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County of La Paz v. Yakima Compost Co., Inc.

Arizona Court of Appeals
233 P.3d 1169 (2010)


Facts

The County of La Paz (the county) (defendant) contracted to permit Yakima Compost Co. (Yakima) (plaintiff) to process sewage on county land for 25 years. The contract stated that Yakima could perform the work on the county landfill for a maximum of three years. The agreement required the county to act diligently to find a new location for the remaining 22 years, but the agreement stated that if the county did not find a new location within that three-year window, it could terminate the agreement. The county did not find a new location within three years and terminated the agreement. Yakima sued the county for breach of the implied covenant of good faith and fair dealing. At trial, Yakima presented evidence that county officials had changed their minds about the wisdom of the contract and were seeking ways to get out of it. The jury returned a $9.2 million verdict in favor of Yakima. The county appealed.

Rule of Law

Issue

Holding and Reasoning (Timmer, C.J.)

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