Plaintiffs manufactured industrial ball bearings, and Defendant was Plaintiffs’ exclusive distributor for certain Nice Ball Bearings, Inc. products. Plaintiffs brought this action for Defendant’s failure to meet its contractual obligations under an agreement between the parties and for Defendant’s anticipatory breach of contract. The trial court ruled in favor of Defendant on Plaintiffs’ claims, finding that Plaintiffs had waived a contractual requirement that Defendant purchase a minimum dollar value of bearings from Plaintiffs each year. The Appellate Court reversed, concluding that, even if Plaintiffs had waived the minimum purchase requirement as to certain years of the contract, the trial court clearly erred in finding that the waiver continued into subsequent contract years. The Supreme Court reversed in part, holding that the record contained sufficient evidence to support the trial court’s finding that Plaintiffs waived the minimum purchase requirement on a continuing basis. Remanded. View "RBC Nice Bearings, Inc. v. SKF USA, Inc." on Justia Law

Defendant Cy Tapia, a teenager living with his aunt and grandmother, was driving a vehicle which crashed, inflicting severe and eventually fatal injuries on his passenger, Cory Driscoll. Before his death Driscoll and his mother filed an action for damages. The parties established that the vehicle driven by Tapia was owned by his grandfather and that Tapia was entitled to $100,000 in liability coverage under an auto policy issued to Melissa McGuire (Tapia’s sister), which listed the vehicle as an insured vehicle and listed Tapia as the driver of the vehicle. The policy was issued by petitioner-defendant 21st Century Insurance Company. 21st Century offered to settle the action for the policy limits of the McGuire policy ($100,000). However, plaintiff1 also believed that Tapia might be covered under policies issued to his aunt and grandmother, each offering $25,000 in coverage and also issued by 21st Century. Plaintiff communicated an offer to settle for $150,000 to Tapia’s counsel; 21st Century contended that it never received this offer (although there was certainly evidence to the contrary). Inferrably having realized the seriousness of its position, 21st Century affirmatively offered the “full” $150,000 to settle the case against Tapia. Plaintiff did not accept this offer, but a month later plaintiff’s counsel served a statutory offer to compromise seeking $3,000,000 for Cory Driscoll and $1,150,000 for his mother Jenny Driscoll. Shortly before the expiration of this offer, 21st Century sent Tapia a letter warning him that it would not agree to be bound if Tapia personally elected to accept the offer. Nonetheless, Tapia agreed to the entry of a stipulated judgment in the amounts demanded by plaintiff. 21st Century paid $150,000 plus interest to the plaintiff. Tapia then assigned any rights he had against 21st Century to plaintiff. This assignment and agreement included plaintiff’s promise not to execute on the judgment against Tapia so long as he complied with his obligations, e.g., to testify to certain facts concerning the original litigation and 21st Century’s actions. This bad faith action followed. Petitioner's unsuccessfully moved for summary judgment, and petitioned the Court of Appeal for a writ of mandate to overturn the trial court's denial. Upon review, the Court of Appeal found that plaintiff’s efforts to pursue essentially a “bad faith” action as assignee of the insured was misguided. Accordingly, petitioner was entitled to summary judgment. View "21st Century Ins. v. Super. Ct." on Justia Law

Rent-A-Roofer, Inc. (Appellant) settled a lawsuit filed by the National Research Corporation (NRC) without notifying its insurer, Farm Bureau Property & Casualty Insurance Company (the Insurer), of the lawsuit. Appellant later notified the Insurer of its involvement in litigation and made a demand under Appellant’s policy with the Insurer. The Insurer declined coverage on the grounds that Appellant breached the policy’s notice provision and the voluntary payments provision. Appellant subsequently brought this action against the Insurer, alleging breach of contract and bad faith. The district court granted summary judgment for the Insurer. The district court first concluded that for an insurer to deny coverage based on breach of a voluntary settlement condition, the insurer must show prejudice in connection with its claim. The court then ruled that, where Appellant failed to meet both the notice and voluntary payments provisions, prejudice had been established as a matter of law. The Supreme Court affirmed, holding that the district court correctly found that the Insurer was not liable for settlement by NRC against Appellant and not liable for Appellant’s defense costs. View "Rent-A-Roofer v. Farm Bureau Prop. & Cas. Ins. Co." on Justia Law

Brand developed Thermablaster, a vent-free heater, to be manufactured by a Chinese company, Reecon. Reecon suggested using Intertek testing to ensure the heaters met U.S. safety standards. Brand spoke with Intertek representatives and visited the company’s website to ensure that Intertek could test to American National Standards Institute (ANSI) standards. Satisfied that Intertek’s China facility had the necessary expertise, Brand allowed Reecon to use Intertek for testing against the most recent applicable ANSI standard. The $22,000 testing cost was part of the per-unit price. Ace Hardware agreed to pay Brand $467,000 for 3,980 Thermablasters. Brand visited China to monitor production. Reecon gave Brand an Intertek document signed by its engineers, showing that the heaters had passed all relevant tests. Brand bought 5,500 heaters and delivered them to Ace. Ace began selling the heaters in 2011 but halted sales permanently after learning from a competitor that they did not meet ANSI standards. Ace obtained a default judgment of $611,060 against Brand. Brand sued Intertek. Intertek countersued, alleging trademark infringement because Brand had placed Intertek’s testing certification mark on boxes before receiving permission. Intertek bought Ace’s judgment against Brand for $250,000 and aggressively tried to collect before trial. The Third Circuit affirmed a verdict finding Intertek liable to Brand for negligent misrepresentation and awarding Brand $1,045,000 in compensatory and $5 million in punitive damages. View "Brand Mktg. Grp. LLC v. Intertek Testing Servs. NA" on Justia Law

This suit stemmed from a failed multimillion dollar investment in commercial real estate. Plaintiffs were seven investors in Southwest Corporate Center (the Property), a three-story office building in Tempe, Arizona. The 30 defendants played various roles in acquiring the Property and marketing ownership shares therein to plaintiffs. This appeal did not involve the parties from whom plaintiffs actually purchased their investments, including defendant WA Southwest Acquisitions, LLC (Acquisitions). Instead, this appeal centered on three judgments of dismissal entered on May 15, 2014, in favor of four defendants (the respondents to this appeal) on the periphery of the transaction: (1) First American Title Insurance Company, which provided escrow and closing services in connection with the acquisition of the Property; (2) Hirschler Fleischer, a law firm that worked on the investment offering and prepared a tax opinion in connection therewith; (3) Trammell Crow Company (Trammell Crow), which acted as real estate broker for the original seller of the Property and then entered into a property management and leasing agreement with plaintiffs; and (4) CBRE, Inc. (CBRE), which acquired Trammell Crow and became its successor in interest. The Court of Appeal affirmed the three judgments of dismissal at issue here because the applicable statutes of limitation foreclosed recovery. View "WA Southwest 2 v. First Amer. Title Ins. Co." on Justia Law

Avila bought his Chicago home with a $100,500 CitiMortgage loan. Five years later, a fire made the house uninhabitable. Avila’s insurance carrier paid out $150,000. CitiMortgage took control of the proceeds and paid $50,000 to get the restoration underway. CitiMortgage later inspected the work and found that it needed to be redone. By then Avila had missed several mortgage payments. CitiMortgage applied the remaining $100,000 toward Avila’s outstanding mortgage loan. Avila’s home was not repaired. CitiMortgage never claimed that restoration was economically infeasible or would reduce its security interest. Nor had any of three special conditions described in the mortgage occurred. Avila sued, alleging breach of fiduciary duty and the mortgage contract, seeking to represent a class of defaulting CitiMortgage borrowers whose insurance proceeds had been applied to their mortgage loans rather than repairs. The district court dismissed, reasoning that the allegations did not support a fiduciary duty on CitiMortgage’s part and Avila was barred from pursuing his contract claim because he had materially defaulted on his own obligations. The Seventh Circuit agreed that allegations of a fiduciary relationship were inadequate as a matter of law, but held that a claim that the mortgage agreement remained enforceable after his missed payments was plausible in light of the agreement’s structure and the remedies it prescribes in the event of default. View "Avila v. CitiMortgage, Inc." on Justia Law

"For more than one hundred and thirty years," the Mississippi Supreme Court has held that an insurance company may void a policy when the insured made material misrepresentations during the application process. While driving his mother’s 2003 Chevy Silverado in Rankin County, sixteen-year-old William Busby crashed into Kenneth Tarlton’s car, which in turn collided with a car driven by Katrice Jones-Smith. When William’s mother, Michelle, applied to Safeway Insurance Company for an insurance policy on the Silverado, the application required her to warrant that she had provided the names of all regular frequent drivers of the covered vehicles, as well as all residents of her household fourteen years old or older. Michelle failed to disclose that fifteen-year-old William resided in her home, and Safeway issued her a policy on the Silverado at a premium that was lower than the premium would have been had Safeway known about William. When Safeway learned that Michelle made a material misrepresentation when she applied for the motor-vehicle-liability policy at issue here, it had the policy declared void. The Supreme Court found no reason to disturb the trial court's grant of summary judgment in this case in favor of Safeway, so it affirmed. View "Jones-Smith v. Safeway Insurance Company" on Justia Law

A lease agreement included a five-year renewal provision but failed to specify the rent to be paid during the renewal period. The circuit judge granted a judgment on the pleadings, finding the renewal provision unenforceable. Finding no reversible error in that decision, the Supreme Court affirmed. View "Intrepid, Inc. v. Bennett" on Justia Law

In 2009, Liu, a physician in a residency program, elected basic life insurance coverage from LINA through his employer’s ERISA plan and elected supplemental coverage in an amount four times his salary. Asked whether, within the last five years he had been diagnosed with “Cancer, Tumor, Leukemia, Hodgkin’s Disease, Polyps or Mole,” he answered “no.” One month after submitting his application, Liu received a cancer diagnosis. On March 1, 2010, the insurance became effective. On April 23, 2010, Liu died. LINA paid the basic benefit of $46,858.49, but reviewed Liu’s medical records, which revealed that Liu had been experiencing symptoms without a diagnosis before submitting his November 12 application. LINA then issued a denial, stating: While the form was completed accurately at the time ... a diagnosis of cancer prior to the coverage approval date was not disclosed … [the] Form states ... any changes in your health prior to the insurance effective date must be reported. His wife responded that Liu was told he would not have to provide evidence of good health, but did not identify the person who made the alleged representation. The court rejected the wife’s suit on summary judgment. The Eighth Circuit affirmed. Liu breached an application requirement by failing to notify LINA of a cancer diagnosis he received before a policy issued. View "Huang v. Life Ins. Co. of N. Am." on Justia Law

The Division of Capital Asset Management and Maintenance (DCAM), the owner of a construction project, entered into a contract with a designer to prepare the project’s designs. DCAM contracted with Gilbane Building Company to be the construction manager at risk (CMAR). Gilbane subcontracted with Coghlin Electrical Contractors, Inc. to perform electrical work. Coghlin later filed a complaint against Gilbane alleging that Gilbane breached the subcontract by causing Coghlin to incur additional costs resulting from design errors. Gilbane filed a third-party complaint against DCAM, asserting that DCAM breached its contract with Gilbane by refusing to pay Gilbane the amounts claimed by Coghlin. The trial court allowed DCAM’s motion to dismiss the third-party complaint. The Supreme Judicial Court vacated the superior court’s judgment, holding (1) a public owner of a construction management at risk project gives an implied warranty regarding the designer’s plans and specifications, but the scope of liability arising from that implied warranty is limited; (2) the construction management at risk contract in this case did not disclaim the implied warranty; and (3) the contract's indemnification provision did not prohibit Gilbane from filing a third-party complaint against DCAM seeking reimbursement of additional costs under the implied warranty for damages claimed by Coghlin caused by an insufficient or defective design. Remanded View "Coghlin Elec. Contractors, Inc. v. Gilbane Bldg. Co." on Justia Law