Lamar Ragland appeals the dismissal of his bad-faith claim against State Farm Mutual Automobile Insurance Company. Ragland sought punitive damages from State Farm based on State Farm's alleged bad-faith failure to pay and related failure to subject his claim for underinsured-motorist ("UIM") benefits to a cognitive review. State Farm moved to dismiss Ragland's claims, because Ragland had filed a separate civil action in 2014 that had not yet been resolved. After review, the Alabama Supreme Court dismissed Ragland's claim as being from a nonfinal judgment. View "Ragland v. State Farm Mutual Automobile Ins. Co." on Justia Law

Julie Gerstenecker borrowed money from her mother-in-law Janice Gerstenecker, for help in repaying her student loans. According to Janice, Janice agreed to repay Julie's student loans and Julie agreed to repay Janice by "pay[ing] [Janice] $700 a month until [Julie and Adam's child] turned one. And then the payments would rise to $1,000." Janice testified that the terms of the agreement between her and Julie were not reduced to writing. Julie testified that she had never borrowed money from Janice and that she does not recall Janice telling her that Janice would lend her money to repay her student loans. Adam Gerstenecker, Janice's son and Julie's husband, also testified at trial; his testimony supported his mother's version of the agreement. Adam and Julie would eventually divorce. Some repayments were made, but ultimately Janice sued Julie for the balance owed. The trial court found Julie breached the agreement she had with Janice. However, the Alabama Supreme Court found the trial court erred in reading an acceleration-of-payments clause into the agreement between Janice and Julie. The Supreme Court reversed the trial court's damages award and remanded this case for the trial court to determine the amount owed based on the accrued payments as of the date of the judgment and not the full amount of the outstanding loan balance. View "Gerstenecker v. Gerstenecker" on Justia Law

Fee-sharing provisions in otherwise valid retainer agreements between clients and two separate law firms are not unenforceable simply because the primary service performed by one firm is the referral of the clients to the other and the agreements fail to specifically notify clients that each firm has assumed joint financial responsibility for the representation.In 2007-2010, Plaintiff, a Gurnee law firm, was retained by 10 clients for representation under the Workers’ Compensation Act. Plaintiff contracted with attorney Esposito for assistance in representing the clients before the Workers’ Compensation Commission. A letter of understanding was drafted by defendant, confirming that the cases had been referred to defendant by plaintiff, outlining the parties’ respective responsibilities regarding representation of the clients, and specifying that the attorney fees obtained in each case would be split between Plaintiff and Esposito. The agreements did not specifically notify the clients that the lawyers in each firm had assumed joint financial responsibility for the representation. Plaintiff’s breach of contract suit against Esposito was dismissed. The Illinois Supreme Court affirmed the appellate court’s reversal, rejecting an argument that the agreements’ lack of an express statement that the attorneys assumed joint financial responsibility violated Rule 1.5(e) of the Illinois Rules of Professional Conduct and thereby rendered the agreements invalid. View "Ferris, Thompson & Zweig, Ltd. v. Esposito" on Justia Law

The circuit court determined that appropriations made by ordinances or resolutions of the cities of Little Rock and North Little Rock (Appellants) to the cities’ chambers of commerce and related economic development entities were in violation of article 12, section 5 of the Arkansas Constitution. The court concluded that Appellants had appropriated city funds to private corporations using “service contracts” that violated article 12, section 5 and were invalid due to lack of consideration and absence of benefits to the taxpayers. The court permanently enjoined Appellants from passing such ordinances or resolutions. The Supreme Court remanded the case to the circuit court with instructions to lift the injunction and dismiss Appellees’ complaint, holding that an amendment to article 12, section 5 rendered the basis for the circuit court’s injunction moot. View "Stodola v. Lynch" on Justia Law

In 2009, Jacquelyn Jacks bought a manufactured home from CMH Homes, Inc., on an installment plan. The purchase was financed through CMH Homes under a manufactured home retail installment contract. The contract contained an arbitration agreement, which provides that all disputes arising from, or relating to, the contract would be resolved by binding arbitration. By its terms, the agreement also covered all co-signors and guarantors, and any occupants of the manufactured Home (as intended beneficiaries of the arbitration agreement. Jacks moved into the home with her husband and their children. Five years later, the Jacks family sued CMH Homes, CMH Manufacturing, and Vanderbilt Mortgage and Finance (not a party to this appeal). They claimed: (1) CMH negligently installed and repaired the manufactured home’s water system, which caused toxic mold to grow; (2) the manufactured home was unreasonably dangerous at the time it left the control of CMH; (3) the manufactured home was not fit for habitation. Jacks also sought to rescind her purchase of the manufactured home, along with her agreement to pay Vanderbilt Mortgage and Finance the indebtedness incurred to purchase the home. The CMH defendants removed the case from state to federal court and moved to compel arbitration and stay the court proceedings. The district court granted the motion to compel as to the claims of Jacks, but denied the motion as to the remaining plaintiffs who were not parties to the installment contract. Defendants had argued that Jacks’ husband and their children were likewise bound by the arbitration agreement, even though they never signed the contract. The district court held that “the single sentence in the Arbitration Agreement generically referencing ‘any occupants of the Manufactured Home (as intended beneficiaries of this Arbitration Agreement)’ was not sufficient to make the nonsignatory plaintiffs third party beneficiaries of the Arbitration Agreement and subject to being compelled to arbitration. The district court also rejected Defendants’ contention that the nonsignatory plaintiffs were “bound to arbitrate their claims” under “the doctrine of equitable estoppel.” Defendants timely appealed the district court’s partial denial of their motion to stay and to compel arbitration. The Tenth Circuit found no reversible error in the district court’s judgment and affirmed it. View "Jacks v. CMH Homes" on Justia Law

In 2013, Herman Kauk, Sr. and Cletis Kauk ("Sellers") contracted to sell land to Herman Kauk, Jr. and Christy Kauk ("Buyers"). The property was known to the parties as “Walter’s Quarter.” The Buyers had their attorney draft a new version of the Sellers’ contract. This version was entitled "Extension of Purchase Agreement" and specified the new closing date. Notably, the new version removed language that granted an option to sell another piece of property, “Katie’s Quarter.” The parties signed the contract. Shortly thereafter, the Sellers sent the Buyers a letter “Notice of Cancellation of Option to Purchase Additional Land." The Sellers executed a Notice of Contract for Deed with the county recorder naming a third party as grantee of the option property. The Buyers filed a complaint on August 10, 2015 requesting a declaratory judgment that the option to purchase "Katie's Quarter" was still valid. Both Buyers and Sellers testified at trial. At trial, both parties acknowledged the first contained an incorrect legal description for the land in the option paragraph, "Katie's Quarter." The "Notice of Cancellation of Option" letter contained the same legal description appearing in that original contract. However, the Notice of Contract for Deed contained the correct legal description for "Katie's Quarter." The district court ultimately found the option was enforceable because it was supported by adequate consideration and nothing in the revised contract revoked the option from the original. The court indicated it was clear "Katie's Quarter" was incorrectly identified in the contract. The Sellers appealed when the district court reformed the contract and ruled in the Buyers’ favor. The Sellers also contended the district court "exceeded its authority when it ruled the issue of reformation was not res judicata" and claims the district court abused its discretion by ordering the same. The North Dakota Supreme Court, after review of the district court record and the Sellers' arguments, found “a structural problem with the district court's orders that this Court cannot ignore.” Concluding the district court abused its discretion by granting declaratory relief, the Supreme Court reversed the district court's orders and remanded for entry of an order of dismissal. View "Kauk v. Kauk" on Justia Law

Plaintiff filed suit against U.S. Specialty for breach of contract, based on its denial of coverage of fraudulent transfer claims in an underlying suit. The district court entered summary judgment for U.S. Specialty and entered judgment against plaintiff. The Eleventh Circuit affirmed, holding that, in light of Florida law, plaintiff's fraudulent conveyance claims "arose from" wrongful acts that predate November 10, 2008, and thus fell within the scope of the Prior Acts Exclusion of the U.S. Specialty policy. Furthermore, the policy's terms were unambiguous and its coverage was not illusory. Therefore, U.S. Specialty did not breach the insurance contract. View "Zucker v. U.S. Specialty Insurance" on Justia Law

A plaintiff may not bring claims for damages under 42 U.S.C. 1981 against state actors, including defendants sued in their official capacities as government officials.The First Circuit affirmed the district court’s dismissal of Plaintiff's section 1981 claims against employees of the City of Boston. Plaintiff, who represented the estate of her late father, challenged her father’s termination from his employment with the Department of Public Works. The district court dismissed the section 1981 claims, concluding that section 1981 provides no implied private right of action for damages against state actors. The First Circuit affirmed, holding that Jett v. Dallas Independent School District compelled the result reached by the district court. View "Buntin v. City of Boston" on Justia Law

Kentucky ruling that authority to bind a principal to arbitration must be explicitly stated in power of attorney violated the Federal Arbitration Act.When the patients moved into Kindred’s nursing home, their relatives used powers of attorney to complete necessary paperwork, including an agreement that any claims arising from the patient’s stay at Kindred would be resolved through binding arbitration. After the patients died, their estates filed suits alleging that Kindred’s substandard care had caused their deaths. The trial court denied Kindred’s motions to dismiss. The Kentucky Supreme Court affirmed, finding the arbitration agreements invalid because neither power of attorney specifically entitled the representative to enter into an arbitration agreement. Because the Kentucky Constitution declares the rights of access to the courts and trial by jury to be “sacred,” the court reasoned, an agent could deprive her principal of such rights only if expressly provided in the power of attorney. The U.S. Supreme Court reversed. The Kentucky Supreme Court’s clear-statement rule violates the Federal Arbitration Act, 9 U.S.C. 2, by singling out arbitration agreements for disfavored treatment. The Act preempts any state rule that discriminates on its face against arbitration or that covertly accomplishes the same objective by disfavoring contracts that have the defining features of arbitration agreements. The FAA is concerned with both the enforcement and initial validity of arbitration agreements. View "Kindred Nursing Centers, L. P. v. Clark" on Justia Law

In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law