Justia Contracts Opinion Summaries

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Flameproof, a distributor of fire retardant and treated lumber (FRT lumber), maintained liability insurance through Lexington, covering liability for "property damage” that is “caused by an occurrence that takes place in the coverage territory.” “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Property damage” is “physical injury to tangible property, including all resulting loss of that property,” or loss of use of property that is not physically injured. Three lawsuits arose from Flameproof’s sale of lumber to Minnesota-based contractors. The contracts called for FRT lumber meeting the requirements of the International Building Code (IBC). The complaints alleged that Flameproof “unilaterally” decided to deliver its in-house FlameTech brand lumber, which purportedly was not IBC-compliant. After the material was installed, the owners discovered that the lumber was not IBC-certified. Flameproof “admitted” that it had shipped FlameTech lumber rather than the FRT lumber advertised on its website and ordered. The FlameTech lumber was removed and replaced, damaging the surrounding materials. The lawsuits alleged negligent misrepresentation, fraudulent misrepresentation, deceptive business practices, false advertising, consumer fraud, breach of warranties, and breach of contract. Lexington sought a ruling that it owed no duty to defend Flameproof. The Seventh Circuit affirmed summary judgment for Lexington. The underlying complaints do not allege an “occurrence”—or accident—as required to trigger Lexington’s duty to defend under the policy. View "Lexington Insurance Co. v. Chicago Flameproof & Wood Specialties Corp." on Justia Law

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The First Circuit affirmed the judgment of the district court against Kodak Alaris, Inc. based on the jury finding that Kodak was in breach of its contractual obligation to ITyX Solutions AG except as to the calculation of prejudgment interest, holding that the district court correctly rejected Kodak's motion for judgment as a matter of law or a new trial but that, as to the prejudgment interest award, the interest must be recalculated from a different date. Judgment in this case was entered against Kodak in the sum of $9,211,699.20, including prejudgment interest. The district court rejected Kodak's argument that the jury must have necessarily found that it was ITyX which actually breached the contract and that ITyX had breached the covenant of good faith and fair dealing. The court further rejected Kodak's various standing and damages arguments. The First Circuit affirmed the rulings of the district court in all respects except its award of prejudgment interest on damages, and, as to that prejudgment interest award, altered the date used and remanded. View "ITyX Solutions AG v. Kodak Alaris, Inc." on Justia Law

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Guerline Felix’s vehicle collided with Brian Richards’ vehicle in New Jersey. Richards was insured under a New Jersey automobile insurance policy issued by AAA Mid-Atlantic Insurance Company (AAA). The policy provided bodily injury (BI) liability coverage, as well as uninsured and underinsured motorist (UM/UIM) coverage. Felix was insured by the Government Employee Insurance Company (GEICO) under a policy written in Florida. That policy provided up to $10,000 in property liability and personal injury protection (PIP) benefits, but it did not provide any BI liability. Felix sued Richards for personal injuries, and, in a separate action, Richards sued Felix and AAA for personal injuries. AAA then filed a third-party complaint against GEICO, claiming that GEICO’s policy was automatically deemed to include $15,000/$30,000 in BI coverage and that payment would eliminate the claim for UM/UIM coverage by AAA. The motion court determined that the New Jersey "deemer" statute applied to GEICO’s policy, rejecting the argument that the statute created a carve-out for BI coverage based upon the basic policy, as well as GEICO’s constitutional challenge. The Appellate Division affirmed, and the New Jersey Supreme Court granted the petition for certification filed by GEICO. The Supreme Court concluded after review that the deemer statute did not incorporate by reference the basic policy’s BI level for insurers, like GEICO, to which the second sentence of N.J.S.A. 17:28-1.4 applied. From the perspective of the insurers’ obligation, the required compulsory insurance liability limits remained $15,000/$30,000. As to the equal protection claim, New Jersey insureds were the ones who had a choice to purchase less than the presumptive minimum BI amount. The obligation of in-state insurers to offer and provide that minimum was the same as the obligation imposed under the deemer statute’s second sentence on authorized insurers writing an out-of-state policy. "The equal protection claim therefore falls flat," and the Appellate Division's judgment was affirmed. View "Felix v. Richards" on Justia Law

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Mac Haik appeals the circuit court’s denial of its motion to compel arbitration. In 2016, plaintiff Brenda Hester purchased a used 2014 Dodge Ram from Jackson Mac Haik CDJR, Ltd. (Mac Haik). Hester executed a retail-installment sale contract with Mac Haik for the purchase of the vehicle. The contract contained an arbitration provision. In 2017, Hester sued Mac Haik, American Financial Warranty Corporation (American Warranty), Randy Miggins d/b/a M&S Towing, and Randy Miggins, alleging that the vehicle she bought from Mac Haik “was defective in materials and workmanship from and after the date of purchase” and “that said defects have existed since the Plaintiff started using said vehicle.” She alleged further that American Warranty issued her a warranty but failed to repair her truck. Hester never served American Warranty with a summons and copy of her complaint. Hester alleged that Mac Haik took possession of her vehicle to make warranted repairs and later allowed it to be towed. Mac Haik, finding that all of Hester’s claims, which sounded in tort or contract and related to her purchase or condition of the vehicle at issue, argued that the claims were subject to arbitration. Mac Haik appealed the circuit court’s denial of its motion to compel arbitration. Because the Mississippi Supreme Court found that the claims fell within the scope of the valid arbitration provision, and that no defenses existed to bar arbitration, it reversed reverse the circuit court’s order denying Mac Haik’s motion to compel arbitration and ordered the claims to arbitration. View "Jackson Mac Haik CDJR, Ltd. v. Hester" on Justia Law

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The Court of Appeal reversed the district court's grant of summary judgment in favor of Aetna. In plaintiff's first cause of action, plaintiff alleged that Aetna violated Health & Safety Code section 1371.4. In plaintiff's second cause of action, plaintiff alleged that Aetna breached an implied contract based on its prior dealing with Aetna by not paying for the emergency medical services it rendered to a patient covered by Aetna's health care service plan. The court held that there were triable issues of fact as to whether plaintiff provided and billed for emergency services and was entitled to reimbursement from Aetna. Accordingly, the court remanded for further proceedings. View "San Jose Neurospine v. Aetna Health of California, Inc." on Justia Law

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North Star Water, LLC, provided water to oil drilling companies. In September 2014, North Star hired Northwest Grading, Inc., to construct an underground water pipeline from the Missouri River to North Star’s various pumping stations. Northwest Grading sent regular invoices to North Star during the course of construction. In August 2015, Northwest Grading informed North Star it owed a balance of $91,072.99. Northwest Grading notified North Star it would repossess the pipeline if it were not paid immediately. Northwest Grading did not receive payment. Employees of Northwest Grading made the pipeline inoperable by closing valves and filling the valve boxes with dirt and concrete. As a result, North Star was temporarily unable to sell water to at least one of its customers. Northwest Grading sued North Star for breach of contract, quantum meruit, and foreclosure of a construction lien. North Star counterclaimed for fictitious billing, trespass, and damage to property through unlawful repossession. The district court entered findings of fact, conclusions of law, and an order for judgment in October 2018. The court found a business relationship existed between Northwest Grading and North Star, but not based on a written contract. The court concluded Northwest Grading was not authorized to repossess the pipeline by pouring concrete in the valve boxes, and its doing so was a breach of the peace. The North Dakota Supreme Court concluded the district court did not err as to either party’s damages and did not abuse its discretion by denying Northwest Grading’s motion to strike testimony. The Court modified the judgment to correct the calculation of interest, and affirmed the judgment as modified. View "Northwest Grading, Inc. v. North Star Water, LLC, et al." on Justia Law

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The Supreme Court reversed the circuit court's dismissal of Plaintiff's deceit claim and affirmed the circuit court's rulings as to Plaintiff's breach of contract, negligent misrepresentation and fraud claims and as to Defendants' counterclaim seeking damages under two three-year lease agreements allowing Plaintiff to rent Defendants' ranch, holding that the circuit court erred in concluding that Defendants fraudulently induced Plaintiff to enter into one of the leases. Following disputes between the parties, Defendants refused Plaintiff's lease payments for the second year. Plaintiff filed suit, and Defendants counterclaimed. The trial court found one lease valid and binding and the other lease valid but voidable. A jury awarded damages to both parties. The Supreme Court reversed in part and otherwise affirmed, holding (1) the circuit court did not abuse its discretion in its evidentiary rulings and in its jury instructions; (2) the circuit court did not err when it found the second lease voidable instead of void; and (3) the circuit court erred when it granted Defendants' motion for summary judgment on Plaintiff's claim that Defendants fraudulently induced him to enter into the second lease. The Court remanded the case for a new trial on Plaintiff's deceit claim. View "Knecht v. Evridge" on Justia Law

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In an earlier appeal, the Tenth Circuit Court of Appeals ruled that Wyoming’s anti-indemnity statute would not defeat possible insurance coverage to an additional insured. In this second appeal and cross-appeal, the issue presented for the Court's review centered on whether the district court correctly ruled that additional-insured coverage existed under the applicable insurance policies; whether the district court entered judgment for the additional insured in an amount greater than the policy limits; and whether the district court correctly ruled that the additional insured was not entitled to prejudgment interest and attorneys’ fees. Ultra Resources, Inc. held a lease for a Wyoming well site. In January 2007, Ultra contracted with Upstream International, LLC under a Master Service Agreement to manage the well site. The Ultra-Upstream contract required Upstream to obtain insurance policies with a stated minimum amount of coverage for Ultra and Ultra’s contractors and subcontractors. To do so, Upstream obtained two policies from Lexington Insurance Company - a General Liability Policy (“General Policy”) and a Commercial Umbrella Policy (“Umbrella Policy”). Lexington issued and delivered the two policies in Texas. Ultra contracted with Precision Drilling (“Precision”) to operate a drilling rig at the well site. Precision maintained a separate insurance policy with Lloyd’s of London (“Lloyd’s”), covering Precision for primary and excess liability. Upstream employed Darrell Jent as a contract management of some Ultra well sites. Jent assumed that Precision employees had already attached and tightened all A-leg bolts on a rig platform. In fact, Precision employees had loosened the A-leg bolts (which attach the A-legs to the derrick) and had not properly secured these bolts. After supervising the pin removal, Jent had just left the rig floor and reached “the top step leading down from the rig floor” when the derrick fell because of the “defectively bolted ‘A- legs’ attaching the derrick to the rig floor.” Jent was seriously injured after being thrown from the steps, and sued Precision for negligence. Precision demanded that Ultra defend and indemnify it as required by the Ultra-Precision drilling contract. Ultra, in turn, demanded that Upstream defend Precision under the insurance policies required by the Ultra-Upstream Contract. The Tenth Circuit concluded the district court ruled correctly on each issue presented, so it affirmed. View "Lexington Insurance Company v. Precision Drilling Company" on Justia Law

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The Supreme Judicial Court affirmed the decision of the superior court in favor of Defendants following a bench trial on Plaintiffs' claims against Defendants stemming from Plaintiffs' purchase of Defendants' house, holding that the trial court's factual findings were supported by the evidence and that the court did not err in deciding in favor Defendants. Defendants entered into a purchase and sale agreement with Plaintiffs to sell Defendants' home. After Plaintiffs discovered a number of deficiencies in the house they filed a complaint alleging counts arising from the house's sale and defects. The trial court granted judgment in favor of Defendants. The Supreme Judicial Court affirmed, holding that the trial court's explicit findings were comprehensive, detailed, and adequately supported by record evidence. View "Wuestenberg v. Rancourt" on Justia Law

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This dispute arose from a 2013 oil well blowout on the HERCULES 265 drilling rig in the Gulf of Mexico. After the rig's charterer filed suit raising products liability claims against a refurbisher of the rig's blowout-prevention components, counterclaims and third-party claims ensued. The district court subsequently granted a series of summary judgments, based both on contractual indemnity and also on the merits of the liability claims. The Fifth Circuit affirmed the district court's grant of summary judgment as to Hercules' duty to defend, hold harmless, and indemnify Axon; reversed the district court's grant of summary judgment as to Walter's duty to directly indemnify Axon; reversed the district court's grant of summary judgment as to Walter's duty to indemnify Hercules for Axon's claims; vacated the district court's order excluding Bellemare's testimony; vacated the district court's orders excluding the expert reports of Sones, Bourgoyne, Williams, Rusnak, Bellemare, and Adair, as well as the orders excluding the affidavits of Sones and Bourgoyne; reversed the district court's grant of summary judgment as to the causation and "unreasonably dangerous condition" prongs of the Louisiana Products Liability Act; vacated the district court's final judgment and fee orders; and remanded for further proceedings. View "Certain Underwriters at Lloyd's v. Axon Pressure Products Inc." on Justia Law