Covenant of Good Faith and Fair Dealing

News & Analysis as of

Ninth Circuit Water Loss Case Provides Guidance on Bad Faith Standard for “Genuine Dispute”

In a recent decision in the case of Pyramid Technologies, Inc. v. Hartford Casualty Ins. Co., 752 F.3d 807 (9th Cir., May 19, 2014), the 9th Circuit, relying on California law, upheld a grant of summary judgment dismissing...more

Bad Faith Claim Against Insurer Ruled Unsustainable by New York Federal Courts Where Based on Same Facts as Breach of Contract...

Two recent New York federal court decisions – 433 Main Street Realty, et al. v. Darwin National Assurance Co., No. 14-cv-587 (NGG) (VMS) (E.D.N.Y. Apr. 22, 2014) and County of Orange v. The Travelers Indemnity Co. No....more

Federal Circuit’s Metcalf Decision a Big Win for Contractors

In a recent decision, the U.S. Court of Appeals for the Federal Circuit (“CAFC”) the supervising court for the Court of Federal Claims and the Boards of Contract Appeals, among others) clarified important legal principles...more

New York Federal Court Dismisses Superstorm Sandy Bad-Faith Claim as Redundant

In 433 Main Street Realty, LLC v. Darwin National Assurance Co., 2014 WL 1622103 (E.D.N.Y. Apr. 22, 2014), the United States District Court for the Eastern District of New York dismissed the insureds’ cause of action against...more

The Supreme Court’s Ginsberg Decision Could Significantly Affect the Outcome of Motor Carrier Preemption Cases

In a unanimous decision, the U.S. Supreme Court recently held that the Airline Deregulation Act (ADA) can preempt even common law claims for breach of the implied covenant of good faith and fair dealing if such claims relate...more

Finally - A Different Result for a Government Contractor's Differing Site Condition Claim

For any government contractor that has had a differing site condition claim denied despite relying on a government geotechnical report about the subsurface conditions of the project site, the U.S. Court of Appeals for the...more

U.S. Supreme Court Unanimously Reverses Ninth Circuit in Northwest, Inc. v. Ginsberg, Holding ADA Preempts State-Imposed Fair...

The U.S. Supreme Court unanimously holds that the Airline Deregulation Act (ADA) preempts a state-law claim for breach of the implied covenant of good faith and fair dealing where it seeks to enlarge the parties' voluntary...more

Recent Governmental decision may benefit contractors on breach of duty of good faith, fair dealing claims.

It is likely that most prime contractors, at one time or another, have felt that their Government customer was not treating them fairly. It is not always clear, however, when conduct that the contractor views as unfair or...more

Who Says Life’s Not Fair: Good Faith and Fair Dealing Prevails in Metcalf Case.

In a ruling highly anticipated among government contractors, the United States Court of Appeals for the Federal Circuit held on February 11, 2014, in Metcalf Construction Company, Inc. v. United States, No. 2013-5041 (Fed....more

The Government's Good Faith and Fair Dealing Duty to Government Contractors - Set-Aside Alert

One of the biggest challenges federal contractors face these days is the time agencies are taking to make decisions that impact the contractors' bottom lines. These delays can be particularly damaging to firms performing...more

Focused on Franchise Law - March 2014

FRANCHISOR 101: Franchisee Not Bound by Arbitration Provision - In March 2013, Edison Subs, LLC, a Subway franchisee/transferee, filed a complaint in New Jersey against Subway and Aliya Patel (the original...more

When Can Online Terms of Use and Privacy Policies Be Changed?

Recently, a California court dismissed a plaintiff’s claims that Instagram’s updated Terms of Services constituted a breach of the covenant of good faith and fair dealing implied in all contacts because Instagram took...more

Eleventh Circuit Rules Lenders Can Demand Flood Insurance Coverage That Exceeds Loan Balance

Agreeing with the First Circuit’s recent en banc ruling in Kolbe v. BAC Home Loans Servicing LP, — F.3d —, 2013 WL 5394192 (1st Cir. Sept. 27, 2013), the United States Court of Appeals for the Eleventh Circuit ruled that the...more

Delaware Court Allows Claims For Breach Of Implied Good Faith Covenant In Earn-Out Case

A recent Delaware Chancery Court opinion in American Capital Acquisition Partners, LLC, et. al. v. LPL Holdings, Inc., et.al. held that a seller’s claim that its buyer diverted opportunities from the acquired business to a...more

Delaware Court of Chancery Applies Implied Covenant of Good Faith and Fair Dealing to Prohibit An Acquiring Entity From Diverting...

In American Capital Acquisition Partners, LLC v. LPL Holdings, Inc., CA NO. 9490-VCG, 2014 WL 354496 (Del. Ch. Feb. 3, 2014), the Delaware Court of Chancery applied the implied covenant of good faith and fair dealing to a...more

Appellate Court Notes - Week of February 17

AC35201, AC35270 - Henderson v. Lagoudis - The “law of the case” doctrine does not preclude a trial court from re-considering subject matter jurisdiction (standing of the plaintiff in this case), even if the plaintiff...more

Delaware Supreme Court Holds That a Minority Stockholder Has No Common Law Right to a Conflict-Free Board Decision Regarding the...

In Blaustein v. Lord Baltimore Capital Corp., No. 272, 2013, 2014 Del. LEXIS 30 (Del. Jan. 21, 2014), the Delaware Supreme Court held that a closely-held corporation’s directors owe no fiduciary duty to decide, free from...more

Blaustein v. Lord Baltimore Capital Corp., No. 272, 2013 (Del. Jan. 21, 2014)

In this opinion, the Supreme Court of the State of Delaware affirmed the Court of Chancery’s denial of plaintiffs’ motion for leave to amend and supplement their complaint to allege a new fiduciary duty claim and a new...more

Practice Tips for M&A Practitioners for 2014

Based on a number of cases decided by the Delaware courts in 2013, below we summarize practice tips regarding careful drafting of contractual provisions and complying with technical and statutory requirements....more

Beer Distribution Law - January 2014

PENNSYLVANIA COURT REFUSES TO REWRITE DISTRIBUTION AGREEMENT - A United States District Court in Pennsylvania, applying Pennsylvania law, recently rejected a distributor's argument that a brewer's refusal to permit...more

Delaware Federal Court Discusses the Duty to Negotiate

Since SIGA Technologies Inc. v. PharmAthene Inc. (Del. 2013), the duty to negotiate in good faith is well recognized in Delaware, but it is not as clear when exactly that duty arises. On December 2, 2013, in Osco Motors...more

In re Trados: Directors Dodge a Bullet

Vice Chancellor J. Travis Laster’s August 16 post-trial opinion in In re Trados Inc. Shareholder Litigation1 (hereinafter, “In re Trados”) has attracted a significant amount of attention. Much as both the Chancery and the...more

Financial Advisory Update

Novel theories by plaintiffs’ lawyers need to foster novel approaches by M&A lawyers. A number of recent cases highlight the increasing risks for financial advisors and the lawyers who represent them. Financial...more

Federal PA Court Permits “Bad Faith Set-Up” as a Defense to Insured’s Bad Faith Claim

A Pennsylvania federal court recently allowed an insurer to plead “bad faith set-up” as a defense to, or “avoidance” of, a bad faith cause of action. The plaintiffs in Shannon v. New York Central Mutual Insurance Company who...more

Winshall v. Viacom Int’l Inc., C.A. No. No. 39, 2013 (Del. Oct 7, 2013)

In this opinion, the Supreme Court of the State of Delaware affirmed the Court of Chancery’s judgment granting the defendants’ motion to dismiss for failure to state a claim upon which relief can be granted, rejecting a claim...more

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