He and his former wife were in a limited partnership for the purpose of writing, publishing, and selling books. The better the partnership did, the more money the former Mrs. Clancy made. Five years after the couple's divorce was final, Tom Clancy removed his name from the Op-Center series of books, which generated income for the partnership. By removing his name from the books, Clancy automatically reduced the partnership's percentage of the books' income. And removing his name was likely to reduce the total size of the pie as well as the partnership's percentage of the pie. The decision, therefore, was likely to cost the partnership a considerable sum.
The former Mrs. Clancy brought suit to try to restore Tom Clancy's name to the series, thus likely restoring the previous size of the partnership's income stream. The Charles County Circuit Court adjudged a verdict in favor of the former Mrs. Clancy. Maryland's intermediate appellate court generally affirmed the circuit court's ruling and the Maryland Court of Appeals then granted cert.
By a 5-2 vote, the resulting opinion handed Tom Clancy a do-over. But the case is interesting because of a couple of footnotes in Judge Harrell's majority opinion. First, in footnote 17, Judge Harrell tells us, "Although the citation of unreported opinions (Maryland or otherwise) ordinarily is not appropriate, this is an unusual situation." He then cites an unpublished Delaware Court of Chancery opinion. This is amusing because in footnote 27, Judge Harrell cites a sitcom. To illustrate the point that "[o]ne certainly breaches the promise of good faith owed in contract and as fiduciary in a partnership by working actively to decrease directly the profits of the business venture," Judge Harrell offers the following:
Okay, note to file: unpublished opinions (except for the odd Delaware Court of Chancery decision) out; Seinfeld quotes in.
Jerry Seinfeld, perhaps an unlikely legal illustrator, once epitomized the duty of good faith in contract. In an episode of his television show, Jerry's character purchased a jacket at a men's clothing shop. The terms of the contract permitted Jerry to return the item for refund at his discretion. When Jerry attempted to return the jacket after an unrelated personal quarrel with the salesman, the following discussion took place.
Jerry: Excuse me, I'd like to return this jacket.
Clerk: Certainly. May I ask why?
Jerry: For spite.
Jerry: That's right. I don't care for the salesman that sold it to me.
Clerk: I don't think you can return an item for spite.
Jerry: What do you mean?
Clerk: Well, if there was some problem with the garment. If it were unsatisfactory in some way, then we could do it for you, but I'm afraid spite doesn't fit into any of our conditions for a refund.
Jerry: That's ridiculous, I want to return it. What's the difference what the reason is? Clerk: Let me speak with the manager . . . excuse me . . . Bob!
(walks over to the manager and whispers)
Bob: What seems to be the problem?
Jerry : Well, I want to return this jacket and she asked me why and I said for spite and now she won't take it back.
Bob: That's true. You can't return an item based purely on spite.
Jerry: Well, so fine then . . . then I don't want it and then that's why I'm returning it.
Bob: Well you already said spite so . . . .
Jerry: But I changed my mind.
Bob: No, you said spite. Too late.
Seinfeld: The Wig Master (NBC original television broadcast 4 April 1996).
In attempting to exercise his contractual discretion out of "spite," Jerry breached his duty to act in good faith towards the other party to the contract. Jerry would have been authorized to return the jacket if, in his good faith opinion, it did not fit or was not an attractive jacket. He may not return the jacket, however, for the sole purpose of denying to the other party the value of the contract. Jerry's post hoc rationalization that he was returning the jacket because he did not "want it" was rejected properly by Bob as not credible.
I'm going to see Seinfeld doing stand up in Baltimore this weekend. Now I'll be scanning the audience looking for Judge Harrell.