David Johansen, D/b/a Grayhawk Air Express, Plaintiff-appellant, v. Airborne Freight Corporation, Defendant-appellee, 9 F.3d 1552 (9th Cir. 1993)

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US Court of Appeals for the Ninth Circuit - 9 F.3d 1552 (9th Cir. 1993)

Argued and Submitted Nov. 2, 1993. Decided Nov. 10, 1993

Before: WRIGHT, GOODWIN and HUG, Circuit Judges.


The district court entered summary judgment for Airborne in Johansen's breach of contract suit. Johansen appeals. We affirm.

The contract between Johansen and Airborne allowed either party to terminate the agreement upon 30 days notice without specifying a reason. It did not require just cause for termination.

Montana implies a covenant of good faith and fair dealing in every contract. Story v. City of Bozeman, 791 P.2d 767, 775 (Mont.1990). In suits involving a covenant of good faith and fair dealing relative to employment contracts, the implied covenant cannot be in direct contradiction of a term of a written contract. Farris v. Hutchinson, 838 P.2d 374, 377 (Mont.1992). The nature and extent of the obligation of good faith is measured by the justifiable expectations of the parties. Talley v. Flathead Valley Community College, 857 P.2d 701 (Mont.1993) (no reasonable expectation of continuing employment given the plain meaning of a "no-tenure" provision).

We reject Johansen's argument that Airborne breached the implied covenant because Airborne's reasons for terminating him were "dishonest, after-the-fact fabrications." He did not have a reasonable expectation of a requirement of just cause for termination. Airborne terminated without cause. Requiring it to show cause for termination would contradict paragraph 14(b) of the agreement.



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