Justia Contracts Opinion Summaries
Circuitronix, LLC v. Kinwong Electronic (Hong Kong) Co., Ltd.
After a jury found that the manufacturer breached its duty to sell its products to certain customers exclusively through the distributor, the manufacturer appealed the denial of a directed verdict as to the status of two customers under the contract. The distributor cross-appealed a ruling that invalidated the contract's liquidated-damages clause and a ruling that prevented it from pursuing lost-profit damages.The Eleventh Circuit concluded that, under Federal Rule of Civil Procedure 6, the closure of the clerk's office renders the office inaccessible and tolls the filing deadline, which makes the motion timely. Therefore, the district court did not err in denying the manufacturer's Federal Rule of Civil Procedure 50 motions. The court also concluded that the district court did not err when it ruled that the liquidated-damages clause was unenforceable because $2 million a breach was grossly disproportionate to the foreseeable actual damages, and the disproportionality amounts to an unenforceable penalty. The court further concluded that the district court did not abuse its discretion by excluding lost-profit damages because Circuitronix failed to disclose its computation of those damages. View "Circuitronix, LLC v. Kinwong Electronic (Hong Kong) Co., Ltd." on Justia Law
Covidien LP v. Esch
In this appeal arising from a contract action, the First Circuit affirmed the judgment of the district court denying Appellants' post-trial request for a declaratory judgment, holding that the district court did not abuse its discretion.Appellants, Covidien LP and Covidien Holding Inc. (collectively Covidien), brought this action against Brady Esche, a former employee, who assigned medical device patent rights to a company he subsequently founded, seeking declaratory judgment to the effect that Esch assign his rights, title, and interest in the patent applications to Covidien. Covidien also alleged that Esch breached his obligations under employment and/or separation agreements he signed. The jury found that Esch breached confidential information and awarded Covidien damages. Covidien subsequently moved for a declaratory judgment asking that Esch be required to assign to Covidien the inventions he subsequently made. The district court denied the request. The First Circuit affirmed, holding that the district court did not abuse its discretion in denying Appellants' post-trial declaratory judgment request. View "Covidien LP v. Esch" on Justia Law
Rowland v. Sandy Morris Financial LLC
In 2014, the Rowlands first met with Morris (SMF), for financial planning advice. In 2015, Morris sold them two annuity contracts; in 2016, Morris sold them universal life insurance. In 2017, the Rowlands hired Morris to manage their investment accounts and completed SMF’s Asset Management Agreement (AMA) and new account forms from TD Ameritrade, which were bundled into a single, 54-page pdf. The Rowlands signed the forms using the online platform, “DocuSign.” The AMA included an arbitration section. Right above the signature block, the contract included this disclaimer, bolded and in all capital letters: “This Agreement contains a pre-dispute arbitration clause.”The Rowlands filed suit, alleging contract and fraud claims. The parties submitted different versions of the AMA to the court for its decision on SMF’s motion to compel arbitration. The district court found that the parties had not formed an agreement to arbitrate. The Fourth Circuit affirmed. Under the Federal Arbitration Act, courts determine whether a contract has been formed. Here, there was no meeting of the minds. The versions of the AMA signed by the Rowlands and by SMF’s agent contained materially different terms. View "Rowland v. Sandy Morris Financial LLC" on Justia Law
Davidson-Eaton v. Iversen
The Supreme Court dismissed this appeal for want of jurisdiction, holding that no final order had been entered in this matter.The co-personal representatives of the Estate of Gale S. Iverson sued Cheri Eaton, Iverson's former caretaker, seeking to recover property that the Estate alleged Eaton unlawfully transferred to herself. The Estate requested that Eaton be ordered to provide the Estate an accounting. Eaton, in turn, sued the Estate in a separate action for breach of express and implied contract and quantum meruit. The district court consolidated the actions, denied Eaton's claims, and ordered that Eaton provide the Estate an accounting. Eaton appealed. The Supreme Court dismissed the appeal for want of jurisdiction, holding that no final order had been entered in this matter. View "Davidson-Eaton v. Iversen" on Justia Law
Salvatore v. Palangio
The Supreme Court affirmed the judgment of the superior court denying Defendant's renewed motion for judgment as a matter of law or, in the alternative, a motion for a new trial, holding that the trial justice did not err in denying the motions.A dispute over certain real property resulted in litigation and a jury trial. Plaintiff bought an eight-count amended complaint against Defendant. The jury was instructed to consider only Plaintiff's promissory estoppel and unjust enrichment claims, and the jury rendered a verdict in favor of Plaintiff on those counts. The Supreme Court affirmed, holding that Defendant was not entitled to judgment as a matter of law or a new trial as to the promissory estoppel and unjust enrichment claims. View "Salvatore v. Palangio" on Justia Law
Horizon Ventures of West Virginia, Inc. v. Bituminous Power Partners, L.P.
The Supreme Court reversed the order of the circuit court granting summary judgment in favor of American Bituminous Power Partners (AMBIT) and dismissing the breach of contract action brought by Horizon Ventures of West Virginia, holding that the circuit court erred in finding that the agreement between the parties was unconscionable.Horizon and AMBIT entered into a contract and agreement whereby Horizon agreed to provide consulting services to AMBIT in exchange for $50,000 annually. When, years later, AMBIT refused to pay Horizon, Horizon brought this breach of contract action. The circuit court granted summary judgment for AMBIT, finding that the agreement was substantively unconscionable and violative of public policy. The Supreme Court reversed, holding that the circuit court erred in finding the consulting agreement unconscionable without finding both procedural and substantive unconscionability. View "Horizon Ventures of West Virginia, Inc. v. Bituminous Power Partners, L.P." on Justia Law
Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co.
The Court of Appeals affirmed the judgment of the court of special appeals concluding that prejudgment interest on defense costs where a party breaches its duty to defend does not fall within the exception to the "modified discretionary approach" and is within the discretion of the fact-finder.The modified discretionary approach used by Maryland courts in awarding prejudgment interest generally places the award of prejudgment interest within the discretion of the trier of fact but also recognizes exceptions where a plaintiff is entitled to prejudgment interest as a matter of right. At issue was whether prejudgment interest should be awarded as a matter of right. The Court of Appeals held (1) prejudgment interest on defense costs is left to the discretion of the fact-finder; and (2) where the jury in this case was not presented with a claim of prejudgment interest, was not instructed on the issue, and did not separately state an award of prejudgment interest in the verdict, the circuit court was not authorized to award prejudgment interest. View "Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co." on Justia Law
Bolton v. McKinney
The Supreme Court reversed the judgment of the circuit court declining to award attorney's fees to Plaintiffs in this case, holding that the circuit court erred in failing to award the amount of attorney's fees Plaintiffs incurred in defending lawsuits initiated by Defendant as damages in this action for breach of a covenant not to sue.During bankruptcy proceedings, the parties in this case entered into a settlement agreement wherein Plaintiffs relinquished all rights to sue Defendants. Less than one year later, Defendant breached the covenant not to sue by suing Plaintiffs twice in state court and once in federal court. Plaintiffs then brought this action alleging breach of the settlement agreement. The circuit court granted summary judgment for Plaintiffs but declined to award attorney's fees. The Supreme Court reversed, holding that the circuit court erred by denying an award of attorney's fees. View "Bolton v. McKinney" on Justia Law
Wisconsin Central LTD v. Soo Line Railroad Co.
In 1987, Central purchased certain Soo assets, including LST rail lines. Soo agreed to retain liability and indemnify Central for “all claims for environmental matters relating to ownership of the Assets or the operation of LST that are asserted” within 10 years of closing, after which Central would assume all liability and indemnify Soo. Years later, contamination was discovered in a former Ashland industrial area, now Kreher Park, which contains a railroad right-of-way purchased by Central under the Agreement. The Wisconsin Department of Natural Resources (WDNR) identified an old factory as the likely source; its owner, Northern, named as a potentially responsible party (PRP), undertook to shift responsibility to the railroads. Central kept Soo apprised of the situation. Central sent notification to Soo in 1997 that it was seeking indemnification for environmental matters, including at Kreher Park. Soo did not agree to indemnify or defend.In 2002, the EPA designated the area as a Superfund site (CERCLA, 42 U.S.C. 9601). In 2011, the EPA issued PRP notices to Central, Soo, Northern, and others. Northern sued Central, Soo, and the city for its cleanup expenses. The EPA cited evidence that the railroads engaged in activities contributing to the contamination. The railroads settled the EPA and Northern claims for $10.5 million.In breach of contract litigation between the railroads, the district court granted Soo summary judgment, finding that no claim had been asserted during the claim period. Central then argued that it should not be responsible for the portion of the environmental claims attributable to operations and land not purchased by Central. The court rejected the argument and awarded Soo $10,799,427, prejudgment interest, and $1,776,764 for attorneys’ fees. The Seventh Circuit affirmed. No “claim” was asserted against the railroads during the Agreement’s claim period; Northern never threatened litigation and the WDNR did not take any action that imposed any legal duties or impending legal peril on either railroad. The operation of the railroad business, not just the ownership of the assets, was identified by the EPA as contributing to the contamination; the claims are within the scope of the indemnification clause. View "Wisconsin Central LTD v. Soo Line Railroad Co." on Justia Law
Bosse v. New York Life Insurance Co.
The First Circuit reversed the decision of the district court refusing to enforce arbitration clauses in the employment agreement between New York Life Insurance Company and Ketler Bosse, which expressly required that any disputes about arbitrability be referred to the arbitrator, holding that the district court abused its discretion.After New York Life terminated its business relationship with him Bosse brought this action alleging race discrimination in violation of 42 U.S.C. 1981 and 1985 and other state law claims. New York Life asked the court to compel arbitration and stay or dismiss the lawsuit, but the district court refused. The First Circuit reversed, holding (1) the district court's analysis contravened the Supreme Court's holdings in Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019), First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) and other cases; and (2) the arbitration clause was clear, unmistakable, and unambiguous and should have been enforced on those terms. View "Bosse v. New York Life Insurance Co." on Justia Law