Alyeska Pipeline Service v. Aurora Air Service

604 P.2d 1090 (1979)

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Nature of the Case

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Facts

D and RCA executed a contract which provided that RCA would construct, operate, and maintain a communications system along the Trans-Alaska Pipeline. In fulfilling the transportation requirements of the D-RCA contract, RCA executed a contract on October 3, 1974, with P. The P-RCA contract, was for P to furnish one (1) Cessna 207 aircraft with pilot, parts, and accessories to provide aircraft service to transport RCA-Alascom equipment, supplies, and personnel along the pipeline route as designated by RCA-Alascom. The P-RCA contract could be terminated at RCA's option. Prior to these contracts, P and D had a contractual relationship under which it was agreed that P would provide non-exclusive air service to D. In the spring of 1975 a payment dispute arose under the P-D contract. P sued and D paid P the sum it claimed was due. In October 1975 D took over the transportation requirements of its contract with RCA. RCA, prompted by D's election to take over the air transportation service, exercised its option to terminate its contract with P. P sued D for termination in bad faith. P claimed that D induced RCA to breach its contract. The court agreed that D could change the transportation requirements under the contract, but it held that a jury question was presented as to whether D had done so in good faith. D's motion for summary judgment was denied. The jury awarded P $362,901. D appealed.