Horse Breeder Breached Implied Covenant of Good Faith and Fair Dealing in Blocking Sale of Filly.

One thoroughbred horse breeder filed an action against another horse breeder, alleging that the defendant had breached their agreement specifying how the parties would reproduce, care for and sell racehorses in their ongoing relationship. The district court granted summary judgment for the plaintiff and the United States Circuit Court of Appeals for the Sixth Circuit affirmed. The court found that the purchase and sale agreement between the parties came with a duty to do everything necessary to carry the agreement out. This included an implied covenant of good faith and fair dealing, which the defendant breached when it blocked the sale of one of its fillies. The defendant secretly bid on the filly and effectively set a reserve price that prevented a willing buyer from purchasing the horse. The court also ruled that the district court did not abuse its discretion in awarding $272,486 in attorney fees to the plaintiff. The contract included a prevailing party provision, and the district court did not reasonably find a 20 percent reduction of the lodestar amount to be an appropriate fee. Crestwood Farm Bloodstock v. Everest Stables, Nos. 13-5688/13-5689, 2014 U.S. App. LEXIS 8751 (6th Cir. May 9, 2014).