Justia Contracts Opinion Summaries

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The First Circuit affirmed the judgment of the district court dismissing this case against Allscripts Healthcare Solutions, Inc. (AHS) on personal jurisdiction grounds but vacated the dismissal as to Allscripts Healthcare, LLC (Allscripts), holding that the district court improperly granted the motion to dismiss as to Allscripts.Dr. Juan M. Rodriguez-Rivera (Rodriguez) brought this action against AHS and Allscripts in Puerto Rico federal court after his electronic patient records from his medical practice were destroyed. AHS and Allscripts filed a motion to dismiss. The district court granted the motion, finding that the disputes should be arbitrated, that it lacked jurisdiction over both AHS and Allscripts, and that Rodriguez's complaint failed to state a claim as a matter of law. The First Circuit affirmed in part and vacated in part, holding (1) the district court improperly granted the motion to dismiss for lack of personal jurisdiction with respect to Allscripts; (2) whether a valid arbitration existed was a factual matter to be resolved by the district court; and (3) the district court erred in concluding that Rodriguez's complaint failed to state a claim against Allscripts. View "Rodriguez-Rivera v. Allscripts HC Sol., Inc." on Justia Law

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The Third Circuit vacated in part the order of the district court denying OptumRX's (Optum) motion to compel arbitration in the underlying action alleging breaches of contract and breaches of duties of good faith and fair dealing and violations of certain state statutes, holding that the district court erroneously applied the incorrect standard in ruling on Optum's motion.More than 400 pharmacies brought suit against Optum, a pharmacy benefits manager responsible for administering prescription drug programs on behalf of health-insurance plans. Optum moved to compel arbitration based on arbitration agreements found in various contracts covering the majority of the pharmacies. The district court denied the motion in full, concluding that compelling the pharmacies to proceed with arbitration would be procedurally unconscionable. The Sixth Circuit vacated the judgment in part, holding that the district court erred by not adhering to Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764 (3d Cir. 2013). View "Robert D. Mabe, Inc v. OptumRX" on Justia Law

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The Callawassie Island Members Club, Inc. ("the Club"), brought separate actions against three couples—the Martins, the Freys, and the Quinns—following a dispute over membership dues. The circuit court granted the Club's motion for summary judgment. The court of appeals consolidated the parties' appeals and affirmed. The South Carolina Supreme Court granted a petition for certiorari review filed by Michael Frey, who challenged the award of summary judgment. Frey contended material questions of fact existed as to whether the Club improperly billed him for continuing membership dues, particularly where his membership was suspended over a decade ago and membership was undisputedly optional when he joined. To this the Court concurred, reversed and remanded for further proceedings. View "Callawasie Island Members Club v. Frey" on Justia Law

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Plaintiff appealed the dismissal of his direct suit against Defendant Brightstar Asia, Ltd. In connection with the sale of his company, Harvestar, to Brightstar Asia, Plaintiff entered into a contract with Brightstar Asia, Harvestar, and his co-founder. The contract provided that conflicted transactions between Brightstar Asia and Harvestar must be on “terms no less favorable to” Harvestar than those of an arms-length transaction. Plaintiff alleged in his complaint that Brightstar Asia engaged in conflicted transactions that rendered his options rights worthless. Those actions, according to Plaintiff, breached both the express terms of the contract and the implied covenant of good faith and fair dealing. The district court dismissed his complaint for raising claims that could be brought only in a derivative suit.   The Second Circuit agreed that Plaintiff can bring a claim for breach of the express conflicted-transactions provision only in a derivative suit. However, the court held that Plaintiff may bring a direct suit for breach of the covenant of good faith and fair dealing because that covenant is based on his individual options rights. Accordingly, the court affirmed in part and vacated in part the district court’s judgment.   The court explained that the inquiry into whether a claim is direct, and a plaintiff, therefore, has “standing” to bring it, is not an Article III standing inquiry Even if the district court were right that Plaintiff’s claims had to be brought in a derivative suit, it should have dismissed the complaint for failure to state a claim. View "Miller v. Brightstar Asia, Ltd." on Justia Law

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The Supreme Judicial Court affirmed the judgment of the single justice of the court treating Petitioner's letter filed in the county court as a petition pursuant to Mass. Gen. Laws ch. 211, 3 and denying it, holding that the single justice did not err or abuse his discretion in denying relief.Petitioner performed certain plumbing work for Defendants, and four different trial court cases stemmed from that work. Petitioner filed his letter seeking relief from various trial court rulings and judgments in the four district and superior court cases. The single justice treated the letter as a petition pursuant to Mass. Gen. Laws ch. 211, 3 and denied it. The Supreme Judicial Court affirmed, holding that, in each of the four cases, Petitioner had an adequate alternative remedy. View "Willitts v. Brogan" on Justia Law

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GenMa is a power company that, long ago, leased two coal-fired power plants from the Lessors. To comply with those leases, GenMa paid NFC $130 million to insure the Lessors up to that sum if GenMa didn’t pay rent. Too late, NFC realized it had promised the Lessors more than $130 million. The Lessors forced NFC to honor its promise, and NFC sued GenMa and others for its losses.   GenMa removed NFC’s claims to district court, which then transferred those claims to a bankruptcy court in Texas. After losing there and at the district court, NFC appealed. It says that its claims against GenMa should return to New York state court because the federal court lacked jurisdiction or because federal law required abstention. NFC also insists, pressing four contract-law theories, that GenMa must cover NFC’s losses.   The Fifth Circuit affirmed holding that the district court had jurisdiction; abstention was not required; and NFC’s claims lack merit.  The court explained that the parties may have miscalculated the amount of credit support needed to satisfy GenMa’s lease obligations. But that mistake, mutual or not, was GenMa’s problem. Had Natixis carefully crafted its letters of credit, NFC would not have had to pay any more to the Lessors than GenMa had paid it, no matter how badly the parties miscalculated the credit support that GenMa’s leases required. The court agreed with GenMa: “NFC cannot demand more money from GenMa for discovering that it could have obtained less credit support” than the Agreement required, and reformation cannot erase that unforced blunder. View "Natixis Funding v. GenOn Mid-Atl" on Justia Law

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Shao Yan Chen, Han Lin Liu, Zhi Hua Mo, Yuk Yee Cheng, Hui Zhen Hu, Ruizhao Wu, and Qi Di Wu (collectively, tenants) had a dispute with Valstock Ventures, LLC and 371 Broadway Street, LLC (together, Valstock) over which of two documents was the operative lease governing the tenants’ tenancies in two of Valstock’s apartment buildings. The tenants filed suit against Valstock seeking a declaratory judgment on this question, alleging a civil conspiracy, and stating claims for violations of the Fair Employment and Housing Act (FEHA), Unfair Competition Law (UCL), and section 37.10B of the San Francisco Rent Ordinance. The trial court awarded the tenants approximately $1.1 million in attorney’s fees under Civil Code section 1717 after granting their motion for summary adjudication of the sole cause of action on the contract in this case, before trial or disposition of the remaining non-contract causes of action. The defendants appealed, arguing the award of attorney’s fees was premature because the litigation as a whole had not yet ended. To this the Court of Appeal agreed and therefore reversed. View "Chen v. Valstock Ventures, LLC" on Justia Law

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The Seventh Circuit affirmed the judgment of the district court granting summary judgment to Defendants on all claims asserted against them, including misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights but vacated the judgment awarding attorneys' fees, holding that a reduction in fees was warranted.REXA, Inc. sued Mark Chester and MEA, Inc. for misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights, alleging that Chester and MEA incorporated and disclosed confidential designs. The district court granted summary judgment to Defendants. The Seventh Circuit affirmed in part and vacated in part, holding that the district court (1) properly granted summary judgment in favor of Defendants; but (2) abused its discretion in awarding Chester and MEA approximately $2.357 million in attorneys' fees, which they requested as a sanction for REXA's litigation conduct, where the court did not make specific findings about each of REXA's objections to the fee petition. View "REXA, Inc. v. Chester" on Justia Law

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Luis Munoz and LR Munoz Real Estate Holdings, LLC (together, Munoz) bought a hotel from a company owned and managed by Rajesh Patel and his son, Shivam. Before escrow closed, the parties negotiated a leaseback arrangement requiring Munoz to lease the hotel back to the Patels’ company after the sale. Escrow closed and the parties thereafter executed the previously-negotiated lease. However, Munoz contended the Patels secretly swapped out the agreed-upon lease for a lease substantially more beneficial to the Patels and worse for Munoz, and then tricked him into signing it. Munoz filed suit against the Patels, an alleged alter ego entity of the Patels called Inn Lending, LLC, and other defendants involved in the sale, asserting causes of action for breach of contract, breach of the covenant of good faith and fair dealing, promissory fraud, and elder financial abuse, among other causes of action. Rajesh and Inn Lending demurred to the operative second amended complaint, the trial court sustained the demurrer without leave to amend. In a prior opinion, the Court of Appeal reversed the judgment and determined, among other things, that Munoz alleged a viable fraud cause of action based on a theory of fraud in the execution. The California Supreme Court granted review and remanded the case back to the appellate court, ordering a rehearing of the parties arguments for fraud. After reconsideration, the Court of Appeal concluded operative complaint alleged facts sufficient to state a viable cause of action for fraud in the execution against Rajesh, but not against Inn Lending. Additionally, the Court concluded the complaint plead facts sufficient to state an elder financial abuse cause of action against both Rajesh and Inn Lending. The Court concluded Munoz failed to establish that the trial court erred in dismissing his breach of contract and bad faith causes of action. In light of these determinations, the appeals court reversed the trial court judgment and remand the matter with instructions that the trial court vacate its order sustaining the demurrer to the entire complaint, and enter a new order. View "Munoz v. Patel" on Justia Law

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The Seventh Circuit affirmed the judgment of the district court, holding that Plaintiff, a guidance counselor at a Catholic high school, was a minister and that the ministerial exception barred of all her claims against Roncalli High School and the Archdiocese of Indianapolis, both federal and state, holding that there was no error.After Plaintiff informed Roncalli's leadership that she was in a same-sex union she was given notice that her employment would not be renewed for the next school year because her conduct violated the terms of her contract. Plaintiff brought this complaint, alleging several claims. The trial court granted summary judgment based on the ministerial exception, grounded in the First Amendment's Religion Clauses, which bars interference with the selection and control of a religious organization's ministers. The Seventh Circuit affirmed, holding that the Archdiocese was entitled to fire Plaintiff without regard to the substantive rules in Title VII of the Civil Rights Act. View "Starkey v. Roman Catholic Archdiocese of Indianapolis, Inc." on Justia Law