Samuel Boytor, an engineer and businessman, and his wife Carol, defaulted on loans they had personally guaranteed. They entered into a settlement agreement with EFS Bank’s successor, restructuring their debt into three new promissory notes secured by mortgages on their properties. PNC Bank, which eventually held these notes, filed a complaint in 2018 against the Boytors for defaulting on two of the notes. PNC sought foreclosure on the Boytors’ residential property and a money judgment for the nonpayment of a separate note.The United States District Court for the Northern District of Illinois held a bench trial and found in favor of PNC on both counts. The court ordered foreclosure on the Boytors’ residential property and issued a deficiency judgment after the property was sold. The Boytors appealed the decision.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The appellate court held that PNC had established a prima facie case for foreclosure by presenting the mortgage and underlying note. The Boytors’ affirmative defenses, including lack of consideration and payment of the notes, were rejected. The court found that the $203,000 note was supported by consideration and that the Boytors had not paid the note. Additionally, the court determined that the $200,000 note was not paid, and the release of the mortgage did not extinguish the underlying debt. The court also rejected the Boytors’ argument of accord and satisfaction, finding no evidence of a new arrangement to pay less than the outstanding debt. View "PNC Bank, National Association v. Boytor" on Justia Law

In late 2003, Wye Oak Technology, Inc., a small American company, entered into a contract with the Iraqi Ministry of Defense to rebuild Iraq’s military. Wye Oak performed under the contract for nearly five months, but Iraq refused to pay and instead gave the money to another party. When Wye Oak’s owner traveled to Iraq to resolve the payment issue, he was killed by unidentified assailants. Wye Oak eventually ceased operations in Iraq and later sued Iraq in a U.S. federal district court for breach of contract.The United States District Court for the District of Columbia found Iraq liable after a bench trial and awarded Wye Oak over $120 million in damages. The court initially held that it had jurisdiction under the Foreign Sovereign Immunities Act (FSIA) based on the commercial exception’s second clause. However, the United States Court of Appeals for the District of Columbia Circuit vacated this judgment, ruling that the second clause did not apply and remanded the case to determine if the third clause of the commercial exception applied. On remand, the district court found that Iraq’s breach had direct effects in the United States, thus reentering its damages order.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and concluded that Iraq’s breach did not cause a direct effect in the United States as required by the FSIA’s commercial exception. The court noted that the contract and its breach were centered in Iraq, and any effects in the United States were too attenuated or involved intervening elements. Consequently, the court held that Iraq was immune from suit, vacated the district court’s judgment, and remanded the case with instructions to dismiss. View "Wye Oak Technology, Inc. v. Republic of Iraq" on Justia Law

Kalvin Earl Richardson purchased a house in St. Louis County, Missouri, through a Post Third Sale Offering, a process for selling tax-delinquent properties that have not been sold in three consecutive annual tax-collection auctions. Richardson then applied for homeowner insurance from Nationwide Mutual Insurance Company, stating on the application that the property was not purchased at a public auction. After a fire damaged the house, Nationwide refused to pay the claim, asserting that Richardson had misrepresented the purchase method. Nationwide sued, claiming the policy was void due to this misrepresentation.The United States District Court for the Eastern District of Missouri granted summary judgment in favor of Nationwide. The court ruled that the Post Third Sale Offering constituted a public auction and that Richardson's contrary statement on the insurance application was a material misrepresentation, rendering the insurance policy void ab initio.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The appellate court found that the term "public auction" was not clearly defined in Nationwide's insurance application and that the Post Third Sale Offering did not meet the ordinary understanding of a public auction, which typically involves competitive bidding. The court noted that Missouri statutes and case law emphasize competition among bidders as a key element of a public auction, which was absent in the Post Third Sale Offering. Consequently, the court held that Nationwide did not meet its burden to prove that Richardson's representation was false in fact. The Eighth Circuit reversed the district court's summary judgment and remanded the case for further proceedings. View "Nationwide Mutual Insurance Company v. Richardson" on Justia Law

A commercial tenant and landlord entered into a contract for the construction and lease of a warehouse, with the landlord also acting as the general contractor. The contract included a waiver of subrogation, where both parties waived subrogation against each other for certain losses, including those caused by their subcontractors. After the warehouse sustained weather damage, the tenant’s insurer sought to recoup insurance payments by suing the subcontractors.The Circuit Court for Baltimore City granted summary judgment in favor of the subcontractors, concluding that they were intended beneficiaries of the waiver of subrogation in the contract between the tenant and landlord. The court did not consider any extrinsic evidence regarding the parties' intent. The Appellate Court of Maryland reversed this decision, finding that the waiver of subrogation in the contract did not unambiguously benefit the subcontractors and that the subcontractors were not intended third-party beneficiaries.The Supreme Court of Maryland reviewed the case and held that the waiver of subrogation in the contract between the tenant and landlord did not extend to the subcontractors. The court found that the language of the waiver was unambiguous and did not show an intent to benefit the subcontractors. However, the court found that the waiver of subrogation included in the subcontracts was ambiguous regarding whether it applied to the tenant’s insurer’s claims against the subcontractors. Therefore, the court held that extrinsic evidence was needed to determine the parties' intent regarding the scope of the subrogation waiver in the subcontracts.The Supreme Court of Maryland affirmed the Appellate Court's decision, reversing the Circuit Court's summary judgment in favor of the subcontractors, and remanded the case for further proceedings to consider extrinsic evidence. View "Lithko Contracting v. XL Insurance America, Inc." on Justia Law

Avantax Wealth Management, Inc. (Avantax) entered into a contract with Marriott Hotel Services, Inc. (Marriott) to host its 2021 annual conference at the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee. The contract included a force majeure clause allowing termination if circumstances beyond control made it illegal or impossible to use the hotel facilities. Due to COVID-19, local health authorities imposed restrictions on gatherings, which Avantax argued made it impossible to hold the conference as planned. Avantax terminated the contract in March 2021, citing these restrictions.The United States District Court for the Middle District of Tennessee granted summary judgment in favor of Avantax, concluding that Avantax had validly terminated the contract under the force majeure clause. The court found that the COVID-19 restrictions in place at the time made it impossible to hold the conference as specified in the contract. Marriott's motion for summary judgment was denied.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the force majeure clause allowed termination based on the prospective illegality or impossibility of performance, as determined at the time of termination. The court found that Avantax had reasonable grounds to conclude that the conference could not proceed as planned due to the COVID-19 restrictions forecasted by local health authorities. The court also determined that Avantax provided timely notice of termination within the required ten-day period after learning of the basis for termination. Thus, the district court's grant of summary judgment to Avantax was affirmed. View "Avantax Wealth Management, Inc v. Marriott Hotel Services, Inc." on Justia Law

Dr. John Insall, an orthopedic surgeon, developed and patented knee replacement devices, which he licensed to Zimmer Biomet Holdings, Inc. In return, Zimmer agreed to pay royalties to Insall, and later to his estate after his death. When Insall’s last patent expired in 2018, Zimmer ceased royalty payments, claiming the obligation had ended. The dispute was submitted to arbitration, where the Estate prevailed. Zimmer then sought to vacate the arbitration award in district court, arguing that continuing royalty payments violated public policy. The district court confirmed the arbitration award.The United States District Court for the Northern District of Illinois reviewed the case. Zimmer argued that the arbitration award should be vacated based on public policy grounds, citing Supreme Court decisions in Brulotte v. Thys Co. and Kimble v. Marvel Entertainment, LLC, which prohibit collecting royalties on expired patents. The district court rejected Zimmer’s argument and confirmed the arbitration award, leading to Zimmer’s appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court emphasized the limited scope of judicial review over arbitration awards under the Federal Arbitration Act (FAA). The court found that the arbitration panel had correctly interpreted the 1998 amendments to the agreement, which untethered the royalty payments from the patents themselves, making them based on the marketing and branding of the NexGen Knee products. Consequently, the court held that the arbitration award did not violate public policy as outlined in Brulotte and Kimble. The Seventh Circuit affirmed the district court’s decision and confirmed the arbitration award in favor of Insall’s Estate. View "Zimmer Biomet Holdings, Inc. v. Insall" on Justia Law

John Craig First purchased an agricultural combine from Rolling Plains Implement Company, which was manufactured by AGCO Corporation. First was told the combine was part of AGCO’s Certified Pre-Owned Program, had roughly 400 hours of use, and had never been to the field. However, these representations were false; the combine was not certified and had over 1,200 hours of use. After experiencing numerous issues with the combine, First discovered in 2019 that it had an extensive repair history and over 900 hours of use. He then filed a lawsuit against Rolling Plains, AGCO Corporation, AGCO Service, AGCO Finance, and other related entities.Initially, First filed his lawsuit in the District Court of Oklahoma County, but it was removed to federal court in Oklahoma, which dismissed the case without prejudice and transferred it to the Northern District of Texas. First amended his complaint multiple times, asserting claims of fraud, breach of warranty, and failure of essential purpose. The district court dismissed the fraud claims against AGCO Corporation, AGCO Service, and AGCO Finance for lack of particularity and granted summary judgment in favor of AGCO Finance on the warranty claims. The case proceeded to trial on the remaining claims, where the jury found that First knew or should have known of the fraud by April 13, 2017, and awarded him $96,000 in damages. However, the district court entered judgment in favor of Rolling Plains based on the statute of limitations.The United States Court of Appeals for the Fifth Circuit reviewed the case. It vacated the district court’s judgment as a matter of law in favor of Rolling Plains, finding insufficient evidence to support the jury’s selected date for the statute of limitations. The case was remanded for retrial on when First’s cause of action accrued. The appellate court affirmed the dismissal of fraud claims against AGCO Corporation, AGCO Service, and AGCO Finance, and upheld the summary judgment in favor of AGCO Finance on the warranty claims. View "First v. Rolling Plains Implement Co." on Justia Law

Donald and Mary Fuger own forty acres of land in Wyoming. Larry Wagoner began using a five-acre section of this land for his oilfield business around 2008. The Fugers and Wagoner agreed to construct two buildings on the site, with Wagoner handling construction and the Fugers securing financing. They did not formalize this agreement in writing. A lease agreement was signed, giving Wagoner exclusive use of the buildings for five years. Wagoner claimed there was an oral agreement to transfer ownership of one building and the land to him in exchange for his construction work and loan payments, which the Fugers denied.The District Court of Sweetwater County initially found in favor of Wagoner, awarding him damages for breach of the oral contract. However, the Wyoming Supreme Court reversed this decision in Fuger v. Wagoner, 2020 WY 154, ruling the oral contract void because Mrs. Fuger did not join the agreement. The case was remanded to consider Wagoner’s equitable claims. On remand, the district court found the Fugers were unjustly enriched by Wagoner’s construction work and awarded him damages, offsetting some of these due to his use of the buildings. The court also awarded prejudgment interest on a portion of the damages.The Wyoming Supreme Court reviewed the case and affirmed the district court’s decisions. The court held that the district court did not err in offsetting Wagoner’s damages by the actual rent he received rather than the fair rental value of the second building. The court also upheld the award of prejudgment interest, finding that a portion of Wagoner’s damages were liquidated and thus subject to such interest. The court concluded that the district court acted within its discretion in its equitable determinations regarding offset and prejudgment interest. View "Fuger v. Wagoner" on Justia Law

Lippa and Manmohan Grewal sold a gas station to Theodore Hansen, who later sold it to Junction Market Fairview, L.C. (JMF). The sale contract required Hansen to make regular installment payments, with the final balance due after three years. Hansen missed many payments and failed to pay the full balance when due. The Grewals initiated foreclosure proceedings over six years after Hansen's first missed payment. The applicable statute of limitations for a breach of contract action is six years, raising the question of when the statute begins to run for installment contracts.The Sixth District Court in Sanpete County granted partial summary judgment in favor of JMF, concluding that the statute of limitations began when Hansen missed the first payment, making the Grewals' foreclosure action too late. The court awarded sole control of the gas station to JMF and ordered the Grewals to release the title. When the Grewals failed to comply, JMF seized the station and sold it to a third party. The district court also awarded JMF attorney fees under the Public Waters Access Act and the reciprocal attorney fees statute.The Utah Supreme Court reviewed the case and found that the sale of the gas station to a third-party bona fide purchaser rendered the Grewals' appeal on the title issue moot, as no court action could affect the litigants' rights to the property. However, the issue of attorney fees was not moot. The court held that the district court did not abuse its discretion in awarding attorney fees to JMF under the reciprocal attorney fees statute. The court affirmed the award of attorney fees and remanded to the district court to determine the amount of reasonable attorney fees JMF incurred in defending against the appeal. View "Grewal v. Junction Market Fairview" on Justia Law

Consolidated Grain and Barge Company (Consolidated) entered into multiple agreements with the Indiana Port Commission (Commission) to build new rail tracks at the Southwind Maritime Centre. In exchange, Consolidated received the right to perform rail switching services for other tenants, allowing it to recoup its investment through service fees. However, in 2021, the Commission hired a new rail service provider, Squaw Creek Southern Railroad, to maintain the tracks and perform rail services, prompting Consolidated to sue, alleging breach of contract.The United States District Court for the Southern District of Indiana dismissed the case, finding that the plain meaning of the agreements did not support Consolidated's claims. The court determined that the agreements did not grant Consolidated perpetual rights to perform its own switching services at no cost, especially after the Commission exercised its right to hire a new rail service provider.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the 2008 New Storage Tracks Agreement unambiguously revoked Consolidated's lease rights over the storage tracks, and any right to perform switching services was tied to the now-expired 2006 Track Use Agreement. The court also found that the Commission had followed the proper procedure in hiring a new rail service provider, as stipulated in the agreements. Consequently, Consolidated's rights to perform its own switching services were extinguished in 2021, and the contracts were not ambiguous as a matter of law. The court also rejected Consolidated's promissory estoppel claim, as it was based on the interpretation of the existing contracts. View "Consolidated Grain and Barge Co. v. Indiana Port Commission" on Justia Law