Justia Contracts Opinion Summaries

by
Bonni Genzer, an Uber driver, contended James River Insurance Company, Uber’s insurer, breached its contractual obligations by declining coverage for injuries she sustained in an accident on the return leg of a lengthy fare. Genzer also contended that, under Oklahoma law, the “mend the hold” doctrine limited James River to the grounds it gave for declining coverage before she sued. The district court granted summary judgment in James River’s favor, first ruling that Oklahoma had not adopted the mend-the-hold doctrine, and next holding that Genzer’s claim falls outside the scope of the governing insurance policy. The Tenth Circuit agreed as to both issues. View "Genzer v. James River Insurance Company" on Justia Law

by
In 2013, Rachel Dixon was driving a car owned by her boyfriend, Rene Oriental-Guillermo (“Policyholder”), when she was involved in an accident with a vehicle in which Priscila Jimenez was a passenger, and which was owned by Iris Velazquez, and operated by Alli Licona-Avila. At the time of the accident, Dixon resided with Policyholder, who had purchased a personal automobile insurance policy (“Policy”) for his vehicle through Safe Auto Insurance Company (“Safe Auto”). The Policy contained an unlisted resident driver exclusion (“URDE”), which excluded from coverage any individuals who lived with, but were not related to, the policyholder, and whom the policyholder did not specifically list as an additional driver on the insurance policy. Jimenez and her husband Luis (collectively, “Appellants”) filed a personal injury lawsuit against Dixon, Policyholder, and Licona-Avila. On May 13, 2015, Safe Auto filed a complaint against Dixon, Policyholder, and Appellants, seeking a declaratory judgment regarding the enforceability of the URDE with respect to Dixon. The trial court granted summary judgment in favor of Safe Auto, finding the URDE unambiguous, valid, and enforceable, and concluding that Safe Auto had no duty under the Policy to defend or indemnify Dixon in the underlying personal injury lawsuit. Appellants timely appealed to the Superior Court, arguing: (1) the trial court erred in holding the URDE was valid and enforceable; (2) that the URDE violated the provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”); and (3) that the URDE violated public policy. The Superior Court affirmed the order of the trial court in a divided, published opinion. The Pennsylvania Supreme Court concurred the URDE at issue in this case was enforceable, and affirmed the Superior Court. View "Safe Auto v. Oriental-Guillermo" on Justia Law

by
Gupta joined Morgan Stanley and signed an employment agreement containing an arbitration clause; an employee dispute resolution program (CARE) applied to all U.S. employees. The CARE program did not then require employees to arbitrate employment discrimination claims but stated that the program “may change.” In 2015, Morgan Stanley amended its CARE program to compel arbitration for all employment-related disputes, including discrimination claims, and sent an email to each U.S. employee, with links to the new arbitration agreement and a revised CARE guidebook. The email attached a link to the arbitration agreement opt-out form and set an opt-out deadline, stating that, if the employee did not opt-out, continued employment would reflect that the employee agreed to the arbitration agreement and CARE guidebook and that opting out would not adversely affect employment status. Gupta did not submit an opt-out form or respond to the email. He continued to work at Morgan Stanley for two years until, he alleges, the company forced him to resign because of military leave. Gupta sued for discrimination and retaliation under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301–35. The court agreed with that Illinois law permits an offeror to construe silence as acceptance if circumstances make it reasonable to do so; based on pretrial evidence, Gupta could not dispute he received the email. The Seventh Circuit affirmed an order compelling arbitration under the Federal Arbitration Act, finding the existence of a written agreement to arbitrate, a dispute within the scope of that agreement, and a refusal to arbitrate. View "Gupta v. Morgan Stanley Smith Barney, LLC" on Justia Law

by
C. Randall Caldwell, Jr. worked for George Woerner, who owned several businesses headquartered in Foley. In 2009, Caldwell was promoted to president of Woerner Landscape, Inc., one of those businesses. Caldwell stated that, at that time, he was a licensed attorney in good standing in Alabama even though he was not engaged in private practice. During his employment with Woerner, the BP oil spill occurred in the Gulf of Mexico. Caldwell contacted an attorney with Cunningham Bounds, LLC, a law firm in Mobile, regarding the possibility of referring Woerner's businesses to Cunningham Bounds for Cunningham Bounds to handle their claims arising out of the spill. In April 2011, the Woerner companies retained Cunningham Bounds; Cunningham Bounds executed representation agreements with each of the Woerner companies. Those agreements provided that Cunningham Bounds would be paid a contingency fee for the work. In 2014, the Woerner companies retained Sirote & Permutt, P.C. to assist Cunningham Bounds in the BP oil-spill litigation. Additionally, each of the Woerner companies sent Caldwell a letter in which they stated that Caldwell had previously assisted with a BP oil-spill claim asserted on behalf of that Woerner company; that the claim had been principally handled by Cunningham Bounds; and that at the time Caldwell provided assistance he was working as in-house counsel for one or more of the Woerner companies. Each letter went on to assert that the claim would have to be reworked "based on newly announced guidelines from appellate courts hearing BP's objections to some of the previously filed claims"; that the owners and management of the Woerner companies felt that it would be in their best interest to retain a firm with experienced tax and business attorneys to assist in the claims; that the Woerner companies wished to continue their representation by Cunningham Bounds; that they were terminating the attorney-client relationship between Caldwell and the Woerner companies; and that they were retaining Sirote to assist Cunningham Bounds in reworking the claims asserted by the Woerner companies. After receiving this letter, Caldwell contacted one of the attorneys at Cunningham Bounds and told him that it was his position that he was entitled to the referral fees discussed in the representation agreements because, he said, he had referred the Woerner companies' claims to Cunningham Bounds. Summary judgment was ultimately entered in favor of Caldwell; the Alabama Supreme Court determined the trial court erred in finding Caldwell was owed a referral fee. Judgment was reversed and the matter remanded for further proceedings. View "Sirote & Permutt, P.C. v. Caldwell" on Justia Law

by
Appellants Icon Legacy Custom Modular Homes, LLC and Icon Legacy Transport, LLC challenged a series of trial court orders in favor of appellees Dagney Trevor, Merusi Builders, Inc., Osborne Construction, LLC, and Paul Osborne. This appeal arose from the sale and construction of a new modular home that suffered from significant deficiencies. Trevor purchased the modular home; Icon Legacy Custom Modular Homes, LLC (Icon Legacy) and Icon Legacy Transport, LLC (Icon Transport) manufactured and transported the home; Osborne Construction, LLC (Osborne Construction) and Paul Osborne (Osborne) were collectively the contractor involved in the assembly the home; Merusi Builders, Inc. (Merusi) was a subcontractor involved in the assembly of the home. Though not parties to this appeal, Vermont Modular Homes, Inc., David Curtis, and Blane Bovier were Icon’s Vermont-based “approved builders” and three of the defendants in the suit below. In 2015, Trevor purchased an Icon Legacy Custom Modular Home as a replacement to one she lost to fire. The home sustained significant water damage during a rainstorm when water entered the home before the roof installation was complete. Other structural defects emerged after Trevor moved into the home. Although Icon and Vermont Modular Homes repaired some of the damage, major defects relating to both the water damage and alleged improper construction remained in the home. Ultimately judgement was entered against Icon. Icon appealed, arguing multiple errors leading to the outcome against it. The Vermont Supreme Court reversed as to the trial court's thirty-percent upward adjustment of the lodestar damages calculation, and remanded for the trial court to strike that amount from Trevor's attorney fee award. The Court affirmed the trial court in all other respects. View "Trevor v. Icon Legacy Custom Modular Homes, LLC, et al." on Justia Law

by
The Fifth Circuit certified the following question of law to the Supreme Court of Texas: Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution? The court also held that a secondary lender is not entitled to contractual subrogation without a valid contract. In this case, without a signature, Freddie Mac has no ability to enforce the contract itself or its subrogation provision. Therefore, the court affirmed the district court's denial of Freddie Mac's contractual subrogation claim. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

by
The defendants, exploration and production companies, contracted with landowners (plaintiffs) to drill for oil and gas on leased properties in Ohio’s Utica Shale Formation between 2010-2012. The agreements provide for royalty payments to the plaintiffs based on the gross proceeds received by the defendants from the sale of each well’s oil and gas production. The defendants sell the oil and gas extracted from the leased properties to “midstream” companies affiliated with the defendants. To calculate the price that an unaffiliated entity would have presumptively paid for the oil and gas, the defendants use the “netback method.” The plaintiffs claim the defendants underpaid their royalties because the netback method does not accurately approximate an arm’s-length transaction price, and improperly deducts post-production costs from the price. The district court granted class certification under FRCP 23(b)(3). The Sixth Circuit affirmed. While the plaintiffs have not met their burden of showing that common issues predominate with respect to a theory that the defendants sold oil and gas to midstream affiliates at below-market prices, the plaintiffs no longer pursued that theory at the class-certification stage. The plaintiffs satisfy the requirements of Rule 23(b)(3) with their liability theory based on the defendants’ deductions of post-production costs. View "Zehentbauer Family Land, LP v. Chesapeake Exploration, L.L.C." on Justia Law

by
After English filed suit against RK&K and CDM Smith for breach of contract and indemnification, the district court granted summary judgment to defendants. The Fourth Circuit vacated the district court's judgment, holding that the district court construed ambiguous contractual language and resolved factual disputes, which violated the established principles of summary judgment. Accordingly, the court remanded for further proceedings. On remand, the court noted that the factfinder will need to interpret the relevant aspects of the contract and to determine the effect of any breach by English on RK&K's liability. Furthermore, the factfinder will need to determine what CDM Smith’s contractual obligations were under the circumstances, whether CDM Smith satisfied those obligations, and if CDM Smith failed to meet its obligations, whether and to what extent English is entitled to damages. View "W. C. English, Inc. v. Rummel, Klepper & Kahl, LLP" on Justia Law

by
The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment granting Plaintiff's motion to certify a class action, holding that when a class-certification case originates with a single named plaintiff and that plaintiff is not subject to an arbitration agreement that was entered into by unnamed putative class members, the defendant need not raise a specific argument referring or relating to arbitration in the defendant's answer. Plaintiff filed a class-action complaint against Defendant, his former employer. When Plaintiff moved to certify the case as a class action Defendant opposed the motion, asserting the defense of arbitration. The trial court granted the motion, concluding that Defendant waived any right of arbitration. The appellate court affirmed, determining that Defendant's failure to assert the arbitration defense in his answer or to seek to enforce the right to arbitration prior to its opposition to the certification was inconsistent with its right to assert the defense. The Supreme Court reversed, holding (1) because arbitration was not available as a defense at the time Defendant submitted its answer, Defendant could not waive a right to assert arbitration at that time; and (2) Defendant had no duty to raise an argument that Plaintiff failed to satisfy Civ.R. 23(A)'s typicality and adequacy requirements. View "Gembarski v. PartsSource, Inc." on Justia Law

by
The Supreme Court affirmed the order of the Public Service Commission denying PacifiCorp's application for approval of an agreement between PacifiCorp and Monticello Wind Farm, LLC (MWF) for the purchase of wind energy, holding that the Commission was not obligated to approve the agreement under the circumstances of this case. Under Utah and federal law, PacifiCorp and MWF could set the terms for their agreement in one of two ways by either fixing pricing based on PacifiCorp's avoided costs, which would make the contract one negotiated within the Commission's framework, or negotiating their own pricing terms and contractually limiting the scope of the Commission's review. The Commission reviewed the pricing to ensure consistency with PacifiCorp's avoided costs, but the pricing was based on a methodology the Commission had discontinued. The Commission concluded the pricing could not be deemed consistent with PacifiCorp's avoided costs and denied the application. On appeal, MWF asserted that the parties opted out of the Commission's framework, and therefore, the Commission was obligated to approve the agreement. The Supreme Court disagreed, holding that this was an agreement the Commission could reject if it obligated PacifiCorp to purchase energy at a price higher than its avoided costs. View "Monticello Wind Farm, LLC v. Public Service Commission of Utah" on Justia Law