Justia Contracts Opinion Summaries

While driving a car insured by Arizona Automobile Insurance Company, Marlena Whicker rear-ended a taxi and injured its passenger, Georgiana Chavez. Chavez sued Whicker in Colorado state court and won a default judgment when neither Whicker nor Arizona entered a defense. Whicker, unable to satisfy the judgment from the lawsuit, assigned her rights against Arizona to Chavez, who then filed this diversity suit against Arizona in federal court for failure to defend Whicker in the underlying state court action. Her theory was that Arizona had a duty to defend Whicker under Colorado law because Arizona knew that she was a driver covered under its policy. The district court disagreed with Chavez and granted Arizona’s motion to dismiss. The Tenth Circuit determined that under Colorado law, Arizona was only required to defend Whicker if Chavez’s complaint plausibly alleged Whicker was insured under the Arizona policy. It therefore reached the same conclusion as the district court and, affirmed its dismissal of Chavez’s case. View "Chavez v. Arizona Automobile Ins. Co." on Justia Law

Elizabeth Frost died in an accidental house fire. At the time, ADT provided security monitoring services to the premises. During the fire, ADT received several alerts through its monitoring system. Although ADT attempted to call Frost and the back-up number listed on her account, it did not get through. After several such attempts, ADT cleared the alerts without contacting emergency services. The administrator of Frost’s estate and her minor heir, M.F., sued ADT. The central theme of the complaint was that ADT’s failure to notify emergency services contradicted representations on its website that it would do so, and that failure wrongfully caused or contributed to Frost’s death. The district court dismissed the complaint, holding the one-year suit limitation provision in the contract between ADT and Frost barred the claims and that Claimants failed to state a claim with respect to certain counts. Because the Tenth Circuit Court of Appeals found the contract between Frost and ADT provided an enforceable suit-limitation provision that barred the claims at issue, it affirmed dismissal. View "Frost v. ADT" on Justia Law

Sonya C. Edwards and Edwards Law, LLC (collectively, "Edwards"), petitioned the Alabama Supreme Court for a writ of mandamus to direct a trial court to enter a summary judgment in their favor in an action filed against them by Ivan Gray. Sonya previously represented Gray in proceedings in federal court. In 2015, after mediation and a settlement, those proceedings concluded with the entry of a final judgment. Thereafter, Gray sought to set aside the settlement, and Sonya terminated her representation of Gray. In 2017, Gray sued Edwards alleging Edwards had entered into a contract with Gray in June 2014 in which Sonya agreed to represent Gray in the federal proceedings in exchange for a contingency fee of 50%. Gray alleged that he paid a total retainer fee in the amount of $14,380.85 to cover expenses. According to Gray's complaint, when his federal case concluded, Edwards disclosed that the actual expenses amounted to $4,516.77, therefore, he felt he was entitled to a refund of $9,864.08. When the refund was not forthcoming, Gray alleged Edward converted his retainer and breached the contract between the two. The Supreme Court determined the "act or omission or failure giving rise to the claim" occurred on September 16, 2015, and that was the operative date from which to measure the applicable two-year limitations period. Gray did not file his action until October 27, 2017, which was beyond the two-year limitations period. Accordingly, Edwards has demonstrated a clear legal right to have a summary-judgment entered in her favor. View "Ex parte Sonya C. Edwards and Edwards Law, LLC." on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court concluding that Defendant committed a breach of an "anti-raiding" restrictive covenant entered into between between the parties but held that the equitable remedy fashioned by the trial judge, which expanded the restrictive covenant beyond its plain terms, constituted an abuse of discretion. The restrictive covenant in this case prohibited Defendant from soliciting or hiring employees from Plaintiff, his former company, for a defined period of time. Defendant, however, hired employees from his former company in breach of the restrictive covenant. The superior court judge concluded that the restrictive covenant was enforceable and that Defendant had committed a breach of the covenant. The judge issued injunctive relief extending the length of the restrictive covenant for an additional year beyond the date provided for in the contract. The Supreme Judicial Court held (1) the restrictive covenant was necessary to protect a legitimate business interest; (2) Defendant committed a breach of the anti-raiding provision; but (3) the use of an equitable remedy to extend the restriction beyond the plain terms of the contract was not warranted without a finding that damages would be inadequate. View "Automile Holdings, LLC v. McGovern" on Justia Law

The Supreme Court affirmed the order of the circuit court overruling Dollar Tree's motion to compel arbitration and stay proceedings on a former employee's claim of disability discrimination, holding that the order was supported by substantial evidence, was not against the weight of the evidence, and correctly applied the law. After Plaintiff, Dollar Tree's former employee, brought this complaint Dollar Tree filed a motion to compel arbitration and stay proceedings under an arbitration agreement in the employment contract. The parties, however, disputed whether there was assent to the arbitration agreement. The circuit court denied the motion to compel arbitration after hearing testimony but did not make any findings. The Supreme Court affirmed, holding that there was no clear and unmistakable evidence of the existence of assent to a delegation provision, and therefore, the circuit court could not delegate the matter to an arbitrator whose existence depended upon the agreement. View "Theroff v. Dollar Tree Stores, Inc." on Justia Law

Molon sued Merkle-Korff, for infringement of the 785 patent. Merkle-Korff filed counterclaims relating to Molon’s 915 and 726 patents. Molon unilaterally executed the 2006 Covenant, agreeing not to sue Merkle-Korff for infringement of the 915 and 726 patents. After the dismissal of the counterclaims, the parties entered into the 2007 Settlement. Merkle-Korff agreed to pay a lump sum for an exclusive license to multiple Molon patents including the 785, 915, and 726 patents, within the Kinetek Exclusive Market. The Settlement granted Merkle-Korff “the right, but not the duty, to pursue an infringement claim” and contains a statement that all prior covenants “concerning the subject matter hereof” are “merged” and “of no further force or effect.” Merkle-Korff later became Nidec. Molon sued, alleging that Nidec is infringing the 915 patent outside the licensed Market. Nidec argued that Molon is barred from enforcing the patent under the 2006 Covenant. Molon responded that the Covenant was extinguished by the 2007 Settlement. The court granted Nidec partial summary judgment after comparing the subject matters of the agreements. The Federal Circuit affirmed; the agreements concern different subject matter and do not merge. The 2006 Covenant gives Nidec a right to avoid infringement suits on two patents. The 2007 Settlement is in some ways broader, as an exclusive license, covering multiple patents and applications and providing Nidec with some enforcement rights, and in other ways narrower, being limited to a defined market. The 2006 Covenant remains in effect because it does not concern the same subject matter as the 2007 Settlement. View "Molon Motor & Coil Corp. v. Nidec Motor Corp." on Justia Law

The Supreme Court affirmed the order of the district court dismissing this action presenting the question of what must be shown to avoid the effects of a contractual forum-selection clause, holding that fraud in general is not sufficient and must relate specifically to the forum-selection clause itself. This case involved an alleged scheme to inflate the purchase price of a general aviation jet aircraft. Plaintiffs argued that Defendants fraudulently misrepresented the acquisition price of the aircraft and failed to disclose the true acquisition price. Defendants filed a motion to dismiss, asserting, in part, improper venue based on the forum-selection clause in the purchase agreement. The district court dismissed the case without prejudice based on improper venue. The Supreme Court affirmed, holding that because Plaintiffs did not allege fraud with respect to the forum-selection clause in the written contract, Plaintiffs' general allegations of fraud in the inducement were insufficient to avoid enforcement of the forum-selection clause of the purchase agreement. View "Karon v. Elliott Aviation" on Justia Law

After a helicopter owned by PHI was required to make an emergency landing in the Gulf of Mexico when its Rolls-Royce-manufactured engine failed, PHI filed suit against Rolls-Royce, Apical, and OHS. The emergency flotation system manufactured by Apical and serviced by OHS partially deflated after the landing and caused the helicopter to turn over in the water, resulting in a total loss due to salt water incursion. The jury found Apical liable for the loss of the helicopter. The Fifth Circuit held that the magistrate judge's pretrial exclusion of all evidence regarding the engine failure and verdict form rulings were in error, because, under Louisiana law, Rolls-Royce is a potential solidary obligor along with Apical. Furthermore, a finding of solidary liability would result in a reduction of damages award against Apical due to Rolls-Royce's earlier settlement with PHI. Accordingly, the court vacated the trial court's judgment and remanded for trial on the issue of solidary liability. View "PHI, Inc. v. Apical Industries, Inc." on Justia Law

At issue in this case was whether a federal court sitting in Oklahoma had specific jurisdiction over Dr. Scott Jolly, a dentist and Arkansas resident, and his Limited Liability practice, Jolly Dental Group, LLC. Dental Dynamics, LLC argued that three isolated business transactions and an allegedly fraudulent contract were sufficient to establish federal court jurisdiction over its breach of contract and fraud claims. The Tenth Circuit disagreed, finding Jolly Dental's contacts with Oklahoma were "too random, fortuitous, and attenuated" to establish personal jurisdiction there. With respect to Denta; Dynamics' fraud claim, the Court concluded Dental Dynamics failed to show conduct sufficiently targeted to Oklahoma to establish personal jurisdiction there. View "Dental Dynamics v. Jolly Dental Group" on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the circuit court's dismissal of Chris Hinrichs and Autovation Limited's (collectively, Hinrichs) common law misrepresentation claims against the DOW Chemical Company and reversing the circuit court's dismissal of Hinrichs' statutory claim under Wis. Stat. 100.18, holding that the court of appeals did not err. Specifically, the Supreme Court held that, with regard to Hinrichs' common law claims, neither the "fraud in the inducement" exception nor the "other property exception" to the economic loss doctrine applied to allow Hinrichs' common law claims to go forward. With regard to Hinrichs' statutory claims the Court held (1) the economic loss doctrine does not serve as a bar to claims made under section 100.18; (2) because one person can be "the public" for purposes of section 100.18(1), the court of appeals did not err in determining that dismissal for failure to meet "the public" factor of the section 100.18 claim was in error; and (3) the heightened pleading standard for claims of fraud does not apply to claims made under section 100.18 and that Hinrichs' complaint stated a claim under the general pleading standard. View "Hinrichs v. DOW Chemical Co." on Justia Law