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Racine & Laramie, Ltd., Inc. v. Department of Parks and Recreation

Court of Appeal of California
14 Cal. Rptr. 2d 335 (1992)


Facts

Racine & Laramie, Ltd., Inc. (Racine) (plaintiff) had a 40-year contract with the California Department of Parks and Recreation (the department) (defendant) to operate concessions at a state park. Several years into its contract, Racine began negotiations with the department to expand Racine’s operations to include a full-service restaurant and the sale of alcohol on the premises. Negotiations took place over several years. Negotiations eventually broke down, and the department declined to enter into an amended contract. Racine sued the department for a breach of the implied covenant of good faith and fair dealing, based on the department’s apparent reversal of its negotiating stance. The jury concluded that the department had exhibited bad faith in its negotiations and awarded damages to Racine. The department appealed.

Rule of Law

Issue

Holding and Reasoning (Froehlich, J.)

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