports, daily sales and computer records all show the correct returns and the only thing incorrect is the data Chevron has pulled up from the main computer through their satellite?"

Chevron, whose investment in one service station alone often exceeds $2 million, alleged the equipment was reprogrammed to cause Hayes' cigarette sales to be fraudulently reported as automotive service bay sales, for which no rents are calculated.

The U.S. petroleum giant accused Hayes of fraud because the station it operated doesn't have automotive service bays and because of the big discrepancies in the cigarette sales it reported in its income tax returns and those reported to Chevron.

The suit further alleged Hayes failed to maintain proper sales records as required by the dealer lease agreement and to pay applicable sales taxes and income taxes for its sales at the service station.

The suit said auditor reports show the amount Hayes reported in cigarette sales for the first five months of 1998 averaged $9,514, while the amount Hayes reported to Chevron in the last seven months of 1998 averaged $1,557.

Chevron issued a termination notice revoking all prior contracts with Hayes on July 21, forcing the foodmart to evacuate its premises in 90 days, even before its dealer lease expires in November.

"They are trying to run us out of business because Hayes has first right of refusal under this agreement," Faircloth said. "That means if Chevron decides to sell the land, they have to offer it first to Hayes at fair market value."

Chevron, however, denied knowledge of any plans to sell the property, said Elizabeth Gonzalez, Chevron's attorney.