Justia Contracts Opinion Summaries

Christopher Meek purchased a universal life insurance policy from Kansas City Life Insurance Company, which combined a standard life insurance policy with a savings account. Meek alleged that Kansas City Life improperly included profits and expenses in the cost of insurance, which was not mentioned in the policy, leading to a lower cash value in his account. Meek filed a federal lawsuit for breach of contract and conversion, and the district court certified a class of about 6,000 Kansans with Meek as the lead plaintiff.The United States District Court for the Western District of Missouri found that Meek's lawsuit was timely for payments going back five years under Kansas’s statute of limitations. The court granted partial summary judgment in favor of Meek on the breach-of-contract claim, interpreting the policy against Kansas City Life. The conversion claim was dismissed. A jury awarded over $5 million in damages, which was reduced to $908,075 due to the statute of limitations. Both parties appealed.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court’s class certification, finding that common questions of law and fact predominated. The court also upheld the application of Kansas law for both the conversion claim and the statute of limitations. The court agreed with the district court’s interpretation of the insurance policy, concluding that the cost of insurance should not include profits and expenses. The court found that the jury’s damages award was supported by reasonable evidence and did not warrant an increase.The Eighth Circuit affirmed the district court’s judgment, including the class certification, the application of Kansas law, the partial summary judgment in favor of Meek, and the damages award. View "Meek v. Kansas City Life Ins. Company" on Justia Law

Christopher Meek purchased a universal life insurance policy from Kansas City Life Insurance Company, which combined a standard life insurance policy with a savings account. Meek alleged that Kansas City Life improperly included profits and expenses in the cost of insurance, which was not mentioned in the policy, leading to a lower cash value in his account. Meek filed a federal lawsuit for breach of contract and conversion, and the district court certified a class of about 6,000 Kansans with Meek as the lead plaintiff.The United States District Court for the Western District of Missouri found that Meek's lawsuit was timely under Kansas’s five-year statute of limitations for breach-of-contract claims. The court granted partial summary judgment in favor of Meek on the breach-of-contract claim, concluding that the policy's cost-of-insurance provision was ambiguous and should be construed against Kansas City Life. The jury awarded over $5 million in damages, which was reduced to $908,075 under the statute of limitations. Both parties appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the cost-of-insurance provision in the policy did not include profits and expenses, as these were not listed factors. The court also upheld the class certification, finding that common questions of law and fact predominated over individual issues. Additionally, the court agreed with the district court's application of Kansas law for the conversion claim and the statute of limitations for the breach-of-contract claim. The court found that the jury's damages award was supported by sufficient evidence and did not warrant an increase. View "Meek v. Kansas City Life Ins. Company" on Justia Law

Digital Forensics Corporation, LLC ("DFC") was retained by King Machine, Inc. and Hartford Fire Insurance Company to perform electronic-discovery services related to a discovery order in litigation in the Etowah Circuit Court. The plaintiffs alleged that DFC misrepresented its capabilities on its website and through its representatives, leading them to believe DFC could perform the required services. Despite paying DFC $35,291.93, the plaintiffs claimed DFC failed to deliver the data in a usable format, resulting in additional costs and sanctions totaling $50,291.93, plus $107,430.44 in attorneys' fees and expenses.The plaintiffs filed a lawsuit in the Jefferson Circuit Court, alleging breach of contract and fraud in the inducement. DFC removed the case to federal court, which later remanded it back to the circuit court. DFC then filed a motion to compel arbitration based on a clause in their agreement, which included a multi-step dispute resolution process culminating in binding arbitration. The plaintiffs opposed the motion, arguing that the arbitration clause was fraudulently induced.The Jefferson Circuit Court denied DFC's motion to compel arbitration. DFC appealed to the Supreme Court of Alabama, arguing that the arbitration provision should be enforced. The Supreme Court of Alabama reviewed the case de novo and determined that the plaintiffs' fraud claims were directed at the entire agreement, not solely the arbitration clause. Therefore, the allegations of fraud in the inducement did not provide a basis to avoid arbitration.The Supreme Court of Alabama reversed the circuit court's order denying DFC's motion to compel arbitration and remanded the case for further proceedings consistent with its opinion. View "Digital Forensics Corporation, LLC v. King Machine, Inc." on Justia Law

Plaintiffs, a group of hospice service providers in Oklahoma, sued Defendant Axxess Technology Solutions, Inc. for breach of contract, alleging that Axxess failed to properly process claims, resulting in non-payment for services. Axxess was served but mistakenly believed it had not been due to an employee error. Consequently, Axxess did not respond to the complaint, leading the district court to enter a default judgment against it. Axxess moved to set aside the default judgment, arguing the court lacked subject matter jurisdiction due to a contractual mediation requirement. The district court denied this motion, and Axxess did not appeal.Over six months later, Axxess filed a second motion to set aside the default judgment, citing Federal Rule of Civil Procedure 60(b)(1), (4), and (6). The district court denied this motion on claim preclusion grounds, and Axxess timely appealed.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court affirmed the district court's decision but not on claim preclusion grounds. Instead, it held that the district court did not abuse its discretion by denying the second motion because the arguments raised could have been presented in the first motion. The court noted that Axxess's delay in raising these arguments was sufficient reason to deny relief under Rule 60(b). The court also granted Plaintiffs' motion to amend their complaint to properly allege diversity jurisdiction, concluding that there was complete diversity between the parties. View "Choice Hospice v. Axxess Technology Solutions" on Justia Law

Two lessors, Elizabeth Franklin and Cynthia Peironnet, owned mineral interests in a tract of land in Louisiana. In 2007, Regions Bank, managing their interests, mistakenly extended a lease for the entire tract instead of a portion. Advances in drilling technology increased the tract's value, and the lessors sued Matador Resources, the lessee, to invalidate the extension. Meanwhile, they entered into a new lease with Petrohawk Energy Corporation, contingent on the invalidation of the Matador lease. The Louisiana Supreme Court upheld the Matador lease, preventing the lessors from benefiting from the more favorable Petrohawk lease.The United States District Court for the Western District of Louisiana held a bench trial in 2021, finding Regions liable for breach of contract. On remand, the court considered extrinsic evidence to determine the lease's royalty provision, concluding it should be based on gross proceeds. The court awarded damages accordingly, including prejudgment interest on past losses and discounted future losses to present value.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's ruling that the lease conveyed a gross proceeds royalty and the admission of extrinsic evidence. However, it reversed the district court's award of royalty damages plus prejudgment interest. The appellate court instructed the district court to consider actual loss data for past years when recalculating damages and to award prejudgment interest from the date each item of past damages was incurred. The case was remanded for further proceedings consistent with these instructions. View "Franklin v. Regions Bank" on Justia Law

Shawn Montgomery was severely injured when his truck was hit by a tractor-trailer driven by Yosniel Varela-Mojena, who was employed by motor carrier Caribe Transport II, LLC. The shipment was coordinated by C.H. Robinson Worldwide, Inc., a freight broker. Montgomery sued Varela-Mojena, Caribe, and Robinson, alleging that Robinson negligently hired Varela-Mojena and Caribe and was vicariously liable for their actions.The United States District Court for the Southern District of Illinois granted partial summary judgment in favor of Robinson on the vicarious liability claim, finding that Varela-Mojena and Caribe were independent contractors, not agents of Robinson. Following the Seventh Circuit's decision in Ye v. GlobalTranz Enterprises, Inc., which held that the Federal Aviation Administration Authorization Act (FAAAA) preempts state law claims against freight brokers for negligent hiring, the district court also granted judgment for Robinson on the negligent hiring claims. Final judgment was entered in favor of Robinson to facilitate Montgomery's appeal, while his claims against Varela-Mojena and Caribe were stayed.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court affirmed the district court's decision, agreeing that Robinson did not exercise the necessary control over Caribe and Varela-Mojena to establish an agency relationship, thus negating vicarious liability. The court also declined to overrule its precedent in Ye, maintaining that the FAAAA preempts state law negligent hiring claims against freight brokers. Consequently, the court affirmed the district court's judgment in favor of Robinson. View "Montgomery v. C.H. Robinson Company" on Justia Law

Duane and Melody Remington purchased a campground and later discovered various defects on the property. They sued the seller, Keith Grimm, and the real estate agent, Bryan Iverson, alleging multiple claims including failure to disclose defects, fraudulent misrepresentation, and breach of fiduciary duty. The Remingtons claimed that Iverson and Grimm did not provide a required property disclosure statement and misrepresented the financial condition of the campground.The Circuit Court of the Seventh Judicial Circuit in Pennington County, South Dakota, granted summary judgment in favor of Iverson, determining that a property disclosure statement was not required because the sale was a commercial transaction. The court did not specifically address the common law claims of nondisclosure against Iverson. The Remingtons appealed the decision.The Supreme Court of the State of South Dakota reviewed the case. The court held that a property disclosure statement was required for the living quarters of the campground, which constituted residential real property. The court affirmed the lower court's decision that a disclosure statement was not required for the non-residential aspects of the campground. The case was remanded to determine whether Iverson breached his fiduciary duty by failing to inform the Remingtons that Grimm was required to provide a property disclosure statement for the living quarters.The court also affirmed the summary judgment on the claims of Iverson’s direct liability, concluding that the Remingtons failed to establish that Iverson had actual knowledge of the alleged defects. The court dismissed Iverson’s notice of review regarding attorney fees and costs due to lack of jurisdiction. View "Remington v. Iverson" on Justia Law

Plaintiffs Chris Robles and the California Voting Rights Initiative filed a lawsuit against the City of Ontario, alleging violations of the Voting Rights Act and the California Voting Rights Act by conducting at-large elections for city council members, which they claimed diluted the electoral influence of Latino voters. The parties eventually settled, agreeing to transition to district-based elections by 2024 and included a provision for attorney fees incurred up to that point.The Superior Court of San Bernardino County initially sustained the defendants' demurrer with leave to amend, but the parties settled and submitted a stipulated judgment. The stipulated judgment included a provision for $300,000 in attorney fees and outlined the process for transitioning to district elections. Plaintiffs later filed a motion to enforce the stipulated judgment, alleging the city violated several statutory requirements related to the districting process. The trial court found the city had not complied with the stipulated judgment but denied plaintiffs' request for additional attorney fees, stating the settlement did not provide for fees beyond those already paid.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the plaintiffs were entitled to seek additional attorney fees under the plain language of the stipulated judgment, which allowed for fees incurred in enforcing its terms. The court reversed the trial court's order denying attorney fees and remanded the case to determine whether plaintiffs were prevailing parties and, if so, the appropriate amount of attorney fees to be awarded. The appellate court clarified that the trial court's assessment of the prevailing party should focus on whether the plaintiffs achieved their litigation objectives. View "Robles v. City of Ontario" on Justia Law

LCPFV, LLC owned a warehouse with a faulty sewer pipe. After experiencing toilet backups, LCPFV hired Rapid Plumbing to fix the issue for $47,883.40. Rapid's work was unsatisfactory, so LCPFV hired another plumber for $44,077 to redo the job. LCPFV sued Rapid Plumbing, which initially responded but later defaulted. LCPFV sought a default judgment of $1,081,263.80, including attorney fees and punitive damages. The trial court awarded a default judgment of $120,319.22, which included attorney fees and other costs, and also awarded $11,852.90 in sanctions.The Superior Court of Los Angeles County reviewed the case. Rapid Plumbing initially participated but ceased involvement after their attorney withdrew. LCPFV then filed numerous motions and requests for sanctions, despite knowing Rapid would not respond. The trial court struck Rapid's answer and granted LCPFV's motion to have its requests for admission deemed admitted, but ultimately awarded a significantly lower judgment than LCPFV sought.The California Court of Appeal, Second Appellate District, reviewed the case. The court affirmed the trial court's judgment, emphasizing the trial court's role as a gatekeeper in default judgment cases. The appellate court found that the trial court acted within its discretion in rejecting LCPFV's use of requests for admissions to establish fraud and punitive damages. The court also upheld the trial court's reduced award of attorney fees, noting the excessive nature of LCPFV's request given the simplicity of the case and the lack of opposition. Additionally, the appellate court supported the trial court's decision on sanctions and prejudgment interest, affirming that the trial court's awards were appropriate and justified. View "LCPFV v. Somatdary" on Justia Law

The Comedy Store, a stand-up comedy venue in Los Angeles, was forced to close for over a year due to COVID-19 restrictions. In July 2021, the Store hired Moss Adams LLP, an accounting firm, to help apply for a Shuttered Venue Operator Grant from the U.S. Small Business Administration. The parties signed an agreement that included a Washington choice of law provision and a forum selection clause mandating disputes be resolved in Washington state courts. The Store alleges Moss Adams failed to inform it of the grant program's impending expiration, causing the Store to miss the application deadline and lose an $8.5 million grant.The Store initially filed a complaint in the United States District Court in Los Angeles, but the case was dismissed for lack of subject matter jurisdiction. The Store then refiled in the Los Angeles Superior Court, asserting claims including gross negligence and breach of fiduciary duty. Moss Adams moved to dismiss or stay the action based on the forum selection clause. The trial court granted the motion, contingent on Moss Adams stipulating that the Store could exercise its right to a jury trial in Washington state. Moss Adams provided such a stipulation, and the trial court signed an order to that effect.The California Court of Appeal, Second Appellate District, Division Four, reviewed the case. The court found that the trial court erred in failing to properly allocate the burden of proof to Moss Adams to show that litigating in Washington would not diminish the Store’s unwaivable right to a jury trial. The appellate court concluded that Moss Adams did not meet this burden, as it did not demonstrate that Washington law would provide the same or greater rights to a jury trial or that a Washington court would apply California law. The appellate court reversed the trial court’s decision and remanded with instructions to deny Moss Adams’s motion to dismiss or stay the action. View "The Comedy Store v. Moss Adams LLP" on Justia Law