Tortious breach of contract. (In The Courts).

Action for breach of implied covenant of good faith and fair dealing cannot be based on exercise of discretion expressly granted to defendant by contract between the parties.

Yarborough v. DeVilbiss Air Power, Inc., 321 F.3d 728 (8th Cir. 2003). As discussed supra with regard to plaintiffs' fraud claim, this action resulted from plaintiffs' dissatisfaction with the payout from the sale of their business to the defendant.

Lewis Yarborough and Robert Williamson sold their company, Ex-Cell Manufacturing Company (Ex-Cell), to DeVilbiss Air Power, Inc. (DeVilbiss) pursuant to an agreement that provided plaintiffs with yearly "earn-out payments." The amounts of these payouts were to vary each year depending on DeVilbiss's net sales of certain designated products to certain specified customers. The plaintiffs were promised a specified percentage of such sales.

In 1998, DeVilbiss discontinued doing business with Wal-Mart, a specified customer in the parties' agreement, and transferred that portion of its business to Sears, which was not a specified customer in the agreement. This resulted in a decrease in the earn-out payment to plaintiffs for 1998.

Although the parties' contract provided that DeVilbiss "has the right, in its sole discretion, to determine the terms and conditions of any …