Justia Contracts Opinion Summaries

Four law firms jointly represented a client in a federal court case against Iraq, resulting in a substantial judgment in favor of their client. Prior to seeking attorneys’ fees, the firms executed an Agreement Concerning Attorneys’ Fees (ACAF), which provided for a forty-six percent contingency fee and included an arbitration clause. Disputes arose regarding the allocation of the fee, particularly after some firms allegedly negotiated a side agreement to increase their shares. One firm, believing its share was subject to future negotiation, did not seek fees in arbitration and was awarded none by the arbitrator.After the arbitration, Quinn, Racusin & Gazzola Chartered (QRG) moved in the Superior Court of the District of Columbia to vacate the arbitrator’s final award, arguing the ACAF was invalid due to fraudulent inducement and duress, and that the arbitrator had exceeded the scope of authority under the agreement. Appellees disputed these claims and sought confirmation of the award. The Superior Court determined that QRG had not established fraud or duress and found the arbitration clause broad enough to encompass both the fee allocation dispute and related tort claims. The court denied QRG’s motion to vacate and confirmed the arbitration award.On appeal, the District of Columbia Court of Appeals reviewed de novo the legal conclusions regarding fraud, duress, and the scope of the arbitration clause. The court held that QRG failed to demonstrate fraudulent inducement or duress in execution of the arbitration clause. It further held that the arbitrator acted within the scope of the ACAF’s arbitration clause, which covered the fee allocation dispute and related tort claims. The Court affirmed the Superior Court’s judgment confirming the arbitrator’s final award. View "Quinn, Racusin & Gazzola Chartered v. Pavich Law Group, P.C." on Justia Law

Sonia Breslow purchased a $250,000 watch from Jacob & Company, which was shipped from New York to the Iron Horse Golf Club in Montana. The Club repackaged the shipment and sent it via Federal Express (FedEx) “priority overnight” to a UPS store in Arizona. The shipping label did not declare a value for the package. Video evidence showed that after FedEx took possession, the yellow bag containing two boxes was no longer secured by a zip tie, and at the Scottsdale facility, an employee removed one box from the bag. Ultimately, FedEx delivered the bag to the UPS store, but the watch was missing. Sonia filed an insurance claim, and Pennsylvania Insurance paid the Breslows the purchase price, then sued FedEx as their subrogee.Pennsylvania Insurance initially brought claims for negligence, conversion, unjust enrichment, breach of contract, and civil theft in Nebraska state court. FedEx removed the case to the United States District Court for the District of Nebraska. The district court ruled that the Airline Deregulation Act preempted the claims for negligence, unjust enrichment, and civil theft, dismissed the conversion claim for lack of evidence, and found breach of contract but limited FedEx’s liability under the shipping contract to $100. The case proceeded to a bench trial, where the court found the breach and upheld the liability limit, entering judgment for Pennsylvania Insurance in the amount of $100.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court’s rulings. The court held that the Airline Deregulation Act preempts state-law claims relating to FedEx’s package handling and transportation services. It found no error in the district court’s dismissal of the conversion claim and upheld the liability limit of $100, concluding that the Club had adequate notice and opportunity to purchase greater coverage. The court also affirmed that Pennsylvania Insurance had standing as subrogee and that FedEx breached the contract. View "Pennsylvania Insurance Co. v. Federal Express Corp." on Justia Law

A former employee entered into a noncompete agreement with his employer, which barred him from engaging in similar business activities for 12 months within the company’s client base area after his employment ended in April 2024. Months later, the employer alleged that the former employee and his new business violated the agreement and sought a temporary restraining order (TRO) and a preliminary injunction to enforce it. After the parties exchanged filings, the district court issued a TRO in June 2025, set to remain in effect indefinitely, and delayed the hearing on the preliminary injunction multiple times, citing new evidence related to a superseding noncompete agreement.The district court clarified the TRO’s scope, found the petitioners in contempt for violating it, and denied their motion to dissolve the TRO. The court eventually allowed the employer to amend its complaint to reflect the new agreement and later issued an amended TRO. A preliminary injunction was finally issued in April 2026. The petitioners challenged the original TRO by writ petition, arguing that it exceeded the 14-day limit allowed by Nevada Rule of Civil Procedure 65(b).The Supreme Court of Nevada reviewed the case and clarified that, under NRCP 65(b)(2), the 14-day time limit applies to TROs regardless of whether they are issued with or without notice. The court held that a TRO cannot be indefinite and must expire after 14 days unless properly extended for good cause or by consent. Because the district court’s TRO was indefinite and not properly extended, it automatically expired 14 days after issuance. The Supreme Court of Nevada granted the writ of mandamus and directed the district court to declare the TRO expired as of June 23, 2025. View "HAVENS VS. DIST. CT." on Justia Law

The case involves a dispute between an individual who spent several years assisting a businessman and his associates in acquiring satellites, with the expectation of future compensation. The parties discussed compensation on various occasions, culminating in an oral agreement that included equity interests and a corporate position for the plaintiff. However, the agreement was never formalized in writing, and the promises were not fulfilled. The plaintiff eventually filed suit seeking compensation for his efforts under several legal theories, including breach of contract, unjust enrichment, promissory estoppel, and fraud.In the Superior Court of the District of Columbia, the case went through several judges. Initially, summary judgment was denied, but after rulings that excluded certain witness testimony—especially the plaintiff’s damages expert—the court ultimately granted summary judgment for the defendants on most claims. The claims for unjust enrichment and promissory estoppel survived, but the plaintiff voluntarily dismissed them to expedite an appeal.The District of Columbia Court of Appeals reviewed the summary judgment rulings. The appellate court agreed with the lower court that the statute of frauds barred the breach of contract and implied contract claims, as the alleged oral agreement could not be performed within one year and no exception applied. The court upheld summary judgment on the fraud claim due to insufficient evidence of fraudulent intent. However, the court reversed summary judgment on the unjust enrichment and promissory estoppel claims, finding genuine disputes of material fact that should be resolved by a factfinder. The appellate court also upheld restrictions on certain lay testimony but vacated limitations on the expert’s damages testimony, remanding the case for further proceedings. View "Farooqui v. Silkwave Holdings Ltd." on Justia Law

A licensed emergency room physician entered into an independent contractor agreement with a medical staffing company to provide services at a hospital’s emergency department. After a patient complained about the physician’s conduct, the hospital instructed the staffing company to remove him from the schedule, and the company subsequently terminated his agreement following its own investigation. The physician brought suit against the hospital, its medical staff, and the staffing company, alleging that his removal from the schedule occurred without the notice or hearing required by statutory and common law fair procedure rights. The claims against the hospital and medical staff were settled and dismissed, leaving the staffing company as the sole defendant.The Superior Court of Kern County considered the staffing company’s motion for summary judgment. The court denied summary judgment, granted summary adjudication in favor of the staffing company on the intentional infliction of emotional distress claim, but denied summary adjudication on the claim for violation of the common law right of fair procedure, allowing that claim to proceed. The staffing company then sought a writ of mandate from the California Court of Appeal, Fifth Appellate District, challenging the denial as to the fair procedure claim.The California Court of Appeal, Fifth Appellate District, held that the common law right of fair procedure does not apply to the staffing company as a matter of law. The court reasoned that the staffing company was not a quasi-public institution or peer review body as defined by statute, nor did it have the power to foreclose the physician’s ability to practice medicine broadly. The court ordered that the trial court’s denial of summary judgment be vacated and that judgment be entered for the staffing company on all claims. The stay previously issued was lifted, and the staffing company was awarded costs in the proceeding. View "Stallion Springs Medical Services v. Super. Ct." on Justia Law

Two families with a close personal and professional relationship engaged in house-flipping ventures, with one couple (the lenders) providing funds and the other (the remodelers) managing renovations. In 2016, the lenders provided funds for a home project called the Cleveland property, followed by another project, the Rose property, with intertwined finances. The parties consolidated outstanding debts into a single promissory note secured by a deed of trust and set a balloon payment due in March 2018. Disagreements arose about the scope of renovations for the Rose property, leading to a breakdown in their relationship and ultimately litigation. Despite negotiating a purchase agreement and a covenant not to sue, the lenders later claimed that the remodelers had not fully repaid the loan.The Superior Court of Los Angeles County granted summary judgment in favor of the remodelers. The trial court found that undisputed evidence showed the lenders had received repayment of the consolidated promissory note through an escrow transfer after purchasing the Rose property. The court also found, in the alternative, that the covenant not to sue barred the lenders’ claims. Partial judgment was initially entered, and after the remodelers dismissed their cross-complaint, final judgment was entered in their favor. The lenders appealed, and the Court of Appeal had previously affirmed a partial judgment in an unpublished opinion, citing deficiencies in the lenders’ opening brief.The Court of Appeal of the State of California, Second Appellate District, Division Eight, reviewed the case independently and affirmed the judgment. The court held that uncontroverted evidence established full repayment of the debt, so the lenders suffered no damages. The lenders’ subjective and unexplained assertions did not create a triable issue of fact. Arguments about other alleged damages were forfeited for lack of timely presentation to the trial court. The judgment was affirmed and costs were awarded to the respondents. View "Buchheim v. Anaya" on Justia Law

A medical institution in Puerto Rico borrowed over $10 million from a bank in 1984 to build a hospital, but soon disputes arose regarding the loan. The bank claimed the institution defaulted, while the institution asserted the bank failed to disburse funds as required. Litigation and bankruptcy proceedings followed. In 1991, the parties settled, but the terms of that settlement—whether the debt was split into interest-bearing and non-interest-bearing portions—remained contested. Over the next decades, the loan changed hands, and in 2013 the institution filed for Chapter 11 bankruptcy again. The current loan-holder claimed a significantly higher outstanding balance than the institution believed was owed, due in part to differing interpretations of the 1991 agreement and subsequent bankruptcy plan.The United States Bankruptcy Court for the District of Puerto Rico previously addressed these disputes. It issued orders requiring the institution to demonstrate, with evidence, that the 1991 agreement created a non-interest-bearing note and that it had made payments in accordance with the bankruptcy plan. The court denied discovery, required summary judgment briefing, and ultimately issued an order with minimal analysis, granting the loan-holder’s motion to dismiss and denying the institution’s motion for summary judgment. The court’s reasoning was ambiguous, referencing both summary judgment and pleading standards, and did not clearly identify the basis for its decision.On appeal, the United States District Court for the District of Puerto Rico affirmed, concluding the bankruptcy plan did not incorporate the 1991 bifurcated note arrangement. The United States Court of Appeals for the First Circuit, reviewing the case, found the bankruptcy court’s order insufficiently reasoned to permit meaningful appellate review. The First Circuit vacated the lower courts’ decisions and remanded for further proceedings, instructing the bankruptcy court to clarify its reasoning, identify the applicable legal standards, and consider whether summary judgment or further fact-finding is appropriate. View "Instituto Medico del Norte, Inc. v. Greengift Capital, LLC" on Justia Law

Several counties and municipalities in New York initiated lawsuits in state courts against two pharmacy benefit managers, Express Scripts, Inc. and OptumRx, Inc., alleging that these companies contributed to the opioid epidemic in their communities. The claims are based on state law and center on the defendants’ alleged practices in negotiating with opioid manufacturers and managing prescription formularies, which plaintiffs contend led to an oversupply of prescription opioids and caused substantial public harm and government expense.The defendants removed the cases to federal court—the United States District Courts for the Southern and Eastern Districts of New York—arguing removal was proper under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), because some of the challenged conduct was performed under contracts with federal agencies, such as the Department of Defense (TRICARE), the Office of Personnel Management (FEHBP), and the Veterans Health Administration. After removal, the plaintiffs amended their complaints to disclaim any claims based on the defendants’ work for federal clients, seeking to have the cases remanded to state court. The district courts accepted the disclaimers and remanded the cases.The United States Court of Appeals for the Second Circuit reviewed the district courts’ decisions. It concluded that the disclaimers were ineffective because the alleged wrongful conduct and resulting harms could not be separated between federal and non-federal clients; the conduct was indivisible. Relying on the Supreme Court's decision in Chevron USA Inc. v. Plaquemines Parish, the Second Circuit held that the defendants satisfied all statutory requirements for federal officer removal: they acted under federal direction, were sued for acts relating to federal authority, and asserted colorable federal defenses. The Second Circuit therefore reversed the remand orders and returned the cases to the district courts for further proceedings. View "County of Westchester v. Express Scripts" on Justia Law

This case concerns a dispute between two sophisticated energy companies over a merger agreement. In December 2017, Trireme entered into an agreement with Innogy Renewables US, LLC, a subsidiary of a German energy company, to transfer valuable development companies related to wind and solar projects in exchange for an upfront payment and the possibility of future milestone payments. The agreement included provisions restricting Innogy from transferring these assets without Trireme’s consent. After a complex asset swap and corporate restructuring involving Innogy’s parent company and other entities, Trireme alleged that the assets were transferred within the corporate family in violation of the agreement.Previously, Trireme filed a lawsuit—referred to as Trireme I—in the United States District Court for the Southern District of New York, alleging breaches of other sections of the merger agreement but not the section concerning asset transfers. Later, Trireme sought to amend its complaint to add this new breach-of-contract claim. The district court denied the motion to amend, finding that Trireme had not acted diligently to discover the claim and was on notice of the potential breach before filing the initial action. Trireme did not pursue an appeal of this denial but instead filed a new lawsuit asserting the same claim. The district court dismissed the new case on grounds of res judicata.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s dismissal. The court held that when a party seeks to assert a claim in a new action after unsuccessfully moving to amend its complaint in a prior action, courts should consider several factors, including whether the denial was on the merits, whether the plaintiff failed to appeal, the timing of the claim, the plaintiff’s diligence, and whether the plaintiff was represented by counsel. Applying these factors, the Second Circuit concluded that res judicata barred Trireme’s new claim and affirmed the judgment. View "Trireme Energy Development v. RWE Renewables" on Justia Law

A municipal corporation operating a large regional commuter rail system in the Chicago area provided rail service on lines owned by a freight rail company. For decades, this service was conducted under a series of agreements, but in 2019, the freight rail company announced it would cease operating the commuter trains. Following litigation, the freight company obtained a declaratory judgment that it had no ongoing obligation to provide such service. While the commuter rail operator began transitioning to run the service itself, the parties failed to reach agreement on compensation for continued use of the lines. With no long-term agreement in place and negotiations at an impasse, the commuter rail operator applied to the federal Surface Transportation Board for terminal trackage rights, which would allow it to use the lines despite the lack of agreement.The Surface Transportation Board granted the application, finding the lines to be terminal facilities for a reasonable distance from the terminal, and that the use would be practicable, in the public interest, and not substantially impair the freight carrier’s operations. The Board did not set compensation or use conditions at that time but pledged to do so retroactively if the parties could not agree. The freight rail company sought review of this decision in the United States Court of Appeals for the Eighth Circuit.The Eighth Circuit held that the Board acted within its statutory authority in granting terminal trackage rights to the commuter operator, including over the full extent of the lines at issue, and properly concluded the public interest was served. However, the court found that the Board erred by granting immediate rights without first ensuring that compensation was paid or adequately secured, as required by statute. The court vacated the Board’s order and remanded for further proceedings, allowing time for the parties to address compensation. View "Union Pacific Railroad Company v. STB" on Justia Law