Justia Contracts Opinion Summaries

Several states challenged Executive Order 14026, which mandated a $15 minimum wage for federal contractors, and the Department of Labor (DOL) rule implementing it. The states argued that the executive order and the DOL rule violated the Federal Property and Administrative Services Act (FPASA) and the major questions doctrine, and that the DOL rule violated the Administrative Procedure Act (APA).The United States District Court for the District of Arizona dismissed the states' complaint and denied their request for a preliminary injunction. The district court concluded that the wage mandate did not violate the FPASA, the major questions doctrine did not apply, and the rule was not subject to arbitrary-or-capricious review under the APA because the DOL had to adopt the policy by executive order.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's dismissal of the complaint, vacated the denial of the preliminary injunction, and remanded for further proceedings. The Ninth Circuit held that the minimum wage mandate exceeded the authority granted to the President and DOL under the FPASA because the FPASA’s purpose statement does not authorize the President to impose a wage mandate without other operative language in the FPASA. The court also held that the major questions doctrine did not apply because the executive order was not a transformative expansion of authority. Finally, the court found that the DOL acted arbitrarily or capriciously by failing to consider alternatives to the $15 per hour minimum wage mandate, thus violating the APA. View "STATE OF NEBRASKA V. SU" on Justia Law

Fitzgerald Fruit Farms, LLC leased land from Whitaker Farms, LLC for a peach orchard. After being locked out of the leased premises, Fitzgerald Farms sued Whitaker Farms for damages. A jury awarded compensatory damages to Fitzgerald Farms. The Court of Appeals affirmed in part but reversed the trial court’s ruling that Fitzgerald Farms could not seek punitive damages. On remand, a second jury awarded punitive damages to Fitzgerald Farms. The Court of Appeals affirmed, holding that statements made during a settlement negotiation by Whitaker Farms’s Chief Operating Officer to Fitzgerald Farms’s owner were properly admitted under OCGA § 24-4-408.The trial court initially ruled that Fitzgerald Farms could not seek punitive damages, but the Court of Appeals reversed this decision. On remand, the trial court conducted a second jury trial focused on punitive damages, where the jury awarded $500,000 in punitive damages to Fitzgerald Farms. Whitaker Farms appealed again, arguing that the trial court abused its discretion by admitting statements made during a settlement negotiation. The Court of Appeals affirmed the trial court’s decision, stating that the statements were admissible to show Whitaker’s intent and state of mind.The Supreme Court of Georgia reviewed the case and vacated the Court of Appeals’s judgment. The Supreme Court determined that the statements made during the settlement negotiation were inadmissible under OCGA § 24-4-408. The Court concluded that the statements were offered to prove Whitaker Farms’s liability for punitive damages, which is not permissible under the statute. The case was remanded to the Court of Appeals to determine whether the admission of the statements was harmful and if a new trial on punitive damages is required. View "Whitaker Farms, LLC v. Fitzgerald Fruit Farms, LLC" on Justia Law

VFS Leasing Co. ("VFS") leased trucks to Time Definite Leasing, LLC ("TDL"), which insured the trucks with Markel American Insurance Company ("Markel American"). Markel American issued joint checks to VFS and TDL for insurance claims, but TDL cashed the checks without VFS's endorsement and kept the proceeds. VFS sued Markel American for breach of contract, claiming it was owed the funds from the joint checks.The United States District Court for the Middle District of Florida granted summary judgment in favor of VFS, holding that Markel American breached the insurance contract by failing to ensure VFS received the funds. The court found that under Florida's Uniform Commercial Code (UCC), Markel American's obligation was not discharged because the checks were not properly endorsed by both co-payees.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed whether Markel American's obligation to VFS was discharged when the drawee bank improperly accepted the joint checks. The court concluded that under Florida Statute § 673.4141(3), a drawer's obligation is discharged when a bank accepts a jointly issued check, regardless of whether both co-payees endorsed it. The court noted that while VFS could pursue a conversion claim against the bank, Markel American's obligation was discharged upon the bank's acceptance of the checks.The Eleventh Circuit reversed the district court's summary judgment in favor of VFS and remanded the case for further proceedings consistent with its opinion. View "VFS Leasing Co. v. Markel Insurance Company" on Justia Law

In 2016, a suicide bombing occurred at the U.S. military base in Bagram Airfield, Afghanistan. The bomber, an Afghan national employed by a subcontractor of Fluor Corporation, detonated an explosive vest, injuring Specialist Winston Tyler Hencely, among others. Hencely sued Fluor, alleging negligence in supervision, entrustment, and retention of the bomber, and breach of contract with the U.S. Government.The U.S. District Court for the District of South Carolina granted judgment to Fluor on all claims. The court found that federal law preempted Hencely’s tort claims and that he was not a third-party beneficiary entitled to enforce the Government’s contract with Fluor. Hencely appealed these decisions.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s judgment, holding that the Federal Tort Claims Act’s combatant activities exception preempted Hencely’s state-law tort claims. The court concluded that Fluor was integrated into combatant activities and that the military retained command authority over Fluor’s supervision of Local Nationals at Bagram Airfield. The court also held that Hencely was not an intended third-party beneficiary of the contract between Fluor and the U.S. Government, as the contract did not express an intent to benefit individual soldiers or confer upon them the right to enforce its provisions.Thus, the Fourth Circuit affirmed the district court’s judgment, precluding Hencely’s tort claims and denying his breach of contract claim. View "Hencely v. Fluor Corporation" on Justia Law

Govind Vaghashia and other plaintiffs appealed a trial court order denying their motion to vacate a settlement agreement with Prashant and Mita Vaghashia. The settlement involved a $35 million payment from the Govind Parties to Prashant and Mita, with specific terms about collateral and property interests. Disputes arose over the interpretation and execution of the agreement, leading to motions to enforce the settlement by both parties. The trial court enforced the agreement largely in favor of Prashant and Mita, rejecting the Govind Parties' interpretations.The trial court found that the Govind Parties were judicially estopped from challenging the settlement agreement after previously moving to enforce it. The court concluded that the Govind Parties' current position that the agreement was unenforceable was inconsistent with their earlier position that it was enforceable. The court also found that the Govind Parties had not taken their initial position due to ignorance, fraud, or mistake.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court's decision. The appellate court agreed that the elements of judicial estoppel were met: the Govind Parties had taken two totally inconsistent positions in judicial proceedings, and the trial court had accepted their initial position that the settlement was enforceable. The appellate court found no abuse of discretion in the trial court's application of judicial estoppel and upheld the denial of the motion to vacate the settlement agreement. The court also denied Prashant and Mita's motion to dismiss the appeal based on the disentitlement doctrine, finding insufficient evidence of non-compliance with trial court orders by the Govind Parties. View "Vaghashia v. Vaghashia" on Justia Law

This case involves a dispute over two adjacent properties, each containing a multi-unit apartment complex with on-site parking. The plaintiffs, Eli and Maha Batta, sought to establish easement rights for additional parking and trash dumpsters on a disputed area of the adjacent property owned by the defendant, Therese Hunt. The Battas purchased their property from Hunt in 1994 and claimed that their tenants had used the disputed area for parking and dumpsters since then. Hunt refused to sign a parking covenant in 2019, leading the Battas to file a lawsuit seeking to quiet title to an easement by grant, prescription, or irrevocable license, and for breach of contract.The Superior Court of Los Angeles County conducted a bench trial and ruled in favor of the Battas, finding they had established easement rights by oral grant, prescription, and implication. The court ordered that the easement would expire upon a bona fide sale of either property. Both parties appealed the decision. Hunt argued that the trial court erred in granting the easement rights, while the Battas contended that the court abused its discretion by ruling that the easement would expire upon a sale.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case and found that the trial court's findings were inconsistent. The trial court had found both that Hunt had granted an easement and that the Battas' use of the property was adverse, which are mutually exclusive conditions. The appellate court concluded that these inconsistent findings required reversal. Additionally, the appellate court found that the trial court abused its discretion by allowing the Battas to amend their complaint to add a cause of action for an easement by implication without giving Hunt the opportunity to rebut the evidence. Consequently, the judgment was reversed and the case was remanded for further proceedings. View "Batta v. Hunt" on Justia Law

In 2019, Jesse Hubbell was hired to film a scuba-diving campaign advertisement. He and John Mues rented scuba gear from Gull Scuba Center. Gull’s instructor, Chris Hanson, asked for their diving certification cards. Mues provided his “Advanced Diver” certification, but Jesse did not have his card. Jesse claimed he was PADI certified, and Hanson either did not verify this or did not recall doing so. Jesse drowned three days later while using the rented gear.Ellen Hubbell, Jesse’s widow, sued several defendants, including Gull, alleging negligence for renting the equipment without verifying Jesse’s certification. The District Court of the Fourth Judicial District, Missoula County, granted summary judgment in favor of Gull, finding no dispute of material fact regarding Gull’s liability.The Supreme Court of the State of Montana reviewed the case. The court held that the District Court did not abuse its discretion by relying on the PRA Membership Standards to establish Gull’s duty to Jesse, as both parties’ experts indicated these standards were generally accepted in the scuba rental industry. The court also upheld the exclusion of Ellen’s expert, Thomas Maddox’s, opinion on industry standards, as it differed substantively from the prior expert’s report, which was beyond the scope allowed by the District Court’s amended scheduling order.Finally, the court agreed with the District Court’s determination that Hanson’s failure to check Jesse’s certification did not cause his death. The court found that even if Hanson had checked Jesse’s certification, Mues, who was of legal age and held an Advanced Diver certification, could have rented the equipment for Jesse. Therefore, the failure to check the certification was not the cause-in-fact of Jesse’s death. The Supreme Court affirmed the District Court’s summary judgment in favor of Gull. View "Hubbell v Gull Scuba Center" on Justia Law

Vernon K. Stensvad, the plaintiff, owns a small cattle herd and entered into a Grazing Lease Contract with Newman Ayers Ranch, Inc. in July 2022. The contract stipulated that Stensvad would graze his cattle on Ayers Ranch's property for a fee, with higher winter rates to be determined. Stensvad paid the fees for July and August but later agreed orally to perform labor in exchange for reduced fees. Disputes arose over the quality of Stensvad's work and the amount owed. In October 2023, Ayers Ranch issued an agister’s lien for $78,662.50, seizing Stensvad’s herd. Stensvad sought a preliminary injunction to prevent the sale of his cattle under the lien.The Seventh Judicial District Court in Prairie County granted Stensvad’s application for a preliminary injunction, ordering the cattle to be moved to a third-party feed lot. Ayers Ranch appealed, arguing that the District Court failed to consider all four factors required for a preliminary injunction under Montana law and that a preliminary injunction was not an appropriate remedy for challenging an agister’s lien.The Montana Supreme Court reviewed the case and held that the District Court manifestly abused its discretion by not addressing all four factors of the preliminary injunction standard. The Supreme Court clarified that under the revised standard, a party must satisfy all four factors: likelihood of success on the merits, likelihood of irreparable harm, balance of equities, and public interest. The Court adopted the "serious questions" test from the Ninth Circuit, allowing for flexibility in evaluating these factors. The case was remanded for the District Court to make supplemental findings consistent with this standard. The Supreme Court also held that a preliminary injunction is an appropriate remedy to challenge an agister’s lien and that Stensvad did not have an adequate remedy at law. View "Stensvad v. Newman Ayers Ranch" on Justia Law

Four plaintiffs were injured when a railing collapsed at FedExField during a professional football game. They sued the owner of the football team, the owner of the stadium, the security services provider, and unidentified maintenance persons for negligence. The defendants moved to compel arbitration based on an arbitration clause in the terms and conditions of the tickets, which were purchased online by a friend of the plaintiffs, Brandon Gordon.The United States District Court for the District of Maryland denied the motion to compel arbitration. The court found factual disputes regarding whether Gordon agreed to the arbitration clause. Additionally, the court held that even if Gordon had agreed to the arbitration clause, the defendants did not demonstrate that Gordon was an agent of the plaintiffs who could bind them to the arbitration clause.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court reversed the district court's decision regarding the plaintiffs being bound by any contract Gordon may have entered into, finding that Gordon had apparent authority to bind the plaintiffs to the arbitration clause. The court held that the Washington Football Team's reliance on Gordon's apparent authority was reasonable and traceable to the plaintiffs' actions of using the tickets to enter the stadium. The court vacated the district court's order denying arbitration and remanded the case to resolve the factual disputes about whether Gordon entered into a contract that included the arbitration clause. View "Naimoli v. Pro-Football, Inc." on Justia Law

The case involves Meisam Sedighi, who sought reimbursement from his employer, Schnackel Engineers, Inc., for $3,000 he paid to an immigration attorney for the preparation and filing of a permanent labor certification application. Sedighi argued that under 20 C.F.R. § 656.12(b), Schnackel Engineers was responsible for these costs. Schnackel Engineers contended that Sedighi was to pursue his green card at his own expense, as stipulated in his employment contract, and that it did not agree to pay for the certification application.The small claims court of the county court for Douglas County ruled in favor of Sedighi, finding that Schnackel Engineers was responsible for the attorney fees under 20 C.F.R. § 656.12(b). Schnackel Engineers appealed to the district court for Douglas County, which reversed the small claims court's decision. The district court found that the employment contract controlled the parties' obligations and that Sedighi was responsible for his own green card expenses. It concluded that the Michigan immigration attorney represented Sedighi, not Schnackel Engineers.The Nebraska Supreme Court reviewed the case and found that the district court erred in its appellate review. The Supreme Court noted that the small claims court's judgment was supported by competent evidence showing that Schnackel Engineers actively participated in the preparation and filing of the permanent labor certification application. The Supreme Court held that the district court should have presumed that the small claims court found the Michigan immigration attorney represented both Sedighi and Schnackel Engineers. Consequently, the Supreme Court reversed the district court's judgment and directed it to reinstate the small claims court's judgment in favor of Sedighi. View "Sedighi v. Schnackel Engineers" on Justia Law