by
In this construction contract dispute, White Flint express Realty Group Limited Partnership, LLLP (White Flint) was entitled to recover attorney’s fees in connection with an action to enforce the contract between White Flint and Bainbridge St. Elmo Bethesda Apartments, LLC (Bainbridge). The court of special appeals affirmed the fee award in favor of White Flint, ruling that the contract provided expressly for attorney’s fees to be recovered in a first-party indemnification action. The Court of Appeals affirmed, holding that the contract contained express provisions that authorized first-party fee shifting, and therefore, White Flint was entitled to attorney’s fees. View "Bainbridge St. Elmo Bethesda Apartments, LLC v. White Flint Express Realty Group Limited Partnership, LLLP" on Justia Law

by
In 2013, Scheurer applied to work at Richelieu which outsourced its staffing needs to Remedy, a temporary staffing agency. The application form she signed with Remedy for placement with Richelieu contained an arbitration agreement. She was assigned to work for Richelieu, but that assignment ended after some months. About a year later, Remedy placed Scheurer with Fromm. Scheurer alleges that while working at Fromm, her supervisor sexually harassed her and that Fromm took no serious action to address the sexual harassment and instead fired her. Fromm tried to arrange a work situation that would have separated Scheurer from the supervisor, but when that proved “impossible,” Fromm asked Remedy to assign Scheurer to another client. Scheurer filed suit against Fromm, but not Remedy, alleging sexual harassment and retaliation, 42 U.S.C. 2000e‐2(a)(1) & 2000e‐3(a). Fromm argued that arbitration should be compelled under the contract law principle of equitable estoppel and because Fromm was a third‐party beneficiary of the Remedy agreement. The district court denied Fromm’s motion. The Seventh Circuit affirmed. There was no basis for finding that Fromm relied on Scheurer’s arbitration agreement since Fromm did not even know about it and Fromm was not a third‐party beneficiary of Remedy’s agreement with Scheurer. View "Scheurer v. Fromm Family Foods, LLC" on Justia Law

by
The Supreme Court affirmed its decision in Narayan I, in which the court held that Plaintiffs, a group of individual condominium owners, could not be compelled to arbitrate claims arising from the financial breakdown of a condominium project. Specifically, the court held in Narayan I that the arbitration clause was unenforceable because the terms of the documents at issue were ambiguous with respect to Plaintiffs’ intent to arbitrate and that portions of the arbitration clause were unconscionable. The United States Supreme Court vacated and remanded Narayan I for further consideration in light of its recent decision in DIRECTV, Inc. v. Imburgia, 577 U.S. __ (2015), which held that state law must place arbitration agreements on equal footing with all other contracts. After recognizing this principle, the Hawaii Supreme Court held that that the arbitration clause at issue in the present case was unconscionable under common law contract principles. View "Narayan v. Ritz-Carlton Development Co." on Justia Law

by
Plaintiff filed suit challenging the constitutionality of Arizona's revocation-on-divorce (ROD) statute after she remained the beneficiary of her ex-husband's IRA account when he died. The Ninth Circuit held that the district court correctly determined that an Arizona state court would disregard the choice-of-law provision in the Plan and instead apply Arizona's ROD statute; the application of the ROD statute was not preempted by federal statutes and regulations governing IRAs; the district courts erred when they denied plaintiff standing; and the California district court did not abuse its discretion in transferring the case to Arizona under 28 U.S.C. 1406(a) on the grounds that it lacked personal jurisdiction over the Estate. Although it disagreed with the district court's holding that plaintiff lacked standing, the panel affirmed the dismissal of the constitutional challenge to the application of Arizona's ROD statute in the allocation of the proceeds of the ex-husband's IRA. View "Lazar v. Kroncke" on Justia Law

by
Plaintiffs Lenny and Tracy Chapman filed suit against Hiland after an explosion seriously injured Lenny, alleging negligence and loss of consortium. Hiland then filed a third-party complaint against Missouri Basin and B&B, seeking indemnification. In this appeal, Missouri Basin challenged the district court's grant of summary judgment to plaintiffs and the district court's ruling on post-judgment motions. The Eighth Circuit held that honoring the Oklahoma choice-of-law provision in the Hiland Master Service Contract did not violate a fundamental public policy of North Dakota because it was not a motor carrier transportation contract under North Dakota law. The court also held that the district court did not abuse its discretion by granting plaintiffs' Fed. R. Civ. P. 59(e) motion where the district court clarified that by using the language "all amounts that have been paid or will be paid," Missouri Basin intended that it indemnify plaintiffs for the full amount of the settlement, including those amounts paid by Hiland's insurers. Furthermore, the district court did not abuse its discretion by denying Missouri Basin's Rule 59(e) motion. View "Chapman v. Missouri Basin Well Service" on Justia Law

by
The arbitrator did not manifestly disregard the law and did not exceed his powers in concluding that the dispute in this case could not be arbitrated as a matter of law. Plaintiff Mountain Valley Property, Inc. (MVP) purchased a comprehensive insurance package (the program) from Applied Underwriters, Inc. (AU). As part of the program, MVP entered into a reinsurance participation agreement with Applied Underwriters Captive Risk Assurance Co., Inc. (AUCRA) that contained a mandatory arbitration clause and a Nebraska choice-of-law clause. MVP later filed a complaint against AU, AUCRA, and Applied Risk Services, Inc. (collectively, Applied) alleging breach of contract and various tort claims arising from its participation in the program. The district court referred the claims against AUCRA to arbitration. The arbitrator concluded that the dispute could not be arbitrated as a matter of law due to the McCarran-Ferguson Act and the Nebraska Uniform Arbitration Act. AUCRA unsuccessfully moved to vacate the arbitration award under the FAA and to transfer the case to the District of Nebraska. Applied appealed from the denial of the motion to vacate. The First Circuit affirmed, holding that the arbitrator did not manifestly disregard the law and did not exceed his powers. View "Mountain Valley Property, Inc. v. Applied Risk Services, Inc." on Justia Law

by
In this business dispute, Plaintiff K’s Merchandise Mart, Inc. challenged orders by the district judge granting summary judgment for Defendants William Weinstein and Frank Morton and requiring Plaintiff to pay Defendants $35,000 in sanctions. The First Circuit affirmed the summary judgment rulings but vacated the sanctions order and remanded for reconsideration of the sanctions matter, holding (1) summary judgment was properly granted on Plaintiff’s claims for fraudulent inducement, breach of the implied covenant of good faith and fair dealing, and breach of contract; and (2) the judge erred when he ordered sanctions against Plaintiff rather than against its attorneys. View "Eldridge v. Gordon Brothers Group, LLC" on Justia Law

by
Tate, sells ingredients to the food and beverage industry. Glatt sells processing equipment to the food industry. In 2008 the two entered a contract: Glatt would, for $7,042,022, design and build a three-story food-manufacturing machine (granulator) for Tate’s Sycamore, Illinois operation. The following year, with the granulator running, it caught fire and was seriously damaged. A flammable corn product that gave off flammable dust was being processed at the time. More than three years later Tate sued, claiming that the fire had resulted from defects in the granulator—either failure to install a fire-suppression system or defects in filters essential to filtering the flammable dust from the machine's exhaust. Tate sought damages of $7,784,767 for property damage, repair costs, and lost profits. Its insurer paid $2,743,248, and joined the litigation. Glatt counterclaimed for the unpaid balance on the contract. A magistrate ruled that a contract provision, forbidding the recovery of “special damages,” prohibited Tate from recovering lost profits. A jury awarded the insurer $853,254, but Tate and Glatt nothing. The parties’ contract entitled a prevailing party to “reasonable legal and other professional fees and expenses.” The judge awarded Tate $785,422.50, and its insurer $213,313.50, in attorneys’ fees plus expenses of $356,075.96. The Seventh Circuit affirmed, rejecting challenges to evidentiary rulings. View "Tate & Lyle Americas LLC v. Glatt Air Techniques Inc." on Justia Law

by
A newly-constructed multi‐story condominium building suffered water damage, allegedly caused by the painting subcontractor, National, failing to apply an adequate coat of sealant to the exterior. In Illinois state court, the condominium association sued the general contractor, developer, and subcontractors. The defendants tendered the defense to Westfield, National’s insurer, Westfield filed a federal action seeking a declaration that it owed no duty to defend in the underlying action. The district court determined that the complaint triggered Westfield’s duty to defend. The Seventh Circuit affirmed the grant of summary judgment, rejecting an argument that failure to apply an adequate amount of paint cannot be considered an “accident” that would constitute a covered “occurrence” under the policy. Westfield also argued that because the damage is to the building itself, which was a new construction and not an existing structure, the association has not demonstrated that there was property damage that is subject to its policy. The policy defines “occurrence” to include the “continuous or repeated exposure to substantially the same harmful conditions,” so the allegation that National acted negligently was sufficient under Illinois law to constitute an “occurrence.” National’s actions allegedly damaged parts of the building that were outside of the scope of its work, so the complaint alleges potentially covered property damage sufficient to invoke the duty to defend. View "Westfield Insurance Co. v. National Decorating Service, Inc." on Justia Law

by
Gary Jet began operating as a Fixed Base Operator (FBO) at the Authority's Gary/Chicago International Airport in 1991. The 2006 “Minimum Standards,” regulations governing FBOs, contained a 1.5% charge on gross revenue for commercial FBO services beginning in 2001, “pending the expiration of existing leases which do not incorporate these terms.” Gary Jet’s lease did not contain this provision. During negotiations for a new lease, the parties agreed that Gary Jet would instead pay “supplemental rent” of 10% of certain fees. A January 2007 “First Amended Lease” with a 39-year term, required Gary Jet to pay base rent plus supplemental rent and stated Gary Jet “shall abide by” the Minimum Standards, except when they conflict with the 2007 Lease. The lease stated that the Minimum Standards “shall be … made applicable to” subsequent lease agreements. In 2013, Gary Jet sued for breach of contract. The parties entered settled in 2014. Gary Jet agreed that New Minimum Standards controlled any conflict with its lease. A 2014 revised lease stated that the Minimum Standards controlled any conflicts. The initial draft of new Minimum Standards did not require Gary Jet to pay a percentage of gross revenue. In 2015, the Authority stated that it intended require that each FBO pay a percentage of gross revenues. Gary Jet objected, but the Authority approved the New Minimum Standards with the provision. The Seventh Circuit affirmed dismissal of Gary Jet’s suit under the Contracts Clause. Gary Jet cannot plausibly demonstrate that it is without a remedy for any violation of its contractual rights, which is essential to a Contracts-Clause claim. View "Gary Jet Center, Inc. v. AFCO AvPORTS Management, LLC" on Justia Law