Freightliner Corp. has been ordered to pay $819,550 to a Lincoln, NE, truck dealership after an arbitrator ruled the Portland, OR-based manufacturer had "breached an implied covenant of good faith and fair dealing."

According to the American Truck Dealers association, Rose Equipment Co. claimed Freightliner had taken actions that "effectively terminated it as a Freightliner dealer," including refusal to give it two new product lines, shrinking its assigned area of responsibility, letting a neighboring Freightliner dealer establish a service facility, and selling trucks directly to Rose's largest fleet customer.
Freightliner said its actions were permitted under the written dealer agreement, and that they did not constitute terminating Rose as a Freightliner dealership.
In making the arbitration ruling, former federal judge Layn Phillips cited an Oregon law saying that a party to a contract can be liable for violation of an agreement -- even if the agreement allows the conduct complained of -- if the conduct violated the reasonable expectations of the parties.