Justia Contracts Opinion Summaries

The dispute centers on the division of a government pension earned by an employee during a lengthy period of cohabitation before marriage. The employee worked at the East Bay Municipal Utility District (EBMUD), contributing to his pension from 1987 to 2018. He and his partner began living together in 1993, executed a domestic partnership affidavit for benefits, purchased a home jointly, and eventually married in 2003. After their relationship ended, the partner sought legal separation and also filed a civil action alleging breach of an oral agreement made during their cohabitation period, in which they agreed to pool their earnings and share equally any property acquired as a result.The Superior Court of the City and County of San Francisco consolidated the civil and divorce proceedings. It bifurcated the case, first trying the claims regarding the oral agreement. After trial, the court found that an implied-in-fact (Marvin) agreement existed during the cohabitation period, entitling each party to an equal share of property acquired, including pension contributions and accumulations. The employee moved to clarify that statutory protections made his pension “unassignable” and “exempt from execution,” but the court held that the partner was entitled to half of the pension benefits accrued during the Marvin period, and could receive payment upon distribution or via other assets after actuarial valuation.The Court of Appeal of the State of California, First Appellate District, Division Five, reviewed whether Public Utilities Code section 12337 barred the partner from sharing in pension benefits accrued during cohabitation. The court held that section 12337 does not prohibit the partner from receiving a share of pension contributions and accumulations, because her claim was based on ownership arising from the Marvin agreement, not as a creditor or assignee. The trial court’s order was affirmed. View "Seiwald v. Irias" on Justia Law

Linda Keagle and her late husband obtained two loans in 2007 and 2008, totaling $450,000, from MLA Capital, LLC and Encarnacion Alvarez and her late husband. Both loans were evidenced by promissory notes with definite maturity dates in 2012 and 2013. The Keagles failed to make payments before the maturity dates, and subsequently, from August 2018 to March 2020, MLA Capital and the Alvarezes received monthly checks from C&C Organization, a company with which Linda was affiliated.MLA Capital and Encarnacion Alvarez filed a lawsuit in 2022 alleging breach of the promissory notes and related common counts. Linda moved for summary judgment in the Superior Court of San Bernardino County, arguing the claims were untimely under four-year and two-year statutes of limitations. She contended the payments made by C&C Organization did not restart or toll the limitations period, as she neither authorized nor signed the checks. Plaintiffs opposed, asserting a six-year statute of limitations applied and that the checks constituted partial payments restarting the limitations period. The trial court granted summary judgment for Linda, finding no evidence Linda had agreed to bear responsibility for the loans after maturity or authorized the payments.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the case and held that a six-year statute of limitations under California Uniform Commercial Code section 3118 applies to the promissory note claims and related common counts, as it is more specific and recent than general contract limitations statutes. The court further determined there is a triable issue of material fact as to whether the payments from C&C Organization constituted partial loan repayments authorized by Linda, which could have restarted the limitations period under Code of Civil Procedure section 360. The judgment was reversed, and the trial court was instructed to deny summary judgment. View "MLA Capital, LLC v. Keagle" on Justia Law

Several employees of the Space and Missile Systems Center of the United States Air Force brought a qui tam action under the False Claims Act against Jeremy Burton, the Center’s former Deputy Chief Information Officer. The plaintiffs alleged that Burton, in coordination with a defense contractor, manipulated contract awards to ensure profits were shared in violation of federal regulations, thereby submitting fraudulent payment claims to the government.Initially, Burton moved to dismiss the claims, arguing that 31 U.S.C. § 3730(e)(1) barred the suit because he was a member of the armed forces, which would preclude jurisdiction over actions brought by one member of the armed forces against another arising out of military service. The United States District Court for the Central District of California first agreed and dismissed the claims against Burton. However, after further briefing on the status of the parties, the district court reconsidered and vacated its earlier order, concluding that Burton was a civilian employee and not a member of the armed forces. The suit was permitted to proceed, and Burton appealed before the case reached final judgment.The United States Court of Appeals for the Ninth Circuit examined whether it had jurisdiction to review the interlocutory order denying Burton’s defense under section 3730(e)(1). The court held that the district court’s order did not meet the requirements of the collateral order doctrine, specifically because it was not effectively unreviewable on appeal from a final judgment. The statute at issue was determined to be a jurisdictional bar, not an immunity from suit, and thus not subject to interlocutory appeal. The Ninth Circuit dismissed the appeal for lack of jurisdiction. View "UNITED STATES V. BURTON" on Justia Law

A technology company developed an artificial intelligence system and imposed contractual and technical restrictions to prevent its use for fully autonomous lethal military operations and mass domestic surveillance. The company had previously adapted its product to meet some government needs but refused to remove these two key restrictions when the Department of War (formerly the Department of Defense) sought contractual terms allowing all lawful uses of the AI system. This disagreement coincided with a dispute over the product’s use in a sensitive military operation and previous incidents where the AI’s restrictions prevented it from fulfilling government requests. As a result, the Secretary of War determined that continued use of the AI posed a national security risk and ordered its removal from the Department’s supply chain under the Federal Acquisition Supply Chain Security Act of 2018.The Department promptly notified the company, offered an opportunity for reconsideration, and began implementing the exclusion. The company petitioned the United States Court of Appeals for the District of Columbia Circuit for review and raised statutory and constitutional challenges, arguing that the exclusion was arbitrary, beyond statutory authority, and violated due process and First Amendment rights. The company also sought a stay, which was denied, and later requested rescission, which was also denied by the Secretary.The United States Court of Appeals for the District of Columbia Circuit held that it had jurisdiction under the statute to review the procurement action. The court found the Department’s determination reasonable, concluding that the company’s ability and willingness to restrict the AI’s use posed a covered “supply chain risk” under the statute, even without evidence of malicious intent. The court also held that less intrusive measures were not reasonably available, and that any procedural deficiencies in notice did not prejudice the company. The court further held that the exclusion did not violate the Fifth or First Amendments. The petitions for review were denied. View "Anthropic PBC v. United States Department of War" on Justia Law

A privately owned railroad company was engaged by the Nevada Department of Transportation to build a high-speed passenger rail line between Southern California and Las Vegas, Nevada. To fund this $12 billion project, the company sought and received a $3 billion federal grant from the Federal Railroad Administration (FRA) under the Infrastructure Investment and Jobs Act. The Act contains a “Buy America” requirement, generally mandating that federally funded projects use goods produced in the United States, but it allows waivers if domestic goods are unavailable or unsatisfactory. The railroad company solicited bids for high-speed trains, and only two manufacturers responded: one offering to build most trains domestically but at a lower maximum speed, and another proposing to build the first two trains abroad to meet the project’s higher speed requirement, before shifting production to the U.S.After reviewing the bids, the FRA proposed to waive the Buy America requirement for either bid, but ultimately finalized a waiver only for the foreign-manufactured trains, based on its finding that no domestic manufacturer could produce trains at the required speed. The railroad company then contracted with the foreign manufacturer. The domestic manufacturer, having lost the contract, challenged the waiver in the United States District Court for the District of Columbia, arguing it was unlawful and arbitrary. The district court dismissed the complaint, finding the domestic manufacturer lacked standing.On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the domestic manufacturer had standing, as it suffered a concrete economic injury traceable to the waiver and redressable by court action. However, the court determined that the waiver was both lawful and reasonable under the statute, as the FRA correctly found no domestic producer could supply the required high-speed trains. The appellate court affirmed the district court’s judgment, converting it from a jurisdictional dismissal to a decision on the merits. View "Alstom Transportation, Inc. v. Federal Railroad Administration" on Justia Law

A Swedish private equity firm specializing in veterinary products sought to acquire a company that manufactured orthopedic implants for animals. At the time of negotiations, the target company was involved in ongoing patent litigation initiated by a third party, which posed significant financial risk. To address this uncertainty, the parties included a broad indemnification provision in their agreement, requiring the sellers to cover losses “as a result of, or in connection with” the patent litigation. After the sale closed, the litigation expanded to include additional products and patents, culminating in a $70 million settlement and a license for one of the company’s products. The buyer financed the settlement with a loan. Most former owners settled indemnity claims, but the company’s founder did not, prompting the new owners to sue for enforcement of the indemnity.The Superior Court of the State of Delaware initially granted summary judgment to the buyers on certain defenses but otherwise denied both parties’ motions, proceeding to trial. Following trial, the court held that the founder was required to indemnify the buyers for damages arising from the patent litigation, but not for the cost of the patent license. It awarded only half of the requested attorneys’ fees for patent litigation, citing allocation challenges, and also denied recovery of fees incurred to enforce the indemnification provision. The court did, however, award prejudgment interest, including on the loan interest expense.On appeal, the Supreme Court of the State of Delaware affirmed in part and reversed in part. It held that the indemnification provision covered losses arising from post-transaction conduct and did not violate public policy, and that the implied covenant defense was inapplicable. The court found error in awarding prejudgment interest on the loan-interest expense, which resulted in a double recovery. For the cross-appeal, it held that the buyers were entitled to the license cost and the full amount of attorneys’ fees from the patent litigation, but not fees for enforcing the indemnification provision. The case was remanded for further proceedings. View "Gendreau vs Movora LLC" on Justia Law

A developer began constructing and selling duplex-style condominiums in Bonner County, Idaho, using a standard real estate purchase and sale agreement (PSA) form. The buyers, including a real estate agent and his wife, entered into PSAs for two units, planning to use them as personal and investment properties. The PSAs referenced detailed “Plans and Specifications” for the construction and finishes of the units, but no such documents were attached or ever created. Disputes later arose over the scope and quality of the promised finishes, especially after the developer communicated price increases and clarified the options for base and upgraded finishes. The buyers sued to enforce the contracts and sought specific performance, while the developer counterclaimed for a declaration that the PSAs were invalid due to indefiniteness.The District Court of the First Judicial District, Bonner County, conducted a bench trial. It found that the PSAs for the disputed units were missing essential material terms, specifically the absent Plans and Specifications, which left the scope of work, finishes, and price adjustments undefined. The court concluded that no enforceable contract was formed and denied the buyers’ request for specific performance. The developer was ordered to return deposits but was deemed the prevailing party, entitling him to attorney fees and costs. The district court also conditioned a stay of its judgment pending appeal on the posting of an additional bond.On appeal, the Supreme Court of the State of Idaho affirmed the district court’s judgment. It held that the PSAs were invalid and unenforceable because they omitted material terms necessary to define the contractual obligations. The buyers’ challenge to the additional bond was deemed moot given the disposition of the contract claims. The award of attorney fees to the developer was upheld, and the Supreme Court granted him attorney fees and costs for the appeal as the prevailing party. View "SCHUSTER v. MILBRATH" on Justia Law

The dispute involved two sets of co-owners of a Kentucky limited liability company operating a pharmacy. In 2019, the Dotsons acquired a 50 percent ownership interest from the Ingrams, with a promissory note and security agreement (the “Ingram debt”), making the Dotsons and the Andersons equal owners. In 2023, the Andersons and the LLC filed suit against the Dotsons, who counterclaimed. In early 2024, the parties participated in a mediation and reached a settlement agreement, which was recorded on video during a Zoom call. The mediator recited the terms, including payment arrangements and asset/debt allocations, and the parties affirmed the terms verbally. Subsequently, disputes arose regarding the nature of the Ingram debt (whether corporate or personal), leading both sides to refuse to fulfill their respective payment obligations.The Rowan Circuit Court, after a hearing, found the settlement agreement valid, enforceable, and unambiguous. The court determined the Ingram debt was personal to the Dotsons and not assumed by the Andersons, and held that the agreement did not violate Kentucky’s Statute of Frauds. The court did not address the applicability of Kentucky Rule of Civil Procedure 99.10. The Kentucky Court of Appeals affirmed and concluded that the requirements of CR 99.10 were satisfied.On discretionary review, the Supreme Court of Kentucky affirmed the Court of Appeals. It held that a video recording of an oral settlement agreement, where parties knowingly affirm the terms, constitutes a valid “electronic record” and “electronic signature” under the Uniform Electronic Transactions Act and satisfies the Statute of Frauds and CR 99.10. The court also found the settlement terms unambiguous and complete, and that the parties mutually assented to them. Issues of alleged breach of contract were deemed premature and not addressed. View "DOTSON V. CIA DRUG, LLC" on Justia Law

In December 2020, an individual was injured at a ski resort owned by a corporation when he collided with a snowmobile operated by an employee. After the incident, he filed several claims against both the corporation and the employee. While the litigation was ongoing, he purchased a ski pass for the 2022-23 season, during which he electronically signed an online waiver releasing any and all claims, including those arising from past events, against the corporation and its employees.The District Court for Summit County, Colorado, concluded that the online waiver signed during the purchase of the 2022-23 pass operated as a release of all existing claims, not merely as a pre-injury exculpatory agreement. The court dismissed the plaintiff’s remaining claims with prejudice, including his claims for willful and wanton conduct and his request for exemplary damages. On appeal, the Colorado Court of Appeals affirmed that the waiver was a valid release, enforceable under general contract principles, and rejected arguments that it was unconscionable or lacked mutual assent. The appellate court also held that claims for willful and wanton conduct and exemplary damages were not independent, cognizable causes of action.The Supreme Court of Colorado, reviewing the case, affirmed the appellate court’s decision. It held that the 2022 online waiver was a post-injury release, not an exculpatory agreement, and was enforceable under traditional contract principles. The Court further held that claims for willful and wanton conduct and exemplary damages were properly dismissed, as they are not independent causes of action. Additionally, it found that its prior decision in Miller v. Crested Butte, LLC, which concerned pre-injury waivers, was not applicable to this post-injury release. View "Litterer v. Vail Summit Resorts, Inc." on Justia Law

Several individuals filed a putative class action against two related corporate defendants, alleging that the defendants’ website terms and conditions violated a California statute known as section 1670.8, or the “Yelp Law.” The plaintiffs argued that certain provisions in the website’s terms—specifically, language related to trademark use and website access—prohibited or penalized negative statements about the defendants, their employees, or their goods and services. The plaintiffs claimed these provisions constituted unlawful non-disparagement clauses in consumer contracts.The Superior Court of Los Angeles County reviewed the case and sustained the defendants’ demurrer to the consolidated class action complaint, first with leave to amend and then, after an amended complaint was filed, without leave to amend. The court found that the challenged terms were limited to intellectual property protections and did not restrict consumer speech. It also determined that the statute did not create a private right of action for merely including a violative provision unless there was a threat to enforce that provision or penalize speech. The court concluded that neither the trademark nor the termination provisions in the defendants’ terms constituted actionable violations of section 1670.8 and entered judgment dismissing the case.Upon appeal, the Court of Appeal of the State of California, Second Appellate District, Division Five, affirmed the trial court’s judgment. The appellate court held that the website’s trademark language did not waive consumers’ rights to make critical statements about the defendants, and the website access termination clause was not a restriction on consumer speech. The court concluded that plaintiffs had not stated a cause of action under section 1670.8 and confirmed that the inclusion of these provisions, without a threat or attempt to enforce against protected speech, does not violate the statute. View "Scott v. Ulta Beauty, Inc." on Justia Law