Grinnell Mutual Reinsurance Company appealed a district court judgment ordering it to pay Larry Pavlicek $214,045.55 under a commercial general liability insurance (CGL) policy Grinnell had with JRC Construction. Grinnell argued the district court misinterpreted the insurance policy, and that it was not required to indemnify JRC Construction because its work product was defective. In 2013, Pavlicek hired a contractor to construct a steel building on his property. JRC Construction installed the concrete floor and floor drain for the project. Another subcontractor installed the in-floor heating system for the concrete floor. After JRC completed the floor drain, it failed to properly install the concrete floor, and its attempts to repair the concrete damaged the drain. Pavlicek sued JRC for breach of contract relating to the defective work. In February 2020, Pavlicek filed a supplemental complaint against Grinnell, alleging it was required to satisfy the judgment as JRC’s insurer. Grinnell claimed it had no obligation to indemnify JRC under the CGL policy. The district court concluded JRC’s defective work on the concrete floor was not covered under the CGL policy, but damage to the floor drain was covered. Because removal and replacement of the floor and in-floor heat were necessary to repair the drain the court concluded the CGL policy covered all of those costs. The North Dakota Supreme Court found that although the CGL policy provided coverage to repair the floor drain, it did not cover the cost of replacing the concrete floor because that damage was the result of JRC’s defective work. The district court erred in finding the CGL policy covered the entire concrete floor replacement because replacement of the floor was the only way to repair the floor drain. Further, the Supreme Court found the district court erred in concluding the CGL policy provided coverage for replacement or repair of the in-floor heating system beyond that which may be necessary to repair the drain. View "Pavlicek v. American Steel Systems, Inc., et al." on Justia Law

In this case concerning two restrictive clauses within a non-compete agreement the Supreme Court affirmed in part and reversed in part the entry of summary judgment in favor of Lorna Gagnon, a former employee of Prudential Locations, LLC (Locations), holding that summary judgment was improper as to one agent as to a non-solicitation clause.The non-compete agreement in this case restricted Gagnon from establishing her own brokerage firm in the state within one year after terminating her employment with Locations and from soliciting persons "employed by" or "affiliated with" Locations. The two restrictive clauses at issue were a non-compete clause and a non-solicitation clause. The Supreme Court vacated the judgments of the lower courts, holding (1) summary judgment was properly granted in favor of Gagnon as to the non-compete clause because the clause was not ancillary to a legitimate purpose; and (2) a genuine issue of material fact existed as to one agent with respect to the non-solicitation clause. View "Prudential Locations, LLC v. Gagnon" on Justia Law

After incurring a million-plus-dollar loss for sending gold coins to a thief who forged check payments and intercepted the shipment of those coins, Gage filed an insurance claim. The underwriters denied the claim citing a coverage exclusion for losses incurred “consequent upon” delivering insured property to any third party against payment by a fraudulent check.The Fifth Circuit certified questions to the Texas Supreme Court: Whether Gage's losses were sustained consequent upon delivering insured property to UPS against a fraudulent check, causing the policy exclusion to apply; if yes. whether UPS's alleged errors are considered an independent cause of the losses under Texas law. The Texas Supreme Court concluded the ordinary meaning of “consequent upon” is but-for causation and answered “yes” to the first question. On the second question, the Texas Supreme Court answered “no” by concluding UPS’s alleged negligence was a concurrent cause of loss, dependent upon Gage’s handing over of the gold coins against fraudulent checks. In light of those answers, the Fifth Circuit affirmed the district court. Gage’s losses were excluded from coverage. Gage’s extra-contractual claims were properly dismissed as they were predicated on coverage under the policy. View "Dillon Gage, Inc. v. Certain Underwriters at Lloyds" on Justia Law

The Supreme Court affirmed the judgment of the superior court denying Defendants' motion for summary judgment and granting summary judgment in favor of Plaintiff, Webster Bank, National Association, holding that there was no error in the proceedings below.Plaintiff brought this action for breach of a loan agreement. In the superior court Defendants claimed that the Connecticut statute of limitations should apply because the parties agreed that Connecticut law would govern the loan agreement. The court entered judgment in favor of Plaintiff. On appeal, Defendants argued that the trial justice erred in applying Rhode Island's ten-year statute of limitations to Plaintiff's claim instead of Connecticut's six-year statute of limitations. The Supreme Court affirmed, holding that Rhode Island law controlled in this case. View "Webster Bank, National Ass'n v. Rosenbaum" on Justia Law

Soto, a former Disney employee, alleged that Disney improperly denied her severance benefits upon her termination for physical illness that rendered her unable to work. Soto, a longtime employee had experienced a severe stroke and other medical problems, which left her unable to work. Disney formally terminated Soto’s employment, paid Soto sick pay, short-term illness benefits, and long-term disability benefits but did not pay her severance benefits. She filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132(a)(1)(B); (a)(3), alleging that the Plan Administrator improperly determined that she did not experience a qualifying “Layoff” as required for severance benefits.The Second Circuit affirmed the dismissal of her case. Her complaint does not plausibly allege that the interpretation of “Layoff” and resulting denial of severance benefits to Soto were arbitrary and capricious. The Plan Administrator had reasoned bases, relating to taxation, for its interpretation of “Layoff” and consequent denial of severance benefits. The court noted an IRS regulation that defines an “involuntary” “termination of employment” as one arising from “the independent exercise of the unilateral authority of the [employer] to terminate to [employee’s] services, . . . where the [employee] was willing and able to continue performing services.” View "Soto v. Disney Severance Pay Plan" on Justia Law

CP and Cimarex entered into the Master Service Agreement (MSA). Cimarex hired CP to work at Cimarex’s Oklahoma oil well. CP assigned Trent, an employee of one of its subcontractors, to work at the well. A flash fire occurred at the well. Trent was severely burned Trent sued Cimarex and CP. Cimarex and its insurers settled with Trent for $4.5 million. The Texas Oilfield Anti-Indemnity Act (TOAIA) voids indemnity agreements that pertain to wells for oil, gas, or water or to mineral mines unless the indemnity agreement is supported by liability insurance. The MSA's mutual indemnity provision required Cimarex and CP to indemnify each other; CP was obligated to obtain a minimum of $1 million in commercial general liability insurance and $2 million in excess liability insurance, Cimarex was required to obtain $1 million in general liability insurance and $25 million in excess liability insurance. CP obtained more coverage than the minimum required by the MSA, but its policy limited indemnity coverage. Cimarex sought indemnity from CP, which paid Cimarex $3 million, but refused to indemnify Cimarex for the remaining $1.5 million.The Fifth Circuit affirmed summary judgment for CP. TOAIA contemplates that mutual indemnity obligations will be enforceable only up to the limits of insurance each party has agreed to provide in equal amounts to the other party as indemnitee. CP did not breach the MSA because CP was only required to indemnify Cimarex up to $3 million. View "Cimarex Energy Co. v. CP Well Testing L.L.C." on Justia Law

Secure intending to open an Illinois coal gasification plant, contracted with Siemens. Secure would buy gasification equipment on a payment plan; Siemens would provide updates and repairs to the equipment. The price of natural gas fell in 2009. Secure had to change its business plan and could not keep up with its payments to Siemens. In 2010, other clients discovered problems with Siemens’s gasification equipment. Siemens began implementing substantial modifications to its gasifiers. Because Secure's plant was not operational, Siemens left Secure out of the loop. In 2015, Siemens decided to exit the gasification market but promised to continue supporting its existing projects, including Secure’s, which had never been opened or used.In 2016, Secure sued Siemens, alleging fraud- and contract-based claims. Siemens, which was still owed 13 million dollars under the contract, filed a breach of contract counterclaim. Years into the litigation, the court denied Secure leave to amend its complaint, then excluded Secure’s expert witness for relying on an unreliable methodology, and granted Siemens summary judgment on Secure’s claims. Before trial on Siemens’s counterclaim, the court excluded Secure's evidence in support of its breach-of-contract affirmative defense. The jury returned a full verdict in Siemens’s favor. The Eleventh Circuit affirmed. The district court did not abuse its discretion in excluding Secure’s expert witness and its trial evidence and did not err in granting Siemens summary judgment. View "MidAmerica C2L Inc. v. Siemens Energy, Inc." on Justia Law

The Housing Authority of New Orleans (HANO) agreed to pay Parkcrest $11 million to build affordable housing. Liberty was Parkcrest’s surety. HANO terminated Parkcrest before the project was done. Parkcrest sued, alleging breach of contract. Liberty and HANO executed a “Takeover Agreement,” incorporating the original contract; Liberty stepped into Parkcrest’s shoes to finish the project. Liberty hired Parkcrest as its completion contractor. HANO claimed that Liberty had forfeited any right to continue working on the project and requested that it relinquish control of the site. Liberty claimed the termination was wrongful. Rather than following the contract’s dispute resolution procedures, Liberty filed a complaint-in-intervention in the HANO-Parkcrest litigation.The district court concluded that HANO had breached the Takeover Agreement and the underlying HANO Contract by terminating Liberty for convenience after Liberty had substantially completed the project, awarded Liberty and Parkcrest damages, and held HANO liable to Liberty for attorney’s fees, but left those fees unquantified. The Fifth Circut affirmed but concluded it lacked jurisdiction to consider the fee award because a fee award is not a final judgment under 28 U.S.C. 1291 until reduced to a sum certain. The district court then awarded Liberty $526,192.25 in fees. The Fifth Circuit reversed. Liberty’s claim for fees arises from the contract, which authorizes fee-shifting “upon the receipt by [HANO] of a properly presented claim.” Liberty breached the contract’s dispute-resolution procedures, this breach was unexcused, so Liberty is entitled to nothing. View "Liberty Mutual Insurance Co. v. Housing Authority of New Orleans" on Justia Law

Employees of a Navy services contractor, SA-TECH, sued the contractor in California state court for violations of the state’s labor laws. Before and during that suit, SA-TECH sought guidance from the Navy as to whether California’s labor laws applied to it and its subcontractors, given the federal nature of its service contract. Those requests went unanswered. SA-TECH’s claim with its contracting officer under the Contract Disputes Act was denied. SA-TECH then sought declaratory relief on the questions: whether the modified understanding of California labor laws would control SA-TECH’s operations on Navy and Navy-chartered ships; whether SA-TECH would be permitted or required by the Navy, under its contracts, to pay any sleep-time over-time; and whether costs incurred by SA-TECH in settling the state-court litigation would be allowable costs under its current contract.The district court dismissed the complaint, citing lack of subject matter jurisdiction pursuant to the Contract Disputes Act’s exhaustion requirements, 41 U.S.C. 7103(a)(1)–(3). The Fourth Circuit affirmed. SA-TECH did not specifically assert any legal or contractual grounds entitling it to the Navy’s opinion on its agency status. Its other issues are monetary claims for which SA-TECH did not present a requested sum certain, as required to exhaust its remedies. View "Systems Application & Technologies, Inc. v. United States" on Justia Law

Gardineer was involved in an automobile accident. She sued the other driver, Lynette Hill, and the vehicle owner, Dennis Hill (Lynette’s father-in-law). Dennis had both a primary insurance policy and an umbrella policy with ANPAC. After Dennis’s death, the parties reached a settlement wherein ANPAC paid Gardineer the policy limit of Dennis’s automobile insurance policy. Gardineer reserved the right to assert that ANPAC had a duty to indemnify Hill under Dennis’s umbrellas policy for Hill’s liability. ANPAC sought a declaration that it had no duty to indemnify Hill under the umbrella policy.The Ninth Circuit affirmed summary judgment in favor of ANPAC. The umbrella policy, by its plain and unambiguous terms, did not provide coverage for Lynettel’s liability arising from her use of Dennis’s vehicle. The term “insured” meant Dennis, his wife, and any “relative” – defined as a related person living in the household. Lynette did not reside in Dennis’s household; she was not a “relative” and not an “insured” under the policy. View "American National Property & Casualty Co. v. Gardineer" on Justia Law