Taylor Equipment, Inc. v. John Deere Co.

Deere & Company and its subsidiary, John Deere Industrial Equipment Company (Deere) (defendants), manufactured and provided industrial equipment to dealers. A dealer was not obligated to pay Deere until the dealer sold or leased the equipment. Taylor Equipment, Inc., doing business as Midcon Equipment Company (Midcon) (plaintiff), was a dealer for Deere. The dealer contract provided that Deere could terminate the contract immediately for cause, including a failure to timely pay Deere for equipment that Midcon sold. The contract also stated that the dealership could not be assigned by Midcon without prior written consent from Deere. Midcon sold $370,000 of Deere’s equipment but failed to timely pay Deere after the sales. Deere chose not to immediately terminate the contract and instead allowed Midcon to attempt to locate a buyer for the dealership. Midcon located a willing buyer, but Deere refused to approve the assignment of the contract unless the buyer provided additional equity capital. The buyer declined to do so. Midcon later assigned the contract to other buyers with Deere’s approval for $1,715,000 less than the original offer. Midcon sued Deere, alleging a breach of the implied covenant of good faith and fair dealing. The jury awarded damages to Midcon, and the district court denied Deere’s motion for judgment as a matter of law and entered judgment in favor of Midcon. Deere appealed.