Justia Contracts Opinion Summaries

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Taizhou, a Chinese manufacturer, entered into a Cooperation Agreement with Z Outdoor, a Wisconsin company owned by Casual Products: Taizhou would manufacture outdoor furniture and other related items for Z Outdoor to sell to customers. Z Outdoor eventually stopped paying Taizhou. The Cornings, on behalf of Z Outdoor, made false statements about future business, forthcoming payments, and causes for the delays. Taizhou continued to fill customer orders without receiving compensation. In 2018, AFG (a Wisconsin LLC also owned by Casual) started submitting purchase orders to Taizhou. AFG never signed the Cooperation Agreement. Taizhou filled the orders and sent AFG invoices. AFG eventually stopped paying Taizhou and made false statements regarding payment delays. The total due from Z Outdoor and AFG accrued to $14 million for purchase orders sent, 2017-2019.The district court entered a default judgment against the corporate defendants on Taizhou's contract claims but ruled against Taizhou on unjust enrichment, fraud, and conversion claims, finding the fraud and conversion claims barred by Wisconsin’s economic loss doctrine and q “mere repackaging of Taizhou’s ‘straightforward breach of contract claim.’” The Seventh Circuit affirmed. Any fraud was interwoven with the Cooperation Agreement, so the economic loss doctrine applies. To the extent the damages amounted to lost profits or lost business, those are also economic losses under Wisconsin law. View "Taizhou Yuanda Investment Group Co., Ltd. v. Z Outdoor Living, LLC" on Justia Law

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In 2001, Levy, a 37-year-old single mother of two, purchased a 20-year term life insurance policy from West Coast, with a $3 million benefit payable upon her death to her sons. In January 2019, Benita—in deteriorating physical and mental health—missed a payment. Approximately five months later, she died, having never paid the missed premium. West Coast declared the policy forfeited.Levy's sons filed suit, alleging breach of contract and that a late-2018 missed-payment notice failed to comply with the Illinois Insurance Code, which forbids an insurer from canceling a policy within six months of a policyholder’s failure to pay a premium by its due date (calculated to include a 31-day grace period) unless the insurer provided notice stating “that unless such premium or other sums due shall be paid to the company or its agents the policy and all payments thereon will become forfeited and void, except as to the right to a surrender value or paid-up policy as provided for by the policy.” West Coast’s 2018 notice incorporated much of the statutory language. The Seventh Circuit affirmed the dismissal of the complaint. The Notice adequately alerted policyholders to the consequences of nonpayment; there was no need for the Notice to mention the company’s agents as alternate payees. View "Levy v. West Coast Life Insurance Co." on Justia Law

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Plaintiff sued to obtain two insurance benefits that she believes Hartford Insurance Company owes her: (1) long-term disability payments and (2) a waiver of life insurance premiums. Although it concedes that Plaintiff was covered by its policy, Hartford contends that she was ineligible for those benefits.The Eleventh Circuit affirmed the district court’s order granting Hartford summary judgment, concluding that Hartford’s determinations were permissible. The court explained that Plaintiff was not entitled to disability payments because Hartford’s interpretation of the disability exclusion was reasonable, and its conflict of interest didn’t lead it to make an arbitrary or capricious decision. Likewise, Plaintiff was not entitled to a waiver of life insurance premiums because she wasn’t disabled within the meaning of Hartford’s life insurance policy. View "Carol H. Stewart v. Hartford Life and Accident Insurance Company" on Justia Law

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The issue this appeal presented for the New Jersey Supreme Court’s review centered on an exclusionary clause in a commercial general liability insurance policy issued by Admiral Insurance Company (Admiral) to Richfield Window Coverings, LLC (Richfield). Richfield sold window coverage products, including blinds, to national retailers like Home Depot and provided retailers with machines to cut the blinds to meet the specifications of the retailers’ customers. Colleen Lorito, an employee of a Home Depot located in Nassau County, was injured while operating the blind cutting machine. She and her husband filed a civil action against Richfield, asserting claims for product liability, breach of warranty, and loss of spousal services. Admiral denied any obligation to defend or indemnify, asserting the claims were not covered under the policy based on the Designated New York Counties Exclusion of the insurance policy. Richfield filed a declaratory judgment action seeking to compel Admiral to defend it in the Lorito case and, if necessary, indemnify it against any monetary damages awarded to the plaintiffs. The Law Division granted summary judgment in favor of Admiral. The Appellate Division reversed, finding that “Richfield’s limited activities and operations have no causal relationship to the causes of action or allegations.” The Supreme Court found that the policy’s broad and unambiguous language made clear that a causal relationship was not required in order for the exclusionary clause to apply; rather, any claim “in any way connected with” the insured’s operations or activities in a county identified in the exclusionary clause was not covered under the policy. Richfield’s operations in an excluded county were alleged to be connected with the injuries for which recovery was sought, so the exclusion applied. Admiral had no duty to defend a claim that it is not contractually obligated to indemnify. View "Norman International, Inc. v. Admiral Insurance Company " on Justia Law

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CAE Integrated L.L.C. and Capital Asset Exchange and Trading, L.L.C. (collectively CAE) sued its former employee and his current employer, Moov, for misappropriation of trade secrets and then moved for a preliminary injunction. The district court denied the preliminary injunction and CAE appealed.   The Fifth Circuit affirmed the denial finding that CAE failed to establish a likelihood of success on the merits of its claims. The court considered that trade secret information derives independent economic value from being not generally known or readily ascertainable through proper means. What CAE refers to as the “transactional documents” are files from Google Drive with purchase orders, invoices, customer equipment needs, and pricing history. The former employee has not had access to his MacBook since 2016 and he testified that Google Drive contained none of the transactional documents when he started at Moov. The district court found the employee’s testimony credible and the forensic analysis confirmed that before the employee began at Moov, he deleted any remaining transactional documents from his Google Drive. Therefore, the district court did not clearly err in finding that neither the employee nor Moov misappropriated trade secrets. Further, even if CAE had established that the employee or Moov misappropriated trade secrets, it failed to show the use or potential use of trade secrets. View "CAE Integrated v. Moov Technologies" on Justia Law

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The Sixth Circuit affirmed in part and reversed and remanded in part the judgment of the district court entering default judgment against Defendants in this breach of contract and fraud action and awarding damages to Plaintiffs on all counts, holding that there was error in the damages award.During the underlying litigation, Defendants committed a string of "egregious" discovery violations, and the district court entered default judgment as a sanction. After a hearing, the district court awarded Plaintiffs two types of breach-of-contract-related damages. The Court then awarded fraud and punitive damages. The Sixth Circuit reversed in part, holding (1) Plaintiffs' fraud claim failed because it did not plead fraud with particularity as required by Fed. R. Civ. P. 9(b); (2) Kentucky's choice-of-remedies rule and the economic-loss doctrine barred Plaintiffs from recovering for both breach of contract and fraud; and (3) because Plaintiffs could not recover fraud damages, the punitive damages award could not stand. View "New London Tobacco Market, Inc. v. Ky. Fuel Corp." on Justia Law

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Appellant appealed the order denying his motion to vacate the judgment entered against him for $251,200.13 after he failed to pay $30,000 as required pursuant to a stipulation for entry of judgment. Appellant contends the trial court erred because the judgment is an unenforceable penalty and is therefore void.   The Second Appellate disagreed with Appellant and affirmed the order denying the motion to vacate the $251,200.13 judgment. Here, the $251,200.13 damage provision in the stipulation for entry of judgment is not arbitrarily drawn from thin air. It is the actual and stipulated amount of damages. This is not a penalty or a liquidated damage provision. The court explained it cannot delete the terms of the stipulated judgment calling for monthly payments and it cannot add a provision to the terms of the stipulated judgment allowing a seven-year moratorium on monthly payments. Money has value over time. Appellant has had the use of the money for seven years. Respondent has been deprived of the use of the money for seven years. Respondent’s “more than reasonable” settlement terms should not be used against it to show “liquidated damages” or a “penalty.” View "Creditors Adjustment Bureau v. Imani" on Justia Law

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Bernstein and France are certified agents, registered with the NFL Players Association to represent NFL players in contract negotiations. Bernstein also owns Clarity, which represents professional athletes in matters such as marketing and endorsement contracts. Golladay signed a standard representation agreement with Bernstein in 2016, before Golladay’s rookie season with the Detroit Lions, and signed a separate agreement with Clarity for representation in endorsement and marketing deals. In January 2019, Golladay terminated both agreements. three days after participating in an autograph-signing event that Bernstein had played no role in arranging. Golladay immediately signed with France.Bernstein believed France was behind the signing event and filed a grievance against France pursuant to the NFLPA dispute resolution provisions. The matter went to arbitration. In pre-hearing discovery, France denied possessing any documents pertaining to the event and denied any involvement in the event. France’s lies were not uncovered until after the arbitration was decided in his favor.The Third Circuit reversed the district court’s confirmation of the arbitration award because France’s fraud procured it. The Federal Arbitration Act, 9 U.S.C. 10, permits an award to be vacated under narrow circumstances, including “where an award was procured by corruption, fraud, or undue means.” France’s fraud was not discoverable through reasonable diligence and was material to the case. View "France v. Bernstein" on Justia Law

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The Seventh Circuit affirmed the judgment of the district court granting the State's motion to dismiss this action brought by two Illinois counties challenging the 2021 passage of a law prohibiting State agencies and political subdivisions from contracting with the federal government to house immigration detainees, holding that the district court properly dismissed the action for failure to state a claim.In their complaint, Plaintiffs argued that the law at issue was invalid under principles of both both field and conflict preemption and that it violated the doctrine of intergovernmental immunity. The district denied relief. The Seventh Circuit affirmed, holding (1) because it was not preempted by federal immigration statutes the law was not invalid as a matter of field or conflict preemption; and (2) the law did not violate principles of intergovernmental immunity. View "McHenry County v. Raoul" on Justia Law

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The district court granted Perficient, Inc.’s motion for summary judgment against Defendants. It awarded nominal damages and attorney’s fees to Perficient, but its orders did not quantify the amount of the award. Defendants appeal. Perficient filed a motion to dismiss for lack of appellate jurisdiction, arguing that the orders from which Defendants appealed are not final.The Eighth Circuit granted Perficient’s motion and dismissed it for lack of jurisdiction finding that Defendants’ appeal was not taken from a final, appealable order and was therefore ineffective to confer appellate jurisdiction upon the court. The court explained that Federal Rule of Appellate Procedure 4(a)(2) cannot save the prematurely filed notice of appeal here. The rule applies “only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment” and does not save a premature appeal “from a clearly interlocutory decision—such as a discovery ruling or a sanction order under Rule 11. View "Perficient v. Thomas Munley" on Justia Law