Justia Contracts Opinion Summaries

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Oakland entered into agreements with OBOT for the development of the former Oakland Army Base. The project was to include a bulk commodity shipping terminal for products, including coal. When the subject of coal became public, it activated interest groups, ultimately leading to an ordinance banning coal handling and storage in the city and a resolution applying the ordinance to the terminal. A federal court held that the resolution was a breach of the OBOT agreements, and enjoined Oakland from relying on the resolution. Friction between OBOT and Oakland continued. OBOT sued, alleging breach of contract and tort claims.The city filed a demurrer, then a special motion to strike (SLAPP motion, Code of Civil Procedure 425.16) that sought to strike “in part” the complaint. The SLAPP motion was heard with other matters. The hearing dealt primarily with the demurrer, which the court overruled in most part, and sustained in part with leave to amend. Days later, the court “denied without prejudice” the SLAPP motion, describing it as “premature” in light of the amended complaint to come.The court of appeal determined that the SLAPP motion has no merit because the complaint is not based on protected activity and remanded with instructions to deny the motion on the merits. The essence of the complaint arose from Oaklands’s acts or omissions in breach of its agreements, its refusal to cooperate, and its tortious conduct. View "Oakland Bulk and Oversized Terminal, LLC v. City of Oakland" on Justia Law

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Porter Scott, P.C. (hereafter, “Porter Scott”) defended The Johnson Group Staffing Company, Inc. (hereafter, “TJG” or “Johnson Group”) through two rounds of litigation with its chief competitor, Aerotek, Inc. (hereafter, “Aerotek”). Aerotek first sued TJG after TJG’s founder, Chris Johnson, left Aerotek to form TJG. In the lawsuit, Aerotek alleged that TJG and Johnson, among other things, misappropriated trade secrets by soliciting Aerotek’s customers. TJG and Johnson settled with Aerotek a little over a year later. The issue presented for the Court of Appeal's review concerned the ownership of fees awarded under Civil Code 3426.4, and whether the prevailing litigant (here, The Johnson Group Staffing Company, Inc.) or the prevailing litigant’s attorney (here, Porter Scott, P.C.) were entitled to the fees awarded to the “prevailing party.” The Court concluded that, absent an enforceable agreement to the contrary, these fees belonged to the attorney to the extent they exceeded the fees the litigant already paid. Furthermore, the Court concluded that, although the parties here entered into a fee agreement, that agreement did not alter the default disposition of fees in favor of the attorney. Because the trial court reached the same conclusion, the Court of Appeal affirmed its judgment. View "Aerotek v. Johnson Group Staffing Co." on Justia Law

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In a dispute concerning a construction company’s liability for contributions to the Benefits Fund, the Fund unilaterally scheduled arbitration. The company sought to enjoin arbitration, alleging fraud in the execution of the agreement it signed. The district court concluded that the court had the primary power to decide whether fraud in the execution vitiated the formation or existence of the contract containing the arbitration provision. The court enjoined arbitration pending resolution of factual issues that bear upon that claim.The Third Circuit affirmed. Under the Federal Arbitration Act (FAA), 9 U.S.C. 4, questions about the “making of the agreement to arbitrate” are for the courts to decide unless the parties have clearly and unmistakably referred those issues to arbitration in a written contract whose formation is not in issue. Here, the formation of the contract containing the relevant arbitration provision is at issue. View "MZM Construction Co. Inc. v. NJ Building Laborers Statewide BenefitsFunds" on Justia Law

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In this case about the enforceability about a mortgage clause the Supreme Court affirmed the decision of the court of appeals reversing the decision of the district court dismissing this action, holding that any language in the mortgage agreement between the mortgagor and mortgagee that would give the mortgagee the ability to take possession of the property was unenforceable in light of the Supreme Court's historical interpretation of Kan. Stat. Ann. 58-2301.The mortgage clause at issue granted to the mortgagee/lender the right to immediate and exclusive possession of the mortgaged property upon the event of the mortgagor/borrower's default. In reliance on the clause the mortgagee took possession of the property and filed a foreclosure action. The district court granted judgment in favor of the mortgagee. The mortgagor filed suit, asserting that, before the court order authorized the mortgagee's possession of the property, the mortgagee's possession was wrongful. The district court dismissed the action on the basis of the mortgage remedies provision and the mortgagor's default. The court of appeals reversed, concluding that the mortgagee's reliance on the provisions of executory agreements was unsupported by Kansas law. The Supreme Court affirmed, holding that there was no support in state law for the mortgagee's reliance on the provisions of the executory agreements. View "Fairfax Portfolio LLC v. Carojoto LLC" on Justia Law

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When a lessee does not timely exercise an option contained in a lease agreement, special circumstances may warrant granting them extra time to exercise the option. In this case, petitioner Burbank Properties LLC mailed its notice shortly after the deadline had passed, and the trial court awarded Burbank an equitable grace period to exercise the option on summary judgment where it was undisputed that no valuable permanent improvements were made. The Washington Supreme Court granted review to decide valuable permanent improvements to the property were a necessary prerequisite to granting the equitable grace period. The Court held that granting an equitable grace period was proper only when a lessee made valuable improvements to property that would result in an inequitable forfeiture if the lessee was not given a grace period. View "Borton & Sons, Inc. v. Burbank Properties, LLC" on Justia Law

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The Eleventh Circuit affirmed the district court's grant of summary judgment for Dish Networks in plaintiff's action for breach of contract and violations of the Fair Credit Reporting Act (FCRA). Plaintiff alleges that Dish negligently and willfully violated the FCRA by requesting and obtaining a consumer report from a consumer reporting agency after an identity thief fraudulently submitted some of plaintiff's personal information to Dish. Plaintiff also alleges that Dish's actions violated a settlement agreement that the parties signed after a similar incident occurred several years ago involving the same parties.The court held that Dish had a "legitimate business purpose" under the FCRA when it obtained plaintiff's consumer report. The court also held that Dish did not violate the settlement agreement where the district court correctly found that plaintiff's claim failed to establish the breach element. View "Domante v. Dish Networks, LLC" on Justia Law

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William Crenshaw, a tenured professor of English at Erskine College, filed suit claiming he was wrongfully fired. A jury found in favor of Dr. Crenshaw and awarded him $600,000. However, after review of the College's appeal, the South Carolina Supreme Court determined the trial court properly granted Erskine's motion for judgment notwithstanding the verdict because, as a matter of law, Erskine did not breach its contract with Dr. Crenshaw. View "Crenshaw v. Erskine College" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the district court in favor of AWIN Real Estate, LLC (AWIN) on its claim that Whitehead Homes, Inc. (WHI) breached an investment agreement between the parties and in favor of WHI on an unpled claim that AWIN breached the parties' operating agreement, holding that the court lacked record evidence to award WHI damages for AWIN's breach of the operating agreement.Specifically, the Supreme Court held (1) the district court's interpretation of the ambiguous language in the investment agreement to hold WHI in breach was reasonable in light of the circumstances of the case; and (2) the district court lacked sufficient evidence to support its award of $55,000 in damages to WHI for AWIN's alleged breach of the operating agreement. The Supreme Court remanded for further proceedings on attorney's fees consistent with this opinion. View "AWIN Real Estate, LLC v. Whitehead Homes, Inc." on Justia Law

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Innovative Images, LLC sued its former attorney James Summerville, Summerville Moore, P.C., and The Summerville Firm, LLC (collectively, the “Summerville Defendants”) for legal malpractice. In response, the Summerville Defendants moved to dismiss the suit and to compel arbitration in accordance with the parties’ engagement agreement, which included a clause mandating arbitration for any dispute arising under the agreement. The trial court denied the motion, ruling that the arbitration clause was “unconscionable” and thus unenforceable because it had been entered into in violation of Rule 1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for attorneys found in Georgia Bar Rule 4-102 (d). The Court of Appeals reversed, holding that the arbitration clause was not void as against public policy or unconscionable. The Georgia Supreme Court concluded after review that regardless of whether the Summerville Defendants violated GRPC Rule 1.4 (b) by entering into the mandatory arbitration clause in the engagement agreement without first apprising Innovative of the advantages and disadvantages of arbitration, the clause was not void as against public policy because Innovative did not argue, and no court has held, that such an arbitration clause could never lawfully be included in an attorney-client contract. For similar reasons, the Supreme Court held the arbitration clause was not substantively unconscionable, and on the limited record before it, Innovative did not show the clause was procedurally unconscionable. Accordingly, the Court affirmed the appellate court's judgment. View "Innovative Images, LLC v. Summerville et al." on Justia Law

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The Pharmacies filed suit against ESI, the nation's largest Pharmacy Benefit Manager (PBM), alleging breach of contract, attempted monopolization, and other claims. The district court dismissed the entire complaint with prejudice, holding that the Pharmacies did not state a claim for breach of contract because their claim was based on the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. The parties had incorporated HIPAA and the HITECH Act into section 5.3 of their pharmacy provider agreements (PPA).The court affirmed and held that, textually, HIPAA does not authorize the Pharmacies to direct or control the use of their customers’ information and does not grant the Pharmacies power to enforce their customers' rights. Furthermore, the Pharmacies failed to allege a breach of contract based upon an alleged past or ongoing HIPAA violation. In this case, the Pharmacies failed to allege that ESI's use of their customers’ HIPAA-protected information to provide lower cost mail order refills lacked the express authorization of the plan sponsors and, thus, the implied authorization of the customers seeking to have their prescription costs covered by their plans.The court also held that the district court did not err in dismissing the Pharmacies' claim for breach of the implied covenant of good faith and fair dealing where the parties' agreements give ESI access to the Pharmacies' customer information and do not prevent its use for mail-order service dispensing. Finally, the court rejected the Pharmacies' claims of unfair competition, misappropriation of trade secrets, tortious interference with business expectancy and attempted monopolization. View "Trone Health Services, Inc. v. Express Scripts Holding Co." on Justia Law