Justia Contracts Opinion Summaries

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GRC, a manufacturer and supplier of refractory products designed to retain strength when exposed to extreme heat, previously included asbestos in its products. GRC was the defendant in 31,440 lawsuits alleging injuries from “exposure to asbestos-containing products manufactured, sold, and distributed by GRC” dating back to 1978. GRC’s insurers initially fielded these claims. During the 1970s and ‘80s, GRC had entered into primary liability insurance policies with several different insurers. GRC also secured additional excess insurance policies. In 1994 GRC’s liabilities from thousands of settled claims far exceeded the limits of its primary insurance coverage. In 2002, after years of continued settlements, GRC tendered the underlying claims to its excess insurance carriers. All denied coverage on the basis of a policy exclusion: It is agreed that this policy does not apply to EXCESS NET LOSS arising out of asbestos, including but not limited to bodily injury arising out of asbestosis or related diseases or to property damage. The district court ruled in favor of GRC. The Third Circuit reversed. The phrase “arising out of,” when used in a Pennsylvania insurance exclusion, unambiguously requires “but for” causation. The losses relating to the underlying asbestos suits would not have occurred but for asbestos, raw or within finished products. View "General Refractories Co. v. First State Insurance Co." on Justia Law

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Plaintiff Fleur and her son, Sidney, filed breach of contract claims against Wilmington. A jury determined that defendants breached an agreement to lend money for the acquisition, maintenance, and certain investments relating to life insurance policies obtained for Charlie and his wife, Fleur. The jury awarded $23 million in damages. The district court then determined post-trial that Wilmington breached an agreement to return certain funds to the Estate upon Charlie's death, and ordered Wilmington to return those funds in accordance with the parties' agreement. The court concluded that the district court did not abuse its discretion in admitting an expert's testimony, because plaintiffs' noncompliance with Rule 26 was harmless in the context of the events that transpired. Furthermore, the district court did not abuse its discretion in rejecting Wilmington's Daubert challenge. The court rejected Wilmington's challenges to the sufficiency of the evidence adduced at trial, and affirmed the district court's order requiring Wilmington to return to the Estate the $5 million in collateral payments that Charlie had made. The court affirmed the portion of the damages award representing the net-in-trust shortfall, because that award was not reached against the clear weight of the evidence, and would not result in a miscarriage of justice. Finally, the court held that the jury properly awarded plaintiffs $3.9 million in consequential damages, and that this award was neither contrary to the clear weight of evidence nor one that would cause a miscarriage of justice. Accordingly, the court affirmed the judgment. View "Bresler v. Wilmington Trust Co." on Justia Law

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Plaintiff sued Debtor after Debtor defaulted on a loan. Plaintiff secured a default judgment in the amount of $137,030.78. Without making payment on the judgment, Debtor later filed for Chapter 7 bankruptcy protection. Plaintiff commenced an adversary proceeding in bankruptcy court seeking an order declaring the debt non-dischargeable. Specifically, Plaintiff claimed that the debt was within the purview of 11 U.S.C. 523(a)(2)(B), which exempts from discharge certain debts. Debtor answered the complaint and then moved to dismiss for failure to state a claim. Plaintiff then moved to amend her complaint to include an alternative claim that the debt was non-dischargeable under 11 U.S.C. 523(a)(2)(A). The bankruptcy court granted Debtor’s motion to dismiss and denied Plaintiff’s motion to amend. The Bankruptcy Appellate Panel for the First Circuit affirmed the bankruptcy court’s dismissal of Plaintiff’s complaint and refusal to allow Plaintiff to add a section 523(a)(2)(A) claim to her complaint. The First Circuit affirmed, holding (1) the section 523(a)(2)(B) claim was properly dismissed; and (2) an adequate basis existed for the bankruptcy court’s denial of Plaintiff’s motion to amend. View "Privitera v. Curran" on Justia Law

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At dispute in this case was an allegedly underfunded trust that was created by the decedent, Donelson Glassie (Donelson), for the benefit of his daughter, the late Jacquelin Glassie (Jacquelin), in accordance with a property settlement agreement between Jacquelin’s divorcing parents, Donelson and Marcia Glassie. After Donelson died, Jacquelin filed a claim against his estate, alleging that her father breached the property settlement agreement by failing to properly fund the trust. The claim was denied. Jacquelin then filed this action alleging breach of contract in that Donelson failed to carry out the provisions of the property settlement agreement. Jacquelin then died. Alison Glassie was appointed executrix of Jacqulin’s estate and was substituted as plaintiff in this action. The superior court granted summary judgment in favor of the defendant, the executor of Donelson’s estate, concluding that the plaintiff lacked standing to sue the estate because, generally, only a trustee may institute an action on behalf of the beneficiaries of a trust. The Supreme Court affirmed, holding that the plaintiff lacked the requisite standing to sue her father’s estate for benefits she would have received based on her status as the beneficiary of the trust. View "Glassie v. Doucette" on Justia Law

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In 2008, the Sixth Circuit held that the retired employees of Meritor and Meritor’s predecessors had a vested right to lifetime healthcare benefits. A petition for rehearing was held in abeyance for eight years while the parties attempted to settle their dispute. During the intervening eight years, the Supreme Court abrogated precedent on which the Sixth Circuit had relied, holding that a series of collective bargaining agreements materially indistinguishable from those involved in the Meritor case did not provide the retirees with lifetime healthcare benefits. On rehearing, the Sixth Circuit entered a superseding opinion and reversed, acknowledging that the case is now controlled by the Supreme Court’s decisions in Tackett (2015) and Gallo (2016) and that the language of the documents does not guarantee lifetime benefits. View "Cole v. Meritor, Inc." on Justia Law

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Arabian Support & Services Co. (ASASCO), a Saudi Arabian business, sought compensation for assisting Textron Systems Corporation in its pursuit of a weapons deal in Saudi Arabia. ASASCO claimed that Textron backed away from its promises to supplement the modest fees paid under the parties’ written consulting agreements through an “offset” arrangement linked to the weapons sale. ASASCO’s complaint alleged breach of contract, tortious interference with ASASCO’s business and contractual relationship, and violations of Chapter 93A, the Massachusetts Deceptive Trade Practices Act. After limited discovery, the district court granted summary judgment for Textron on all of ASASCO’s claims. The First Circuit vacated the summary judgment in part, holding that the district court erred in dismissing ASASCO’s Chapter 93A misrepresentation claim based solely on the failure of the contract claim. Remanded for further proceedings on ASASCO’s misrepresentation theory. View "Arabian Support & Services Co. v. Textron Systems Corp." on Justia Law

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Appellants and Grady Reed were shareholders in a closely held corporation. In a 2010 complaint, Reed alleged that Appellants had breached the shareholders’ agreement and demanded relief in the form of money damages. After a jury trial, Judge Richard Ferenc granted Reed’s motion for a directed verdict and awarded him money damages, apportioning the liability among Appellants in proportion to their shares in the corporation. The court of appeals reversed, concluding that the trial court erred by treating the complaint as an action for money damages when the only available remedy was specific performance. On remand, Judge Ferenc concluded that Appellants had no right to a jury trial because Reed’s predominant claim for relief was equitable in nature. Appellants sought a writ of prohibition arguing that Judge Ferenc’s exercise of judicial power was unauthorized by law and that they did not have an adequate remedy by way of appeal from his adverse rulings. The court of appeals granted Judge Ferenc’s motion to dismiss the complaint. The Supreme Court affirmed, holding that Appellants failed to establish their entitlement to a writ of prohibition. View "State ex rel. Samarghandi v. Ferenc" on Justia Law

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In 1990, after Denver determined that it needed a new airport, a group of citizens formed the Stapleton Redevelopment Foundation to develop the former Stapleton International Airport. The Stapleton Redevelopment Foundation created a master plan to convert the former airport site. In 1995, the private, nonprofit Stapleton Development Corporation (“SDC”) was formed to lease and sell the former airport property. SDC selected Forest City as the master developer for redevelopment of the property. Forest City sold the vacant residential lot at issue here to a professional home builder, Infinity Home Collection at Stapleton, LLC (Infinity), with whom Respondent/Cross-Petitioner Tad Rogers had contracted to build a home. When Infinity purchased the lot from Forest City, the lot was vacant, did not have utilities, and still needed to be graded to its final configurations. Rogers ultimately purchased the lot and the home from Infinity. The home included a foundation drain system designed to collect ground water into a sump pit and to pump that water into the yard by way of a sump pump. Because of the high water table beneath his house, coupled with calcite leaching from the recycled concrete aggregate base course used to construct the roads, calcite built up in the foundation drain around Rogers' house. In turn, this water and calcite buildup made his basement uninhabitable and caused his sump pump to run and discharge more water. This case presented an issue of whether contractual privity was necessary for a home buyer to assert a claim for breach of the implied warranty of suitability against a developer. The Colorado Supreme Court held that, because breach of the implied warranty of suitability was a contract claim, privity of contract was required in such a case. Here, because the home buyer did not have contractual privity with the developer, he could not pursue a claim against the developer for breach of the implied warranty of suitability. View "Forest City v. Rogers" on Justia Law

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This case centered on a contract dispute between Clean Energy Collective LLC (CEC) and two defendants, Borrego Solar Systems, Inc. (Borrego) and 1115 Solar Development, LLC (1115 Solar). CEC was a Colorado limited liability company; Borrego was a California corporation headquartered in San Diego, and 1115 Solar was a Delaware limited liability company with its principal place of business in California. Borrego was 1115 Solar’s parent company and owned the latter in its entirety. CEC’s claims against Borrego and 1115 Solar arose from an asset purchase agreement (“APA”) to construct several solar photovoltaic projects. The APA specified that CEC would pay defendants to construct three power-generation projects in Massachusetts and allowed for additional projects pursuant to separate contracts governed by the APA’s terms. After the parties were unable to resolve disagreements regarding pricing and payments for projects subject to the APA (all of which were to be completed outside Colorado) CEC sued the defendants in Colorado, asserting claims for breach of contract and breach of warranty. The issue presented for the Supreme Court's review was whether the trial court erred in concluding Borrego was subject to general personal jurisdiction in Colorado. Because the trial court did not assess whether Borrego was essentially at home in Colorado, the Court concluded it did not fully apply the test announced in "Magill v. Ford Motor Co.," (379 P.3d 1033), and therefore erred in exercising general personal jurisdiction over Borrego. Applying the complete test itself, the Court concluded Borrego was not subject to general jurisdiction in Colorado. View "In re Clean Energy Collective LLC v. Borrego Solar Sys., Inc." on Justia Law

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In 2009, plaintiff Dragen Perkovic was operating a semitruck in Nebraska when he swerved to avoid hitting a car that had spun out in front of him. Plaintiff’s truck then crashed into a wall. Plaintiff’s resulting injuries were treated at The Nebraska Medical Center. At the time of the accident, plaintiff maintained personal automobile insurance with Citizens Insurance Company of the Midwest (Citizens) and a bobtail insurance policy with Hudson Insurance Company (Hudson). Plaintiff’s employer was insured by defendant Zurich American Insurance Company. The issue this case presented for the Supreme Court's review centered on the notice requirements of the no-fault act, specifically those set forth in MCL 500.3145(1): whether a nonparty medical provider’s provision of medical records and associated bills to an injured person’s no-fault insurer within one year of the accident causing injury constitutes proper written notice under MCL 500.3145(1), so as to prevent the one-year statute of limitations in MCL 500.3145(1) from barring the injured person’s subsequent no-fault claim. The Michigan Supreme Court held that when, as in this case, the documentation provided by the medical provider contained all of the information required by MCL 500.3145(1) and was provided to the insurer within one year of the accident, the statutory notice requirement was satisfied and the injured person’s claim was not barred by the statute of limitations. Therefore, the Court reversed the judgment of the Court of Appeals, vacated the trial court’s order granting summary disposition in favor of defendant Zurich American Insurance Company, and remanded to the trial court for further proceedings. View "Perkovic v. Zurich American Ins. Co." on Justia Law