Justia Contracts Opinion Summaries

The superior court dismissed a subcontractor’s claims against the contractor because a venue provision in the subcontract required that litigation be conducted in another state. The superior court also dismissed the subcontractor’s unjust enrichment claim against the project owner for failure to state a claim upon which relief could be granted. The subcontractor appealed the dismissals; finding no reversible error, the Alaska Supreme Court affirmed the superior court’s decisions. View "Resqsoft, Inc. v. Protech Solutions, Inc." on Justia Law

Daredevil filed suit against ZTE for breach of contract, fraud, and unjust enrichment. After the case went to arbitration in Florida, Daredevil sought to add ZTE Corp., the parent company of ZTE USA, to its arbitration claims. The arbitrator rejected the request to add ZTE Corp., ruling that Daredevil's claims against ZTE Corp. were outside the scope of arbitration. Daredevil then filed this suit against ZTE Corp., alleging breach of contract, fraud, unjust enrichment, and tortious interference with contract. The arbitrator ultimately denied each of Daredevil's claims against ZTE USA. The arbitration award was confirmed by the United States District Court for the Middle District of Florida and affirmed by the Eleventh Circuit Court of Appeals. Daredevil subsequently reopened this case in the Eastern District of Missouri against ZTE Corp.The Eighth Circuit affirmed the district court's decision to apply Florida law, holding that Daredevil's claims met the requirements for claim preclusion and were therefore barred. The court explained that Daredevil's current and previous claims share identity of the parties and identity of the cause of action, and Daredevil does not dispute that Florida's other two requirements are satisfied. In this case, privity exists between ZTE Corp. and ZTE USA where ZTE Corp. and ZTE USA are parent and subsidiary. Furthermore, Daredevil's current claims are so closely related to its arbitration claims and thus the identity-of-cause-of-action requirement has been met. Accordingly, Daredevil's claims against ZTE Corp. are barred by the decision in its prior arbitration against ZTE USA. View "Daredevil, Inc. v. ZTE Corp." on Justia Law

Martin Burdette appealed a circuit court judgment entered in favor of Auburn-Opelika Investments, LLC ("AOI"), regarding a dispute involving a promissory note entered into by the parties. AOI cross-appealed the trial court's judgment denying its request for relief under the Alabama Litigation Accountability Act. In 2004, Martin Burdette and Susan Burdette, a married couple, formed AOI, with each owning 50% of the company. After its formation, AOI obtained a bank loan to purchase certain commercial property. In 2012, Martin and Susan sold property that they owned in Florida for $432,855. Martin and Susan agreed to use the proceeds from that sale, along with other funds, to make a loan to AOI so that it could pay off the bank loan. In May 2012, AOI executed a promissory note ("the 2012 note"). In 2014, Martin and Susan divorced. Neither the 2012 note nor ownership of AOI was addressed in the divorce proceedings. In 2016, Martin and Susan had a disagreement regarding the management and operation of AOI, and Martin sued Susan. In June 2017, as part of those proceedings, Martin and Susan entered into a mediated settlement agreement wherein Susan agreed to pay Martin in exchange for sole ownership of AOI ("the 2017 agreement"). That note was secured by a mortgage on the property owned by AOI. Susan later sold the property, and she paid the balance due on the note to Martin in full. In August 2019, Martin sued AOI, asserting claims of breach of contract and unjust enrichment, alleging AOI had failed to pay Martin the amount owed under the 2012 note. AOI argued Martin commenced the action against it without substantial justification because Martin was "fully aware that he has been paid in full for his interest in the 2012 Promissory Note and despite that fact, [he] initiated the groundless underlying lawsuit." The Alabama Supreme Court found that although the trial court found in favor of AOI on the substantive claims Martin asserted in his complaint, the trial court could have determined the issues of fact surrounding Martin's claim were reasonably in conflict. Accordingly, the trial court's factual determination that Martin's action was not frivolous or groundless in fact was supported by the evidence. Moreover, the Supreme Court's review of the record, lead it to conclude that Martin's claims against AOI were not groundless in law. Accordingly, the trial court's decision to not award attorney fees and costs to AOI under the ALAA was affirmed. View "Auburn-Opelika Investments, LLC v. Burdette" on Justia Law

Nicholas Jay appealed the grant of summary judgment entered in favor of United Services Automobile Association ("USAA") on his claim against USAA seeking uninsured-motorist ("UM") benefits. Nicholas was injured in an automobile accident when riding as a passenger in Ryen Gorman's automobile. Gorman did not have automobile insurance. Nicholas received $50,000 in UM benefits through a policy he had with Nationwide Insurance Company. Thereafter, Nicholas commenced an action against USAA, seeking UM benefits pursuant to a USAA policy owned by his father-in-law, George Brewer, and under which Nicholas's wife, Michelle Jay, had automobile-insurance coverage. Because Nicholas was not a "covered person" under the USAA policy, the Alabama Supreme Court affirmed the judgment. View "Jay v. United Services Automobile Association" on Justia Law

A three-year memorandum of understanding (MOU) between Alameda County Superior Court (ACSC), the County, and the Sheriff’s Office governed court security services. The trial court held that the MOU did not obligate the Sheriff to provide a minimum level of court security services of 129 “FTEs” (full-time equivalents) after the MOU's expiration but rather entitled the County and the Sheriff to unilaterally reduce court security services if state funding was not sufficient to pay for 129 FTEs. The decision turned on the court's conclusion that MOU Exhibit C-3 permitted the Sheriff to reduce court security services during the last six months of the three-year MOU period and was the “deployment schedule” that remained in force after the MOU’s expiration.ACSC argued that Exhibit C-1, the deployment schedule that governed the level of court security during the first two years and required a minimum of 129 FTEs, was the only deployment schedule in the MOU, and remained in force after the MOU's expiration. The court of appeal reversed. Exhibit C-1’s provisions remained in force after the expiration of the MOU because Exhibit C-1 is the only portion of the MOU that meets the requirement of Government Code section 699261 that a court security MOU must specify an “agreed-upon level” of court security services. Exhibit C-3 did not satisfy that requirement. View "Superior Court v. County of Alameda" on Justia Law

Colulmbia City seeks to compel IMA to arbitrate a dispute involving unreimbursed medical fees. The parties are connected by a series of intermediary agreements within a preferred provider organization (PPO) network that allows patients in covered health plans to receive medical services from participating hospitals at discounted rates, and one of these agreements contains an arbitration clause. It is undisputed that IMA is not a party or signatory to the Hospital Agreement that contains the arbitration clause.The Fifth Circuit affirmed the district court's denial of Columbia Hospital's motion to compel arbitration. Applying Texas law, the court concluded that the district court correctly applied this circuit's precedent that knowledge of the agreement requires knowledge of the contract's basic terms. In this case, the district court did not clearly err in concluding, based on the record before it, that IMA lacked the requisite knowledge of the Hospital Agreement and its basic terms to be compelled to arbitrate under direct benefits estoppel. Alternatively, the court declined, contrary to Columbia Health's assertions, to construe the series of contracts between IMA, PPOplus, HealthSmart and Columbia Hospital as a unified contract. View "IMA, Inc. v. Columbia Hospital Medical City" on Justia Law

After a federal jury found that 3 Star Properties fraudulently sold SED Holdings millions in loans and awarded SED over $14 million in damages, the Fifth Circuit affirmed the liability judgment against 3 Star but concluded that the damages award was excessive, remanding for remittitur of the award.The court concluded that res judicata does not bar SED's claims and the district court did not err by denying the Hyland Defendants' motion for JMOL on that basis. On the merits, the court concluded that the district court correctly denied the Hyland Defendants’ renewed JMOL as to the fraudulent transfer claim; the district court properly denied their new trial motion as to the conspiracy claim; and the district court did not commit reversible error in instructing the jury on the fraudulent transfer claim and did not abuse its discretion by declining to ask the jury whether subsequent transfers out of the escrow account were fraudulent, when those transfers were not at issue.The court remanded for remittitur and instructed the district court to subtract at least the following three identifiable amounts from the jury award: (1) the double-counted $2 million; (2) the $4 million in lost profits; and (3) the $551,578.17 already recovered from the Biltmore II settlement (in total, $6,551,578.17). The court concluded that no evidence supports the jury conclusion that Home Servicing breached the Servicing Agreement with SED Holdings and thus a new trial is warranted. Therefore, the court vacated the judgment as to SED’s breach of contract claim against Home Servicing and remanded for a new trial. In regard to SED's cross appeal against Nations Law firm, the court concluded that the SED has not shown a fact dispute as to Nations' "full knowledge of all material facts" and the district court did not err by granting summary judgment to Nations. View "SED Holdings, LLC v. TM Prop Solutions, LLC" on Justia Law

The Supreme Court reversed the judgment of the district court dismissing Shree Ganesh, LLC's contract and tort claims against Weston Logan, Inc., and Matthew Weston, an individual, holding that there remained a genuine dispute as to material facts, precluding summary judgment.Shree Ganesh entered into a contract with Weston Logan to purchase Weston Logan's Best Western Inn. After the sale of the property closed, Shree Ganesh learned about Weston Logan's plans to build a competing hotel across the street. Shree Ganesh subsequently sued Weston Logan for its failure to disclose its plans to develop the competing hotel. The district court granted summary judgment in favor of Weston Logan on all claims. The Supreme Court reversed, holding (1) the purchase agreement was ambiguous as to Weston Logan's disclosure obligations; and (2) there remained a genuine dispute as to material facts relevant to Shree Ganesh's tort claims. View "Shree Ganesh, LLC v. Weston Logan, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals vacating an arbitration award and affirmed the circuit court's denial of the motion to vacate the arbitrator's award, holding that the court of appeals exceeded the statutory basis for vacating the award.After she purchased a home, Plaintiff initiated an arbitration proceeding against Defendants, the seller of the home as well as two real estate agents, seeking to recover damages or to rescind the purchase contract. The arbitrator concluded that Plaintiff could not, as a matter of law, prevail on her breach of contract and rescission claims. Plaintiff filed a petition seeking to vacate the arbitration decision pursuant to the provisions of Ky. Rev. Stat. 417.160. The circuit court denied the petition. The court of appeals reversed and remanded for a new arbitration. The Supreme Court reversed, holding that the arbitrator did not exceed his powers. View "Booth v. K&D Builders, Inc." on Justia Law

In an appeal related to a California insurance insolvency proceeding, the New York Plaintiffs requested clarification from the San Francisco Superior Court as to whether its orders "prohibit or stay" their New York claims. In the insolvency case, the trial court appointed the California Insurance Commissioner (Commissioner) as conservator, and later as liquidator, of CastlePoint. The trial court, as part of the process, issued injunctions and approved releases pertaining to claims filed against or on behalf of CastlePoint or its assets.The Court of Appeal concluded that some of the causes of action in the New York lawsuit are not barred. These causes of action relate to: (i) the alleged breach of so-called "successor obligor provisions"; and (ii) an alleged $143 million payment from ACP to shareholders of TGIL. The court explained that these causes of action are not asserted against CastlePoint or the insurance companies that were merged into it, and there is no indication the Commissioner could have asserted these causes of action on behalf of the insolvent insurance companies. Therefore, the court reasoned that permitting them to proceed in New York will not interfere in any meaningful way with the plan for CastlePoint's liquidation, especially given the New York Plaintiffs' agreement not to assert any judgment against the insolvent insurance companies' estate or assets.However, prior to entering into releases, the Commissioner could have asserted fraudulent conveyance causes of action and a cause of action for unjust enrichment because they are based on alleged improper transfers of assets of the insolvent insurance companies. Accordingly, the court concluded that these causes of action are barred by the injunctions and releases in the liquidation proceeding. The court affirmed in part and reversed in part. View "Lara v. Castlepoint National Insurance Co." on Justia Law