Plaintiff dealer appealed from judgment of nonsuit granted in favor of defendant company by the Superior Court of Stanislaus County (California), on two causes of action related to the dealership contract termination and from a conditional order granting new trial on the third cause of action on which plaintiff was successful at trial. The parties were represented by California business and employment lawyer.
Plaintiff dealer was an independent dealer of a vehicle hire business for defendant company. Defendant learned that plaintiff was dishonest in reporting the number of hires and, in terminating the dealership agreement, breached a 30-day notice requirement. The jury returned a verdict in favor of plaintiff for a substantial amount in damages, and the trial court entered a judgment of nonsuit in favor of defendant on plaintiff’s additional causes of action for fraud and for breach of the covenant of good faith and fair dealing. However, the trial court granted defendant’s motion for a new trial based on excessive damages, unless plaintiff agreed to a reduction of damages to the loss during the 30-day period. On appeal by plaintiff, the court determined that defendant breached the contract but that damages were limited by the parties’ agreement to the loss during the 30-day period. The court held that plaintiff was not entitled to recovery of special damages that were not foreseeable by the parties. The court also affirmed the nonsuit of plaintiff’s two other causes because there was no special relationship between the parties. The court affirmed the judgment of the trial court.
The court affirmed the judgment of nonsuit as to fraud and breach of covenant of good faith and fair dealing because there was no special relationship between the parties. The court affirmed the order granting defendant company a new trial unless plaintiff dealer agreed to a reduction of the damages to the notice period because special damages were not foreseeable.
All parties appealed an order from the Superior Court of Stanislaus County (California), entering judgment for plaintiff hauling company and plaintiff corporate shareholder in a suit against defendant corporation and employees for breach of the implied duty of good faith and fair dealing. Plaintiffs claimed that an improper jury instruction was given regarding plaintiffs’ right to recover punitive damages for defendant’s bad faith.
Plaintiff hauling company entered a contract with defendant corporation to haul walnuts. Because plaintiff did not agree to a reduced tariff rate, defendant claimed the contract was rescinded. Plaintiff hauling company and plaintiff corporate shareholder officer brought suit, alleging, inter alia, breach of contract and breach of the implied duty of good faith and fair dealing. The jury awarded plaintiff damages. The trial court denied the new trial motion. All parties appealed. Plaintiffs claimed that a jury instruction regarding tort liability and damages for the failure to deal fairly and in good faith was in error. The appellate court modified in part, reversed in part, and affirmed in part. Although punitive damages were not available for a simple breach of contract, the court found that defendant could be held liable for tort damages upon a finding that defendant denied, in bad faith, that the contracted existed. The failure to give a qualified instruction on the subject was prejudicially erroneous. Because a jury, if properly instructed, could have concluded from the evidence that defendant acted in bad faith, a new trial on the claim was required.
The appellate court modified in part, reversed in part, and affirmed in part the trial court’s judgment for plaintiff hauling company in its suit against defendant corporation for, inter alia, breach of the implied duty of good faith and fair dealing. Because an erroneous jury charge was given regarding the availability of punitive damages, a new trial was ordered.