Burger King Corp. v. Weave

169 F.3d 1310 (11th 1999)

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Nature of the Case

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Facts

In 1976, D entered into an agreement with P that allowed D to lease and operate a P restaurant owned by P in Great Falls, Montana. D and P entered into another franchise agreement in 1988, allowing D to operate a second Great Falls P restaurant, this one at a site which D owned. D agreed to make monthly royalty payments and advertising contributions in exchange for, among other things, a license to use the P trademarks and franchise system at his restaurants. The agreements clearly did not in any way grant any area, market, or territorial rights proprietary to D. In 1989, P authorized the opening of a restaurant at Malmstrom Air Force Base in Great Falls. D viewed the new restaurant as encroaching on the business of his existing restaurants and a breach of P's obligations. D stopped making his rent, royalty, and advertising payments under the franchise agreements. Eventually, P filed this suit to collect the amounts due under the franchise agreements. D counterclaimed for breach of the franchise agreements, breach of the implied covenant of good faith and fair dealing, violation of the Montana Unfair Trade Practices Act, and actual and constructive termination of franchise without cause. The district court eventually granted summary judgment to P on D's claims of breach of the implied covenant of good faith. It held that the Florida courts do not recognize a claim for breach of the implied covenant of good faith and fair dealing absent a breach of an express contractual provision. D did not allege that P's actions violated any express provision of the franchise agreements. The court entered final judgment for P holding that D infringed P's trademarks by using the Burger King (R) marks after his franchises had been properly terminated and then ordered an accounting of profits. D appealed.