*1 COMPANY, Maryland AMOCO OIL Petitioner,
Corporation, ERVIN, Wallen, R.
Dale Mike Don A.
Plummer, Rush, Rodger D. Richard B. Smith,
Kruger, Norman and the Estate (Daniel Smith, Per T. Norman Smith Representative), Gregory S. Hear
sonal Cook, Koehnen,
ing, R. Edward Leslie J. Cameron,
Stephen D. Richard D. Ones Galli, Marshall,
lager, Rodney O. John Weibel, Hawley,
John L. Herbert Wil- (“Bill”) Mattedi, Hu W.
liam J. Gerald
man, (“Rodger”) Scott, Roger Robert H.
Schroeder, Robert H. Estate of (Jeanne Schroeder, Personal Schroeder Geist,
Representative), and Samuel W.
Respondents.
No. 94SC452. Colorado,
Supreme Court
En Banc.
Dec. Rehearing on Denial of
As Modified 16, 1996.
Jan. *2 products through
tributes a dual distribu- landlord, system. tion As leases independent ser- service station facilities to states, vice in various includ- station dealers Cicero, Jr., Ellis, Kirkland Prank John & products ing Colorado. Amoco sells its *3 Denver, Krendl, DeSisto, Horowitz & A. resell independent these dealers who then Denver, Krendl, Reichert, E. Lee Amoco public. also sells the same to the Amoco its Noble, Chicago, Illi- Corporation, William J. directly through products public to the its nois, Ellis, Godfrey, Kirkland & Richard C. operated company own stations. Illinois, Chicago, for Petitioner. Amoco into and entered written lease deal- Safran, Denver, (agreements) supply agreements with var- M. Farrell La er Hubert & Mantia, Rosemont, Mantia, ious in the state La Illi- dealers of Colorado. The Mark A. “[ljessee provided that nois, agreements lease Respondents. for Premises, pay shall as to Lessor rent for the P.C., Breit, Bosch, Coppola, Levin and designated per the sum month [a amount] of Levin, Denver, Amicus Bradley A. for Curiae during this a Lease unless varia- term Lawyers Trial Association. Colorado monthly is ble rental indicated below....” agreements, Amoco both Under these leased Opinion Justice SCOTT delivered property facilities to service station and real the Court. supply Both the and each dealer. lease Ervin v. granted certiorari review We years; to three had terms (Colo.App.1 Amoco Oil cancellation, integration, and contained 994).1 Company Petitioner Amoco Oil clauses; merger specific dollar and included (Amoco) appeals’ appeals the court of deci agree- to the amounts of rent. Pursuant judgment on sion entered a to affirm ments, internally calculated the Amoco respondents, sixteen cur verdict in favor from each amount it would collect of rent brand retail rent or former Amoco service properties. its service station dealer for in doing business Colorado station dealers has its Investment Amoco used Since “dealers”). (collectively referred to as (IVR) to Report program Value determine appeals Amoco court of held that breached goals. Using IVR its Colorado rental the amount of program, Amoco calculates tortiously pro dealing and interfered asset of each service rent on the value based spective relationships. We affirm business station. part, part, and remand to the reverse adopting Prior asset rental valua- based appeals with that it court of directions return tions, amount calculated the rent Amoco trial instructions the case to the court with gasoline particular at a based on the sale of damages be recalculated. program). (gallonage station rent Under spe- paid a gallonage program, rent dealers I gaso- every gallon for cific amount rental However, gal- Amoco, Maryland corporation, is na- Amoco decided line sold. manufacturer, transporter, lonage provided a program disincentive tionwide rent rent petroleum products. gasoline Amoco dis- to sell a dealer’s marketer more because supplier’s granted pressure,” address these which a 1.We certiorari to issues. nomic under price competition with inde- lawful retail appeals 1. Whether the court of erred re- pendent subject suppli- can distributors writing lease rental terms of the contracts so liability er tort. obligation plaintiffs relieve the of their as to holding appeals relat- Whether the court contractually pay agreed-upon ing and fair breach of faith holding rent that an inde- amounts preempted by Petroleum Mar- for pendent cause of action exists breach of Act, (1988). keting Practices U.S.C. and fair an dealing holding appeals relat- 4. Whether the court of nullify express, that can override ing interference non-discretionary to the claim intentional contract terms. brings Colorado with contractual relations the court of committed 2. Whether by creating law into direct with antitrust laws. legal error the new tort of "eco- conflict would higher part increase with In year previous sales. Each years three worth disincentive, correct this Amoco instituted an maintenance costs are totalled aver- asset based calculation aged. to determine average rent annual becomes the payments agreements. under In portion es- for maintenance the rent the next sence, sought Amoco to move year. fixed costs fiscal charge Amoco also adds a gasoline operation personal value of real property paid estate taxes dealership. particular real estate each on Follow- location. In addition to these philosophy, eventually pro- figures, facility operations, on full ap- mulgated program. the IVR plies charge a uniform for each automotive bay despite service of buildings, inclusion program, Under the IVR Amoco first de- equipment, machinery, and fixtures land, termines market value of the which *4 capital improvements portion of rent calcula- appraised highest at its and best use. they tions. The dealers being contend Second, Amoco a for capital establishes value charged bays double on the service because improvements. improvements Capital in- capital improvement component covered buildings, machinery, equipment, clude furni- capital cost. Amoco charge, adds the ture, together and fixtures. Amoco adds cost, taxes, average maintenance and service original (i.e., dollar amounts investment val- bay charges to for partic- calculate the rent ue) paid improvements, regardless for the of ular location.2 money Next, spent. when the was the mar- ket land 20,1988, value value attributed On June the dealers initiated suit capital improvements Amoco, together against are added alleging agree- breach to determine the investment base. Amoco ments and tortious pro- interference with charges eight percent of spective the investment base business relations. The dealers’ capital charge. calculate a complaint claims, dealer’s Final- contained seven four of ly, eight Amoco adds other per- fees which prior were dismissed to trial. The capital charge. cent remaining three counts were submitted to following example The from an comes internal presentation: Amoco discounts,
The rent adjusted total be which rent, temporary include construction waivers of rental programs, eighteen assistance twenty-four programs. hour incentive that, charges. bay They claimed jury a verdict service jury. The returned million in Amoco charging bays, twice for favor of the dealers over service $2.5 interest, and costs for prejudgment damages, discretion. This abuse resulted abused its good faith implied of an duty good breach Amoco’s breach dealing and fair tortious interference dealing. fair faith and business relations. prospective Although agreements fully were inte- jury judgment on the appealed the entered grated, parol trial court admitted evi- verdict.3 duty on the issue of dence breach judg- appeals court of affirmed the The dealing. in- jury fair was faith and trial court. Ervin v. Oil ment according structed to enforce the It con- (Colo.App.1994). expectations reasonable finding supported a the record cluded overcharges and determine rental for service faith and deal- that the covenant employed by IVR bays based on the method Id at 250. The court was breached. found that Amoco breach- Amoco. that the also held dealers established duty ed interference, prima facie case tortious dealing, in favor of the rendered verdict properly trial court submitted and the dealers, a total of and awarded the dealers appeal- jury. Id at 258. Amoco claim to the *5 $987,125 damages.” in “rental ed. trial Amoco that the appeal, On contended II of in this parol court’s introduction evidence Implied agree- Breach Contract Covenant improper the lease case was because of Dealing and Faith Fair unambiguous fully integrat- Good and ments were of Corp. v. Radiology ed. See Professional claimed that Amoco breached The dealers Ass’n, Inc., 195 Colo. Area Health Trinidad obligations its the contractual under (1978). 577 P.2d 750 dealing by good of faith and fair improperly al- trial argued that the court power, acting scope of abusing its outside the unambiguous and jury to the rewrite lowed discretion, usurping and of the benefits in three fully integrated agreements lease Specifically, complaint agreements. the (1) of their dealers relieved respects: were alleged that reserved discretion pre- pay Amoco was decisions, obligation to rents and establishing including certain make (2) rents; collecting rental fuel, from cluded purchase price for motor station (3) hours, entirely;4 and rentals, rewritten arrange- amount was station and credit barring implied covenants paragraph both that Amoco’s ments. The dealers asserted agreement Program absent written internal and modifications use of the IVR was parties of deleted.5 calculation of rents resulted redundant both right any dur- summary judg- at time cross-appealed have the Lessee shall The dealers (90) ninety day period to terminate in favor of Amoco on a claim that ment entered said Act, (15) days' § upon giving 6-2- no- Unfair Practices fifteen violated Colorado's this Lease (1992), denying writing. and dam- 2 C.R.S. an order tice signs capital ages certicare on Amoco’s asset agreement 5.The states: lease however, issues, ledger calculations. Those obligations, understand- or No before us. the terms ings of shall be from Lease, modify obligations, provisions 4. Amoco claims it had discretion to of all and agreements this respect provides: understandings amount. The lease and rental being expressly subject matter hereof of Rental. In the event that the Modification representations or herein. original set forth statements, No term of this more than Lease is for expressly set year, year other than those each Lessor of said term herein, upon by right modify monthly forth were relied reserves entering specified this No modification above with Les- into Lease. rental to conform to, of, policy or deletion in effect for or waiver addition established rental sor’s anniversary effective type facility be the terms of this Lease shall as of each signed by by writing Les- reduced to of the commencement of the term unless date (90) ninety days’ representative Lessor autho- giving at ad- see and a Lessee least rental, changed rized to execute this notice of such Lease. vance 498 appeals rejected
The court performance Amoco’s ar- faith of a Good contract involves holding guments, although “payment [by agreed purpose “faithfulness to an common monthly consistency justified expecta- of the actual fixed with the dealers] rent- non-discretionary,” Fargo, party.” al amount is Amoco re- tions other 872 Wells (Second) discretionary authority modify (citing tained P.2d at 1363 Restatement Ervin, (1981)). charges. applica- P.2d at 205 rent 251. This Contracts cmt. a contract, authority, granted by expectations circum- tion the reasonable doctrine duty give good scribed faith and fair often “fails effect some hornbook dealing. governing id. at 250-51. rules See The court the construction of con- tracts,” including precept concluded the dealers were be- “the that contracts ing charged bay charges twice for ambiguity service in which are free from are to be written_” calculation, Davis, rental could con- enforced as 712 P.2d at Nonetheless, good clude that faith and fair & n. 7. adherence to this principle was at 251. promotes policy breached. Id. central “the under- law, lying construing contract that of con- A parties’ tracts so to effectuate as inten- 991; Farm, tions. ...” Id. see also State Colorado, juris majority like the 166-67; 851 P.2d at Simon v. Shelter Gen. dictions, every recognizes that contract con (Colo.1992). Ins. implied duty an tains 4-1-203, dealing. § (“Every C.R.S. duty fair' duty within imposes contract or this title dealing applies party when one has discre obligation performance faith in its tionary authority to determine certain terms see, enforcement.”); e.g., Fargo Realty Wells contract, quantity, such price, as Inc., Uioli, Funding, Advisors Inc. v. time. Hubbard Chevrolet Co. v. General Mo (Colo.App.1994); P.2d Friedman *6 (5th 873, Cir.), Corp., tors F.2d 873 876 cert. Bank, 1033, v. Colorado Nat’l P.2d 1042 825 denied, 506, 978, 110 493 U.S. S.Ct. 107 (Colo.App.1991), grounds, rev’d on other 846 (1989); II, supra, L.Ed.2d at 508 Burton 501. (Colo.1993); 159 County P.2d v. Yuma Ruff may upon only The covenant be relied when Co., 1296, Transp. P.2d (Colo.App. 690 1298 performance specific the manner of under a 1984); Dairies, see also Larese v. Creamland contract term allows for on discretion the Inc., (10th Cir.1985) (ex 767 F.2d 717 part party. of either See Hubbard Chevrolet plaining that the rela franchisor-franchisee However, 873 at 877. will F.2d not tionship that requires parties is one the to contradict which terms conditions for a good deal with in in one another faith and a party bargained. has Id. manner); commercially gener reasonable see (Second) ally Restatement of Contracts concept perfor in The discretion (1981); Corbin, § 205 3 Arthur Linton Cor- power party’s mance to “refers after (1960); bin on Contracts at 278 n. 2 contract to or control the formation set terms Burton, J. Breach Contract Steven and the II, performance.” supra, at Burton Duty Law to Common in Good Perform parties, Discretion at forma occurs when the Faith, (1980) 94 369 [here Harv.L.Rev. tion, regarding performance defer a decision inafter Burton I]. Generally, terms of contract. Id. good performance faith doctrine be used good performance The faith doctrine protect party “strong to a “weaker” a generally is to used effectuate the intentions party. er” in strength Weakness and parties of the or to honor their reasonable context, however, do not refer to the relative expectations. See State Farm Mut. Auto. bargaining parties. power com- One Nissen, (Colo. Co. v. Ins. explained: mentor 1993); Corp., Davis v. M.L.G. P.2d (Colo.1986); Burton, Steven J. More on Good performance typically faith in- cases Faith a transactions, Good Contract: A arm’s-length volve often be- Performance of Summers, to Reply sophisticated Iowa L.Rev. tween persons. business The Professor [hereinafter strength Burton party exercising II]. relative agree- has typically implied arises from an vides that each contract an discretion cove- parties parties good to confer control nant that shall act in faith and ment depen- party. fairly.” on contract term The deal The trial court further instruct- faith party good jury requires then is “that party dent left ed the the law each party in control. to a in contract act such a manner that party will their expec- each attain reasonable I, at supra, Burton 383-84. tations under the contract.” The evidence agreements, Amoco Under re that, jury’s finding supported by trial modify monthly tained discretion rent duplicate charging, perform Amoco not did depended upon al amount. The dealers in the contracts accordance with the dealers’ setting in good faith of Amoco the rental expectations. Considering reasonable its ac- Although spe established terms. knowledgment of franchisor-franchisee inter- formation, figures cific rental at contract dependence, could have concluded they modify also decided allow Amoco implied that Amoco covenant of breached adjust By allowing rental terms. review, good dealing. faith and fair On we effect, parties, left the rental terms the properly jury’s will not disturb a instructed provisions open. open rent these future The findings fact. upon required depend al terms the dealers good general imply faith. rule Amoeo’s B contract, every
ing the combined regarding specific with the discretion rental faith asserts terms, duty created implied covenant cannot be because the dealing for Amoco. im agreements stated that there were no plied The court of disa party covenants. acted in is Whether Amoco, holding an greed with that because question must of fact which be determined implied good faith and fair Testimony deal a ease case at trial on basis. contract, every that, at law charged being in addition to revealed provision precluding covenants did percent eight value of the land recovery agree. in this We assets, prevent ease. charged capital dealers were bays. additional amount the service good faith The covenant of that Amoco was aware record also reflects every to enforce contract exists *7 However, charging. during double parties. expectations of the the reasonable negotiations, contract after Amoco never dis merger integration clauses do not The implications of its IVR closed the calcula implied permit Amoco to covenant breach tions. Evidence shows that additional by duplicate fair charge was not disclosed dealers until expectations of The charging. reasonable suggests that 1988. That also evidence in ev vital considerations remain agreed charged twice to be dealers never Simon, P.2d at ery contract. See agree any goods or services under the lease jury’s supports the conclusion The record justified expect ments. The dealers were that Amoco breached that, rent, ing determining appropriate dealing. good faith and fair charge not Amoco would double for is, although of the calculation. That element to dealers left the rental calculation Amo Ill discretion, they presumably would not co’s signed they had known
have Pressure Economic charge duplicate would amount for appeals that the court Amoco contends bays. service of “economic by creating erred new tort Amoco, supplier’s properly pressure.” According trial court
The instructed price with its inde- jury regarding competition lawful retail subject dealing. pendent trial court does not good faith and The distributors jury pro- supplier agree. liability that “Colorado law in tort. We informed the us, alleged expression, prospective In the case before dealers The contractual relation, that Amoco the costs to in this increased the dealers not used Section in a strict, products company operated to its necessary sold technical It is not sense. prices. stations at The dealers al- prospective expected deflated relation be formal, leged with that Amoco acted the intent to binding be reduced to a contract. move dealers’ customers from stores com- It prospective quasi-contraetu- include pany operated stations. The awarded restitutionary rights al or other or even $921,844 eight dealers emotional distress voluntary conferring of commercial damages for pro- tortious interference with recognition benefits in of a moral obli- spective relationships. business gation. (Second) appealed, contending § that the deal- Restatement of Torts 766B cmt. c (1979). prima had not out a
ers
made
facie case of
tortious
appeals
interference. The court of
When a
utilizes a
customer
dealer’s
“competition
that although
held
and an eco- products
services,
the relation is transac
seeking
acquire
nomic
interest
business
formal,
tional and is not
to a
“reduced
bind
usually improper
...
interference
Rather,
by purchasing prod
contract.”
Ervin,
pressure may
economic
be.”
885 P.2d
particular
ucts or
services from
service
(Second)
(citing
Restatement
of Torts
station, a customer confers an economic ben
(1979)).
§ 767 cmt. c
The court of
dealer,
upon
efit
but does not establish a
rejection
affirmed the trial court’s
of Amoco’s multi-transactional,
continuing contractual
legal
justification
defenses
and absolute
relationship.
benefits that flow to
privilege as to the tortious
interference
“quasi-contractual
dealer constitute
or other
claim.
id. at
argues
See
254-55. Amoco now
restitutionary rights.”
relationship
be
appeals erroneously adopted
the court of
potential
tween
customer and dealer com
a new tort
pressure”
legal
“economic
plies
prospective
the definition
con
price competition.
tractual relation
in section
used
766B.
Section 767 of the Restatement sets forth
A
seven factors
used
determine whether
recognizes
Colorado
the tort of
improper
there has been an
interference with
prospective
intentional
with a
interference
767;
§
contractual
Id.
relations.
see Memo-
Capitol
business relation. Dolton v.
Fed.
Gardens,
Olympian
rial
Inc.
Sales &
Ass’n,
(Colo.
Sav. & Loan
642 P.2d
Consultants, Inc.,
Management
App.1981).
(Second)
The Restatement
(Colo.1984).
provides:
Section
(1979)provides:
Torts
766B
In determining whether an actor’s conduct
intentionally
improperly
One who
in-
intentionally interfering
with a contract
prospective
terferes with another’s
con-
prospective
or a
contractual relation of an-
(except
tractual
a contract
relation
to mar-
not,
improper
other is
consideration is
*8
ry)
subject
liability to
is
the other for
given
following
factors:
pecuniary
resulting
the
harm
from loss of
(a)
conduct,
the nature of the actor’s
relation,
the benefits of the
whether the
(b)
motive,
the actor’s
interference
consists
(c) the
of the
interests
other with which
(a) inducing
causing
or otherwise
a third
interferes,
the actor’s conduct
person not to
into or
enter
continue the
(d)
sought
the interests
to be advanced
prospective
or
relation
actor,
by the
(b) preventing
acquiring
the other from
(e)
protecting
the social interests in
the
continuing
or
prospective
the
relation.
freedom of action of the actor and the
prospective
Tortious interference with a
busi-
other,
contractual
interests
the
requires
showing
ness relation
a
of intention-
(f) the
proximity
remoteness
the
improper
preventing
al and
interference
for-
actor’s conduct to the interference and
Dolton,
a
mation of contract.
contractual the other seek sold inde- acquire pendent too.” Id. and company operated dealers sta- tions. The leases were for a of one to term A liable for tor- defendant will be years, by and three were terminable plaintiffs prospec tious interference with a by upon at dealers time and Amoco in contractual relations if a defendant tive agreement by breach of the the dealers or tentionally improperly and interferes with upon specified grounds. other The IVR relationships. Occusafe, Inc. v. such EG&G calculating payments by method rent Flats, (10th Inc., 618, Rocky 622 54 F.3d developed pri- dealers was itself because the Cir.1995). However, may plaintiff a not sue system or created what Amoco was believed qua competitor, competitor, a for intentional a disincentive the dealers to sell more prospective with a business interference rela products and encourage Amoco intended to Gardens, Olympian tion. Memorial Inc. products. to sell its dealers en- Consultants, Inc., Management & Sales 690 into the with tered lease 207, (Colo.1984). 210-11 P.2d perspective, dealers from business intend- “predatory e Comment delineates money. to make c, 767, § physi- means discussed in Comment violence, fraud, cal civil suits criminal competitive Amoco’s efforts were not prosecutions” “wrongful as means” under wrongful. purpose Amoco’s was to increase (Second) section Restatement of Torts stations, profits its own from all not inter- (1979); § cmt. 768 e William see also H. intentionally improperly fere with the Prosser, al., et Prosser and Keaton on the relationships dealers’ customers. their 130, (5th 1984) § Law Torts at 1013 ed. (discussing breach of competitive various the covenant of means a de- Amoeo’s may employ incurring fendant does not translate without liabili- However, liability ty). into for tortious may persuasion an interference. “actor use These represent concepts separate legal constructs [or she] he limited exert economic pressure” remedy wrongs. intended to engaging wrongful without in different necessarily Breach of one does not means. The rule 768 constitute stated section “rests case, violation the other. In competition necessary on belief that double is covenant, charging, although a breach of enterprise.” desirable incident of free Re- (Second) not, without more than the dealers have statement of Torts 768 cmt. e established, (1979). wrongful section allege, means under Nowhere do the much dealers 768(b). of, present less evidence Amoco’s use of violence, fraud, physical or civil or criminal assumes, Competition necessarily and is prosecution compete with the dealers with- predicated upon, pressure. economic dual distribution scheme.6 record does contain that Amoco evidence engaged permissible company operated com intended finance its petition. system It had a dual profits distribution stations with the it made from double jurisdictions recognize DP-Tek, 6. Other the limited defini Inc. v. AT & T Global Solu- Information See, Co., wrongful Occusafe, 1510, e.g., (D.Kan.1995) tion of means. 54 F.Supp. 891 tions ("[T]he 1523 618; Denver, City F.3d R-G Ltd. v. First Hold proper qualifies test for whether conduct Inc., 1469, ings, (10th Cir.1986); 789 F.2d 1476 improper as means should be whether con- Amerinet, Corp., see also Inc. v. Xerox 972 capable F.2d forming duct itself is the basis of 1483, (8th Cir.1992) means,' Ecolab, ("'Wrongful actor.”); Inc., 1507 liability Soap Co. v. (Ala.1994) as those words are used in 768(b), (listing physical Restatement Section 646 So.2d fraud, violence, suits, intrinsically 'refer[ ] to prosecu- means which are civil and criminal is, wrongful capable means); wrongful conduct which is Downey Chiropractic tions as —that forming ") liability the basis of Nampa actor.’ Corp., Clinic v. 286, Restaurant 127 Idaho Conoco, (quoting 895, Inc. (listing v. Inman Oil 774 F.2d conduct (8th Cir.1985)), denied, constituting wrongful wrong- cert. U.S. means as conduct (1993); 113 S.Ct. recog- L.Ed.2d 356 regulation, ful reason of a statute or Co., Inc., Escape, Body law, City Inc. v. Great Union nized rule of common stan- established (7th Cir.1986) violence, (holding threats, 791 F.2d profession, dard of a trade or something "illegal” must be misrepresentation, there about the deceit bribery, unfounded *10 sufficient); employed' defamation, falsehood). litigation, means not disparaging or —intimidation
503
Also,
thoroughly occupies
legisla-
law ...
charging
the record does
federal
the dealers.
Liggett
Cipollone
Group,
v.
support
finding that Amoco
to tive field....”
intended
Inc.,
2617,
504, 516,
2608,
However,
112
505
S.Ct.
put the
out of business.
U.S.
dealers
(citations
omitted);
such
120 L.Ed.2d
assuming that some
inferences
407
even
Inc.,
Advertising,
jury, we
see also Banner
were available to the
conclude
Aso,
wrongful
provisions
at 1080.
not constitute
federal
must be
Amoeo’s actions did
768(b).
'light
presumption
“in
Because the
construed
means under section
jury’s
against
police
support
findings,
preemption
power
of state
record does not
518,
regulations.”
at
appeals.
Cipollone,
of
505 U.S.
112
we
the court
reverse
2618;
Advertising,
S.Ct. at
see also Banner
Inc.,
state laws that
to franchise
I
termi-
do not think that the stat-
nations or
Bellmore v.
any
nonrenewals.
Mobil
provision
ute intended
void
state law
(2d
300,
Cir.1986);
Corp.,
F.2d
indirectly
Oil
783
305
that
affects the termination or non-
Corp.,
see also Simmons v. Mobil Oil
29 F.3d
relationship....”);
renewal
the [franchise]
(9th Cir.1994) (“Those
505,
Bellmore,
(“It
512
...
law
state
Congress
preempt
did not intend “to
all
resulting
preemption
law
in the
of a state
regulation through passage
state
of the
statute in
Congress
areas that
PMPA.”
left
Depart-
Esso Standard
v.
Oil Co.
states.”).
control of
431,
Although
Affairs,
ment
Amoco’s
Consumer
793 F.2d
435
(1st Cir.1986);
Bellmore,
practices had an
see
attenuated affect on
also
783 F.2d at
(“The
ability
expressly
304
PMPA
dealers’
to remain
impli-
neither
nor
viable business en-
tities,
edly
they
directly
preempts
impact
all
did not
relating
state law
the termi-
aspect of the
nation or
termination
non-renewal
nonrenewal of the
franchises. Be-
franchises.”);
petroleum
Service,
Ted’s Tire
cause the dealers’ state law claims address
U.S.A., Inc.,
Inc. v. Chevron
F.Supp.
470
provisions
substantive
and behavior that did
(D.Conn.1979) (“The
165
...
nonrenewal,
[PMPA]
not
does
involve termination or
they
preempt
all
regulating petrole-
state laws
preempted
are not
by the PMPA.
”).
um franchises....
The framers of the
PMPA intended “to
system
create
uniform
V
termination,
of franchise
not a
sys-
uniform
tem of contract law.” O’Shea v. Amoco Oil
with Antitrust Laws
Conflict
(3d
Cir.1989).
886 F.2d
593
appeals’
Because we reverse the court of
preempt
The dealers’ claims are not
holding regarding tortious interference with
present
ed
they
ease because
do not
relations,
prospective business
we need not
implicate Amoco’s
termination
nonrenewal
address this issue.
Simmons,
of the franchises.
See
F.3d at
challenge
pro
The dealers
substantive
VI
visions of the contracts and
pricing
Amoco’s
conduct,
during
which occurred
the term of
Accordingly,
part,
affirm in
we
reverse in
the contracts. Patterson v. McLean Credit
part,
and remand to
court of
with
Union,
164, 176-80,
491 U.S.
109 S.Ct.
directions that it return the case to the trial
2372-74,
105 L.Ed.2d
(distinguish
damages
court with instructions that
be re-
ing postformation conduct from behavior
calculated.
contract).
during initial formation of
Allow
ing
pursue
the dealers to
their state law
VOLLACK, C.J.,
part
concurs in
rights
claims does not create substantive
MULLARKEY, J.,
part,
joins
dissents
would not exist under the PMPA. See Mobil
in the concurrence and dissent.
Corp.,
Oil
of the lease nor did the lease any agreements of contain other indication I. rent was how the calculated. selling gaso- Amoco is the business 20, 1988, respondents On June sixteen a dual distribution through line. It does so Amoco, against alleg- action (1) filed the instant gasoline whereby its scheme Amoco sells alia, ing, contract and tor- dealers, inter breaches of independent including the re- to its prospective tious interference with business public, who then it to the spondents, resell jury relationships. In (2) October of directly gasoline Amoco sells to the and breaching an im- against found for through company oper- public owned dealing plied good faith and fair covenant in this case respondents stations. The ated and for tortious The district interference. ser- group a of sixteen Amoco-branded (the subsequently judgment against Dealers). court entered vice station dealers Amoco for more than million. $2.5 gasoline Amoco leases to the Deal- stations appeal, appeals Each the court of affirmed and is thus the landlord. On ers Dealers’ agreement judgment of the district court and verdict Dealer executed written lease alia, held, jury. court that a to three of the inter with Amoco for term from one agreement years. specifies Each could have found that lease reasonable pay implied faith monthly agreed rent that the breached its Dealer to the because Amoco.1 The leases also contain modifica- Dealers provision that Amoco used tion of in which Amoco re- submitted evidence rental Dealers calculating the right modify charges the amount redundant when served pro- monthly through IVR rent monthly rent of than one Dealers’ leases more Agreement. cancels and provisions uniformly "Rental. This Lease stated: Entire 1. These pay the Premis- prior shall as rent for unwritten supersedes Lessee es, Lessor all written and per $[varying month amounts] the sum understandings between during of this the term Lease parties pertaining to covered the matters obligations, agreement [sic] or No this Lease. understandings provision states: 2. This any implied from shall be that the Modification Rental. In the event Lease, provisions all this the terms and original than one term of this Lease is for more understandings obligations, agreements and year year, each said term Lessor reserves being subject respect hereof matter modify right monthly specified rental representations expressly forth No set herein. to conform established above with Lessor's statements, expressly set other than those facility policy type rental in effect as of herein, by parties in upon forth were relied anniversary date commencement of each entering into this Lease. No modification (90) ninety by giving the term Lessee at least to, of, from the waiver addition or deletion changed days’ advance written of such notice effective unless terms of this Lease shall be rental, right and Lessee have the shall writing signed Lessee and reduced to during day period ninety said time representative execute of Lessor authorized upon giving this Lease Lessor fifteen terminate (15) days' writing. this Lease. notice in provision states: 3. This
gram. rejected dealing, Fargo Realty court of also and fair Wells Advis Uioli, Inc., merger Funding, ors Amoco’s assertion inte- Inc. gration precluded application (Colo.App.1994) (citing clause Restate (Second) (1981)), covenant of deal- ment Contracts ing. trial court The court also held essence *13 allowing jury by protection
did not err
the
to decide
and fair
is the
of the rea
pressure
applied
expectations
parties. Big
that Amoco had
economic
to
of
sonable
the
Co.,
Dealers,
thereby tortiously interfering
the
Horn Coal
v.
Edison
Co. Commonwealth
Cir.1988)
(10th
prospective
(citing
852 F.2d
the Dealer’s
business rela-
1267
E.
Farnsworth,
tionships. Finally,
rejected Amo- Allan
the court
Faith
Good
Performance
imposition
co’s
that
affirmative defenses
the
and Commercial Reasonableness under the
Code,
liability against
an
Amoco for breach of
30
Commercial
U.Chi.L.Rev.
Uniform
(1963)).
Horn,
implied
good
Big
covenant of
faith and fair deal-
670
In
the Court
ing
preemption provisions
Appeals
violates the
for
explained:
the
the Tenth Circuit
Act,
Marketing
Petroleum
Practices
and that
good
Although
generally applica-
faith is
imposition
liability against
Amoco for tor-
provisions,
possible
ble to all
“it
contract
tious
conflicts with
interference
federal and
to so draw a contract as to leave decisions
subsequently grant-
state antitrust law. We
absolutely to the uncontrolled discretion of
petition
ed Amoco’s
for certiorari.
parties
one
and in such a
ease
good
issue
...
In
is irrelevant.”
faith
II.
invoking
such a case the reason for
provision
may
is irrelevant. The reason
be
that,
Although agree
majority
I
with the
in
purely
caprice;
a whim or
all that matters
Colorado,
imposes
duty
good
law
proper
given.
is that
notice is
The ratio-
contracts,
dealing upon
all
I
[this
nale behind
is that
rule]
disagree
majority’s
with the
conclusion that
expressly
contracted
the unconditional
proper
jury
it was
to allow the
to use this
right
they
reasonably
and thus
cannot
ex-
principle materially
unambiguous
to
rewrite
pect any special implied protection from
express provisions
agreements
of the lease
terminating
contract
than
other
between Amoco and
I would
the .Dealers.
proper written notice.
hold that
improperly
the trial court acted
(1)
when it allowed
to
Horn,
relieve the Big
(quoting
To hold otherwise would allow the Dealers
jury
renegotiate
to
the
to use the
as
tool
disagree with
utilization of
Because I
the
agreements
legal formation.
lease
after their
good
faith and fair
the
covenant
right
This
cut off Amoco’s
to enter into
would
and rent modifica-
dealing to rewrite the rent
any legal contract and to exercise its lawful
agreements in
provisions
tion
of the lease
Here,
case,
rights
Amoco exercised
respectfully
part
thereunder.
dissent from
II
this
I
property
equip-
right
opinion.
to offer lease
I concur with
majority’s
right
liability against
Amoco had
to majority’s holding
ment to the Dealer.
Amo-
desired,
by
it
precluded
make the offer on
terms
co for tortious interference
subject
negotiation
principle
competitors
or not. Amo-
who do not
whether
offer,
from
legally
engage wrongful
not
means are shielded
co was
bound
extend the
liability
negotiate its
for tortious interference.
much less
terms. The Dealers
obligations imposed
good
[good
be
if
form in
faith
faith]
manee of
is to measured
such
agreement.
manifestly
By
by
unreasonable.”
their
standards
not
imposing
right
party
con-
to modi-
When one
uses discretion
no limitation on Amoco’s
...
rent,
dishonestly
by
or to
fy
parties
to act
in the instant case con-
ferred
the contract
practices
accepted commercial
of absolute discretion with
act outside of
tracted for
standard
party
regard
provision.
expec-
deprive
of the benefit of
The reasonable
the other
to that
contract,
guided by that
the contract is breached.
tations of the
are thus
omitted);
(citations
provided by §
see also Abbott v.
4-2-102.
standard as
Id. at 1363
Amoco,
Ill.App.3d
97-
189 Ill.Dec.
denied,
appeal
798-99
619 N.E.2d
allege
The Dealers do
that Amoco failed to
not
624 N.E.2d
191 Ill.Dec.
Ill.2d
(1993).
give
proper
them
notice.
reasoning
Applying
to the case
the above
agreed
I
that utilization of the
6. Even if
bar,
by
erred
that the trial court
I would hold
ap
dealing
faith and fair
was
covenant
(1)
allowing
jury
relieve the Dealers
case,
propriate in
I would hold that the trial
preclude
obligation
pay
their rents
improperly
allowed the
to use the
court
rents; (2)
collecting
substitute
those
Amoco from
express provisions of the
to reform
express
lease
rent terms in the
Realty
agreements.
Fargo
In Wells
Advis
lease
jury;
with lower amounts fashioned
Uioli, Inc.,
Funding,
LARKEY in this concurrence and dis-
sent. SMITH,
Stuart L. and Lutheran Medical
Center, non-profit a Colorado Petitioners,
corporation, Gary
Patricia A. BOYETT Boyett, Respondents.
A.
No. 94SC420. Colorado,
Supreme Court of
En Banc. 11, 1995.
Dec.
a
section 767.
notes
Comment
(Sec-
improper.
Id.
language
be both intentional
specific
must
the Restatement
explains
§
a. The
further
ond)
767 cmt.
comment
§
supplants
generaliza-
of Torts
weight
carried
these factors
a;
767.
767 cmt.
see
tions of section
Id.
considerably, and
determination
vary
Gardens, Inc.,
Memorial