Court Opinion

ID: 9530707
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:02:51.208531+00
Date Added: 2024-06-11T13:28:13.478388
License: Public Domain

SULLIVAN, Judge,
concurring in part and dissenting in part
I respectfully disagree with the majority’s conclusion that, as a matter of law, Seyfert did not “require” that Best acquire (whether by construction, purchase, lease, or otherwise) a warehouse. Under the facts, a trier of fact might very well reasonably conclude that Best had little or no choice but to honor Seyfert’s wishes with regard to additional storage capacity. Such lack of choice could well constitute a “requirement” within the meaning of the definition of a franchise fee. Nevertheless, I agree that the cost of the warehouse is recoverable and was incurred in the ordinary course of business. For that reason, it is not a franchise fee.
Similarly, I believe that a reasonable trier of fact might conclude that by reason of the contractual obligations and benefits created between the parties a relationship equivalent to a fiduciary relationship existed so as to give rise to a duty of good faith and fair dealing between them. See Union Miniere, S.A. v. Parday Corp. (1988) Ind.App., 521 N.E.2d 700.
Be that as it may, it is only common sense to acknowledge as a sound legal principle that inherent in every contractual relationship is a duty upon the parties to act reasonably, fairly, and in good faith. See RESTATEMENT SECOND OF CONTRACTS § 205 (1981) (providing that “[ejvery contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement” (emphasis supplied)). As acknowledged by the majority, the UCC has adopted this principle. See I.C. 26-1-1-203 (Burns Code Ed. Repl.1992) (stating that “[ejvery contract or duty within IC 26-1 imposes an obligation of good faith in its performance or enforcement”). Furthermore, because Seyfert may be considered a “merchant” under the Code, it was also required to observe “reasonable commercial standards of fair dealing in the trade.” See I.C. 26-1-2-104 (Burns Code Ed. Repl.1992) (defining merchant as a “person who deals in goods of the kind”); I.C. 26-1-2-103 (Burns. Code Ed. Repl.1992 & Supp.1998) (defining ‘“Good faith’ in the case of a merchant” as “honesty in fact and observance of reasonable commercial standards of fair dealing in the trade”).
Although I agree with the majority that Section 203 does not create an independent cause of action for breach of good faith, I cannot agree with the majority’s assertion that “Best did not assert any breach of a distributorship agreement (contract) in its counterclaim.” Slip op. at 19. In Count III of its counterclaim, Best alleged that prior to Seyfert’s attempt to terminate the relationship, Seyfert engaged in several activities, including selling Seyfert’s products to Best’s customers, hiring Best’s drivers to work in sales areas and contacting Best’s existing customers and engaging in activities which caused Best to lose sales to these customers. Thus, Best’s counterclaim is susceptible to proof that Seyfert, by engaging in these certain activities, failed to act in good faith and deal fairly.
I would remand to the trial court for a determination by the trier of fact as to whether a fiduciary relationship existed between Seyfert and Best and whether Seyfert, by engaging in certain activities, failed to deal fairly and in good faith in its contractual relationship with Best and if so, what damages, if any, were sustained by Best.
In all other respects, I concur in the affir-mance of the partial summary judgment.