Justia Contracts Opinion Summaries

Keiland Construction, L.L.C. entered into a construction subcontract with Weeks Marine, Inc. for a project in Louisiana. Weeks terminated the contract for convenience, leading to a dispute over compensation. Keiland submitted pay applications and demobilization costs, which Weeks partially paid. The disagreement centered on whether the contract required lump-sum payments for work completed before termination or if it converted to a cost-plus basis upon termination.The United States District Court for the Western District of Louisiana held a bench trial and found the contract ambiguous. It construed the ambiguity against Keiland, the drafter, and ruled in favor of Weeks. The court awarded Keiland damages based on Weeks’s interpretation of the contract but denied Keiland’s claims for direct employee and demobilization costs. The court also awarded Weeks attorneys’ fees and costs, though less than requested, and denied Weeks’s motion for post-offer-of-judgment fees and costs.The United States Court of Appeals for the Fifth Circuit reviewed the case. It affirmed the district court’s findings, agreeing that the contract was ambiguous and that the ambiguity should be construed against Keiland. The appellate court upheld the district court’s rulings on damages, attorneys’ fees, and costs, including the denial of post-offer-of-judgment fees and costs. The court also affirmed the award of prejudgment interest to Keiland, finding no abuse of discretion.In summary, the Fifth Circuit affirmed the district court’s judgment in all respects, including the interpretation of the contract, the award of damages, attorneys’ fees, costs, and prejudgment interest. View "Keiland Construction v. Weeks Marine" on Justia Law

The case involves a dispute between the law firm Abraham Watkins Nichols Agosto Aziz & Stogner and its former associate, Edward Festeryga. Abraham Watkins terminated Festeryga’s employment after discovering that he attempted to take clients and firm files to a new firm. Abraham Watkins sued Festeryga in Texas state court for conversion, breach of fiduciary duty, and tortious interference with contract. Festeryga moved to dismiss the suit under Texas’s anti-SLAPP statute, the Texas Citizens Participation Act (TCPA), which stayed the expedited discovery sought by Abraham Watkins. Despite agreeing to produce certain documents, Festeryga filed a notice of removal to federal court, claiming diversity jurisdiction as a Canadian citizen.The United States District Court for the Southern District of Texas remanded the case back to state court. The district court did not address whether Festeryga had shown diversity of citizenship but concluded that Festeryga waived his right to remove by participating in state court proceedings, specifically by filing a TCPA motion to dismiss. The district court found that this action demonstrated an intent to invoke the jurisdiction of the state court.The United States Court of Appeals for the Fifth Circuit reviewed the case to determine if it had appellate jurisdiction over the remand order. The court concluded that it did not have jurisdiction, citing its precedent in In re Weaver, which held that waiver-based remand orders are jurisdictional under 28 U.S.C. § 1447(c) and thus unappealable under § 1447(d). The court noted that although it disagreed with the reasoning in Weaver, it was bound by the rule of orderliness to follow the precedent. Consequently, the Fifth Circuit dismissed the appeal for lack of appellate jurisdiction. View "Abraham Watkins Nichols Agosto Aziz & Stogner v. Festeryga" on Justia Law

Southbridge RE, LLC (Southbridge) executed promissory notes and secured mortgages for two properties in Massachusetts with LendingHome, which later assigned the mortgages to Christiana Trust. However, LendingHome had previously issued blank assignments of the same mortgages to Toorak Capital Partners as security for a private funding agreement. Toorak filled in its name and recorded the assignments after Southbridge defaulted on the mortgages. Christiana Trust conducted foreclosure sales on both properties, which Southbridge contested, arguing that the blank assignments to Toorak broke the chain of title, rendering the foreclosures invalid.The United States District Court for the District of Massachusetts found that the blank assignments to Toorak were void under Massachusetts law and granted summary judgment in favor of Christiana Trust, declaring it had the authority to conduct the foreclosure sales. The court denied Southbridge's motion for summary judgment and defendants' cross-claims for slander of title, unjust enrichment, and promissory estoppel. Southbridge appealed the decision.The United States Court of Appeals for the First Circuit affirmed the district court's judgment. The appellate court held that under Massachusetts law, assignments in blank are void and convey no interest. The court found that Toorak's filling in its name on the blank assignments did not validate them, as Toorak lacked authorization from LendingHome. The court also determined that post-foreclosure affidavits confirming the invalidity of the Toorak assignments were proper and did not contravene state law. Additionally, the court ruled that the foreclosure sale notices did not need to reference the void Toorak assignments, as they were not part of the chain of title. Thus, the foreclosure sales conducted by Christiana Trust were valid. View "Southbridge RE, LLC v. Kiavi Funding, Inc." on Justia Law

The case involves a qui tam action under the False Claims Act (FCA) brought by Relators against Great American Insurance Company (GAIC) and Native American Services Corporation (NASCO). The Relators allege that GAIC and NASCO fraudulently took control of DWG & Associates, Inc. (DWG), a company that had graduated from the Small Business Administration's (SBA) 8(a) program but was still performing on 8(a) contracts. The 8(a) program is designed to help small, disadvantaged businesses compete for federal contracts. DWG, initially owned and controlled by a disadvantaged individual, Gose, lost its eligibility when GAIC and NASCO allegedly took over its ownership and control without notifying the SBA or seeking a waiver, as required by the program's regulations.The United States District Court for the Middle District of Florida dismissed the Relators' claims with prejudice. The court found that DWG, having graduated from the 8(a) program, was no longer a "participant" and thus not subject to the program's ownership and control requirements. Consequently, the court ruled that Relators failed to allege any false claims. Additionally, the court held that fraudulent inducement related to bidding on government contracts was not actionable under the FCA and that Relators failed to meet the particularity requirements of Rule 9(b) for pleading fraud.The United States Court of Appeals for the Eleventh Circuit reversed the District Court's decision. The appellate court held that a business that has graduated from the 8(a) program but is still performing on 8(a) contracts remains a "participant" and is subject to the program's ownership and control requirements. The court further held that submitting bids and claims for payment under these circumstances without notifying the SBA or obtaining a waiver could constitute an actionable claim under the FCA. The court also found that Relators' complaint met the particularity requirements of Rule 9(b) by providing sufficient details about the alleged fraudulent conduct, including the specific contracts, task orders, and the date DWG became ineligible to bid. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Berry v. Native American Services Corporation" on Justia Law

The case involves a dispute between two parties who entered into a partnership agreement that specified the financial conditions under which the appellant would receive a distribution upon the sale of the partnership’s principal asset. The agreement set a net-sale-price threshold above which the appellant would receive a distribution, and it directed the general partner to calculate that net sale price by deducting certain categories of costs from the gross sales price. The general partner determined that the deductions reduced the net sale price below the minimum threshold for a distribution. The appellant challenged several of these deductions, particularly the costs incurred to defease the interest payments on the mortgage.The Court of Chancery of the State of Delaware reviewed the case and held that the deduction for the costs to defease the interest payments on the mortgage was proper under the partnership agreement. The court concluded that this deduction was outcome determinative and entered judgment in favor of the partnership. The court also noted that the general partner acted in good faith in calculating the net sale price, which eliminated any breach of contract claim.The Supreme Court of the State of Delaware reviewed the case and affirmed the Court of Chancery’s judgment. The Supreme Court held that the plain language of the partnership agreement and the formula used permitted the challenged deduction for defeasance costs. The court did not reach the effect or correctness of the Court of Chancery’s alternative holding regarding the general partner’s good faith. The Supreme Court concluded that the defeasance costs were properly deducted, which reduced the net resale price below the threshold required for the appellant to receive a distribution. View "Exit Strategy, LLC v. Festival Retail Fund BH, L.P." on Justia Law

FDJ, LLC, Richard Flugge, and LeAnn Julius (Plaintiffs) sued Ross Determan, alleging he breached a covenant not to compete after selling his accounting practice to them. Determan counterclaimed, asserting the LLC failed to make required payments under their purchase agreement. The circuit court found the LLC breached the agreement by not making payments, which voided Determan's non-compete obligation. The court awarded Determan $106,972.36 and held Plaintiffs jointly and severally liable.The circuit court determined that the LLC failed to make payments to Determan after May 2018, which constituted a material breach of the purchase agreement. This breach relieved Determan of his obligations under the non-compete clause. The court found that Determan resumed working for former clients only after the LLC stopped payments, and Plaintiffs did not provide sufficient evidence to justify withholding payments for alleged expenses.The Supreme Court of South Dakota reviewed the case and affirmed the judgment against the LLC but reversed the imposition of joint and several liability against Flugge and Julius individually. The court held that the purchase agreement explicitly stated the LLC was responsible for payments to Determan, and there was no basis to hold Flugge and Julius personally liable. The court also noted that Determan did not allege facts to justify disregarding the corporate entity, and the circuit court did not provide findings to support such a decision. Thus, the judgment was affirmed in part and reversed in part. View "FDJ, LLC v. Determan" on Justia Law

Dakota Bail Bonds (DBB) posted bonds for two criminal defendants who violated their conditions of release but did not fail to appear in court. The circuit court forfeited the bonds, interpreting SDCL 23A-43-21 as requiring forfeiture for any material breach of release conditions. DBB requested the forfeiture be set aside under SDCL 23A-43-22, arguing their surety only guaranteed court appearances, not compliance with all conditions of release. The circuit court denied this request and entered orders forfeiting the bonds.The circuit court, part of the Second Judicial Circuit in Lincoln County, South Dakota, determined that the statutory language did not distinguish between types of bonds and required forfeiture for any breach of release conditions. The court also declined to set aside the forfeiture, reasoning that justice did not warrant such action merely because the defendants complied with court appearance requirements but violated other conditions. Consequently, the court entered judgments of default against DBB.The Supreme Court of the State of South Dakota reviewed the case. It held that the circuit court erred in its interpretation of the surety bond's language. The Supreme Court found that DBB's surety bond explicitly guaranteed only the defendants' court appearances, not compliance with all conditions of release. Since the defendants did not fail to appear in court, there was no violation of the condition guaranteed by DBB. Therefore, the Supreme Court concluded that the circuit court should have set aside the forfeiture under SDCL 23A-43-22 and vacated the judgment of default against DBB. The Supreme Court reversed the circuit court's decision and remanded the case with instructions to vacate the judgment of default. View "State v. Dakota Bail Bonds" on Justia Law

Covil Corporation, through its receiver, sued Pennsylvania National Mutual Insurance Company for breaching their insurance contract by not contributing to a settlement in an asbestos case. David Rollins had sued Covil and others, alleging negligent asbestos exposure caused his mesothelioma. Penn National insured Covil during part of the exposure period. Covil settled the case and sought $50,000 from Penn National, which the insurer refused to pay.The circuit court granted summary judgment for Covil, requiring Penn National to indemnify Covil for the settlement. The court rejected Penn National's arguments about untimely notice, premature summary judgment, and policy exclusions. The court of appeals affirmed the decision.The South Carolina Supreme Court reviewed the case and affirmed the court of appeals' decision with modifications. The court held that the notice-prejudice rule did not apply because the underlying plaintiff, Rollins, had already been fully compensated. The court also found that Covil's untimely notice was not a material breach of the insurance contract, as Covil's interests were adequately protected by other insurers' counsel. Additionally, the court ruled that Penn National did not waive its right to timely notice by attending mediation.The court further held that the policy's "Products Hazard" and "Completed Operations Hazard" exclusions did not apply. The Products Hazard exclusion was inapplicable because Covil's liability was based on installation, not supplying asbestos. The Completed Operations Hazard exclusion did not apply because Rollins's exposure occurred before Covil's work was completed. Thus, the court affirmed the lower court's summary judgment in favor of Covil. View "Covil Corporation v. Pennsylvania National Mutual Casualty Insurance Company" on Justia Law

Dr. Joseph Papin, a medical resident at the University of Mississippi Medical Center (UMMC), was terminated following a series of complaints about his workplace behavior, culminating in a serious incident involving patient care. Dr. Papin alleged that his troubles began in December 2016, but UMMC presented evidence of issues from the start of his residency. Dr. Papin entered into a "Remediation Agreement" with Dr. T. Mark Earl, the residency program director, which was supposed to give him sixty days to improve. However, UMMC terminated his employment before the remediation period ended, leading Dr. Papin to sue for breach of contract.The United States District Court for the Southern District of Mississippi held an eight-day trial, where a jury found that UMMC breached the Remediation Agreement, awarding Dr. Papin over $6.5 million in damages, including punitive damages. However, the trial court set aside the jury's verdict, granting UMMC's motion for judgment as a matter of law (JMOL). The court ruled that Dr. Earl did not have the authority to enter into a binding contract on behalf of UMMC, as required by Mississippi law for public institutions.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the Remediation Agreement was not a valid contract because Dr. Earl lacked the actual authority to bind UMMC. Mississippi law requires strict adherence to prescribed contracting procedures for public institutions, and only specific officials, such as the Vice Chancellor for Health Affairs or the Associate Dean for Graduate Medical Education, had the authority to enter into employment contracts. The court also found that the ACGME guidelines cited by Dr. Papin did not override Mississippi's legal requirements for public contracts. Thus, the appellate court upheld the JMOL in favor of UMMC. View "Papin v. University of Mississippi Medical Center" on Justia Law

Farzam Salami received emergency services at Los Robles Regional Medical Center on three occasions in 2020. He signed a conditions of admission contract agreeing to pay for services rendered, as listed in the hospital's chargemaster. Los Robles billed him for these services, including a significant emergency services fee (EMS fee). Salami paid part of the discounted bill but disputed the EMS fee, claiming it covered general operating costs rather than services actually rendered. He argued that had he known about the EMS fee, he would have sought treatment elsewhere.Salami sued Los Robles in December 2021 for breach of contract and declaratory relief. The trial court sustained Los Robles's demurrer to the first amended complaint (FAC), finding that Salami did not allege he performed his duties under the contract or that Los Robles failed to perform its duties. The court also found that the breach of contract claim could not be cured by amendment. Salami was granted leave to amend to assert claims under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). In his third amended complaint (TAC), Salami alleged that Los Robles failed to disclose the EMS fee adequately.The Court of Appeal of the State of California, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that Los Robles had no duty to disclose the EMS fee beyond including it in the chargemaster. The court referenced recent cases, including Moran v. Prime Healthcare Management, Inc., which held that hospitals are not required to provide additional signage or warnings about EMS fees. The court concluded that Los Robles complied with its statutory and regulatory obligations, and Salami's claims under the UCL and CLRA failed as a result. The judgment in favor of Los Robles was affirmed. View "Salami v. Los Robles Regional Medical Center" on Justia Law