Justia Contracts Opinion Summaries

The plaintiff participated in a clinical trial for an experimental COVID-19 vaccine manufactured by AstraZeneca in November 2020. Before receiving the vaccine, she signed an informed-consent form stating that AstraZeneca would compensate her for injuries caused by the vaccine, including providing medical care and reimbursement, and that the company had an insurance policy to cover such costs. The form also disclosed that federal law may limit her right to sue for vaccine-related injuries, referencing the Public Readiness and Emergency Preparedness Act (PREP Act), which provides broad immunity to vaccine manufacturers during a public health emergency.After suffering debilitating medical injuries from the vaccine, the plaintiff requested compensation and care from AstraZeneca, which was denied. She then filed suit in the United States District Court for the District of Utah, alleging breach of contract and breach of the contractual duty of good faith and fair dealing. AstraZeneca moved to dismiss the complaint, arguing that the PREP Act immunized it from liability. The district court denied the motion, holding that the PREP Act’s immunity provision applies only to tort claims, not to contract-based claims. The court further reserved judgment on whether AstraZeneca had waived its statutory immunity in the informed-consent form.The United States Court of Appeals for the Tenth Circuit reviewed the case and reversed the district court’s ruling. The appellate court held that the PREP Act’s immunity provision applies to “all claims for loss,” including those arising from breach of contract, provided they bear a causal relationship to the administration or use of a covered countermeasure like a vaccine. The court remanded the case for the district court to consider whether AstraZeneca waived immunity in the informed-consent form. View "Dressen v. AstraZeneca AB" on Justia Law

A technology company developed a healthcare revenue management software platform and, in 2014, licensed a white-labeled version to a bank. The bank branded this software as its own and used it to provide services to its customers. The licensing agreement gave the bank access to confidential software and data, while prohibiting reverse engineering, copying, or creating derivative works. In 2018, the bank began developing its own software that performed similar functions. The technology company later noticed a decline in users of its platform and suspected the bank had breached the contract by reverse engineering and copying its software. The company then sought a preliminary injunction to stop the bank from using its new platform and from misusing the information gained through the contract.The United States District Court for the Western District of Missouri reviewed the request for a preliminary injunction. The district court found that the technology company failed to show that it would suffer irreparable harm absent injunctive relief, ruling that any potential financial losses could be compensated with money damages and that claims of reputational harm were too speculative. The court also determined that the contract’s clause permitting injunctive relief was not, by itself, sufficient to require an injunction.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s decision. The appellate court held that the district court did not clearly err in finding the alleged harms compensable with money damages or too speculative, nor did it abuse its discretion by giving limited weight to the contract’s injunctive relief provision. The court emphasized that failure to demonstrate likely irreparable harm is, by itself, a sufficient ground to deny a preliminary injunction. Accordingly, the denial of the preliminary injunction was affirmed. View "RMS v. Commerce Bank" on Justia Law

A dairy operator in Northeast Missouri leased thousands of acres of adjacent forage land from a landowner to grow feed for its cattle and manage waste under regulatory requirements. The lease included provisions for renewal at a market rental rate and an agreement for the eventual sale of the leased and surrounding acreage to the dairy, with fair market value to be established by appraisal if necessary. The dairy alleged that the landowner breached the lease by unilaterally raising rent, demanding an unfavorable addendum, and refusing to complete the agreed land sales, while the landowner asserted that the dairy breached by not signing the addendum and threatened eviction.The United States District Court for the Eastern District of Missouri granted the dairy’s request for injunctive relief, enjoining the landowner from evicting or otherwise interfering with the dairy’s possession of the leased land. The landowner appealed, arguing lack of adequate notice and opportunity to be heard, as well as contesting the enforceability of the lease and the propriety of the injunction.The United States Court of Appeals for the Eighth Circuit first determined it had jurisdiction, treating the lower court order as a preliminary injunction rather than a temporary restraining order, based on its duration and effect. The appellate court held that the landowner waived or forfeited its due process objections by not raising them below. On the merits, the court found the dairy had a fair chance of prevailing on its contract claims, including the enforceability of the land-sale provision and compliance with notice requirements. The court further concluded that the dairy faced irreparable harm due to threatened loss of unique land, that the balance of harms favored the dairy, and that the public interest did not weigh against the injunction. The Eighth Circuit affirmed the district court’s issuance of the preliminary injunction. View "La Belle Dairy, LLC v. Sharpe Holdings, Inc." on Justia Law

The Maine Human Rights Commission filed a lawsuit in the Superior Court alleging that a landlord discriminated against his tenant based on sex, asserting claims under both the Maine Human Rights Act and the Fair Housing Act. After litigation began, the tenant requested a judicial settlement conference. The landlord did not attend the conference, but his attorney and daughter attended, allegedly with his authority to settle. After the conference, a record form stated that the parties had agreed to a full and final settlement, but disagreements arose during subsequent exchanges of draft settlement agreements, particularly over provisions related to an acknowledgment of antidiscrimination laws and certain “public-relief terms” such as fair-housing training and property management oversight.The Kennebec County Superior Court reviewed a motion to enforce the settlement agreement. Without holding an evidentiary hearing, the court found that the parties intended to be bound by an agreement reached at the settlement conference, as reflected in the settlement conference record form. The court identified five basic terms as the substance of the agreement, including a payment to the tenant and specific non-monetary provisions. The court ordered the parties to execute an agreement consistent with these terms, except for the acknowledgment provision, which it found was not part of the agreement.On appeal, the Maine Supreme Judicial Court found that the record was insufficient to support the Superior Court’s finding that the parties mutually assented to all material terms of a binding settlement agreement. The Supreme Judicial Court held that, in the absence of an evidentiary hearing or a sufficiently detailed record, the lower court erred in enforcing the settlement. The Supreme Judicial Court vacated the judgment and remanded the case to the Superior Court for an evidentiary hearing to determine whether the parties actually reached a binding agreement and, if so, its precise terms. View "Maine Human Rights Commission v. Larkin" on Justia Law

A homeowner hired a general contractor to perform a remodeling project, which included electrical work provided by a subcontractor. During construction, a fire occurred at the home, allegedly due to improper electrical work by both the general contractor and the subcontractor. The homeowner’s insurer paid for the fire damage and, acting as subrogee, brought a negligence and breach of contract action against both contractors. After the fire, the homeowner discontinued the services of both contractors and later hired a new general contractor to complete the project.The Minnesota District Court granted summary judgment in favor of the contractors, dismissing the insurer’s claims as time-barred under the two-year statute of limitations for defective construction claims involving improvements to real property, as set out in Minn. Stat. § 541.051, subd. 1. The district court found that the statute of limitations began to run when the homeowner terminated the contract with the original general contractor, concluding that the action was not timely filed.On appeal, the Minnesota Court of Appeals reversed the district court's decision. The appellate court interpreted the statute to mean that the statute of limitations does not begin until the entire construction project is terminated, substantially completed, or abandoned, not merely upon termination of the contract with the general contractor.The Supreme Court of Minnesota reviewed the case to resolve the statutory interpretation issue. The court held that, for purposes of the statute of limitations under Minn. Stat. § 541.051, subd. 1, the termination of the contract with the general contractor constitutes “termination … of the construction or the improvement to real property.” As a result, the Supreme Court reversed the Court of Appeals and reinstated the district court’s dismissal of the insurer’s claims as time-barred. View "American Family Insurance Company vs. NB Electric, Inc." on Justia Law

A church with property insurance sustained windstorm damage and submitted a claim to its insurer. When the parties could not agree on the amount of loss, the church invoked the insurance policy’s binding appraisal process. Each party selected an appraiser, and the appraisers agreed on an award, which the insurer paid and the church accepted. Afterward, the church alleged it discovered additional, previously hidden damages, and the insurer refused to pay more than the appraisal award. The church then sued, claiming breach of contract and seeking to set aside the binding appraisal based on the later-discovered damage.The Franklin County Court of Common Pleas granted judgment on the pleadings to the insurer, finding that the appraisal award was binding and there was no evidence of fraud, misfeasance, or mistake to justify reopening the award. The Tenth District Court of Appeals reversed, holding that the church’s complaint pleaded mistake with sufficient particularity to satisfy Ohio’s Civil Rule 9(B), which requires that mistake be pled with particularity.The Supreme Court of Ohio reviewed the case and held that a binding appraisal award may only be set aside for fraud or manifest mistake, defined as an egregious error undermining the intent of the agreement, not a mere error in judgment. The court further concluded that, to plead mistake with particularity under Civil Rule 9(B), the facts alleged must satisfy the elements of mistake. Since the church only alleged that additional, hidden damages were discovered after the appraisal, and did not plead facts constituting a manifest mistake by the appraisers, the complaint did not state a claim for mistake. The Supreme Court of Ohio reversed the Tenth District’s judgment and reinstated the trial court’s dismissal of the complaint. View "One Church v. Bhd. Mut. Ins. Co." on Justia Law

A male sophomore at a private university was accused by two female students of physically assaulting them in separate incidents involving alleged choking. Both incidents occurred during the 2023 academic year and involved evolving accounts from the complainants, contradictory witness testimony, and a lack of immediate reporting. The accused, John, denied the accusations and provided evidence and witnesses in his defense, including text messages and accounts from a sole eyewitness supporting his version of events. Despite this, the university’s internal investigation and disciplinary hearing were alleged to have been conducted in an imbalanced way, favoring the complainants, limiting the accused’s ability to present witnesses, and subjecting him and his witness to more rigorous questioning. The hearing concluded with John being found responsible and suspended for two years, which he appealed internally without success.The United States District Court for the District of New Jersey reviewed John’s subsequent lawsuit against the university, which asserted claims under Title IX for sex discrimination as well as state law claims for breach of contract and breach of the implied covenant of good faith and fair dealing. The District Court dismissed the complaint, holding that John’s allegations were insufficient to plausibly state a claim under federal or state law.On appeal, the United States Court of Appeals for the Third Circuit reversed the District Court’s dismissal. The Third Circuit held that, taking the allegations as true, John had plausibly alleged that the university’s disciplinary process was influenced by both external and internal pressure to favor female complainants over male respondents, and that procedural irregularities and evidence of biased treatment supported an inference of sex discrimination under Title IX. The court also found that John plausibly alleged breaches of contract and the implied covenant of good faith and fair dealing based on the university’s failure to follow its own procedures and to provide a fundamentally fair process. The case was remanded for further proceedings. View "Doe v. Princeton University Trustees" on Justia Law

At a U.S. Army depot in Pennsylvania, workers used pumps to transfer flammable paint thinner in a paint-mixing room. The depot hired a contractor, Finishing Systems, to upgrade these pumps and provide brief operational training. The pump manufacturer, Carlisle Fluid Technologies, installed the pumps and, per contract, agreed to assist and train personnel in their use, care, and maintenance. Carlisle’s employee provided limited training focused on operation, not safety procedures. Two months after installation, a worker, wearing ordinary clothing rather than required anti-static gear, released vapors while swapping drums. A static discharge sparked a fire, killing two employees and severely injuring another.The survivors and estates of the deceased sued several parties, including Carlisle, alleging negligence for failure to provide adequate safety training. The United States District Court for the Middle District of Pennsylvania granted summary judgment in favor of Carlisle, concluding that it owed no duty of care to train workers on safety beyond its limited contract to provide operational instruction.On appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s summary judgment de novo. The Third Circuit held that, under Pennsylvania law and Section 324A of the Restatement (Second) of Torts, Carlisle’s duty was no broader than its contractual undertaking to sell, install, and provide basic operational training for the pumps. Carlisle did not increase the risk of harm, assume the depot’s safety training duties, or induce reliance for comprehensive safety training. The court found no legal basis to impose a broader duty. Accordingly, the Third Circuit affirmed the District Court’s summary judgment for Carlisle. View "Byers v. Finishing Systems Inc." on Justia Law

In this dispute, an Argentine construction company issued dollar-denominated convertible debt notes to two trusts as part of a capital-raising effort. The parties entered into an indenture agreement, later amended in December 2019, which authorized the company’s Board of Directors to convert the notes into equity if certain financial thresholds were met. Section 1301 of the indenture vested the Board with authority to determine if these conditions were satisfied, provided their determination was free from “manifest error.” In 2020, the Board concluded that the threshold for conversion had been reached, relying on the company’s increased net equity following the issuance of new preferred shares. The trusts disagreed, contending the Board’s calculation was manifestly erroneous and that the actual value of equity sold did not meet the $100 million threshold required by the indenture.The United States District Court for the Southern District of New York presided over a bench trial. The court dismissed the trusts’ claims regarding improper amendment and bad faith, focusing solely on the manifest error claim. After reviewing the evidence, the District Court concluded that the Board had manifestly erred by using metrics not contemplated by the indenture—specifically, shareholder equity changes and liquidation preferences—rather than the actual value of shares sold. The court found that the threshold for mandatory conversion had not been met, and GCDI breached the agreement by ceasing interest payments on the notes.The United States Court of Appeals for the Second Circuit reviewed the District Court’s factual findings for clear error and its legal conclusions de novo. The Second Circuit affirmed the District Court’s judgment, holding that the Board’s determination constituted a manifest error under New York law because it failed to value the equity sold as required by the indenture’s plain terms. The judgment awarding damages to the trusts was affirmed. View "Tennenbaum Living Tr. v. GCDI S.A." on Justia Law

The city at the center of this case, after decades of financial distress and unsuccessful efforts to revitalize its economy through projects like a waste facility and a casino, declared bankruptcy in 2022. Prior to the bankruptcy filing, the city had pledged certain revenue streams—including payments from a casino, a waste facility, and agreements with the county—to secure debt issued through complex arrangements. These pledges were established through city ordinances and related contracts with creditors, including a trust indenture and a contribution agreement. The revenue streams and contractual rights to payment became the focal point of disputes in the bankruptcy proceedings.Bankruptcy Judge Ashely M. Chan of the United States Bankruptcy Court for the Eastern District of Pennsylvania heard adversary claims from the city against its creditors. The creditors asserted that their liens on the pledged revenues survived the bankruptcy, arguing that their interests were statutory liens or arose from special revenues or proceeds exempt from discharge. The Bankruptcy Court held that the creditors had properly perfected their interests but determined that their liens were consensual, not statutory, and thus cut off by 11 U.S.C. § 552(a). The court also found that the pledged revenues were not "special revenues" under bankruptcy law and ordered that certain excess funds be transferred to the city. The creditors appealed these determinations.On appeal, the United States Court of Appeals for the Third Circuit affirmed the Bankruptcy Court's rulings on three key issues: the liens were not statutory and thus did not survive the bankruptcy; the pledged revenues were not special revenues; and the Trust Indenture required excess funds to be transferred to the city. However, the appellate court remanded for further proceedings on whether certain contract language conveyed a right to payment from which post-petition proceeds could be derived, and whether the creditors’ interests extended to pre-petition accrued amounts not yet paid to the city. View "City of Chester v. PHCC LLC" on Justia Law