Justia Contracts Opinion Summaries

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This litigation arose from a suit filed by plaintiff Beverly Smith against Darlene Shelmire and her insurer, GoAuto Insurance Company (“GoAuto”), as a result of an automobile accident in 2010. In 2015, following a trial on the merits, the district court entered judgment in favor of plaintiff against Shelmire and GoAuto in an amount in excess of the insurance policy limits. GoAuto appealed that judgment, but Shelmire did not. The court of appeal ultimately affirmed the district court’s judgment in March 2016. Thereafter, Shelmire assigned her rights to pursue a bad faith action against GoAuto to Smith. Through that assignment of rights, Smith filed the underlying suit against GoAuto on March 10, 2017, and amended her petition on September 27, 2017, asserting a bad faith claim based on GoAuto’s violation of its duties under La. R.S. 22:1973(A) as well as the recognized duty of good faith pre-existing the statute. GoAuto answered the petitions, asserting the prescriptive period for a bad faith claim against an insurer was a delictual action, and subject to a one-year prescriptive period. Plaintiff opposed the exception arguing a bad faith claim against an insurer was a contractual action and subject to a ten-year prescriptive period. The Louisiana Supreme Court granted this writ application to determine whether a first-party bad faith claim against an insurer was indeed a delictual action subject to a one-year prescriptive period, or whether it was a contractual claim subject to a ten-year prescriptive period. Finding the bad faith claim arose as a result of the insured’s contractual relationship with the insurer, the Court held it was subject to a 10-year prescriptive period. View "Smith vs. Citadel Insurance Company" on Justia Law

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In Langley v. MP Spring Lake, LLC, 813 SE2d 441 (2018), the Court of Appeals affirmed the trial court’s grant of summary judgment in favor of MP Spring Lake (“Spring Lake”) on two premises-liability tort claims brought by Pamela Langley. While a lawful tenant of Spring Lake Apartments in Morrow, Georgia, Langley fell in a common area of the complex when her foot got caught and slid on a crumbling portion of curb. She later made claims of negligence and negligence per se due to Spring Lake’s alleged failure to repair the curb despite being aware of its disrepair. Spring Lake asserted, as one of its defenses, that Langley’s claims were barred by a contractual limitation period contained within her lease. Spring Lake then moved for summary judgment on this basis, arguing that, because Langley’s lease contained a one-year limitation period for legal actions and she filed her complaint two years after the injury occurred, her claim was time-barred. Langley petitioned for certiorari, raising: (1) Does the “Limitations on Actions” provision of Langley’s lease contract apply to her premises-liability tort action against MP Spring Lake, LLC?; and (2) If so, is that provision enforceable? The Georgia Supreme Court concluded the provision was not applicable to Langley’s premises-liability tort action against Spring Lake. It therefore reversed the judgment of the Court of Appeal s and remanded for further proceedings. View "Langley v. MP Spring Lake, LLC" on Justia Law

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Plaintiffs appealed the district court's grant of summary judgment to Orkin and dismissal of their numerous claims under Louisiana law. Plaintiffs had contracted with Orkin to protect their property from termites, but later discovered that their home had become infested with Formosan termites. The Fifth Circuit held that the district court did not err in granting summary judgment and dismissing plaintiffs' claim that Orkin was contractually liable for the cost of repairing the damage to their home caused by Formosan termites; the district court did not err in granting summary judgment to Orkin on plaintiffs' Louisiana Unfair Trade Practices Act and Louisiana Insurance Code claims; and the district court did not err in dismissing plaintiffs' detrimental reliance claim. However, the district court erred by dismissing plaintiffs' claim that Orkin was negligent or grossly negligent in directing and approving installation of a moisture barrier under their home. Accordingly, the court affirmed in part, vacated in part, and remanded. View "Cenac v. Orkin, LLC" on Justia Law

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The Second Circuit affirmed the district court's grant of Argentina's motion to dismiss with prejudice under Federal Rule of Civil Procedure 12(b)(6) and denying as moot plaintiffs' motion for injunctive relief and expedited discovery. In this case, plaintiffs claimed that they entered into binding settlement agreements with Argentina over defaulted bonds. The court held, under its precedent and New York state law, that when an agreement expressly requires a party's countersignature to be binding and the factors set out in Winston Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir. 1985), otherwise indicate that the parties did not intend to be bound, no valid contract exists in the absence of a party's countersignature. In this case, the purported agreements between plaintiffs and Argentina expressly required Argentina's countersignature before binding the parties, and the parties did not intend to be bound in the absence of a countersigned agreement. View "Attestor Value v. Republic of Argentina" on Justia Law

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The Supreme Court of Texas answered two certified questions, holding that the time for determining the existence and amount of unpaid commission due under Tex. Bus. & Com. Code section 54.001(1) is the time the jury or trial court determines the liability of the defendant, whether at trial or through another dispositive trial-court process such as a summary judgment; and that a plaintiff may recover attorney's fees and costs under section 54.004(2) even if the plaintiff does not receive treble damages, if the factfinder determines that the fees and costs were reasonably incurred under the circumstances. The Fifth Circuit held that CPTS was not entitled to treble damages, and the district court was thus correct to grant summary judgment to Horsburgh on the treble damages claim. In this case, there were no unpaid commissions due at the time of judgment, because Horsburgh had already paid all of its outstanding commissions, plus interest. The court also held that CPTS was eligible for attorney's fees simply by virtue of Horsburgh's breach. Therefore, the district court correctly concluded that CPTS was not entitled to treble damages, but erred by granting summary judgment to Horsburgh without awarding CPTS reasonable attorney's fees and costs. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "JCB, Inc. v. The Horsburgh & Scott Co." on Justia Law

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The Supreme Court reversed the judgment of the circuit court holding the City of Kansas City in civil contempt of a 1976 modified judgment, holding that the parties could not bring a contempt action to enforce the 1976 modified judgment because they were not parties to the litigation and the 1976 plaintiffs were not certified as a class. Sophian Plaza Association and a class of similarly situated plaintiffs brought claims of breach of injunction, breach of contract, specific performance, and civil contempt stemming from the City's termination of a trash rebate program. The court certified a class and then entered judgment in favor of the class on its claims. The court of appeals affirmed. The Supreme Court reversed, holding that the class could not avail itself of enforcement proceedings brought upon the 1976 modified judgment because they were not parties to the litigation nor were the 1976 plaintiffs certified as a class under Mo. R. Civ. p. 52.08. View "Sophian Plaza Ass'n v. City of Kansas City, Missouri" on Justia Law

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Ron Koenig was the superintendent and principal of the Warner Unified School District (the district). He and the district entered an agreement to terminate his employment one year before his employment agreement was due to expire. Under the termination agreement, Koenig agreed to release any potential claims against the district in exchange for a lump sum payment equivalent to the amount due during the balance of the term of his employment agreement, consistent with Government Code section 53260. The district also agreed to continue to pay health benefits for Koenig and his spouse "until Koenig reaches age 65 or until Medicare or similar government provided insurance coverage takes effect, whichever occurs first." The district stopped paying Koenig's health benefits 22 months later. Koenig then sued to rescind the termination agreement and sought declaratory relief he was entitled to continued benefits pursuant to his underlying employment agreement, which provided that Koenig and his spouse would continue receiving health benefits, even after the term of the agreement expired. After a bench trial, the trial court determined the district's promise in the termination agreement to pay health benefits until Koenig turned 65 violated section 53261, was unenforceable, and rendered the termination agreement void for lack of consideration. Both Koenig and the district appealed the judgment entered after trial. Koenig contended the trial court properly determined the termination agreement was void but should have concluded he was entitled to continued health benefits until the age of 65. The district contended the trial court erred when it concluded the termination agreement was void; rather, the trial court should have severed the termination agreement's unenforceable promise to continue paying benefits, enforced the remainder of the termination agreement, and required Koenig to pay restitution for benefits paid beyond the term of the original agreement. The Court of Appeal concluded the termination agreement's unlawful promise to pay health benefits in excess of the statutory maximum should have been severed to comply with sections 53260 and 53261, Koenig did not establish he was entitled to rescind the termination agreement, and the district was entitled to restitution for health benefits paid beyond the statutory maximum. Judgment was reversed and the trial court directed to enter judgment in favor of the district for $16,607. View "Koenig v. Warner Unified School District" on Justia Law

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In this appeal concerning whether International Business Machines, Corp. (IBM) was entitled to post-judgment interest on its $49.5 million damages award running from the date of the original judgment or running from the judgment on remand the Supreme Court held that the post-judgment interest due to IBM runs from the judgment on remand. The State, acting on behalf of the Family and Social Services Administration, and IBM entered into a contract to improve Indiana's welfare eligibility system. The Supreme Court earlier determined that IBM materially breached the contract and remanded the matter to the trial court to determine damages and appropriate offsets. On remand, the trial court determined damages and that IBM was entitled to offsets in the amount of $49.5 million. The court of appeals determined that IBM was entitled to post-judgment interest on the $49.5 million damages award. In determining at what pointing time post-judgment interest runs the Supreme Court held that post-judgment interest due to IBM stems from the judgment on remand rather than the original judgment. View "International Business Machines Corp. v. State ex rel. Indiana Family & Social Services Administration" on Justia Law

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After a customer purchased a pharmaceutical product from Target (the retailer) which was distributed by McKesson (the supplier), she experienced an adverse reaction to the product that resulted in serious bodily injury. The customer filed suit against Target, and McKesson and Golden State Insurance (the carrier) refused to defend it. Target then filed suit against McKesson and Golden State, seeking to compel them to defend it. The trial court granted McKesson and Golden State's motion for summary adjudication. The Court of Appeal affirmed, holding that the indemnification/defense clause in McKesson's contract with Target and the additional insured endorsement did not require McKesson and Golden State to defend Target against the customer's lawsuit. In this case, the customer's claim was based on Target's mislabeling of a product that was not defective. Therefore, Target's actions came within the exclusions of the additional insured endorsement for repackaging and labeling and relabeling. Furthermore, the additional insured endorsement did not impose on McKesson a duty to provide additional insured coverage that would protect Target from the customer's claim that it had mislabeled the medication and had failed to warn of possible adverse reactions and side effects. View "Target Corp. v. Golden State Insurance Co. Ltd." on Justia Law

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The United States District Court for the Ninth Circuit certified a question of law to the Washington Supreme Court. Specifically, the federal appellate court asked whether an insurance company was bound by its agent’s written representation (made in a certificate of insurance) that a particular corporation was an additional insured under a given policy. This question arose in a case where: (1) the Ninth Circuit already ruled that the agent acted with apparent authority; but (2) the agent’s representation turned out to be inconsistent with the policy; and (3) the certificate included additional text broadly disclaiming the certificate’s ability to “amend, extend or alter the coverage afforded by” the policy. The Washington Supreme Court responded yes: an insurance company is bound by the representation of its agent in the circumstances presented by the federal court. “Otherwise, an insurance company’s representations would be meaningless and it could mislead without consequence.” View "T-Mobile USA, Inc. v. Selective Ins. Co. of Am." on Justia Law