Dick Broadcasting Company, Inc. Of Tennesse v. Oak Ridge Rm, Inc

395 S.W.3d 653 (2013)

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Nature of the Case

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Facts

On June 23, 1997, P and D entered into three separate, but related contracts. The first agreement was a Time Brokerage Agreement wherein D sold substantially all of WOKI-FM's broadcast time to P. The Time Brokerage Agreement was binding on the parties and their 'successors and assigns' and contained no limitation on the right of either party to assign the agreement. The second agreement was a Consulting Agreement between P and ComCon Consultants, a partnership composed of John W. Pirkle and his son Jonathan W. Pirkle, employees at D. Under the Consulting Agreement, the Pirkles were paid to serve as consultants to P for seven years. The Consulting Agreement was binding on the parties and their 'successors and assigns' and contained no limitation on the right of either party to assign the agreement. The third agreement was a Right-of-First-Refusal Agreement between D and P that gave P the right of first refusal to purchase at a discounted price substantially all of D's assets used in the operation of WOKI. The agreement stated that no party may assign its rights, interests or obligations hereunder without the prior written consent of the other party, and any purported assignment without such consent shall be null and void and of no legal force or effect. On April 30, 2000, P entered into a written Asset Purchase Agreement with Citadel Broadcasting Company ('Citadel') selling most of its radio station assets, including its agreements with D, for a purchase price of $300,000,000. P asked for D’s consent to the assignment. D refused to consent without additional consideration. D's goal was to negotiate a 'separate and more profitable agreement with Citadel.' P finalized the deal with Citadel without the assignment of the agreements and with a $10,000,000 reduction in the sales price. P sued D seeking a declaratory judgment that the Time Brokerage Agreement and the Consulting Agreement were assignable by P to Citadel without the consent of the Ds and that Mr. Pirkle, on behalf of D, breached the agreements by wrongfully and unreasonably withholding consent to the assignments in order to extract money from the sale to Citadel. P alleged that the implied covenant of good faith and fair dealing applied to the Right-of-First-Refusal Agreement and that Ds breached the agreement by failing to act reasonably and in good faith. Both sides filed a motion for summary judgment. D got a summary judgment, and P appealed. The Court of Appeals vacated holding that the implied covenant of good faith and fair dealing applies to the assignment clause in the Right-of-First-Refusal Agreement and that genuine issues of material fact made the summary judgment improper. P and D appealed.