Tennessee Supreme Court Affirms Reinstatement, Remand Of Dick Broadcasting Suit Over WOKI TBA Deal
January 24, 2013 at 4:24 AM (PT)
The TENNESSEE Supreme Court has affirmed a Court of Appeals action to vacate summary judgement and reinstate DICK BROADCASTING CO.'s lawsuit over the refusal of JOHNNY PIRKLE's OAK RIDGE FM, INC. to consent to the sale of DICK's right of first refusal to buy WOKI/OAK RIDGE-KNOXVILLE.
DICK held the right to buy the station and the contract allowed it to assign the right only with written consent from OAK RIDGE, which then refused to consent to a transfer of the right and also refused to consent to assignment of DICK's Time Brokerage Agreement and PIRKLE's Consulting Agreement, neither of which had consent provisions. DICK had attempted to sell the TBA to CITADEL as part of a sale of its KNOXVILLE cluster for $300 million in 2000, but PIRKLE would not consent and the sale went through without the WOKI TBA and at a $10 million discount.
The Court held that "where the parties have contracted to allow assignment of an agreement with the consent of the non-assigning party, and the agreement is silent regarding the anticipated standard of conduct in withholding consent, an implied covenant of good faith and fair dealing applies and requires the non-assigning party to act with good faith and in a commercially reasonable manner in deciding whether to consent to the assignment. Because there are genuine issues of material fact in dispute, we affirm the judgment of the Court of Appeals and remand to the trial court."