Court Opinion

ID: 9563115
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:37:02.225148+00
Date Added: 2024-06-11T09:17:44.303852
License: Public Domain

RIGGS, J.,
concurring in part; dissenting in part.
I agree with the majority’s reasoning and conclusion that it was error for the trial court to grant the motions to dismiss the interference with contractual and business relationship claims. However, I would hold that the contractual and tortious good faith and fair dealing claims were improperly dismissed, and I dissent from the part of the majority opinion that affirms those rulings.
For its conclusion that the duty of good faith and fair dealing does not apply to a lender’s right to invoke a contractual default remedy, the majority opinion relies on two opinions which expressly declined to address the issue for which they are now cited. Furthermore, the majority opinion conflicts with Best v. U.S. National Bank, 303 Or 557, 564, 739 P2d 554 (1987).
Best stands for the proposition that “there is an obligation of good faith in the performance and enforcement of every contract.” 303 Or at 561. “Enforcement” refers to the enforcement of both promises and rights, including the *369right to foreclose.1 In this case, plaintiffs alleged that defendant maliciously timed the enforcement of its right to foreclose in order to prevent a sale that would have preserved some of plaintiffs’ equity. Sheets v. Knight, 308 Or 220, 233, 779 P2d 1000 (1989), repeats that contracts must be enforced in good faith. A careful reading of Sheets indicates that it did not intend to restrict the use of the doctrine to business contracts, but instead reaffirmed the traditional principle that the doctrine does not apply to an employer’s right to discharge at will. 308 Or at 233.
For several reasons, the majority’s reliance on Sheets and Harris v. Griffin, 109 Or App 253, 258, 818 P2d 1289 (1991), is misplaced. The majority’s holding that the doctrine of good faith is inapplicable to the termination of all contracts rests on the following language from Sheets:
“The foundation of the at-will employment contract is the express or implied understanding that either party may terminate the contract for any reason, even for bad cause. A duty of good faith and fair dealing is appropriate in matters pertaining to on-going performance of at-will employment agreements. It is not appropriate to imply the duty if it is inconsistent with aprovision of the contract.” 308 Or at 233. (Emphasis supplied.)
The termination clauses of at-will employment contracts are commonly understood as sui generis, and nothing in Sheets suggests otherwise.2 It cannot be said that the foundation of most business contracts is that either party can terminate them, even for “bad cause.”3 The duty of good faith is commonly applied to the termination of at-will business contracts. Cf. Seaward Yacht Sales v. Murray Chris-Craft *370Cruisers, 701 F Supp 766 (D Or 1988); see also Johnson v. School District No. 12, 210 Or 585, 312 P2d 591 (1957).
Even if we import “at-will” employment contract law into the area of business contract law, as the majority does, Sheets leaves open the possibility that a party who terminates an at-will contract for an improper purpose (as opposed to “bad cause,” which has a specialized meaning in the context of employment law) might have breached the implied duty of good faith.
“In dicta we twice suggested that the covenant might be implied in at-will contracts. See State ex rel Roberts v. Public Finance Co., 294 Or 713, 719 n 4, 662 P2d 330 (1983); Best v. U.S. Bank, 303 Or 557, 564, 739 P2d 554 (1987). Although these cases referred to at-will employment, the dicta is better understood as dealing with situations in which the employee had developed a reasonable expectation of continued employment. Because at-will employees maybe fired at anytime and for any reason, they have no reasonable expectation of continued employment. Such a reasonable expectation is only present where the at-will contract has been supplanted by some other contractual relationship, like an implied-in-fact contract.” 308 Or at 234 n 13.
In other words, where there is a reasonable expectation of continued employment, the doctrine of good faith might apply to termination. Here, plaintiffs have pleaded enough facts to support a reasonable expectation that defendant would not intentionally and maliciously endanger plaintiffs investment, and, if we follow Sheets, the question of whether the doctrine of good faith applies remains open.
The majority’s reliance on Harris v. Griffin, supra, is also misplaced. That decision explicitly refused to decide whether the doctrine of good faith applies to a real property seller’s right to declare a default and accelerate. 109 Or App at 258. Harris is distinguishable from this case because the plaintiffs in Harris never alleged that the seller had an improper motive.
It bears repeating that this is a review of a trial court’s dismissal pursuant to a Rule 21 motion, and that we must accept the plaintiffs allegations as true. Under Best, plaintiffs have adequately pleaded abreach of the duty of good faith and fair dealing. Therefore, their contract claim was *371improperly dismissed. For the same reason, their tort claim for breach of the duty of good faith was also improperly dismissed.
I disagree with the majority’s statement that holding Seafirst’s conduct tortious would render default remedies unavailable to any lender who offered a borrower assistance. 127 Or App at 363. The default remedy would be available as long as the lender did not act with malice.
For these reasons, I concur in part and dissent in part.

 Black’s Law Dictionary 528 (5th ed 1979) defines “enforce” as “causing to take effect.” There is no indication that Best intended to narrow the definition of “enforcement.”

 For a discussion of how the law of at-will contracts developed separately from general contract law, see Murray, Murray on Contracts §§ 38, 57 (3rd ed 1990) (At-will contracts a “stark exception” to rule that courts will imply reasonable duration in at-will contract; (interpretation of at-will franchise agreements not modelled on interpretation of at-will employment contracts.

 Furthermore, “bad cause” is a term peculiar to employment law. “Bad cause” is not the same as improper motive, i.e., bad faith. At-will contracts are breached by a long list of improper motives, which are now defined by statute. Farrimond v. Louisiana-Pacific Corp, 103 Or App 563, 566, 798 P2d 697 (1990).