John Hancock Life Insurance Co. v. Abbott Laboratories

Disappointed by the limited fruits of its multimillion-dollar investment with Abbott Laboratories (Abbott), John Hancock Life Insurance Company (Hancock) sued, seeking to recover damages under its contract with Abbott or, alternatively, to rescind the contract. At issue in this appeal was a contract provision that the parties viewed disparately either as a liquidated damages provision - and thus enforceable - or a penalty - and thus unenforceable. The district court concluded that the provision at issue was unenforceable. The First Circuit reversed this holding and affirmed the district court’s judgment in other respects, holding (1) Abbott failed to carry its burden of proving that the key provision was a penalty rather than a valid and enforceable liquidated damages provision; and (2) the district court did not err in striking Hancock’s prayer for rescission where Hancock recovered damages under the contract for Abbott’s breach of the contract. View "John Hancock Life Insurance Co. v. Abbott Laboratories" on Justia Law