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Lowe’s expanded its retail home improvement stores into Mexico. Lowe’s Mexico contracted with Karum to provide private-label credit card services there. The program failed to meet expectations. Karum sued, claiming breach of contract. Early on, Karum disclosed its summary “damages model,” a 37-page estimate of damages with hundreds of figures contained in charts and graphs. Karum intended to have its Chairman and former CEO Johnson and/or its current CEO and CFO Ouchida present the damages model at trial as lay opinion testimony. Karum never retained a damages expert. Two months before trial, Lowe’s moved to preclude Johnson and Ouchida from testifying as to the damages model because any testimony regarding the model required the specialized knowledge of an expert. The district court granted the motion, finding that Karum had never properly disclosed an expert pursuant to Federal Rule of Civil Procedure 26(a)(2). Since this was a case-dispositive sanction, the court granted judgment in favor of Lowe’s. The Seventh Circuit affirmed. The plain meaning of Rule 26(a)(2) demands a formal designation for expert disclosures. Although Lowe’s deposed Johnson about the model and knew Karum intended to call him to testify about its content, Lowe’s should not have to assume a particular witness will testify as an expert. View "Karum Holdings LLC v. Lowe's Companies, Inc." on Justia Law

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ATC, a Michigan manufacturer, outsources orders, including to YiFeng, a Chinese company. ATC pays vendors in four separate payments, based on manufacturing progress. YiFeng emails ATC invoices. On March 18, 2015, ATC’s vice-president, Gizinski, emailed YiFeng employee Chen requesting all outstanding invoices. An unidentified third party intercepted this email, and impersonating Chen, began corresponding with Gizinski. On March 27, the impersonator emailed Gizinski that, due to an audit, ATC should wire its payments to a different account from usual. YiFeng had previously, legitimately informed ATC it had changed its banking details; ATC had no process for verifying the information. Gizinski wired the money to the new account. On April 3, the impersonator emailed Gizinski, stating that “due to some new bank rules,” the previous transfer was not credited to its account so it would return the payment. The impersonator requested that Gizinski wire the money to a different bank account. Gizinski wired the money to this new account. The impersonator ran this scam twice more. Gizinski wired additional payments of $1575 and $482,640.41. When the real YiFeng demanded payment, ATC paid YiFeng approximately 50% of the outstanding debt; the remaining 50% was contingent on ATC’s insurance claim. ATC sought recovery from Travelers, under the Policy’s “Computer Fraud” provision. Travelers denied the claim. ATC sued for breach of contract. The court granted Travelers summary judgment. The Sixth Circuit reversed. Computer fraud “directly caused” ATC’s “direct loss” and no exclusion applied. View "American Tooling Center, Inc. v. Travelers Casualty & Surety Co." on Justia Law

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Plaintiffs each entered into agreements to provide services to Voice of America (VOA), a U.S. government-funded broadcast service. The agreements were a series of individual purchase order vendor (POV) contracts that each plaintiff entered into over several years with the Broadcasting Board of Governors (BBG), which oversees VOA. In 2014, the Office of Inspector General for the U.S. Department of State issued a report that was critical of the BBG’s use of POV contracts, concluding that the BBG was using such contracts in some cases to obtain personal services. Plaintiffs filed a class action complaint alleging that, along with other individuals who have served as independent contractors for VOA, they should have been retained through personal services contracts or appointed to positions in the civil service. If their contracts had been classified as personal services contracts or they had been appointed to civil service positions, they alleged, they would have enjoyed enhanced compensation and benefits. The Claims Court dismissed and denied their request for leave to file a proposed second amended complaint. The Federal Circuit affirmed, rejecting several contract-based claims, seeking damages for the loss of the additional compensation and benefits to which Plaintiffs contend they were entitled. Plaintiffs have set forth no viable theory of recovery. View "Lee v. United States" on Justia Law

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Millard Gutter Company’s voluntary dismissal of its civil action against American Family Insurance Company had no effect on the district court’s authority to make further rulings, but the court erred in taxing technology expenses and jury expenses as costs. After Millard Gutter filed a voluntary dismissal without prejudice, the district court entered a judgment of dismissal and taxed costs to Millard Gutter, including expenses incurred by American Family in setting up courtroom technology and expenses incurred by the court in compensation prospective jurors. On appeal, Millard Gutter argued that once it filed a voluntary dismissal, the district court lacked authority to make any further rulings and, alternatively, that the district court erred in taxing technology expenses and jury expenses as costs. The Supreme Court affirmed in part and in part reversed, holding (1) because Millard Gutter had no statutory right to voluntary dismissal at the time it filed its dismissal, the district court’s authority to make further rulings was unaffected by that filing; and (2) the district court abused its discretion in taxing such expenses as costs. View "Millard Gutter Co. v. American Family Insurance Co." on Justia Law

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Francis Franson appealed after the district court granted Hess Corporation’s (“Hess”) motion for summary judgment and Agri Industries, Inc.’s (“Agri”) motion for prejudgment interest. Hess cross-appealed parts of the district court’s judgment rejecting Hess’ alternative arguments for dismissal. In 2008, Hess hired Geokinetics USA, Inc. to complete seismographic testing on Franson’s property. Shortly after, Franson noticed a loss of pressure from his water well between December 2008 and January 2009. Franson hired Agri to drill a new well in January 2009. In March 2013, Agri sued Franson for not paying for its well-drilling services. The district court determined Hess was not entitled to dismissal under the statute of limitations and Franson’s third-party complaint was adequate under N.D.R.Civ.P. 8 and 14. However, the district court granted Hess’ motion for summary judgment, concluding Hess could not be held liable for the negligence of its independent contractor and Franson did not comply with N.D.C.C. 38-11.1-06, which required a certified water test to recover against a mineral developer for damage to a water supply. The district court held a jury trial on the remaining issues between Agri and Franson, and the jury returned a verdict in favor of Agri in the amount of $77,924.85, the exact amount invoiced to Franson for the services. The jury verdict did not mention interest. Agri moved for an award of prejudgment interest. The district court determined Agri was entitled to prejudgment interest because the damages were certain or capable of being made certain by calculation. The North Dakota Supreme Court affirmed the portion of the district court’s judgment granting summary judgment to Hess. The Court reversed the portion of the district court’s judgment granting Agri’s motion for prejudgment interest. "A district court errs by granting a motion for prejudgment interest when the unobjected-to jury instruction on awarding interest became the law of the case." View "Agri Industries v. Franson" on Justia Law

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The Supreme Court reversed the judgment of the circuit court granted summary judgment for Debtor in this breach of contract case brought by Creditor to recover unpaid installments under a promissory note. In moving for summary judgment, Debtor relied on an acceleration provision in the promissory note, asserting that the statute of limitations had expired on Creditor’s claim six years after Debtor defaulted. The Supreme Court reversed the circuit court’s grant of summary judgment in favor of Debtor, holding that a material issue of fact was in dispute whether Debtor’s conduct following default warranted a different limitation period. View "Work v. Allgier" on Justia Law

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Knopick purchased a Jayco recreational vehicle from an independent Iowa dealer for $414,583, taking title through an LLC he alone controlled. Jayco’s two-year limited manufacturer’s warranty disclaims all implied warranties and “does not cover … any RV used for rental or other commercial purposes,” explains that an RV is “used for commercial and/or business purposes if the RV owner or user files a tax form claiming any business or commercial tax benefit related to the RV, or if the RV is purchased, registered or titled in a business name,” and states that performance of repairs excluded from coverage are "goodwill" repairs and do not alter the warranty. Almost immediately, Knopick claims, the RV leaked, smelled of sewage, had paint issues, and contained poorly installed features, including bedspreads screwed into furniture and staples protruding from the carpet. Knopick drove it to Jayco’s Indiana factory for repairs. He later picked up the RV to drive to his Texas home. Concerned about continuing problems, Knopick left it at a Missouri repair facility, from which a Jayco driver took it to Indiana for further repairs. Jayco later had a driver deliver the coach to Knopick in Arkansas. Knopick remained unsatisfied and sued for breach of warranty under state law and the Magnuson-Moss Warranty Act, 15 U.S.C. 2301. The Seventh Circuit affirmed summary judgment for Jayco, finding that Knopick had no rights under the warranty because the RV was purchased by a business entity. View "Knopick v. Jayco, Inc." on Justia Law

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The Second Circuit reversed the district court's denial of Defendant Emmons and Wallace's post-trial motion for judgment as a matter of law, and the corresponding entry of judgment following a jury verdict in favor of plaintiff on his claims against defendants for tortious interference with contract under New York law. The court held that there was insufficient evidence for a reasonable juror to have found at least two elements of plaintiffs claims where the jury's intent finding that defendants purposefully targeted particular contracts was wholly without support, and there was no evidence that anyone stopped performing under a specific contract because of anything said or done by defendants. Accordingly, the court remanded with directions to enter judgment for defendants. View "Conte v. Emmons" on Justia Law

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Lossia used a Flagstar Bank checking account to initiate Automated Clearing House (ACH) transactions--electronic payments made from one bank account to another. Common ACH transactions include online bill pay and an employee’s direct deposit. The account agreement states: Our policy is to process wire transfers, phone transfers, online banking transfers, in branch transactions, ATM transactions, debit card transactions, ACH transactions, bill pay transactions and items we are required to pay, such as returned deposited items, first—as they occur on their effective date for the business day on which they are processed.” National Automated Clearing House Association Operating Rules and Guidelines define an ACH transaction's effective date as “the date specified by the Originator on which it intends a batch of Entries to be settled.” In practice, this date is whatever date the merchant or bank submits the transaction to the Federal Reserve, which includes this settlement date in the batch records that it submits to the receiving institution (Flagstar), which processes the transactions in the order that they were presented by the Federal Reserve in the batch files. Lossia asserted that the order in which Flagstar processed his transactions caused him to incur multiple overdrafts rather than just one. The Sixth Circuit affirmed summary judgment for Flagstar; the plain language of the agreement does not require Flagstar to process transactions in the order that the customer initiated them. View "Lossia v. Flagstar Bancorp, Inc." on Justia Law

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The Supreme Court affirmed in part and reversed and remanded in part the district court’s judgment reversing the decision of the circuit court cancelling the mobile home sale between Respondent and Petitioner upon finding that the parties made a mutual mistake in drafting their contract, holding that the district court erred when it found that Petitioner breached the contract. Specifically, the Supreme Court affirmed the district court’s reversal of the circuit court’s finding of a mutual mistake of the parties, holding that the district court did not err in determining that the circuit court improperly applied the doctrine of mutual mistake. The Court, however, reversed the district court’s decision to hold Petitioner in breach of the contract before Respondent’s performance was due and, conversely, found that Respondent breached the contract, holding that the district court made a clearly erroneous finding of fact and as a matter of law. View "Larson v. Burton Construction, Inc." on Justia Law