No. 85-455 INTHE SUPREME COURT OF THE STATE OF MONTANA 1986

TERRENCE DUNFEE and PATRICIA DUNFEE, Plaintiffs and ~es~ondt;e .& 

## ,-vsBASKIN-ROBBINS, INC., Defendant and Appellant.

APPEAL FROM: District Court of the Second JudicialDistrict, Inand fortheCounty of SilverBow, The Honorable Mark Sullivan, Judge presiding.

COUNSEL OF RECORD: ForAppellant: James A. Robischon argued, Butte, Montana TereseLowney Garrett, Glendale, California For Respondent: Knight, Dahood, McLean & Everett; Bernard Everett argued, Anaconda, Montana For Amicus Curiae: (International~ranchise Assoc.) Anderson, Brown, Gerbase, Cebull & Jones; James L. Jones, Billings, Montana Andrew A. Caffey, Washington, D.C. Lewis G. Rudnick, Chicago, Illinois

Submitted: April 111986 Decided: June 4, 1986

ClerkMr. Justice Frank B. Morrison, Jr., delivered the Opinion of the Court.

This is an appeal from judgment entered upon a jury verdict in the Second Judicial District. The jury found in favor of plaintiffs, assessing compensatory damages in the amount of $232,138.88 and $300,000 in punitive damages. Defendant appeals. We affirm. Baskin-Robbins, Inc. (appellant)and TerranceDunfee and Patricia Dunfee (respondents) entered into a franchise contract for the operation of a Baskin-Robbins store in Butte,Montana. Initiallyappellant explored the possibility of locating a store in the Butte Plaza Shopping Center but

was unable to secure a space. Subsequently, a site was obtained across Harrison Avenue in the "Raymond Mini-Mall." Appellant signed a leasewith Raymond on October 5,1979,and commenced constructionat theMini-Mall site. Respondents first saw the Baskin-Robbins store in July, 1980, and decided to approach appellant about the business. Respondents submitted a franchise application on July 31, 1980. Following interviews and training sessions sponsored by appellant, the respondents signed the franchise contract

on October 29, 1980. Prior to signing respondents consulted legal counsel, who suggested certain changes in the franchise agreement. Appellant insisted the standard agreement be signedwithout change and thiswas done. The purchase price of the store was $71,000. The respondents obtained the funds through a loan from Montana Bank guaranteedby the SmallBusinessAdministration. The store opened on October 29, 1980, and sales were brisk through the first 10 months of operation. 

### In the spring of 1981, the parking lot in front of the store waspaved pursuant to the contract between appellant and the Raymond.Mini-Mall. Thepaving of the lot reduced.the amount of parking and also changed the flow of traffic so that automobiles entering fromHarrisonAvenue could not exitupon the same thoroughfare. Rather, customers had to drive out through an alley, over a large hump to a side street. The respondents received numerous complaints about traffic flow. Thereafter, sales slumped dramatically. During the first 10 months of operation, the store averaged $13,359 in monthly sales; the next twelve months the average monthly sales dipped to $8,088. In the fa.11of 1981,the respondentshad problems making their payments. A representative from the Small Business Administration evaluated the business and recommended it be sold. Respondents were advised the store was in a poor location. Thereafter, respondents sought to persuade appellant that the store should be moved across Harrison Avenue to the Butte Plaza Shopping Center. Terrance Dunfee began discussing the possibility of relocation with Harold Donahue,manager of the Plaza Shopping Center. The Plazahad no similar store and Donahue encouraged themove. Therewas

a vacancy next to the movie theatre. Mr. Dunfee spoke to

'Sharon McCa.rthy,District Manager for Baskin-Robbins, about

the move. McCarthy consulted with Baskin-Robbins' Division Manager, Bob Miller. No written correspondence reflectedany discussions between Miller andMcCarthy. Site location, under the franchise agreement, exclusively belonged to Baskin-Robbins. Any site relocation had to be authorized and approved by a Baskin-Robbins Vice President. The vice president in chargewas never consulted by McCarthy or Miller regarding relocation of the store.Patricia.Dunfee testified that Sharon McCarthy told her Baskin-Robbins could not move because they were committed to

a fifteen year lease in the Raymond Mini-Mall. However, the Baskin-Robbins lease with the Raymond Mini-Mall had a terminationright after fiveyears and a right to sublease at any time. These factswere not communicated to respondents. Sharon McCarthy testified, contrary to the testimony of Patricia Dunfee, that she only told respondents that relocationwas not in theirbest interests. Following denial of the relocation request, and continued losses eachmonth, the respondents closed the store

on August 23, 1982. The Small Business Administration took possession and sold the store in December, 1982 for $25,000. As of April 9,1983,the respondents still owed over $82,000 in long termdebts on thebusiness. The respondents filed this action on May 26, 1983, alleging breach of fiduciscry duty, breach of the implied covenantofgood faith and fairdealing,and fraud. The case

was submitted to a jury on ageneral verdict form. Following

aplaintiffs' verdict appellant filed this appeal raising the following issues: 1. Whether the court properly instructed the jury that Baskin-Robbins owed a fiduciary duty to theDunfees? 2. Whether the District Court properly instructed the jury on theduty of good faith and fairdealing? 3. Whether there was substantial credible evidence in the record to support submission of the case to the jury on either theory? 4. Whether the evidence supported an award for emotional distress damages? 5. Whether therewas sufficient evidence in the record to support submissionof apunitive damage issue to the jury?ISSUEONE Whether the court properly instructed the jury that Baskin-Robbinsowed a fiduciary duty to theDunfees? Generally a franchisor does not owe a fiduciaryduty to

a franchisee. Picture Lake Campground v. Holiday Inns, Inc.

(E.D. Va. 1980), 497 F.Supp. 858, 869 ("[a] franchise relationship is inherently a business relationship, not a fiduciary relationship")

# . Accord Arnoco Oil Company v. CardinalOilCo., Inc. (E.D. Wis. 1982), 535 F.Supp. 661, 666

(courtrefused to allow amendment ofpleadings on the ground that a breach of fiduciary duty complaint failed to state a claim for relief in action by franchisee against franchisor); Murphy v. White Hen Pantry, Inc. (7th Cir. 1982), 691 F.2d 350, 354 ("the [district] court correctly determined that there was no legal basis for the argument that [franchisor] owed a fiduciary duty to [franchisee]"). Respondents recognize the general rule that under a franchise agreement a fiduciary relationship does not ordinarily develop. However, the respondents argue that special trust and confidence was reposed by the respondents in the expertiseof appellantand that under the authorityof Deistv. Wachholz (Mont. 19841,678P.2d 188, 41 St.Rep. 286,

a fiduciary duty resulted. When a fiduciary duty exists the one in the stronger position owes an obligation, by virtue of that trust relationship, to act in the best interests of the beneficiary. Deistv. Wachholz, supra. We find that we need not decide whether the special facts and circumstancesof this case gave rise to a fiduciary duty on the part of appellant. Although fiduciary duty was defined in the instructions, the court only held appellant to the responsibility of acting in good faith and dealing fairlywith respondents. The questioned instruction is court's instructionno. 15which stated: YOU ARE INSTRUCTED THAT a fiduciary relationship exists in all caseswhere there has been a special confidence reposed in one who in equity and. good conscience is bound to act in good faith, and with due regard to the interestsof the one reposing the confidence. A fiduciary relationship implies a conditionof superiority held by one of the parties over the other. A fiduciary relationship may exist when there is both a reposingof faith, confidenceand trust,the placing of reliance by one person on the judgment and advice of another, and the acceptance by the otherof the confidencereposed inhim. Theremust exist a just foundation for a belief that in giving advice orpresenting argumentsone is acting not in his own behalf, but in the interest of the other party. A careful reading of this instruction shows that the court defined fiduciary relationship as being a relationshipwhere

onepersonhas reposed trustand confidence in another person and that for the relationship to exist the stronger person must be acting in the interest of the otherparty and not in his own behalf. The entire second paragraph of the instruction definitional. The only duty stated the instruction is found in the first sentence where the court advised the jury that, where a fiduciary relationshipexists,

one isbound to act ingood faith,andwith due regard to the interests of the one reposing the confidence. Instruction

no. 15 must be read in conjunctionwith instruction no. 16 which stated: YOU ARE INSTRUCTED that apartywho has a fiduciary duty in its relationship with another party has a duty to act in good faith in its dealingswith the otherparty. When read together the instructions informed the jury that a person in a fiduciary relationship owes an obligation to deal fairly and ingood faith. The courtdid not instruct the jury that liability atta.ched if Baskin-Robbins acted intheir own interest to the detriment of the interest of Dunfees. Instructionno. 15 isnot artfullyworded. However,the instruction is not clearly erroneous nor does the instruction, when read with the other instructions, substantiallyprejudice the interestsof appellant. ISSUETWO Whether the District Court properly instructed the jury

on the duty ofgood faithand fairdealing? Appellant objects to court's instruction no. 13 which amplified upon the obligation of dealing fairly and in good faith. That instruction stated: YOU ARE INSTRUCTED THAT in every contract, such as the contract with BASKIN-ROBBINS, INC. in this case, there is an implied covenant that neither party shall do anything which will have the effect of injuring the right of the otherparty to receive the benefit of the contract, which means that in every contract there exists an implied covenant of good faith and fairdealing. Appellant argues that this instruction does not accord with the definition set forth recently by this Court in Nicholson v. United Pacific Ins. Co. (Mont. 1985), 710 P.2d

InNicholsonwe stated: Rut whether performing or breaching, eachparty has a justifiable expectation that the other will act as a reasonable person. Neal 

### v. Farmers Ins. Exchange (Cal. 1978), 582 P.2d 980. Thenature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrarily, capriciously or unreasonably, that conduct exceeds the justifiable expectationsof the second party. The second party then should be compensated for damages resulting from the other's culpable conduct.

The Nicholson casehad not been decided at the time the court instructed this jury. Court's instructionno. 13 does however containthe language approved by thisCourt in Gibsonv. Western Fire Ins. Co. (Mont. 1984), 682 ~.2d 725, 41 St.Rep. 1048. In that case Justice Sheehy defined the implied covenant of good faith and fair dealing as follows: Theduty to accept a reasonableofferwithinpolicy coverage limits arises from an implied covenant of good faith and fair dealing that neitherpartywill do anything which will injure the right of the other to receive the benefits of the agreement.

The District Court was offered, in place of the given instruction, defendant's proposed instruction no. 7 which stated: You are instructed that both parties to any commercial transactionhave the duty to fairlydeal with each other in good faith. Good faith is defined as meaning honesty in fact in the conduct or transaction involved. Therefore, in this case if you find that the Defendant did some dishonest act or acts that harmed the Plaintiffs, then it is guilty of the tort of bad faith and liable for any damages proximately caused thereby. Conversely, if you find that Defendant did not do anything dishonest in its dealing with the Plaintiffs, then your verdict must be in favor of theDefendant. The courtwisely chose to refuse thedefendant'soffered instruction. In McGregor v. Mommer (Mont. 1985), 714 P.2d 536, 43 St.Rep. 206,this Court held that it was insufficient to define good faith as "honesty in fact." While the majority did not specifically disa.pproveof good faith as

"honesty in fact," the majority did hold that amore complete duty had to be submitted to the jury. The trial court here, gave a more complete definition. In fact the court gave, nearly verbatim, the definition previously approved by this Court inGibson, supra. The implied covenant of good faith and fair dealing has presented problems in its application. In a commercial settingwe now have held thatwhere the conduct of one partyunreasonably breaches the justifiable expectations of the other party, an action in tort results. Nicholsonv. United Pacific Ins. Co.

## , supra. The rule,whether defined as the District Court defined it here, or as defined in Nicholson, should allow for the functioning of a free enterprise marketplace. Parties must be permitted to openly and forthrightly breach contracts electing to pay contract damages only. The right to intentionally breach a contract is recognized inNicholson, where the Court stated: Historically, a party to a contract generally had the right to breach and pay damages rather than perform. Thenon-breachingparty, theoretically is "made whole" from the damages paid following the breach and thus still received benefits from the agreement. TheCourtquoted with approval the following rule: "Tontract law isbased in part upon the assumption that certain intentional breaches are to be encouraged. Permitting parties to breach their contracts promotes an efficient economy, at least when the gains from the breach exceed the expected pecuniary injuriesof thepromisee.'"

The Court's opinion in Nicholson then distinguished legitimate breaches of contract from activities which may constitute a tort. The Court said: "Butwhether performing

or breaching, each party has a justifiable expectation that the otherwill act as a reasonableperson." Id. In the case at bar, the jury had to focus upon appellant's conduct in performing the contract rather than breaching the contract. Under the franchise agreement, appellant had the exclusive right to determine site location and the inquiry necessarily evaluated the reasonableness of appellant's conduct in light of the reasonable expectations of theparties to the franchise agreement.Were this case to be tried following the Nicholson decision the court's instruction would reflect the rule stated in Nicholson. Not having the benefit of our discussion in Nicholson, the District Court gave an instruction quoting language from the Gibson decision rendered only a fewmonths before the trial. The jury was given a fair and complete definition of "good faith" as defined by this Court. More cannot be asked 

### of the trial judge. ISSUETHREE Whether there was substantial credible evidence in the record to support submission of the case to the jury on either theory? Appellant contends there was insufficient evidence in the record to justify submissionof appellant's lack of good faith to the jury. The controversy centers around appellant's refusal to remove the store from it's Raymond Mini-Mall location, across Harrison Avenue, to a location within the larger indoor Butte PlazaMall. Both appellant and respondents developed substantial evidence respecting the merits of relocation. The record contains evidence showing that business declined rapidly due to a change of traffic flow the year foll-owingthe store's original opening. This change of circumstance,and the dire financial conditionof the ice creambusiness in its existing location,may have reasonably triggered an inquiry regarding relocation. Unquestionably appellant had the sole contractual right to determine the location but the law imposes a duty upon appellant to reasonably consider the facts regarding relocation. In determining whether a jury issue exists we must view the record in a light most favorable to respondents. FirstNational Bank in Libby v. Twombly (Mont. 1984), 689 P.2d 1226,41 St.Rep. 1948. Distil-led to its essence, the respond.entslcase rests upon evidence that Sharon McCarthy, acting for appellant, advised Patricia Dunfee that Baskin-Robbins was tied to a fifteen year commitment at the Raymond Mini-Mall and could. not move. In fact, Baskin-Robbins had a provision for sublease and a right to termination after five years. This information was not conveyed to the respondents and, therefore,respondentshad no opportunity to find a subleasee and facilitate theirmove. Respondents' proof further established the only person from appellant's organization who could authorize relocation, namely a vice president, was not told of the relocation question. Therefore, the merits of respondentsfrelocation argument were never considered by the 01-11-y person who could authorize themove. While this Courtmust recognize the contractual right of Baskin-Robbins to refuse relocation on the basis of cost or other economic circumstances,the law does impose a duty upon Baskin-Robhins to be reasonable in the exercise of that right. Respondents have presented evidence that vital information was withheld from them and from the vice president in charge of authorizing relocation. This evidence, if believed, would provide a basis for finding appellant acted unreasonably, thereby breaching it's duty to exercise good faith as defined by the court's instructions. ISSUEFOrJR Whether the evidence supported an award for emotional distressdamages? The testimony at trial concerning the Dunfees' mental and emotional distress consisted of the following: Mr.Dunfee said they were devastated and felt a sense of loss; Mrs. Dunfee testified that she was distraught and had lost her self-esteem. The Dunfees lived in the country and Mrs. Dunfee tried never to go into Butte; she felt ashamed as being recognized as a failure. While the testimony given by the Dunfees shows mental and emotionaldistress,appellant argues that the distress is related to the business failure and not to denial of relocation. However, whether the respondents would have failed had the relocationbeen authorized was a question for the jury to consider. The jury was properly instructed.on proximate cause and its members found that the mental distress damageswere related to the appellant's unreasonable failure to evaluate relocation. We hold therewas a submissible jury issue onmental and emotional distress and although the award of $1-50,000 is generous we cannot say, as amatter of law,that the jurywas moved by passion orprejudice. ISSUEFIVE Whether there was sufficient evidence in the record to support submission of a punitive damage issue to the jury? Punitive damages are governed by § 27-1-221,MCA,which provides as follows: When exemplary damages allowed. (1) Subject to subsection (2), in any action for a breach of an obligation not arising from contract where the defendant has been guilty of oppression, fraud or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant. The issue of punitive damages went to the jury over appellant's objection that there was no evidence sufficient to raise an issue under the statute. The trial judge gavethe following instructions defining oppression, fraud and malice:INSTRUCTIONNO. 23 You are instructed that oppression is defined as an act of cruelty, severity, unlawful exaction or excessive use of authority. An act is oppressively done ifdone in awa.yormanner whichviolates the right of anotherpersonwith unnecessary harshness or severity as by misuse or abuse ofauthorityorpower. INSTRUCTIONNO. 24 You are instructed that the abuse of authority or power is the essence of cohstructive fraud. INSTRUCTIONNO. 25 You are instructed that the standard for presumed malice sufficient to support an award forpunitive damages under the laws of the State of Montana is as follows: When a person knows orhas reason toknow of facts which create a high degree of risk orharm to the substantial interests of another, and either deliberately proceeds to act in conscious disregard of or indifference to that risk, or recklesslyproceeds inunreasonable disregard of or indifference to that risk, his conduct meets the standard of willful, wanton and/or reckless to which the law of this State will allow imposition of punitive damages on the basis ofpresumed malice. Instruction no. 23 is an accurate statement of the law as contained in Purcell 

### v. Automatic Gas Dist., Inc. (Mont.

Instruction no. 25 is a correct statement of the law taken from Owens v. Parker Drilling Co. (Mont. 1984), 673 P.2d at 1251, 41 St.Rep. at 69. Instruction no. 24 is not the statutory definition of constructive fraud as found in 5 28-2-406. However, the languagewas taken fromour opinion in Purcell v. Automatic Gas Dist., Inc., supra. ~lthough instructionno. 24 could have beenmore complete,the conduct described is embraced within the definition of oppression asthe following instructions defining oppression, fraud and malice:INSTRUCTIONNO. 23 You are instructed that oppression is defined as an act of cruelty, severity, unlawful exaction or excessive use of authority. An act is oppressively done if done in a way ormannerwhichviolates the rightof anotherpersonwith unnecessary harshness or severity as by misuse or abuse of authorityorpower. INSTRUCTIONNO. 24 You are instructed that the abuse of authority or power is the essence of constructive fraud. INSTRUCTIONNO. 25 You are instructed that the standard for presumed malice sufficient to support an award for punitive damages under the laws of the State of Montana is as follows: When a person knowsorhas reason toknow of facts which create a high degree of riskorharm to the substantial interests of another, and either deliberately proceeds to act in conscious disregardof or indifference to that risk, or recklesslyproceeds in unreasonabledisregard of or indifference to that risk, his conduct meets the standard of willful, wanton and/or reckless to which the law of this State will allow imposition of punitive damages on thebasis ofpresumed malice. Instruction no. 23 is an accurate statement of the law

as contained in Purcell v. Automatic Gas Dist., Inc. (Mont.

Instruction no. 25 is a correct statement of the law taken from Owens v. Parker Drilling Co. (Mont. 1984), 673 P.2d at 1251, 41 St.Rep. at 69. Instruction no. 24 is not the statutory definition of constructive fraud a.s found in S 28-2-406. However, the languagewas taken from our opinion in Purcell v. Automatic Gas Dist., Inc., supra. ~lthough instructionno. 24 could have beenmore complete, the conduct described is embraced within the definition of oppression asstated in instruction no. 23. Any error in the incompleteness of instruction no. 24, when viewed in conjunctionwith instructionno. 23, isharmless. The question remains whether there was sufficient evidence to submit punitive damages to the jury. In First NationalBank in Libbyv. Twombly, supra,we said: When the duty to exercise good faith is imposed by law rather than the contract itself 

# ... the breach of that duty is tortious. Therefore, punitive damages are recoverable if the [breaching party's] conduct is sufficiently culpable.

In the present case, viewing the evidence in a light most favorable to the Dunfees, a jury questionwas raised as to fraud, oppression and malice on the part of Baskin-Robbins. According to the respondents' testimony, appellant failed to properly review their relocation request and did not attempt to renegotiate the Mini-Mall lease. Furthermore, SharonMcCarthy, ifPatriciaDunfee is believed, misrepresented material facts with respect to the underlying lease between Baskin-Robbins and the Raymond Mini-Mall. In furtheranceofher vindictive attitude she refused todeliver any of the facts to the vice president, the only one who could make a decision favorable to the Dunfees' relocation request. The evidence on punitive damages presents this Court with a closequestion. When the question for jury submission is a close one,doubt should be resolved in favorof the jury deciding a fact issue. In Jacques

### v. Montana National Guard

(1982), 199 Mont. 493, 649 P.2d 1319, we quoted from Mr. Justice Black's dissenting opinion filed in Galloway v. United States (1943), 319 U.S. 372, 63 S.Ct. 1077, 87 L.Ed. 1458 whereinhe said:As for myself, I believe that a verdict should be directed, if at all, only when, without weighing the credibility of the witnesses, there is in the evidence no room whatever for honest difference of opinion over the factual issue and controversy. I shall continue to believe that in allother cases a judge should, in obedience to the command of the seventh amendment, not interfere with the jury's function. Since this is matter of high constitutional importance, appellate courts should be alert to insure the preservation of this constitutional right even though each case necessarily turns on its peculiar circumstances. In Jacques we adopted the standard articulated by Justice Black for the purpose of measuring directed verdict questions. When the standard is here applied,we find the respondents' evidence sufficientto take the case to the jury on the questionofpunitive damages.

We Concur:

ChiefJustice 

## n

JusticesMr. Justice Fred J. Weber dissentsas follows:

I would reverse the District Court because I conclude there was not sufficient evidence to support a punitive damage award of $300,000. As stated in the majority opinion, the question is whether there was sufficient evidence to submit the issue of punitive damages to the jury. The majority concluded that a review of the evidence in a light most favorable to the Dunfees resulted in a conclusion that a jury question had been raised as to fraud, oppressionandmalice on thepart of Baskin-Robbins. The majority opinion then refers to three factualbases for this conclusion: (1) According to the Dunfees' testimony, Baskin-Robbins failed to properly review theDunfee relocation requestand did not attempt to renegotiate the lease;

(2) The Dunfees testified that District Manager Sharon McCarthy of Baskin-Robbins misrepresented material facts with respect to the underlying lease; (3) In furtherance of District Manager McCarthy

## 's "vindictiveattitude" she refused todeliver any of the facts to the Vice President of Baskin-Robbins, the only one who could make a favorable decision forrelocation. Iwilldiscuss these inmore detail. With regard to (I),I conclude that the Dunfees did not prove a failure by Baskin-Robbins to review the relocation request. The evidence submitted without contradiction by Baskin-Robbins shows that the relocation requestwas considered by Sharon McCarthy, the District Manager for Baskin-Robbins, and that she forwarded the information to Division Manager Miller. In turn, Division Manager Miller discussed the move with Mr. Bovshow, Baskin-Robbins' RealEstate Manager, and they both concluded that the relocation

was not a good idea and disapproved it. Mr. Bovshowwas the Baskin-Robbins representative originally involved in the location of the store inButte. Even ifwe accept the testimony ofMrs. Dunfee that shewas not told of the possibility of a sublease and of the 5year termination possibility, the Dunfees have still failed to prove that Baskin-Robbins did not properly consider and reject their request for relocation. I conclude that there is a complete absence of evidence suggesting that Baskin-Robbins failed to properly review the relocation request. With regard to (2), we have a difficult question because Mrs. Dunfee did testify that District Manager McCarthy misrepresented the underlying lease and its terms. However, if

we start with the premise that Baskin-Robbins has a right to decide whether or not to authorize the change of ,location, the issue takeson a different light. Unless themajority is concluding thatBaskin-Robbins had an obligationto renegotiate the lease, themisrepresentation of facts is notmaterial. Ihave concluded that Baskin-Robbins was involved in an

arms length transaction under which itproperly could refuse to enter into a changeof location,and Ibelieve the majority essentially agreeswith that conclusion. At thatpoint, I must also conclude that there was no misrepresentation of a fact material to the rights of the Dunfees. Clearly the facts are not of the type sufficientto raise a jury question

on fraud,oppression ormalice. With regard to (3), the majority emphasizes that "in furtherance of her vindictive attitude" District Manager McCarthy refused to deliver any of the facts to the Vice President of Baskin-Robbins, the only one who could make afavorable relocation decision. I conclude that is not a correct factual analysis. The record does not in any way indicate that District Manager McCarthy refused to deliver any facts to the vice president of Baskin-Robbins. As district manager she passed this information on to her division manager, Mr. Miller. Mr. Miller in turn discussed the same with the Baskin-Robbins real estatemanager, and they disapproved relocation. That determinationwaswithin the discretiongranted to the divisionmanager and the district manager by Baskin-Robbins. In view of their decision againstrelocation, there was no reason to pass the information on up the corporate ladder to the vice president. Presentation to the vice president of Baskin-Robbins was required only in the event that the lower level managers concluded that relocation

was advisable. I therefore conclude there isa total absence of any proof of a vindictive attitude on the part of the officersor representativesofBaskin-Robbins involved in the failure to pass the informationup to thevice president,he being the only one who could make a favorable decision for relocation. I conclude there is an absence of evidence showing fraud, oppressionormalice on the part ofBaskin-Robbins. I then conclude theDunfees failed tomeet theminimum standard for proof of punitive damages, and that submission of the punitive damages issue to the jury constitutes reversible

error. I further disagree with the majority opinion in regard to Issue I,which pertains to the instruction on fiduciary duty. InstructionNo. 15,which is quoted at length in the majority opinion, isextremely confusing. In this case it is

an invitation to error so far as the jury is concerned.There are no facts in the recordwhich warrant an instruction

on fiduciary relationship. Themajority concludes that even though it may be true that there was no fiduciary relationship, the instructions are not reversible error because they require only an acting in good faith and fair dealing which is appropriate. Idonot agree with that conclusion. Under Instruction No. 15, it is possible that the jury could have concluded that a fiduciary relationship existed between Baskin-Robbins and the Dunfees because of a special confidence imposed in Baskin-Robbins, binding it in equity and good conscience to act in good faith and with due regard to the interests of the Dunfees. That relationshipcould be found to imply a condition of superiority by Baskin-Robbins

over the Dunfees. The second paragraph of the instruction could be interpreted to mean that the fiduciary relationship of Baskin-Robbins exists because there was a reposing of faith, confidence and trust by the Dunfees. The last sentence could allow the jury to conclude that there was a requirement that Baskin-Robbins should act not in its own behalf but in the interest of the Dunfees. That idea is totally inappropriate to an arms length transaction with which we are here involved. I would therefore reverse because of this incomplete andmisleading instruction. Iwould reverseand remand fornew trial. 

# -<&Z~A/

Justi We concur in the foregoing dissent of ~ustice/%eber,



# , 

# ,/fb YL' ef Justice