Opinion ID: 63385
Heading Depth: 3
Heading Rank: 2

Heading: Implied Obligations

Text: Innovative also contends that the district court erred by “analyz[ing] only the express provisions of the contract.” Instead, Innovative claims, the court should have considered how Northwood breached the “implied obligations” of the agreement by selling trailers to an unlicensed dealer2 within Innovative’s exclusive territory, by refusing to deliver trailers in reasonable quantities to Innovative, and by coercing or attempting to coerce Innovative into lowering its prices. To support this argument, Innovative cites Louisiana Civil Code article 1768 for the proposition that “[c]onditions may be either expressed in a stipulation or implied by the law, the nature of the contract, or the intent of the parties,” and also relies upon various sections of Louisiana Revised Statute 32:773.1 (the Louisiana State Motor Vehicle statute) and several Louisiana cases. Furthermore, even if the district court had accepted Northwood’s statement of 1 uncontested facts as uncontested, Innovative’s claim that “the factual foundation of Northwood’s summary proceeding is false” is foreclosed. In its supplemental reply brief, Innovative points out that Northwood’s statement of uncontested facts cites a judgment of the 19th Judicial District Court, in the matter of Bourget’s of the South, L.L.C. v. La. State Recreational & Used Motor Vehicle Comm’n, No. 541-552, as final authority for the proposition that Bourget’s was a licensed dealer during the pertinent time period. Innovative claims that this constitutes a material misrepresentation of fact because the Louisiana First Circuit Court of Appeal later reversed that judgment. However, pursuant to a March 11, 2008, order of the 19th Judicial District Court, brought to our attention in Northwood’s Federal Rule of Appellate Procedure 28(j) letter, the Louisiana First Circuit Court of Appeal’s decision was vacated as an absolute nullity due to the State Recreational and Used Motor Vehicle Commission’s intervening ruling that Bourget’s did have at all times relevant to this dispute a proper license under Louisiana law. As discussed supra, note 1, it is now a fact that Bourget’s was a licensed dealer during 2 the events at issue. 5 No. 07-30598 None of this authority supports the extra-contractual obligations that Innovative asks this court to read into the agreement. First, as Northwood points out, it is untenable to baldly assert that statutes, regulations, and ordinances typically regulated by governmental bodies or administrative agencies are included as implied obligations in every Louisiana private contract. Second, the cases upon which Innovative relies stand at most for the following principle: Into all contracts . . . good faith performance is implied. Furthermore, everything that by equity is considered incidental to the particular contract, or necessary to carry it into effect, is also a part of all agreements. And . . . equity will supply such incidents only as the parties may reasonably be supposed to have been silent upon from a knowledge that they would be supplied from that source. Nat’l Safe Corp. v. Benedict & Myrick, Inc., 371 So. 2d 792, 795 (La. 1979). In this case, however, the parties agree that an implied duty of good faith exists and address that theory as an independent issue. Moreover, an experienced dealer like Innovative cannot reasonably expect equity to supply terms from outside ordinances and regulations to which the parties never agreed. While such arguments may present issues between Northwood and the State of Louisiana, they are immaterial to Innovative’s private breach of contract claims. As a result, the district court did not erroneously disregard the agreement’s “implied obligations.”