Justia Contracts Opinion Summaries

The dispute centers on an employee, who was hired by a company operating customer service call centers, and who signed an arbitration agreement and a confidentiality agreement as part of her onboarding process. The arbitration agreement was included in a lengthy new hire packet, and the employee understood she was required to sign it to accept the job. The agreement mandated arbitration for nearly all claims between the parties, including those that could arise after employment ended and claims unrelated to employment. The confidentiality agreement included provisions restricting the employee from soliciting colleagues and granted the company the ability to seek injunctive relief for breaches without proving actual damages.After the employee left her position, she filed a class action lawsuit against the company asserting several employment-related claims. The company responded by seeking to compel arbitration based on the previously signed agreement. The Superior Court of Los Angeles County reviewed the motion. It found the arbitration agreement was governed by the Federal Arbitration Act and determined it was a contract of adhesion with a low degree of procedural unconscionability. However, the court found the agreement substantively unconscionable due to its overly broad scope, unlimited duration, and lack of mutuality, following precedent such as Cook v. University of Southern California (2024) 102 Cal.App.5th 312. The court also concluded the confidentiality agreement’s injunctive relief and nonsolicitation clauses were unconscionable. Ultimately, the court denied the motion to compel arbitration, finding the unconscionable terms could not be severed without rewriting the contract.On appeal, the Court of Appeal of the State of California, Second Appellate District, Division Eight, affirmed the trial court’s order. The appellate court held that the arbitration agreement, read together with the confidentiality agreement, was permeated with unconscionability that could not be cured by severance, and thus was unenforceable. View "Bennett v. VXI Global Solutions" on Justia Law

HYC Logistics, a Tennessee-based logistics provider, entered into a contract with OJCommerce (OJC), a Florida-based importer, to transport consumer goods from the Port of Los Angeles to OJC’s California warehouse. While the contract included provisions regarding liens, attorney’s fees, and Tennessee law, payment terms were negotiated separately by email. HYC Logistics billed OJC for various services, but OJC contested the charges, claiming they were inflated, and left a substantial balance unpaid despite making a partial payment. When OJC attempted to cancel a shipment, HYC Logistics exercised its lien rights over nine shipping containers and withheld delivery pending payment.The United States District Court for the Western District of Tennessee presided over the case, which involved both parties asserting multiple claims. A jury found OJC liable for breach of contract and validated HYC Logistics’ exercise of its lien, awarding damages to HYC Logistics. The jury also found HYC Logistics liable for violating the Tennessee Consumer Protection Act (TCPA) and for intentional or reckless misrepresentation, awarding damages to OJC on these claims. Post-trial motions resulted in the district court vacating the TCPA verdict against HYC Logistics but upholding the misrepresentation verdict. The court granted HYC Logistics attorney’s fees and denied OJC’s request for fees, and it rejected a motion for Rule 11 sanctions brought by Weiss, OJC’s owner.The United States Court of Appeals for the Sixth Circuit reviewed the consolidated appeal. It affirmed the district court’s rulings, upholding the jury’s verdicts on breach of contract and lien rights, finding no error in the jury instructions or damages awards, and agreeing with the district court’s grant of attorney’s fees to HYC Logistics. The Sixth Circuit also affirmed the denial of prejudgment interest and Rule 11 sanctions, concluding there was no abuse of discretion or objective unreasonableness in the district court’s decisions. View "HYC Logistics, Inc. v. OJCommerce, LLC" on Justia Law

After being rear-ended in 2018, the plaintiff claimed various injuries including concussion, neck pain, cognitive deficits, psychological issues, and TMJ dysfunction. She settled with the at-fault driver’s insurer for $45,000 but believed her damages exceeded that amount. She sought $25,000—the full underinsured motorist (UIM) policy—from her own insurer, Safeco. Safeco evaluated her claim, excluded certain medical expenses such as TMJ treatment, and initially offered $4,000, inviting further negotiation. The plaintiff rejected this and filed suit for breach of contract, enhanced damages (Hayseeds), and violations of the West Virginia Unfair Trade Practices Act (WVUTPA).The case originated in West Virginia state court but was removed by Safeco to the United States District Court for the Northern District of West Virginia. During discovery, the plaintiff produced new expert reports estimating much higher damages. Safeco then offered the full UIM policy limit of $25,000, which was memorialized in a joint motion signed by both parties, explicitly resolving the claim for policy proceeds and leaving only extracontractual and bad faith claims. The district court found the contractual claim settled, denied the plaintiff’s attempt to later seek reformation for higher policy limits, and granted summary judgment to Safeco on all claims. It found Safeco’s conduct reasonable and no evidence of a pattern of unfair trade practices.Reviewing the appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s summary judgment. The court held the breach of contract claim was resolved for $25,000 based on undisputed settlement evidence, rejected the plaintiff’s reformation argument, found Safeco’s conduct did not necessitate litigation for Hayseeds damages, and concluded there was no evidence of a general business practice violating WVUTPA. The judgment and orders of the district court were affirmed. View "Kreitzer v. Safeco Insurance Company of America" on Justia Law

Cemen Tech manufactures concrete production equipment and entered into a Reseller Agreement with G.W. Van Keppel Company in 2016, authorizing Van Keppel to sell and service its products. The agreement included a publicity provision prohibiting either party from making public statements about the other or the agreement without prior consent. In late 2025, Cemen Tech alleged Van Keppel breached contractual obligations and signaled intent to terminate if not remedied. Van Keppel denied the breach, but Cemen Tech formally terminated the agreement in early 2026. Shortly after, Van Keppel sent a message to its customers and employees explaining the termination and defending its performance, which Cemen Tech viewed as a violation of the publicity provision.The United States District Court for the Southern District of Iowa reviewed the matter after Cemen Tech sought a preliminary injunction to prevent Van Keppel from making further public statements about Cemen Tech or the agreement without its approval. The court held a hearing and considered evidence presented by both parties. It granted the injunction, finding Van Keppel’s communication posed a risk of irreparable harm to Cemen Tech’s reputation, goodwill, and customer relationships, and enjoined Van Keppel from making public statements about Cemen Tech or the agreement without Cemen Tech’s consent.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision for abuse of discretion, examining factual findings for clear error and legal conclusions de novo. Van Keppel challenged the sufficiency of Cemen Tech’s showing of irreparable harm and the breadth of the injunction. The appellate court held that the district court did not abuse its discretion in finding a risk of irreparable harm or in issuing the injunction. Because Van Keppel did not properly raise the overbreadth argument below, it was not considered on appeal. The Eighth Circuit affirmed the district court’s order. View "Cemen Tech, Inc. v. G.W. Van Keppel Co." on Justia Law

Two cousins established a custom T-shirt company in 2012, entering into agreements governing equal ownership and joint authorization of disbursements. One founder took medical leave in 2017, allegedly delegating management duties and compensation to the other. During his absence, he claims he was denied access to company financial records and excluded from payment decisions, contrary to the agreements. The business declined, and in 2023, the founder sold his share for $550,000, releasing all related claims. He later discovered purportedly suspicious financial payments and asserts he would not have agreed to the buyout had he known about them. The company was acquired and dissolved in 2024. The founder then brought federal RICO and state law claims, individually and on behalf of the company, against various related parties, alleging financial misconduct.The United States District Court for the District of South Dakota dismissed the action without prejudice, denied leave to amend the complaint as futile, and awarded attorney fees to two defendants based on an indemnification provision in the buyout agreement. The court found the plaintiff lacked capacity to bring derivative claims because he was no longer a company member, and that his individual claims failed because his injuries were not distinct from those suffered by all shareholders. The plaintiff’s motion for reconsideration was also denied.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the dismissal de novo. The court affirmed the district court’s rulings, holding that the plaintiff lacked legal capacity to bring derivative RICO claims and failed to allege a distinct individual injury sufficient for direct RICO claims. The denial of leave to amend was upheld because the proposed amendments would not cure these deficiencies. The court also concluded it had jurisdiction to review the attorney fees award and affirmed that award, finding no reversible error in the district court’s application of the indemnification provision. View "Stewart v. Plains Commerce Bank" on Justia Law

The case arises from a series of contractual and property disputes among three parties in Vermont. In 2015, one party sold land to another, then was hired to construct a pond on a separate property owned by the buyer. The pond builder subcontracted a third party to clear-cut land for the pond and also hired this subcontractor to cut timber on his own property. Disagreements ensued regarding payment, completion of work, and use of equipment, resulting in a lawsuit in 2017. The plaintiff alleged breach of contract and violations under Vermont’s Prompt Pay Act against the buyer, as well as conversion and intentional infliction of emotional distress. Claims against the subcontractor included breach of contract and conversion. Both defendants counterclaimed, including allegations of consumer protection violations, assault, and extortion.The Vermont Superior Court, Windsor Unit, Civil Division, conducted a jury trial on most claims. The plaintiff was awarded $7,500 for breach of contract against the buyer, plus interest. The buyer received $5,000 for assault, and the subcontractor was awarded $15,100 on his civil extortion claim. Both the plaintiff and buyer requested attorney’s fees under the Prompt Pay Act, each arguing they were the substantially prevailing party. The court denied both motions, finding neither party substantially prevailed in the construction dispute. The court also allowed the subcontractor’s civil extortion claim to proceed.On appeal, the Vermont Supreme Court affirmed the trial court’s decisions. It held that the determination of a substantially prevailing party under the Prompt Pay Act is within the trial court’s discretion and confirmed that neither party substantially prevailed. The Supreme Court also upheld the recognition of a civil claim for restitution based on economic duress, consistent with Vermont precedent, and affirmed the damages awarded for extortion. The judgment was affirmed in all respects. View "Lamson v. Goode" on Justia Law

A dispute arose following a 2016 chlorine gas leak at a chemical plant in West Virginia, where IPI, Inc. employees, including its president, Matthew Joseph Taylor, were injured and IPI’s equipment was damaged while performing power washing and industrial painting services for Westlake Chlor-Vinyls Corporation and Westlake Natrium LLC (collectively Westlake). The parties operated under two interrelated service agreements containing indemnity provisions. After the incident, IPI and Taylor sued Westlake for personal injury and property damage. Westlake counterclaimed, arguing that IPI breached the indemnity agreements by bringing suit and owed Westlake indemnification for Taylor’s claims.The Circuit Court of Marshall County applied Pennsylvania law, granted summary judgment to Westlake, and found the indemnity agreements clearly required IPI to indemnify Westlake, even for claims arising from Westlake’s own negligence, except in cases of Westlake’s sole negligence or willful misconduct. The court ruled that IPI’s claims fell within the scope of the agreements, including damages from the chlorine gas release, and certified its order as final under Rule 54(b). On appeal, the Intermediate Court of Appeals of West Virginia affirmed the application of Pennsylvania law but concluded that the circuit court erred by not analyzing the possible conflict between the two indemnity provisions and by insufficiently explaining why the claims fell within their scope. The ICA remanded for further proceedings.The Supreme Court of Appeals of West Virginia reviewed the ICA’s decision de novo, holding that the two indemnity provisions should be read together, not in conflict, and that both unequivocally require IPI to indemnify Westlake for its own negligence. However, the court found ambiguities regarding the scope of indemnity and the application of exceptions, necessitating factual development through parol evidence. The court affirmed in part, reversed in part, and remanded the case with directions to the circuit court. View "Westlake Chlor-Vinyls Corp. v. IPI, Inc." on Justia Law

Two affiliated companies operating as a public utility entered into a revenue-based factoring agreement with a financial entity. In exchange for $130,000, the companies agreed to pay future receipts totaling $169,000, granting the financier a security interest in their property. Payments were made for a short period before ceasing. The utility was placed in receivership due to mismanagement and subsequently filed for bankruptcy. The financier filed a claim in bankruptcy, which the bankruptcy court upheld, finding the contract enforceable and not against the public interest, despite arguments about the lack of regulatory approval.Following the bankruptcy, the financier sued the utility and its receiver for breach of contract and other claims in the Circuit Court of Tucker County, and the case was assigned to the Business Division. Meanwhile, the Public Service Commission (PSC) initiated an investigation. The PSC found the contract void as contrary to the public interest, citing improper enrichment of affiliates and harm to utility assets. The Business Court dismissed the breach of contract claim, relying on the PSC’s finding that the contract was void. The financier appealed, and the Intermediate Court of Appeals (ICA) reversed, holding that the bankruptcy court’s prior determination was res judicata and bound both the Business Court and the PSC.The Supreme Court of Appeals of West Virginia reviewed the ICA’s decision de novo. It held that the ICA erred in reversing the Business Court’s dismissal. The Supreme Court found that the PSC’s statutory authority to void utility contracts for public interest reasons superseded prior bankruptcy court findings regarding the contract’s enforceability. Because the PSC declared the contract void, there was no contract to breach, and the financier’s claim failed to state a cause of action. The Supreme Court reversed the ICA and remanded the case for dismissal of the breach of contract claim. View "Timberline Four Seasons Utilities, Inc. v. Kapitus Servicing, Inc." on Justia Law

A couple entered into an agreement with a construction company to build a home on their property. The contract was signed at a time when the construction company’s registration as a contractor had lapsed, which violated the Idaho Contractor Registration Act (ICRA). During construction, numerous problems arose, including water leaks, mold, improper grading, and unfinished work. The couple paid substantial sums and alleged that the company issued fraudulent invoices for work not performed. After failed attempts to resolve the issues, the couple sued for breach of contract, breach of implied warranty of merchantability, and fraudulent billing. The construction company counterclaimed, arguing it was prevented from completing the work and that its registration lapse was inadvertent.The District Court of the Second Judicial District, Clearwater County, initially dismissed the construction company’s counterclaims due to its failure to register under ICRA. Later, the court granted summary judgment to the construction company, dismissing the couple’s claims and finding the contract void and unenforceable because of the registration violation. The court reasoned that neither party could enforce the contract and denied all claims arising from it, including those for breach of contract and fraudulent billing.On appeal, the Supreme Court of the State of Idaho reviewed the summary judgment de novo. The Court held that while ICRA prohibits an unregistered contractor from enforcing a contract, it does not bar the innocent project owner from doing so. Contracts entered in violation of ICRA are voidable, not void, and remain enforceable at the option of the project owner. The Supreme Court reversed the district court’s dismissal of the couple’s breach of contract claim and remanded for further proceedings, clarifying that the project owner may pursue claims under such a contract. Attorney fees were denied, but costs were awarded to the prevailing party. View "Kumm v. Work Shops & Sons " on Justia Law

The parties in this case were involved in a residential real estate transaction in the District of Columbia. The sellers transferred a property to the buyer, and a disclosure statement about the property’s condition was provided, as required by statute. After encountering water issues, the buyer sued the sellers, alleging that the disclosure statement contained fraudulent and negligent misrepresentations. The disclosure statement, while referenced, was explicitly not part of the sales contract itself.The case was initially tried in the Superior Court of the District of Columbia. The judge conducted a bench trial and ruled in favor of the sellers on the buyer’s claims. Subsequently, the sellers sought attorney fees under a provision of the sales contract that allowed recovery for actions based on the performance or nonperformance of the contract’s terms and conditions. The trial court denied this request, finding that the buyer’s claims were based on statutory obligations for disclosure, not on any term or condition of the contract.On appeal, the District of Columbia Court of Appeals reviewed whether the sellers were entitled to attorney fees under the contract. The court applied a de novo standard of review to the contract’s interpretation and found its language unambiguous. The court held that attorney fees could only be recovered for actions based on performance or nonperformance of contractual terms, not statutory obligations. Since the buyer’s claims were rooted in alleged statutory violations rather than breaches of the contract, the sellers were not entitled to attorney fees. The District of Columbia Court of Appeals affirmed the trial court’s denial of attorney fees. View "Lovern v. Jackson" on Justia Law