Justia Contracts Opinion Summaries

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Williams Alaska Petroleum owned the North Pole refinery until 2004. Williams knew that the then-unregulated chemical sulfolane was present in refinery property groundwater, but it did not know that the sulfolane had migrated off the refinery property via underground water flow. Flint Hills Resources Alaska bought the North Pole refinery from Williams in 2004 pursuant to a contract that contained detailed terms regarding environmental liabilities, indemnification, and damages caps. Almost immediately the Alaska Department of Environmental Conservation informed Flint Hills that sulfolane was to be a regulated chemical and that Flint Hills needed to find the source of the sulfolane in the groundwater. The Department contacted Flint Hills again in 2006. Flint Hills’s environmental contractor repeatedly warned Flint Hills that sulfolane could be leaving the refinery property and that more work was necessary to ascertain the extent of the problem. In 2008, Flint Hills drilled perimeter wells and discovered the sulfolane was migrating beyond its property and had contaminated drinking water in North Pole. A North Pole resident sued Flint Hills and Williams, and Flint Hills cross-claimed against Williams for indemnification. After extensive motion practice the superior court dismissed all of Flint Hills’s claims against Williams as time-barred. Flint Hills appealed. After review, the Supreme Court held that the superior court correctly applied the contract’s damages cap provision, but concluded that the court erred in finding Flint Hills’s contractual indemnification claims and part of its statutory claims were time-barred. The Court also affirmed the court’s dismissal of Flint Hills’s equitable claims. View "Flint Hills Resources Alaska, LLC v. Williams Alaska Petroleum, Inc." on Justia Law

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Schellinger planned commercial development of a large Sebastopol tract that it had agreed to purchase from Cotter. Certification of an environmental impact report (EIR) under the California Environmental Quality Act (Pub. Resources Code, 21000) was stalled for five years. In the first lawsuit, the court of appeal rejected Schellinger’s contention that CEQA section 21151.1 imposed a mandatory deadline of one year for EIR approval of an EIR and noted that a significant portion of the delay was attributable to Schellinger’s changes to its proposal. Cotter then sued Schellinger for breach of the contract, arguing that the prior litigation established that Schellinger took an unreasonably long time to secure approval. The trial court rejected that argument, but fixed a date by which Schellinger must secure final approval. The court of appeal affirmed. Schellinger then sued Cotter for breaching the contract and obtained a $2,855,431.77 judgment, plus costs and attorney fees. The court of appeal affirmed, agreeing that Cotter committed a breach of contract “animated by egregious bad faith” after failing to obtain relief in prior litigation, by undermining Schellinger’s efforts to obtain approval and by Cotter’s management of the property and efforts to transfer the property to others. View "Schellinger Bros. v. Cotter" on Justia Law

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Michael Mandell and Bayliss Ward and Bayliss Architects, P.C. (Bayliss) agreed that Bayliss would provide architectural and construction services for Mandell’s home. Mandell refused to pay Bayliss’s final invoice, and Bayliss filed a construction lien on the property. Mandell initiated this action stating counts of breach of contract, declaratory judgment that the lien was invalid, and quiet title to the property. Bayliss counterclaimed for foreclosure of the construction lien, quantum meruit, and breach of contract. The district court partially granted Mandell’s claim for declaratory relief, ruling that because Bayliss failed to obtain a written contract for construction services, the contract was void and the lien for those services was invalid. After a trial, the district court granted relief in quantum meruit and awarded attorney fees to Bayliss. The Supreme Court affirmed in part, reversed in part, and remanded, holding that the district court (1) did not err in granting equitable relief in quantum meruit, despite violation of the statutory requirement that residential construction contracts be in writing; and (2) erred in awarding attorney fees for the quantum meruit claim. Remanded. View "Mandell v. Bayliss Ward" on Justia Law

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Plaintiff filed suit against the Plan to recover payment for health care services provided to Plan policyholders. The trial court dismissed plaintiff's suit because the state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The court concluded that, notwithstanding procedural irregularies, plaintiff's due process rights were not violated where any error by the trial court was harmless; plaintiff's claims for breach of contract, quantum meruit, and promissory estoppel are not preempted by ERISA where these quasi-contract and contract causes of action do not address an area of exclusive federal concern; and plaintiff's claim for interference with contractual relations is preempted where this cause of action addresses an area of exclusive federal concern. View "Morris B. Silver M.D., Inc. v. Int'l Longshore & Warehouse Union" on Justia Law

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Plaintiffs Morris and McDaniel filed suit against Ernst & Young, alleging that the company misclassified Morris and similarly situated employees and denied overtime wages under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., and California laws. Ernst & Young subsequently moved to compel arbitration under the agreements signed by Morris and McDaniel. The district court ordered arbitration and dismissed the case. Morris and McDaniel argue that their employment agreements, where they signed a "concerted action waiver" with the company, violate federal labor laws and cannot be enforced. Plaintiffs claim that the “separate proceedings” clause in the agreement contravenes three federal statutes: the National Labor Relations Act (NLRA), 29 U.S.C. 151 et. seq., the Norris LaGuardia Act, 29 U.S.C. 101 et seq., and the FLSA. The court agreed with the Board's interpretation of section 7 and section 8 of the NLRA that an employer violates the NLRA when it requires employees covered by the Act, as a condition of their employment, to sign an agreement that precludes them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions against the employer in any forum, arbitral or judicial. In this case, the terms of the concerted action waiver are unenforceable. The “separate proceedings” clause prevents concerted activity by employees in arbitration proceedings, and the requirement that employees only use arbitration prevents the initiation of concerted legal action anywhere else. The court also concluded that the Federal Arbitration Act, 9 U.S.C. 1 et seq., does not dictate a contrary result. Accordingly, the court vacated and remanded for the district court to determine whether the “separate proceedings” clause was severable from the contract. View "Morris v. Ernst & Young, LLP" on Justia Law

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Zachery Edens was killed in when an oncoming car turned in front of his motorcycle. David Edens, Zachery's father and the Chief Executive Officer of Edens Structural Solutions LLC (Edens LLC), and Rhonda Edens, Zachery's mother, sent a demand letter to The Netherlands Insurance Company, claiming that Zachery was an insured under Edens LLC’s Netherlands insurance policy and demanding $1,000,000 in underinsured motorist benefits. After Netherlands denied coverage, David, Rhonda, and Edens LLC sued Netherlands. On summary judgment, the district court concluded that David was an insured under the policy because he was an executive officer of Edens LLC, and that Zachery was an insured as David's family member. Despite this, because David and Rhonda Edens owned Zachery's motorcycle, the district court concluded that the Netherlands policy didn’t cover his accident. David, Rhonda and Edens LLC appealed, arguing, among other things, that the policy’s coverage terms were ambiguous and should be construed in their favor. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "Edens v. Netherlands Insurance" on Justia Law

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This attorneys’ fees dispute arises out of an underlying lease dispute between HDRE and RARE. HDRE appealed the district court's award of attorneys’ fees for RARE under an attorneys’ fees provision in a lease agreement between the parties that was subsequently novated by another agreement. The court held that the novation of the Lease extinguished the parties’ rights under that agreement to prevailing-party attorneys’ fees and that the district court consequently abused its discretion in awarding fees to RARE. The court disagreed with the district court’s conclusion that several provisions of the Lease evince the parties’ intent for the attorneys’ fees provision to survive a future novation. Accordingly, the court reversed the district court's judgment. View "HDRE Bus. Partners Ltd. Grp. v. RARE Hosp. Int'l" on Justia Law

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This letter opinion addressed Third-Party Defendants’ motions to dismiss Third-Party Plaintiffs’ amended third-party complaint. The Third-Party Defendants advanced four bases on which the amended complaint should be dismissed, including lack of personal jurisdiction, failure to state a claim, failure to comply with Court of Chancery Rule 23.1, and an unreasonable delay in bringing the amended complaint. The Court of Chancery granted the Third-Party Defendants’ motions to dismiss, holding that the Third-Party Plaintiffs’ claims were time-barred because the Third-Party Plaintiffs failed to identify a tolling doctrine or extraordinary circumstances sufficient to avoid application of laches. View "CMS Inv. Holdings, LLC v. Castle" on Justia Law

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In 2002, Deere became the exclusive North American wholesale supplier of Hitachi products. In 2014, Deere notified Rudd, a long-time authorized dealer of Hitachi equipment, of its intent to terminate its dealer agreements and initiated arbitration proceedings, as required by the agreement. Although Rudd agreed that arbitration was the proper forum, it sought injunctive relief to maintain the status quo during arbitration and moved to seal the case, stating that “the very fact of this lawsuit” could cause loss of customers, layoffs (or preemptive departure) of employees, and diminution of the value of Rudd’s financial investment. Two weeks later, the district court entered Rudd's proposed order, before Deere submitted a response. During an on-the-record telephonic status conference, the court asked the parties whether the case should remain under seal; Rudd’s counsel replied that it should, while Deere’s counsel was silent. The matter proceeded to an Agreed Order. The arbitration panel requested a copy of that Order, believing that it would obviate the need for an expedited hearing. Deere’s counsel forwarded the Order without consulting Rudd. Rudd moved for contempt . Deere moved to vacate the sealing order. The Sixth Circuit affirmed an order unsealing the case. Rudd cannot show any countervailing privacy interest sufficient to outweigh the strong presumption in favor of public access to federal court records View "Rudd Equip. Co., Inc. v. John Deere Constr. & Forestry Co." on Justia Law

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Kurtrina Smith and Rickey Levins separately initiated actions against defendants the African Methodist Episcopal Church, Inc. ("the AME Church"); James L. Davis, bishop and presiding officer of the AME Church's Ninth Episcopal District (collectively, "the Ninth District"); and Lincoln National Life Insurance Company ("Lincoln National") after Lincoln National denied their respective claims for benefits filed pursuant to a group life-insurance policy Davis had purchased from Lincoln National on behalf of the Ninth District. Smith and Levins alleged the group policy provided coverage for Smith's mother and Levins's father. The defendants moved the trial court hearing each action to compel arbitration pursuant to arbitration provisions that were allegedly part of the group policy and certificates. The trial court denied those motions, and defendants appealed. Finding that the trial court erred in denying the motion, the Supreme Court reversed and remanded for arbitration proceedings. View "African Methodist Episcopal Church, Inc. v. Levins" on Justia Law