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Carmichael v. Adirondack Bottled Gas Corp.

Vermont Supreme Court
161 Vt. 200 (1993)


Adirondack Bottled Gas Corporation (Adirondack) (defendant) supplied Philip and Janet Carmichael’s (plaintiff) petroleum gas distributorship with propane and other fuel that was then sold to the Carmichaels’ customers. Included in the contract between Adirondack and the Carmichaels was a “key man” clause which provided that the supply contract terminated automatically upon the death of Philip or any change in the management or ownership of the Carmichaels’ business. Several years later, Philip died, triggering the key man provision. Thereafter, Adirondack continued to supply Janet’s business with fuel while making several offers to purchase the Carmichaels’ business for approximately half its value. Each time an offer was made, Janet refused. Abruptly, an attorney for Adirondack informed Janet that it would no longer supply the fuel products. Consequently, Janet was forced to lay off her employees, sell most of the company’s assets, and her customers went without needed propane. After the parties wrapped up the performance of certain obligations required under the contract, Janet filed suit against Adirondack for breach of bad faith and fair dealing among other claims. After a trial, a jury held for Janet and awarded her $60,000 in compensatory damages and $100,000 in punitive damages. Adirondack appealed.

Rule of Law


Holding and Reasoning (Morse, J.)

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