A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law

The College Network, Inc. (TCN) appealed an order denying its motion to compel arbitration of a consumer fraud and breach of contract action brought by Plaintiffs Bernadette Magno, Rosanna Garcia, and Sheree Rudio. TCN argued the arbitration provision in Plaintiffs' purchase agreements was valid and enforceable and contended the trial court erred when it ruled the provision unconscionable. Alternatively, TCN argued that if the forum selection clause was unconscionable, the court abused its discretion in voiding the arbitration provision altogether rather than severing the objectionable provisions and enforcing the remainder. After review of the provision at issue, the Court of Appeal concluded the trial court correctly determined the arbitration provision to be procedurally and substantively unconscionable and did not abuse its discretion in voiding it in its entirety. View "Magno v. The College Network, Inc." on Justia Law

Constellation Development, LLC, appealed dismissal of its claims against Western Trust Company and its trustee, Gary Hoffman (collectively "Western"), for breach of contract and equitable and promissory estoppel, and against Dabbert Custom Homes, LLC, for tortious interference with a business contract. In 2013, Constellation agreed in writing to purchase about 24 acres of land in Cass County from Western, with the remaining balance to be paid on October 14, 2013. A check was tendered with the agreement, but was returned for insufficient funds. When Constellation tendered a cashier's check to cover the earlier check, Western refused it. In it s suit against Wester, Constellation claimed there had been an oral extension of the purchase agreement. The Supreme Court found the district court did not err in finding there was no breach of any agreement Western had with Constellation, it affirmed dismissal of Constellation's claims. View "Constellation Development, LLC v. Western Trust Co." on Justia Law

Camden National Bank filed a complaint for foreclosure against Ilene Weintraub. Weintraub brought several counterclaims against the bank, including violations of the Maine Consumer Credit Code, breach of contract, and a claim for intentional infliction of emotional distress, alleging that she suffered injuries as a direct and proximate result of the abuse conduct of the Bank’s collections department and an accusation of criminal conduct. The Bank filed a special motion to dismiss requesting dismissal of several claims based on Maine’s anti-SLAPP statute, but failing to request dismissal of the breach of contract claim. The superior court concluded that the anti-SLAPP statute prohibits selective dismissal of claims and that Weintraub met her burden of demonstrating a prima facie case of actual injury and causation. The Supreme Judicial Court affirmed, holding that the trial court (1) erred in holding that the anti-SLAPP statute did not allow for selective dismissal of some, but not all, of Weintraub’s counterclaims, but the error was harmless; and (2) did not err in concluding that Weintraub met her burden of showing prima facie evidence of causation. View "Camden Nat’l Bank v. Weintraub" on Justia Law

Plaintiff, the insured of Dairyland, sustained bodily injury and property damage while operating his motorcycle. After paying plaintiff all proceeds to which he was entitled under the Dairyland policy, and after plaintiff had settled with the tortfeasor's insurer, Dairyland sought and obtained subrogation from the tortfeasor's insurer for the property damages that it previously paid to plaintiff. Plaintiff then demanded Dairyland pay him the funds it obtained on its subrogation claim. When Dairyland refused, plaintiff filed suit for breach of contract and bad faith. The court concluded that the made whole doctrine does not apply to preclude Dairyland from retaining the funds it received from its subrogation claim because the equities favor Dairyland: (1) Dairyland fully paid plaintiff all he bargained for under his Dairyland policy, which included the policy's limits for bodily injury and 100% of plaintiff's property damage; (2) plaintiff had priority in settling with the tortfeasor's insurer; and (3) if Dairyland had not proceeded on its subrogation claim, plaintiff would have had no access to additional funds from the tortfeasor's insurer. The court also concluded that Dairyland did not act in bad faith. Accordingly, the court reversed the court of appeals decision in all respects. View "Dufour v. Progressive Classic Ins. Co." on Justia Law

In August 2005, D.R. Horton, Inc. completed construction of the Smiths' home, and the Smiths closed on the property and received the deed. Thereafter, the Smiths experienced a myriad of problems with the home that resulted in severe water damage to the property. D.R. Horton attempted to repair the alleged construction defects on "numerous occasions" during the next five years, but was ultimately unsuccessful. In 2010, the Smiths filed a construction defect case against D.R. Horton and seven subcontractors. In response, D.R. Horton filed a motion to compel arbitration. The Smiths opposed the motion, arguing, inter alia, that the arbitration agreement was unconscionable and therefore unenforceable. The circuit court denied D.R. Horton's motion to compel arbitration, finding that the arbitration agreement was unconscionable. D.R. Horton appealed, but finding no error in the circuit court's decision, the South Carolina Supreme Court affirmed. View "Smith v. D.R. Horton, Inc" on Justia Law

Caudill, the owner of a real estate brokerage, sued Keller Williams for breach of a 2001 franchise contract. Caudill's position as Regional Director of Keller Williams was terminated in 2010; her franchise was terminated in 2011. The suit settled with an agreement including a prohibition against disclosure of its terms, except to tax professionals, insurance carriers, and government agencies; those recipients had to promise to keep them in confidence. Any violation entitled the victim to damages of $10,000. Months later, Keller Williams issued an FDD (Franchise Disclosure Document) to about 2000 existing or potential franchisees and other parties, describing Caudill’s lawsuit in detail. The FDD was not required by the Federal Trade Commission under 16 C.F.R. 436.2(a). Caudill sought $20 million (2000 x $10,000) in damages. The district judge rejected her claim, noting that under Texas law a liquidated damages clause is enforceable only if “the harm caused by the breach is incapable or difficult of estimation and … the [specified] amount of liquidated damages is a reasonable forecast of just compensation.” The Seventh Circuit affirmed. It is unreasonable to suppose, without evidence, that the dissemination of the FDD caused Caudill a $20 million loss. Although the burden of proving that a liquidated damages clause is actually a penalty clause is on the defendant, Keller Williams established that there was no basis for the requested damages. View "Caudill v. Keller Williams Realty, Inc." on Justia Law

After Ozark was sold to Mobilex, Mobilex filed suit against defendant to enforce the non-compete and confidentiality agreements defendants had signed with Ozark. The district court granted summary judgment to defendants on the basis that a personal services contract cannot be assigned to a subsequent employer under Missouri law without the employee’s contemporaneous consent. The court adopted the majority rule and held that covenants not to compete can be assigned to a successor employer without contemporaneous consent. In this case, the non-compete agreements precluded only working in the field of medical diagnostics or soliciting business from certain clients within a specified geographical area. A reasonable jury, looking at the facts in the record, could find that defendants did not agree to the non-compete and confidentiality agreements because of Ozark’s unique characteristics. Because the court found that the non-compete and confidentiality agreements at issue here were not personal services contracts and could be assigned without the consent of defendants, the court reversed and remanded for further proceedings. View "Symphony Diagnostic Serv. v. Greenbaum" on Justia Law

Under Ohio Rev. Code 1333.85, suppliers manufacture or import alcoholic beverages and must sell their products to state-licensed distributors, who sell to retailers; supplier-distributor franchise agreements are protected from termination without just cause, except when a successor manufacturer acquires another manufacturer, the successor may terminate the franchise by repurchasing the distributor’s inventory and compensating for the diminished value of the distributor’s business that is directly related to the sale of the product terminated. NAB owned Labatt through nested holding companies. NAB's owners sold their interests to CCR. Months later, Ohio distributors of the Labatt brands received letters terminating their franchises, citing the section 1333.85(D) exception. In the distributors' suit, the court granted CCR summary judgment on a Takings Clause claim and a claim regarding the scope of section 1333.85(D), then determined the diminution of the values of the distributors. The Sixth Circuit affirmed rejection of the constitutional claims. At common law, businesses may enter into contracts that allow for termination and contracting parties have a right to breach a contract that is no longer advantageous, in an “efficient breach.” That common-law norm is abrogated by section 1333.85, with an exception. The state created and is free to take away that protection from termination. The court remanded the calculation of damages with instructions to deduct the distributors' projected profits for the time until the date when the franchise agreements are finally terminated View "Tri County Wholesale Distrib., Inc. v. Labatt USA Operating Co." on Justia Law

After seeking a mortgage modification under the Home Affordable Modification Program Plaintiff filed a complaint against Wells Fargo Bank, N.A. and Homeward Residential Inc., claiming breach of contract, unfair debt collection under Mass. Gen. Laws ch. 93A, and derivative equitable relief. A federal district court dismissed Plaintiff’s action in its entirety. The First Circuit vacated and remanded, holding that Plaintiff’s complaint sufficiently alleged that Defendants failed to offer her a mortgage modification in a timely manner and that Plaintiff had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that Plaintiff’s breach of contract and Chapter 93A claims failed, and therefore, her derivative claim for equitable relief failed as well. View "Young v. Wells Fargo Bank, N.A." on Justia Law