In a business divorce arising from the termination of a decade-long hot tub dealership arrangement, the court rejected claims of civil conspiracy, fraudulent misrepresentation, franchise liability, bad faith, and breach of restrictive covenant arising from a shareholder buyout and subsequent supply termination.
The court held that the governing relationship was an indefinite-term dealer agreement carrying an implied obligation of termination on reasonable notice, and that the dealer was not contractually bound to sell the manufacturer’s products exclusively.
Allegations that the dealer fundamentally breached the agreement by selling competing products and filing false warranty claims were not proven.
Applying distributorship reasonable notice principles, the court found that six months’ notice was required and awarded the dealer damages of $565,365 plus pre- and post-judgment interest.
All remaining claims and the counterclaim were dismissed.
