Maddaloni Jewelers, Inc. v. Rolex Watch U.S.A.. Inc

In Maddaloni Jewelers, Inc. V. Rolex Watch U.S.A. Inc. 41 AD3d 269 (2007) the defendant sought summary judgment to dismiss the plaintiff's third amended complaint, which alleged a cause of action for breach of an implied duty of good faith and fair dealing but did not assert a cause of action for breach of contract. The Court sustained a cause of action for breach of an implied duty of good faith and fair dealing, holding that, although the parties' contract permitted the defendant to accept plaintiff's orders and time its deliveries at its "discretion," the plaintiff's allegations had "raise[d] a triable issue of fact as to whether [the defendant]'s discretion under the contract was exercised in bad faith." Id. at 270. In Maddaloni Jewelers, Inc. v. Rolex Watch U.S.A.. Inc. (41 AD3d 269, 838 N.Y.S.2d 536 [1st Dept 2007]) the First Department "acknowledged that a cause of action for breach of the covenant of good faith and fair dealing sufficiently stood on its own where the implied covenant of good faith obligated the defendant Rolex to exercise its discretion in good faith, not arbitrarily or irrationally, when determining when to deliver the items purchased by plaintiff". However, Maddaloni does not address the issue of whether a breach of contract claim is duplicative of a claim for a breach of the covenant of good faith and fair dealing. The case involved a summary judgment motion in which the First Department upheld the trial court's dismissal of a claim for tortious interference with prospective business relations, as well as the trial court's finding that "genuine issue of material fact existed as to whether watch manufacturer exercised bad faith in allegedly punishing jeweler, by refusing to process certain customer orders and unreasonably delaying others" (id.) In Maddaloni, an issue of fact was raised as to whether defendant's discretion under contractual agreement was exercised in bad faith.