## Facts

- CCH Incorporated is a legal publisher of tax and business law information products.
- In 2009, CCH decided to launch a new line of treatises (the “Expert Treatises Library”), a product category it had not previously published.
- Stephen J. Dunn, a tax attorney who had written tax-related materials before, entered into a publishing agreement with CCH to write a treatise on IRS tax practice and procedure.
- Under the parties’ arrangement, Dunn would submit chapters over time and CCH would review submissions and request revisions when needed.
- Dunn submitted the first chapter. CCH requested significant revisions, and Dunn revised the chapter to CCH’s satisfaction.
- Dunn then submitted a second chapter. After receiving it, CCH instructed Dunn to stop working on the treatise.
- CCH terminated the publishing agreement without giving Dunn an opportunity to revise the second chapter.
- Dunn sued in the United States District Court for the Eastern District of Michigan, asserting breach of contract and breach of the implied covenant of good faith and fair dealing.
- Dunn sought about $600,000 in damages, including claimed lost business referrals and claimed future royalties tied to publication of the treatise.
- Dunn moved for partial summary judgment on liability, and CCH moved for summary judgment on liability and on Dunn’s requested damages.

## Issues

1. Whether genuine disputes of material fact barred summary judgment on whether CCH breached the publishing agreement by terminating after the second chapter without allowing revisions.
2. Whether genuine disputes of material fact barred summary judgment on Dunn’s claim that CCH violated the implied covenant of good faith and fair dealing in its handling of revisions and termination.
3. Whether CCH was entitled to summary judgment limiting or eliminating Dunn’s claimed damages (including lost referrals and future royalties) as legally unrecoverable or too speculative on the record.

## Decision

- The court denied Dunn’s motion for partial summary judgment on liability.
- The court denied CCH’s motion for summary judgment on liability and damages.
- The court ruled that disputed facts made summary judgment inappropriate on breach, good faith, and the viability and amount of Dunn’s claimed damages.

## Legal Principles

- Summary judgment is improper when the record shows genuine disputes of material fact such that a factfinder must resolve competing accounts and draw reasonable inferences.
- Even where contract language may be interpreted as a legal question, summary judgment may be denied if the parties’ performance, communications, and the circumstances of termination are materially disputed.
- Under Michigan contract law, a party’s discretion under a contract generally must be exercised in good faith; whether conduct satisfied that duty may turn on fact questions about how discretion was used and whether the other party was denied the expected benefit of the bargain.
- Claimed contract damages, including consequential damages such as lost profits, must be supported by evidence of causation, foreseeability, and reasonable certainty; where the record leaves material disputes about those points, the issues may be left for trial rather than resolved categorically on summary judgment.

## Conclusion

Because the record contained conflicting evidence about the parties’ course of dealing, the adequacy of Dunn’s submissions, what CCH communicated about needed revisions, and whether termination complied with the agreement and with good-faith limits on contractual discretion, the court denied both sides’ summary-judgment motions; it also declined to reject Dunn’s claimed royalty and referral-related damages as a matter of law at that stage, leaving those matters for resolution at trial.


Dunn v. CCH Inc., 834 F. Supp. 2d 657, 658 (2011)