Opinion ID: 8704064
Heading Depth: 3
Heading Rank: 1

Heading: Count II: Breach of the Implied Covenant of Good Faith and Fair Dealing

Text: Defendant first contends that Himmelstein has failed to allege facts that would permit the Court to infer that Com-cast acted with the bad faith required to state a claim for breach of the implied covenant of good faith and fair dealing. See Mot. at 6-8. Plaintiff counters that it has alleged sufficient bad faith in “Com-cast’s repeated egregious behavior and misrepresentations made throughout the collections process,” and the “fact that Comcast’s errors and misrepresentations occurred at least three (3) times to a single customer is sufficient to infer that Com-cast’s actions were not merely a simple ‘mistake, misunderstanding, or oversight,’ ... but rose to the level of bad faith.” Opp. at 12. The Court disagrees. The accounting mistakes made by Comcast in handling Himmelstein’s account — while unquestionably frustrating — do not raise an inference of bad faith sufficient to state a claim for breach of the covenant. The District of Columbia recognizes that “in every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing.” Hais v. Smith, 547 A.2d 986, 987 (D.C.1988) (internal quotation marks and citation omitted); see also Allworth v. Howard Univ., 890 A.2d 194, 201 (D.C.2006) (“all contracts contain an implied duty of good faith and fair dealing”) (internal citation omitted). A party may be liable for a breach of this duty if it “evades the spirit of the contract, willfully renders imperfect performance, or interferes with performance by the other party.” Paul v. Howard Univ., 754 A.2d 297, 310 (D.C.2000). In Allworth, the court looked to the Restatement for guidance on the meaning of “good faith” in the context of a breach of the covenant, noting: The phrase “good faith” is used in a variety of contexts, and its meaning varies somewhat with the context. Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party; it excludes a variety of types of conduct characterized as involving “bad faith” because they violate standards of decency, fairness or reasonableness. Allworth, 890 A.2d at 201-202 (quoting Restatement (Second) of Contracts § 205 cmt. a). The court further observed that bad faith “ ‘may be overt or may consist of inaction,’ ” involving “ ‘evasion of the spirit of the bargain, lack of 'diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party’s performance.’ ” Id. (quoting Restatement § 205 cmt. d). Significantly, the court noted that “ ‘[b]ad faith means more than mere negligence ....’” Id. (quoting Gupta v. New Britain Gen. Hosp., 239 Conn. 574, 687 A.2d 111, 122 (1996)); see also Maljack Prod., Inc. v. Motion Picture Ass’n of America, Inc., 52 F.3d 373, 375 (D.C.Cir. 1995) (applying California law, but noting breach of covenant requires “a conscious and deliberate act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the other party thereby depriving that party of the benefits of the agreement,” rather than “honest mistake, bad judgment or negligence”) (internal quotations and citations omitted). Plaintiff has failed to allege facts here that would permit the Court to infer that Defendant acted with the requisite bad faith or willfully rendered imperfect performance. Defendant’s actions amount to a series of mistakes and were not the result of an interested or corrupt motive. See Burnsed Oil Co. Inc. v. Grynberg, 320 Fed.Appx. 222, 230 (5th Cir.2009) (applying Mississippi law in holding, “Bad faith is more than bad judgment or negligence: it is a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive and implies the conscious doing of a wrong because of dishonest purpose or moral obliquity.”) (internal quotation marks and citation omitted). While Himmelstein consistently attempts to frame Comcast’s actions as “bad faith” conduct, see Compl., ¶¶ 46^19, the Court must look beyond “ ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action,’ ” when evaluating a Rule 12(b)(6) motion. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (internal citation omitted). The Court cannot infer that Com-cast’s bungled handling of Himmelstein’s account was motivated by a malevolent intent; indeed, it appears that Comcast sought to redress its errors, though ultimately failing to do so, since it mailed Himmelstein a shipping box for the missing modem and “informed [him] that if the missing modem were located and returned, the charge would be removed and corrected.” Compl., ¶ 21. Additionally, “Com-cast notified Himmelstein that his account balance had been corrected and a refund check would be issued automatically.” Id., ¶ 23. These allegations do not permit a sufficient inference of bad faith, even if Comcast ultimately failed to make good on these assurances. The Court will thus grant Defendant’s Motion as to Count II.