Justia Contracts Opinion Summaries

SEACOR Marine, L.L.C., a company that owns and operates marine vessels, entered into a Brokerage Agreement with GOL, L.L.C., a broker connecting vessel owners with oil and gas companies. Under this agreement, GOL acted as SEACOR’s agent to obtain charters, and was responsible for remitting payments to SEACOR if charterers paid GOL. GOL brokered SEACOR’s vessels to Cox Operating, LLC, invoicing Cox for $2.7 million plus a brokerage fee. Cox did not pay, subsequently filing for bankruptcy. GOL submitted a prepetition claim in Cox’s bankruptcy, which included SEACOR’s invoices. The bankruptcy court permitted Cox to pay $13 million toward GOL’s prepetition claim to incentivize continued services during bankruptcy, with GOL agreeing to use these funds for claims secured by liens, including SEACOR’s.The United States District Court for the Eastern District of Louisiana granted summary judgment in favor of GOL. It found GOL was not obligated to pay SEACOR from the $13 million, reasoning that GOL had not received payment specifically for SEACOR’s invoices, and that the Trade Agreement required payment only to vendors continuing to provide services to Cox. The court also determined GOL had fulfilled its duty to make reasonable efforts to collect from Cox and dismissed SEACOR’s claims, denying reconsideration.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s grant of summary judgment de novo. The Fifth Circuit held that genuine disputes of material fact exist as to whether any part of the $13 million payment was for SEACOR’s services and whether GOL breached its contractual and fiduciary duties by not remitting payment to SEACOR. The court found the Trade Agreement did not prohibit GOL from paying SEACOR and reversed the district court’s grant of summary judgment. The case was remanded for further proceedings. View "Seacor Marine v. GOL" on Justia Law

A church contracted with a corporation, operated by its president, to refurbish and install a pipe organ. The corporation delivered an unfinished, nonfunctional organ. The church then sued both the corporation and its president, alleging breach of contract and unjust enrichment, and sought to hold the president personally liable by piercing the corporate veil. Both defendants were properly served but did not respond to the complaint.Subsequently, the church moved for a default judgment. The District Court of Cass County, East Central Judicial District, granted the motion, adopting the church’s proposed findings and order verbatim. The court concluded that the corporate veil could be pierced, found fraudulent conduct, and awarded damages totaling $324,640 against both defendants. After judgment was entered, the defendants retained counsel and moved to vacate the default judgment under N.D.R.Civ.P. 60(b)(1), presenting evidence that the president had suffered cognitive decline that excused the failure to respond. The district court denied the motion, finding the evidence of incapacity insufficient and, in its written order, applied additional legal requirements not supported by the cases it cited, including showing diligence, lack of prejudice to the plaintiff, and good faith.On appeal, the Supreme Court of North Dakota reviewed whether the district court abused its discretion in denying the motion to vacate. The Supreme Court held that the district court erred by imposing a heightened legal standard not supported by precedent and by adopting the church’s proposed order verbatim without adequate independent analysis, especially given that many of the order’s case citations were inaccurate or nonexistent. The Supreme Court reversed the order denying the motion to vacate the default judgment and remanded for further proceedings under the correct legal standard. View "St. Paul's Newman Center v. P.J. Swartz, Inc." on Justia Law

A party entered into a contract for investment-management services with a trust company and later brought suit asserting multiple claims related to the agreement. The plaintiff initially filed the action in the Cuyahoga County Court of Common Pleas in 2016, but voluntarily dismissed it in 2017. Within a year, the plaintiff refiled the action, which was again dismissed without prejudice in 2022. Shortly after, and within one year of the second dismissal, the plaintiff commenced a third action asserting similar claims.The defendants moved for judgment on the pleadings in the trial court, contending that the plaintiff could not invoke Ohio’s saving statute, R.C. 2305.19(A), more than once, as the statute of limitations had expired for some claims before the second refiling. The trial court agreed, holding that the saving statute did not apply to the third action and that the claims were time-barred. On appeal, the Eighth District Court of Appeals affirmed the dismissal of the negligence claims but reversed as to the fraud, breach-of-contract, and promissory-estoppel claims, concluding that the latter had not previously relied on the saving statute because their statute-of-limitations periods had not expired at the time of the second filing.The Supreme Court of Ohio reviewed the case and clarified that R.C. 2305.19(A) does not limit the number of times an action may be recommenced if the statute’s requirements are met, regardless of whether the statute of limitations for a claim expired before a prior use of the saving statute. The court held that the saving statute applied to the entire action and that all claims could proceed. The judgment of the Eighth District was affirmed in part and reversed in part, and the case was remanded for further proceedings. View "Kohn v. Glenmede Trust Co., N.A." on Justia Law

Two former employees of a company specializing in heating, ventilation, and air conditioning systems allegedly transferred confidential and trade secret information from their employer to their personal accounts while still employed. They subsequently formed a competing business and left their employer to run it. The employer claimed that these individuals and their new business used confidential information to compete for customers and sought to enjoin them from soliciting certain clients for one year, alongside other relief.The Massachusetts Superior Court heard the employer’s motion for a preliminary injunction. The defendants agreed to return any confidential information and refrain from using it, but did not agree to the restriction on soliciting the employer’s customers. The judge denied the injunction request, finding a genuine dispute as to whether the information taken constituted trade secrets and whether the company took adequate steps to protect it. The judge determined the employer had not established a likelihood of success on the merits or demonstrated irreparable harm, noting that alleged losses could be compensated with monetary damages and did not threaten the existence of the employer’s business.The Supreme Judicial Court of Massachusetts transferred the appeal on its own initiative. The court reviewed whether the motion judge abused discretion and whether proper legal standards were applied. It held that a presumption of irreparable harm does not arise solely from a likelihood of success on a trade secret misappropriation claim. Instead, a party seeking a preliminary injunction must demonstrate irreparable harm through specific proof. Because the employer failed to show that monetary damages would be inadequate, and the defendants had already agreed not to use confidential information, the Supreme Judicial Court affirmed the order denying the injunction. View "Daikin Applied Americas Inc. v. Russo" on Justia Law

A high school principal was terminated by his school district’s board after an internal investigation into allegations that he mistreated a female student over several years and attempted to dissuade staff from making a mandatory report of child abuse. The investigation included interviews with the student, a school counselor, the principal, and other witnesses. The board provided the principal with written notice of the allegations and an opportunity to respond, after which it held a multi-day hearing where both sides presented evidence and witnesses. The board found, by a preponderance of the evidence, that the principal had engaged in inappropriate conduct toward the student and interfered with mandatory reporting obligations, and concluded that there was just and sufficient cause for termination.The principal appealed the dismissal to the Windham Southeast School District Board and, following the board’s decision, filed suit in the Vermont Superior Court, Bennington Unit, Civil Division. He challenged the sufficiency of the evidence, argued that the pre-termination and post-termination processes violated his constitutional rights, and asserted claims of breach of contract, wrongful termination, denial of due process, intentional infliction of emotional distress, and defamation. The civil division dismissed some claims, granted summary judgment to the defendants on the remaining claims, and found that the board’s decision was supported by the record, that the principal was afforded adequate due process, and that no evidence supported claims of bias or other wrongdoing.The Vermont Supreme Court reviewed the case and affirmed the civil division’s decision. The Court held that the principal received constitutionally adequate pre- and post-termination process, that the trial court did not abuse its discretion in denying discovery related to alleged bias, and that sufficient evidence supported the board’s findings and conclusion that just cause existed for dismissal. The Court also found that structural or actual bias claims were either unpreserved or unsupported. View "Perrin v. Windham Southeast Supervisory Union" on Justia Law

Senator James C. Justice II and his family own several coal companies that obtained surety bonds from Lexon Insurance Company, exposing Lexon to significant financial risk. To mitigate this risk, Lexon required the companies to pay annual premiums and post collateral. Over time, the companies’ financial situation declined, leading to missed premium payments and reduced collateral. In 2018 and 2019, Lexon and the companies entered agreements to restructure payments and collateral obligations, with Senator Justice personally guaranteeing these obligations. Despite these agreements, the companies failed to fulfill their collateral and premium commitments, prompting Lexon to demand payment from Justice, who also declined to pay.The United States District Court for the Middle District of Tennessee reviewed the case. At summary judgment, the court found Justice liable for breaching the guaranty but noted factual disputes regarding the exact amount owed for past-due premiums. After a bench trial, the district court determined that the relevant agreements defined Justice’s liability as including both unpaid collateral ($14.25 million) and a dynamic “Total Indebtedness” for premiums ($10,929,709.24), resulting in a judgment exceeding $25 million plus interest. The court interpreted the contract language to include ongoing missed premium payments within “Total Indebtedness” and concluded that the obligation to pay persisted until all amounts were satisfied.The United States Court of Appeals for the Sixth Circuit reviewed the appeal. The court held that the agreements unambiguously defined “Total Indebtedness” as a dynamic sum that increased with each missed premium payment during the agreement’s term. The guaranty did not cap Justice’s liability at a static amount but covered the full, evolving indebtedness as specified in the agreements. The court also held that the contract’s term continued until all obligations were paid in full, not until a specific date. The judgment of the district court was affirmed. View "Lexon Insurance Company v. Justice" on Justia Law

A mortgage issuer, Reverse Mortgage Funding, LLC (RMF), participated in a federal program allowing it to securitize reverse mortgages. When RMF entered bankruptcy, Texas Capital Bank provided debtor-in-possession financing, secured by RMF’s interests in certain collateral, specifically incremental balances on the mortgages known as “tails.” After RMF defaulted on its agreement, the Government National Mortgage Association (Ginnie Mae), under its statutory and contractual authority, extinguished RMF’s interests in the underlying mortgages and assumed ownership of the loans, also extinguishing Texas Capital’s lien interest in the mortgage tails. Texas Capital argued that Ginnie Mae’s actions violated federal law and Texas tort law.The United States District Court for the Northern District of Texas initially allowed Texas Capital’s claims for statutory authority under the Administrative Procedure Act (APA) and tortious interference to proceed, but dismissed the promissory estoppel claim due to sovereign immunity. Later, the district court granted summary judgment to Ginnie Mae, finding it acted within its statutory authority and concluding that the extinguishment of RMF’s interests necessarily eliminated Texas Capital’s derivative interest in the mortgage tails. The court also dismissed Texas Capital’s tortious interference claim, citing sovereign immunity and a lack of legal basis, and refused to consider Texas Capital’s arbitrary-and-capricious APA theory because it was not sufficiently pled.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo. It held that Ginnie Mae acted within its statutory and contractual authority under 12 U.S.C. § 1721(g)(1) in extinguishing both RMF’s and Texas Capital’s interests in the mortgages. The court affirmed the district court’s summary judgment, finding Texas Capital’s tortious interference claim barred by sovereign immunity and ruling that Texas Capital’s failure to plead an arbitrary-and-capricious APA theory justified the district court’s refusal to consider it. The judgment of the district court was affirmed. View "Texas Captl Bank v. Govt Natl Mtge" on Justia Law

Two individuals who were enrolled in a health insurance plan administered by a company alleged that their sensitive health information was disclosed without their authorization. In August 2023, the company sent each of them a letter explaining that an associate had mistakenly emailed a spreadsheet containing their private health information—including names, provider details, dates of service, and amounts billed or paid—to one or more other plan members. The plaintiffs asserted that they had entrusted this information to the company based on explicit and implicit promises of confidentiality and that the company’s privacy policy reinforced those expectations. They claimed the company’s unauthorized disclosure deprived them of the benefit of their bargain and diminished the value of the contracted services.Reviewing the case, the United States District Court for the District of Idaho dismissed the plaintiffs’ class action lawsuit on the grounds that they had not suffered an “injury in fact” necessary for Article III standing. The district court reasoned that disclosure of private information, without more, did not constitute a concrete injury and that the plaintiffs had not shown a substantial likelihood of future harm.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The court held that the plaintiffs’ alleged harm—the unauthorized disclosure of sensitive health information entrusted on the basis of confidentiality—was analogous to the common law actions for breach of confidence and breach of contract, both of which were historically recognized as sufficient to support lawsuits. The court further noted that congressional judgment, as reflected in federal statutes like HIPAA, underscored the sensitivity of such information. Accordingly, the Ninth Circuit concluded that the plaintiffs had adequately alleged an injury sufficient for Article III standing, reversed the district court’s dismissal, and remanded the case for further proceedings. View "BLACK V. IEC GROUP, INC." on Justia Law

Needy children in Texas receive orthodontic care through Medicaid, which is administered by the Texas Health and Human Services Commission (HHSC). HHSC contracted with Conduent State Healthcare, LLC (formerly known as Xerox Corporation and ACS State Healthcare, LLC) to review and approve prior-authorization requests for these services. After Conduent allegedly approved requests without adequately assessing medical necessity, legal disputes arose. The State of Texas pursued civil penalties against Conduent for violating Medicaid policy, resulting in a settlement. Separately, dentists, including Diana Malone, DDS; Scott Malone, DDS; and M&M Orthodontics, PA, settled Medicaid-fraud claims by paying $2 million. Subsequently, these dentists sued Conduent and the State, alleging tortious conduct by Conduent in approving requests without proper review.In Travis County District Court, the State’s plea to the jurisdiction based on sovereign immunity was granted, dismissing it from the case. Conduent’s plea to the jurisdiction, which invoked derivative sovereign immunity and the election-of-remedies provision in the Texas Tort Claims Act, was denied. Conduent appealed this interlocutory order. The Court of Appeals for the Third District of Texas affirmed the district court’s denial of Conduent’s plea, addressing Conduent’s immunity arguments on the merits. A dissenting justice argued that the appeal should have been dismissed for lack of appellate jurisdiction.The Supreme Court of Texas reviewed whether the court of appeals had jurisdiction to hear Conduent’s interlocutory appeal. It held that Conduent, as a private contractor, is not a “governmental unit” under the relevant statutory definitions, and thus cannot utilize Section 51.014(a)(8) or Section 51.014(a)(5) to appeal the denial of its jurisdictional plea. The Supreme Court vacated the court of appeals’ opinion and judgment and remanded the case to the district court. View "CONDUENT STATE HEALTHCARE, LLC v. M&M ORTHODONTICS, PA" on Justia Law

The case centers on a longstanding family partnership, formed originally in 1988 and later converted to a limited partnership. Rick served as the managing partner, with other family members as partners. Following the death of a parent in 2011, annual financial meetings ceased, and several partners alleged they did not receive adequate financial records or updates for years. Concerns arose over Rick’s management, including incomplete and disorganized financial disclosures, and withdrawals from accounts over which Rick had power of attorney. These issues, along with disputed partnership interests and controversial financial transactions, led to Rick’s removal as managing partner and triggered litigation over his alleged breach of fiduciary duties.The District Court for Douglas County was presented with an amended complaint alleging Rick’s breach of fiduciary duties to the partnership. Rick moved to dismiss, arguing that a related county court proceeding involving a family trust precluded jurisdiction, but the district court denied the motion. Rick filed responses and counterclaims, but failed to properly plead affirmative defenses such as the statute of limitations. Extensive discovery and a bench trial followed, with evidence showing Rick’s negative capital account and numerous questionable withdrawals and transfers.The Nebraska Supreme Court reviewed the district court’s rulings de novo, including jurisdictional questions, evidentiary issues, and the award of attorney fees. The Court held that it had jurisdiction, affirmed the district court's findings that Rick no longer had an ownership interest in the partnership due to his negative capital account, and upheld the damages awarded for his breaches of fiduciary duty. The Court also affirmed the award of attorney fees to the prevailing parties and rejected Rick’s arguments regarding lack of specificity in pleadings, statute of limitations, and the district court’s jurisdiction. The district court’s orders were affirmed in full. View "Berkshire v. Berkshire" on Justia Law