No. 85-455 

IN THE 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 Judicial District, 

In and for the County of Silver Bow, 

The Honorable Mark Sullivan, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James A. Robischon argued, Butte, Montana 

Terese Lowney 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 11 1986 

Decided: June 4, 1986 

Clerk 
Mr. 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 Terrance Dunfee and 

Patricia Dunfee (respondents) entered into a franchise 

contract for the operation of a Baskin-Robbins store in 

Butte, Montana. Initially appellant 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 lease with Raymond on October 5, 1979, and 

commenced construction at the Mini-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 

signed without change and this was done. 

The purchase price of the store was $71,000. The 

respondents obtained the funds through a loan from Montana 

Bank guaranteed by the Small Business Administration. 

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 was 
paved pursuant to the contract between appellant and the 

Raymond. Mini-Mall. The paving of the lot reduced. the amount 

of parking and also changed the flow of traffic so that 

automobiles entering from Harrison Avenue could not exit upon 

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.11 of 1981, the respondents had 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 Plaza had 

no similar store and Donahue encouraged the move. There was 

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 reflected any 

discussions between Miller and McCarthy. 

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 charge was 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 

termination right after five years and a right to sublease at 

any time. These facts were not communicated to respondents. 

Sharon McCarthy testified, contrary to the testimony of 

Patricia Dunfee, that she only told respondents that 

relocation was not in their best interests. 

Following denial of the relocation request, and 

continued losses each month, 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 term debts on the business. 

The respondents filed this action on May 26, 1983, 

alleging breach of fiduciscry duty, breach of the implied 

covenant of good faith and fair dealing, and fraud. The case 

was submitted to a jury on a general verdict form. Following 

a plaintiffs' 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 the Dunfees? 

2. Whether the District Court properly instructed the 

jury on the duty of good faith and fair dealing? 

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 there was sufficient evidence in the record 

to support submission of a punitive damage issue to the jury? 
ISSUE ONE 

Whether the court properly instructed the jury that 

Baskin-Robbins owed a fiduciary duty to the Dunfees? 

Generally a franchisor does not owe a fiduciary duty 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. 

Cardinal Oil Co., Inc. (E.D. Wis. 1982), 535 F.Supp. 661, 666 

(court refused to allow amendment of pleadings 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 expertise of appellant and that under the authority of 

Deist v. Wachholz (Mont. 19841, 678 P.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. Deist v. Wachholz, supra. 

We find that we need not decide whether the special 

facts and circumstances of 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 fairly 
with respondents. The questioned instruction is court's 

instruction no. 15 which stated: 

YOU ARE INSTRUCTED THAT a fiduciary relationship 

exists in all cases where 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 interests of the one reposing the 

confidence. A fiduciary relationship implies a 

condition of superiority held by one of the parties 

over the other. 

A fiduciary relationship may exist when there is 

both a reposing of faith, confidence and trust, the 

placing of reliance by one person on the judgment 

and advice of another, and the acceptance by the 

other of the confidence reposed in him. There must 

exist a just foundation for a belief that in giving 

advice or presenting arguments one 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 relationship where 

one person has reposed trust and confidence in another person 

and that for the relationship to exist the stronger person 

must be acting in the interest of the other party 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 relationship exists, 

one is bound to act in good faith, and with due regard to the 

interests of the one reposing the confidence. Instruction 

no. 15 must be read in conjunction with instruction no. 16 

which stated: 

YOU ARE INSTRUCTED that a party who has a fiduciary 

duty in its relationship with another party has a 

duty to act in good faith in its dealings with the 

other party. 

When read together the instructions informed the jury 

that a person in a fiduciary relationship owes an obligation 

to deal fairly and in good faith. The court did not instruct 

the jury that liability atta.ched if Baskin-Robbins acted in 
their own interest to the detriment of the interest of 

Dunfees. 

Instruction no. 15 is not artfully worded. However, the 

instruction is not clearly erroneous nor does the 

instruction, when read with the other instructions, 

substantially prejudice the interests of appellant. 

ISSUE TWO 

Whether the District Court properly instructed the jury 

on the duty of good faith and fair dealing? 

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 other party to receive 

the benefit of the contract, which means that in 

every contract there exists an implied covenant of 

good faith and fair dealing. 

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 

In Nicholson we stated: 

Rut whether performing or breaching, each party has 

a justifiable expectation that the other will act 

as a reasonable person. Neal v. Farmers Ins. 

Exchange (Cal. 1978), 582 P.2d 980. The nature 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 

expectations of the second party. The second party 

then should be compensated for damages resulting 

from the other's culpable conduct. 

The Nicholson case had not been decided at the time the 

court instructed this jury. Court's instruction no. 13 does 

however contain the language approved by this Court in Gibson 
v. 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: 

The duty to accept a reasonable offer within policy 

coverage limits arises from an implied covenant of 

good faith and fair dealing that neither party will 

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 transaction have the duty to fairly deal 

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 

the Defendant. 

The court wisely chose to refuse the defendant's offered 

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.pprove of good faith as 

"honesty in fact," the majority did hold that a more 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 in Gibson, supra. 

The implied covenant of good faith and fair dealing has 

presented problems in its application. In a commercial 

setting we now have held that where the conduct of one party 
unreasonably breaches the justifiable expectations of the 

other party, an action in tort results. Nicholson v. 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 in Nicholson, where the Court stated: 

Historically, a party to a contract generally had 

the right to breach and pay damages rather than 

perform. The non-breaching party, theoretically is 

"made whole" from the damages paid following the 

breach and thus still received benefits from the 

agreement. 

The Court quoted with approval the following rule: 

"Tontract law is based 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 injuries of the promisee.'" 

The Court's opinion in Nicholson then distinguished 

legitimate breaches of contract from activities which may 

constitute a tort. The Court said: "But whether performing 

or breaching, each party has a justifiable expectation that 

the other will act as a reasonable person." 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 the parties 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 few months 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. 

ISSUE THREE 

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 submission of 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 Plaza Mall. 

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-owing the store's 

original opening. This change of circumstance, and the dire 

financial condition of the ice cream business 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. First 
National Bank in Libby v. Twombly (Mont. 1984), 689 P.2d 

1226, 41 St.Rep. 1948. 

Distil-led to its essence, the respond.entsl case 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, respondents had no opportunity to find a subleasee 

and facilitate their move. 

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 respondentsf relocation 

argument were never considered by the 01-11-y person who could 

authorize the move. 

While this Court must 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. 

ISSUE FOrJR 

Whether the evidence supported an award for emotional 

distress damages? 

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 emotional distress, 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 relocation been 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 damages were related to the appellant's unreasonable 

failure to evaluate relocation. 

We hold there was a submissible jury issue on mental and 

emotional distress and although the award of $1-50,000 is 

generous we cannot say, as a matter of law, that the jury was 

moved by passion or prejudice. 

ISSUE FIVE 

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 gave 
the following instructions defining oppression, fraud and 

malice: 

INSTRUCTION NO. 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 wa.y or manner which violates 

the right of another person with unnecessary harshness or severity as by misuse 

or abuse of authority or power. 

INSTRUCTION NO. 24 

You are instructed that the abuse of 

authority or power is the essence of 

cohstructive fraud. 

INSTRUCTION NO. 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 knows or has reason to know 

of facts which create a high degree of 

risk or harm to the substantial interests 

of another, and either deliberately 

proceeds to act in conscious disregard of 

or indifference to that risk, or recklessly proceeds in unreasonable 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 of presumed 

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 language was taken from our opinion 

in Purcell v. Automatic Gas Dist., Inc., supra. ~lthough 

instruction no. 24 could have been more complete, the conduct 

described is embraced within the definition of oppression as 
the following instructions defining oppression, fraud and 

malice : 

INSTRUCTION NO. 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 or manner which violates 

the right of another person with unnecessary harshness or severity as by misuse 

or abuse of authority or power. 

INSTRUCTION NO. 24 

You are instructed that the abuse of 

authority or power is the essence of 

constructive fraud. 

INSTRUCTION NO. 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 knows or has reason to know 

of facts which create a high degree of 

risk or harm to the substantial interests 

of another, and either deliberately 

proceeds to act in conscious disregard of 

or indifference to that risk, or recklessly proceeds in unreasonable 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 of presumed 

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 language was taken from our opinion 

in Purcell v. Automatic Gas Dist., Inc., supra. ~lthough 

instruction no. 24 could have been more complete, the conduct 

described is embraced within the definition of oppression as 
stated in instruction no. 23. Any error in the 

incompleteness of instruction no. 24, when viewed in 

conjunction with instruction no. 23, is harmless. 

The question remains whether there was sufficient 

evidence to submit punitive damages to the jury. In First 

National Bank in Libby v. 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 question was 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, Sharon McCarthy, if Patricia Dunfee is believed, 

misrepresented material facts with respect to the underlying 

lease between Baskin-Robbins and the Raymond Mini-Mall. In 

furtherance of her vindictive attitude she refused to deliver 

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 close question. When the question for jury submission 

is a close one, doubt should be resolved in favor of 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 wherein he 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 all other 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 sufficient to take the case to the jury 

on the question of punitive damages. 

We Concur: 

Chief Justice 

n 

Justices 
Mr. Justice Fred J. Weber dissents as 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, oppression and malice on the part of 

Baskin-Robbins. The majority opinion then refers to three 

factual bases for this conclusion: 

(1) According to the Dunfees' testimony, 

Baskin-Robbins failed to properly review the Dunfee 

relocation request and 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 

"vindictive attitude" she refused to deliver any of 

the facts to the Vice President of Baskin-Robbins, 

the only one who could make a favorable decision 

for relocation. 

I will discuss these in more 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 request was 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' Real 
Estate Manager, and they both concluded that the relocation 

was not a good idea and disapproved it. Mr. Bovshow was the 

Baskin-Robbins representative originally involved in the 

location of the store in Butte. Even if we accept the testimony of Mrs. Dunfee that she was not told of the possibility 

of a sublease and of the 5 year 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 takes on a different light. Unless the majority is 

concluding that Baskin-Robbins had an obligation to renegotiate the lease, the misrepresentation of facts is not material. I have concluded that Baskin-Robbins was involved in an 

arms length transaction under which it properly could refuse 

to enter into a change of location, and I believe the majority essentially agrees with that conclusion. At that point, 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 sufficient to raise a jury question 

on fraud, oppression or malice. 

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 a 
favorable 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 estate manager, and they disapproved relocation. That determination was within the discretion granted to the division manager and the district manager 

by Baskin-Robbins. In view of their decision against relocation, 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 is a total absence 

of any proof of a vindictive attitude on the part of the 

officers or representatives of Baskin-Robbins involved in the 

failure to pass the information up to the vice president, he 

being the only one who could make a favorable decision for 

relocation. 

I conclude there is an absence of evidence showing 

fraud, oppression or malice on the part of Baskin-Robbins. I 

then conclude the Dunfees failed to meet the minimum 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. Instruction No. 15, which is quoted at length in the 

majority opinion, is extremely confusing. In this case it is 

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

on fiduciary relationship. The majority 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. I do not 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 relationship could 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 and misleading instruction. 

I would reverse and remand for new trial. 

-<&Z~A/ 

Justi 

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

, ,/fb YL' 

ef Justice