The Louisiana Supreme Court granted review in this case to determine whether the Louisiana Commissioner of Insurance was bound by an arbitration clause in an agreement between a health insurance cooperative and a third-party contractor. The Louisiana Health Cooperative, Inc. (“LAHC”), a health insurance cooperative created in 2011 pursuant to the Patient Protection and Affordable Care Act, entered an agreement with Milliman, Inc. for actuarial and other services. By July 2015, the LAHC was out of business and allegedly insolvent. The Insurance Commissioner sought a permanent order of rehabilitation relative to LAHC. The district court entered an order confirming the Commissioner as rehabilitator and vesting him with authority to enforce contract performance by any party who had contracted with the LAHC. The Commissioner then sued multiple defendants in district court, asserting claims against Milliman for professional negligence, breach of contract, and negligent misrepresentation. According to that suit, the acts or omissions of Milliman caused or contributed to the LAHC’s insolvency. Milliman responded by filing a declinatory exception of lack of subject matter jurisdiction, arguing the Commissioner must arbitrate his claims pursuant to an arbitration clause in the agreement between the LAHC and Milliman. The Supreme Court concluded, however, the Commissioner was not bound by the arbitration agreement and accordingly could not be compelled to arbitrate its claims against Millman. The Court reversed the appellate court's judgment holding to the contrary, and remanded the case for further proceedings. View "Donelon v. Shilling" on Justia Law

In this case involving an order compelling Plaintiff to arbitrate her dispute with an investment firm the Supreme Court reversed the circuit court's order to the extent that it included language that invaded the province of the arbitrator but otherwise affirmed the order dismissing Plaintiff's suit and compelling her to arbitrate.Plaintiff's deceased husband created two accounts with an investment firm, and the documents he signed required the arbitration of any account disputes. After the investment company paid the proceeds of both accounts to two other individuals, Plaintiff brought this suit, asserting her right to the proceeds of the accounts. The circuit court concluded that Plaintiff was required to comply with the arbitration agreements even though she was a nonsignatory. The Supreme Court affirmed in part and reversed in part, holding (1) the circuit court properly determined that Plaintiff was required to arbitrate her claims to the proceeds of both accounts; but (2) the circuit court erred in including improper language in its order that exceeded the court's authority. View "Bayles v. Evans" on Justia Law

Teed promoted himself online as a real estate agent with “over 25 years of experience as a building contractor” with “an extensive background in historic restorations.” Moore believed that Teed was a general contractor. Moore toured homes that Teed had renovated and retained Teed as his agent. Moore bought a large San Francisco fixer-upper house for $4.8 million. The home was built in 1912 and was last updated in the 1950s. Moore borrowed significantly. Teed received a commission from the sale. Teed was not a licensed contractor; his team of contractors gutted large parts of the house and excavated the lot but the foundation was defective. After Moore became aware of the defects, he halted all work and engaged consultants, who concluded, despite Teed's strong resistance, that the foundation had to be torn out and replaced. Teed’s structural engineer agreed and privately apologized to Moore. Moore had paid about $265,000 of the $900,000 promised cost for Teed’s renovations. A jury awarded Moore his out-of-pocket expenses for replacing the foundation and benefit-of-the-bargain damages for the additional cost he incurred in obtaining the promised renovations. Conceding liability, Teed challenged the award. The court of appeal affirmed that benefit-of-the-bargain damages are available to fully compensate a plaintiff for all the detriment proximately caused by a fraudulent fiduciary’s actions and the award of statutory attorney fees and costs based on the jury’s special verdict finding that Teed violated the Contractors’ State License Law. View "Moore v. Teed" on Justia Law

The National Credit Union Administration Board ("NCUAB"), the self-appointed conservator of Citizens Community Credit Union ("Citizens"), repudiated a letter of credit Citizens issued to Granite Re, Inc. Granite filed a complaint for damages against the NCUAB, claiming wrongful repudiation and wrongful dishonor of a letter of credit. The NCUAB moved to dismiss with prejudice, arguing 12 U.S.C. 1787(c) authorized it to repudiate the letter of credit with no liability for damages, and section 1787(c) preempted conflicting North Dakota Law. The district court agreed and dismissed the complaint. The Eighth Circuit determined that were it to adopt the NCUAB's construction of section 1787(c), the NCUAB could "quietly appoint itself conservator and repudiate letters of credit with no liability to the injured beneficiary. Absent the ability to predict an impending conservatorship, a clean letter-of-credit beneficiary like Granite is subject to repudiation with no recourse." The Court determined NCUAB's construction was inconsistent with the language of the statue, which provided a limited remedy for damages determinable at the point of conservatorship, but did not negate recovery entirely. The Court also determined it was premature to declare section 1787(c) preempted North Dakota law. The Court reversed the trial court's judgment and remanded for further proceedings. View "Granite Re, Inc. v. Nat'l Credit Union Adm. Board" on Justia Law

In this case arising from an inflated appraisal of certain property and governed by New York law, the Supreme Court reversed in part the court of appeals' decision affirming the jtrial court's judgment awarding Claymore Holdings $211 million in equitable relief, holding that there was no valid basis in New York law for this large award of equitable monetary relief.The subject property was a real estate project. Claymore loaned the project $250 million and took the real estate as collateral. After the borrower defaulted and the collateral's value declined, Claymore sued Credit Suisse, which helped arrange the transaction, alleging that Credit Suisse fraudulently inflated the appraisal of the real estate, inducing Claymore to make the loan, and that the faulty appraisal amounted to a breach of contract. A jury found for Claymore on the fraudulent inducement claim and awarded $40 million. The court found Credit Suisse liable for breach of contract and other theories but concluded that Claymore's damages on all claims could not be calculated with reasonable certainty. The court then awarded Claymore $211 million in equitable relief. The Supreme Court remanded the case, holding that the jury's $40 million fraud verdict must stand but that the court's award of $211 million in equitable relief must not. View "Credit Suisse AG v. Claymore Holdings, LLC" on Justia Law

In 2003, jury found E*Trade liable for trade secret misappropriation and for breach of a mutual nondisclosure agreement with Ajaxo. The jury awarded damages only for the breach of contract after the court granted a nonsuit on the issue of damages for trade secret misappropriation. On remand, in 2008, a jury found no net damages for unjust enrichment and awarded nothing. The court denied Ajaxo’s request to seek a reasonable royalty under the California Uniform Trade Secret Act (Civ. Code 3426-3426.11). On second remand, the court held a bench trial, declined to award any royalty, and awarded E*Trade its costs as the prevailing party.The court of appeal affirmed. The trial court did not abuse its discretion by declining to award any reasonable royalty despite the available evidence from which a reasonable royalty theoretically might have been derived, considering its findings on the evidence, application of apportionment principles from patent law, exclusion of expert testimony and analysis of Ajaxo’s royalty model, and treatment of the “Georgia-Pacific factors” for determining a royalty rate in intellectual property disputes. The trial court did not err in its prevailing party determination and costs award despite the practical effect of Ajaxo having already obtained full satisfaction of what became a separate, final judgment in its favor following the 2006 remittitur from the first appeal, including costs. View "Ajaxo, Inc. v. E*Trade Financial Corp." on Justia Law

In this case where a judgment creditor sought to garnish the judgment debtor's bank account, which, at one time, contained funds both exempt and nonexempt from garnishment, the Supreme Court affirmed the judgment of the county court finding that the bank account consisted solely of exempt funds, holding that funds exempt from garnishment remain exempt, even when commingled with nonexempt funds, so long as the source of exempt funds is reasonably traceable.Plaintiff obtained a judgment against Defendant and sought to garnish Defendant's bank account. The court ordered that the non-exempt funds in the account be transferred to the court. Defendant requested a hearing, asserting that the funds were exempt from garnishment because the only funds in the account were Social Security payments. Plaintiff stated that at one point the account held non-exempt funds commingled with the Social Security funds but that the non-exempt funds had been spent. The county court ruled that the funds were exempt. The district court affirmed. The Supreme Court affirmed, holding that Defendant met his burden to prove that the remaining funds in his account constituted exempt Social Security funds. View "Schaefer Shapiro, LLP v. Ball" on Justia Law

Skyrise bid $950,000 to supply “stick building” rough frame carpentry for building housing units near the University of Wisconsin-Oshkosh. Upon receiving a letter of intent from Annex, the general contractor, to enter into a contract, Skyrise blocked the project on its calendar and declined other work. Skyrise delayed returning the actual proposed contract for two months. Amex rejected Skyrise’s subsequent proposals for a broader scope of work and a different payment plan and awarded the carpentry contract to another firm. Skyrise sued for breach of contract, promissory estoppel, negligent misrepresentation, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, and violation of the Wisconsin Deceptive Trade Practices Act.The Seventh Circuit affirmed summary judgment in favor of the defendants. Although the parties signed various proposals during their negotiations, no contract formed. The undisputed, objective evidence demonstrates that both parties intended for their relationship to be governed by a detailed contract that remained under review until Skyrise ultimately rejected that contract by making material alterations. Skyrise knew or should have known, that the negotiations could fall apart before the parties entered into a binding agreement. Annex never represented to Skyrise that it had the framing subcontract. View "Skyrise Construction Group LLC v. Annex Construction LLC" on Justia Law

North Edwards Water District (the District) selected Clark Bros., Inc. (Clark) as its general or direct contractor on a public works project to build an arsenic removal water treatment plant. Clark hired subcontractor Crosno Construction (Crosno) to build and coat two steel reservoir tanks. The subcontract contained a "pay-when-paid" provision that stated Clark would pay Crosno within a reasonable time of receiving payments from the District, but that this reasonable time "in no event shall be less than the time Contractor and Subcontractor require to pursue to conclusion their legal remedies against Owner or other responsible party to obtain payment . . . ." After Crosno completed most of its work, a dispute arose between the District and Clark halting the project. As Clark sued the District, Crosno sought to recover payments owed under the public works payment bond that Clark had obtained for the project. The issue this case presented for the Court of Appeal's review involved Crosno's claim against the bond surety, Travelers Casualty and Surety Company of America (Travelers). At issue was whether the pay-when-paid provision in Crosno's subcontract precluded Crosno from recovering under the payment bond while Clark's lawsuit against the District was pending. Relying on Wm. R. Clarke Corp. v. Safeco Ins. Co., 15 Cal.4th 882 (1997), the trial court found the pay-when-paid provision here unenforceable because it affected or impaired Crosno's payment bond rights in violation of Civil Code section 8122. With the facts largely undisputed, the court granted Crosno's motion for summary judgment and entered judgment in its favor for principal due plus prejudgment interest. Travelers argued the trial court misconstrued Wm. R. Clarke and erred in failing to enforce the pay-when-paid provision against the bond claim. After carefully considering the parties' arguments, the Court of Appeal agreed with the trial court's analysis and affirmed. View "Crosno Construction, Inc. v. Travelers Casualty etc." on Justia Law

In this insurance dispute over whether an insurer's payment of an appraisal award obtained under a unilateral appraisal clause bars an insured's claims under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code chapter 542 the Supreme Court reversed the judgment of the court of appeals concluding that Insured's claims were barred, holding that Insured's claims should be considered in light of this Court's recent decisions on these issues.After Insurer declined to pay for damage to Insured's properties Insured asked to invoke the policy's appraisal process. Insurer refused, asserting that it was the only party that could invoke appraisal under the unilateral appraisal clause. Insured sued Insurer alleging claims for breach of contract, bad faith, and violations of the TPPCA. Insurer then obtained an order compelling appraisal. After Insurer paid the appraisal award the trial court granted summary judgment for Insurer. The court of appeals affirmed. The Supreme Court reversed, holding that remand was required for the trial court to consider Insured's claims in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Biasatti v. GuideOne National Insurance Co." on Justia Law