In Transport Truck & Trailer, Inc. v. Freightliner LLC, 2008 WL 4239002 (D. Idaho, Sept. 20, 2008), the court granted Freightliner, LLC’s motion for summary judgment dismissing all claims, including a claim for breach of the implied covenant of good faith and fair dealing based on Freightliner’s grant of a competing dealership in the territory of Transport Truck & Trailer, Inc. (“TTT”).
Although it had a non-exclusive territory, TTT claimed that by granting another dealership in its territory, Freightliner violated its implied covenant of good faith and fair dealing. Following Ninth Circuit precedent, the court examined whether Freightliner’s actions essentially and purposefully destroyed TTT’s ability to enjoy the fruits of the distribution agreement. In determining whether Freightliner acted in bad faith by allowing another dealership in the area, the court noted, among other things, that there was a legitimate purpose for opening the dealership because Freightliner received an economic benefit from it. Additionally, TTT was able to sell parts to the new dealership and also receive referrals for certain services. These economic benefits, coupled with the fact that TTT showed no actual injury from the competing business, led the court to conclude that TTT could not prove a claim.