Justia Contracts Opinion Summaries

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This case involves a dispute between the owners of El Gran Combo, one of the most popular Puerto Rican bands in history, and the band's former lead vocalist, Carlos Aponte-Cruz. The dispute centers on the interpretation of the Digital Performance Right in Sound Recordings Act of 1995, which entitles the "recording artist or artists featured on [a] sound recording" to a 45% share of certain royalties that the recording generated. Aponte-Cruz argues that he is the "artist . . . featured" on certain El Gran Combo sound recordings for which he was the lead vocalist and is therefore entitled to his portion of the 45% share of the statutory royalties for those recordings. The owners of El Gran Combo, on the other hand, contend that the band as an independent entity distinct from any of its individual members is the "artist . . . featured" on those recordings.The United States District Court for the District of Puerto Rico ruled in favor of the owners of El Gran Combo, finding that the band, as a distinct legal entity, was the group most prominently featured on the sound recordings and thus entitled to collect the royalties as the featured artist. The court also ruled that Rafael Ithier, as the sole owner of El Gran Combo, was entitled to collect the featured artist royalties due to the corporation.On appeal, the United States Court of Appeals for the First Circuit reversed the District Court's ruling. The appellate court concluded that even though the covers for the El Gran Combo albums that contain the disputed recordings refer only to the band itself and not to any of its individual members, Aponte-Cruz, as a "recording artist . . . featured" on the recordings in dispute, is entitled to his portion of the 45% share of the statutory royalties for those recordings. The court found that neither EGC Corp. nor Ithier is entitled to the 45% royalty share in the recordings at issue. View "Ithier v. Aponte Cruz" on Justia Law

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A general contractor, Graycor Construction Company Inc., was involved in a dispute with a subcontractor, Business Interiors Floor Covering Business Trust, over unpaid invoices for flooring work performed on a movie theater project. Business Interiors submitted three separate applications for periodic payments, which Graycor neither approved nor rejected within the time limit set by the Prompt Pay Act. As a result, the applications were deemed approved under the Act. Business Interiors sued Graycor for breach of contract and other claims in the Superior Court. The Superior Court granted Business Interiors's motion for summary judgment on its breach of contract claim and entered separate and final judgment. Graycor appealed.Graycor argued that the original contract was not a "contract for construction" within the meaning of the Act, and that it had a valid impossibility defense due to its failure to pay. The Supreme Judicial Court held that the Act defines its scope broadly, and the subcontract at issue was a "contract for construction" under the Act. The Court also held that common-law defenses are not precluded by the Act, but a contractor that does not approve or reject an application for payment in compliance with the Act must pay the amount due prior to, or contemporaneous with, the invocation of any common-law defenses in any subsequent proceeding regarding enforcement of the invoices. As Graycor sought to exercise its defenses without ever paying the invoices, it could not pursue the defenses. The Court also vacated and remanded the rule 54 (b) certification to the motion judge for reconsideration. View "Business Interiors Floor Covering Business Trust v. Graycor Construction Company Inc." on Justia Law

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The Supreme Court of the State of Colorado was asked to review a case involving a dispute between the City of Aspen and the Burlingame Ranch II Condominium Owners Association, Inc. The dispute centered around alleged construction defects in an affordable housing project overseen by the City of Aspen. The Association claimed that Aspen had breached express and implied warranties, and Aspen argued that the claims were barred by the Colorado Governmental Immunity Act (CGIA), which provides immunity to public entities from claims for injury that lie in tort or could lie in tort.The lower court agreed with Aspen, ruling that the Association's claims sounded in tort, or could sound in tort, and were thus barred by the CGIA. The Association appealed, and the Colorado Court of Appeals reversed the lower court's decision. The appellate court reasoned that the Association's claims could only sound in contract, and thus were not barred by the CGIA. The court relied on the economic loss rule, which generally provides that a party suffering only economic loss from the breach of a contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.The Supreme Court of the State of Colorado reversed the appellate court's decision. The court held that the economic loss rule has no bearing on whether the CGIA bars a plaintiff’s claims. The court clarified that the CGIA bars claims that could arise in both tort and contract, and that the economic loss rule cannot rescue an otherwise CGIA-barred claim. The case was remanded back to the lower court for further proceedings. View "City of Aspen v. Burlingame Ranch II" on Justia Law

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The case revolves around a dispute between the Board of Regents of the University of Texas System and IDEXX Laboratories, Inc. over the interpretation of a patent licensing agreement. The agreement, signed in 2000, pertained to a peptide used to test for Lyme disease in dogs. The agreement stipulated different royalty rates for different types of products, depending on what tests were included. The dispute arose over the interpretation of two royalty provisions, one for 1% and the other for 2.5%, which could both be read to apply to the same sales of goods. IDEXX Laboratories had been paying the lower royalty rate, but the University argued that the higher rate should have been applied.The trial court ruled in favor of the University, concluding that the licensing agreement was clear and unambiguous and that the University was entitled to recover the unpaid royalties claimed plus accrued interest. On appeal, IDEXX Laboratories argued for the first time that the licensing agreement was ambiguous. The court of appeals agreed, concluding that both interpretations of the royalty provisions were reasonable and conflicting, and therefore the agreement was ambiguous. It reversed the trial court's decision and remanded the case.The Supreme Court of Texas disagreed with the court of appeals. It found that the royalty provisions were not ambiguous when read in the context of the licensing agreement itself and the objective circumstances in which the agreement was produced. The court concluded that the provisions were most reasonably interpreted to require royalties on IDEXX Laboratories' products at the higher rate stipulated in the agreement. The court reversed the court of appeals' judgment and remanded the case to that court for further proceedings. View "Board of Regents of the University of Texas System v. IDEXX Laboratories, Inc." on Justia Law

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The case revolves around a dispute over the calculation of postjudgment interest on a series of loans between David Meiergerd and Qatalyst Corporation and Roland Pinto. Meiergerd had filed a complaint in 2007 seeking to recover on a series of loans that occurred between him and the appellees. In 2008, the district court granted Meiergerd’s motion for default judgment, ordering the appellees to pay Meiergerd a certain amount plus postjudgment interest “at the rate of 16% compounded annually ($58.97 per day).”The appellees initiated a separate proceeding in 2022, seeking to vacate or amend the judgment from the earlier proceedings. This new action was ultimately dismissed. Subsequently, in the original case, the court granted the appellees’ motion for revivor. The appellees then filed a “Motion for Satisfaction and Discharge of Judgments” related to the judgment against them. The district court calculated the amount of postjudgment interest due to Meiergerd by multiplying the per diem rate stated in the 2008 order, $58.97, by the number of days between the date of the 2008 order and the date of payment. The court found that the appellees’ checks had satisfied the amount due on the judgment, including postjudgment interest, costs, and attorney fees.Meiergerd appealed to the Nebraska Court of Appeals, asserting that the computation of the amount due and owing in the satisfaction of judgment improperly used the specified per diem rate, but failed to apply compound interest on the postjudgment amount. He contended that the district court’s approval of this daily rate disregards the language in the 2008 order that stated that postjudgment interest would be “compounded annually.” The Court of Appeals affirmed the order of the district court, and Meiergerd petitioned for further review.The Nebraska Supreme Court affirmed the decision of the Court of Appeals. The court concluded that the 2008 order was ambiguous with respect to the manner of calculating postjudgment interest, and determined that the 2008 order provided for simple interest and did not introduce compound interest that had not been requested by Meiergerd or supported by prior conduct between the parties. View "Meiergerd v. Qatalyst Corp." on Justia Law

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Joe Iskra and Rani Singh, the plaintiffs, entered into a contract to purchase a house from Kenneth Vinoski. Before closing, they hired a home inspection service that discovered a leak in the attic. The plaintiffs requested Vinoski to repair the leak before the sale, and Vinoski contracted Bear Roofing, LLC, the defendant, for the repair. The plaintiffs alleged that they were intended third-party beneficiaries of the contract between Vinoski and Bear, and that Bear breached the contract and an associated express warranty. They also claimed that Bear negligently performed the contracted repairs.The Jefferson Circuit Court entered a summary judgment in favor of Bear, ruling that the plaintiffs were not intended third-party beneficiaries of the contract between Vinoski and Bear. The court reasoned that the plaintiffs failed to provide substantial evidence that Bear intended to bestow a direct benefit to them at the moment the contract was formed. The court also noted that the contract did not mention or refer to the plaintiffs, and there was no evidence that Bear intended for anyone other than Vinoski to receive the benefit of its work performance.On appeal, the Supreme Court of Alabama reversed the trial court's decision and remanded the case for further proceedings. The Supreme Court found that the plaintiffs presented evidence showing a genuine issue of material fact regarding whether Bear intended to bestow a direct benefit upon them. The court also found that the plaintiffs presented evidence demonstrating a genuine issue of material fact regarding whether they were covered under Bear's warranty. Lastly, the court found that the plaintiffs presented evidence showing that they had relied to their detriment on Bear's performance in repairing the leak, and that Bear had known that it had been hired to repair a leak noted in an inspection report prepared in contemplation of the imminent sale of the house. Therefore, the trial court erred in entering a summary judgment in favor of Bear on the plaintiffs' negligence claim. View "Iskra v. Bear Roofing, LLC" on Justia Law

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The case involves Brian Frye, a homeowner who claimed that his property had suffered damage due to underground mine subsidence. He submitted a claim to his home insurer, Erie Insurance Company, and notified the Board of Risk Insurance and Management (BRIM) of the damages. Both Erie and BRIM investigated the claim, but both denied it, stating that the damage was not due to mine subsidence. Frye then sued Erie for breach of contract and other claims. The Circuit Court of Ohio County granted summary judgment to Erie, concluding that Erie functioned as BRIM’s agent in the adjustment of Frye’s claim. Frye moved the court to alter or amend that judgment, arguing that it threatened the constitutionality of certain West Virginia statutes.The Supreme Court of Appeals of West Virginia vacated the lower court's decision and remanded the case for further proceedings. The court found that the lower court erred by failing to notify the Attorney General of the constitutional questions raised in Frye’s motion to alter or amend the summary judgment order. The court concluded that the appropriate remedy was to vacate the lower court’s order denying Frye’s motion and to remand the matter to permit the lower court to notify the Attorney General of these proceedings in accordance with Rule 24(c) of the West Virginia Rules of Civil Procedure. View "Frye v. Erie Insurance Company" on Justia Law

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The case involves a dispute between William Good and Uber Technologies, Inc., and Rasier, LLC (collectively, Uber), and one of its drivers, Jonas Yohou. Good, a chef, used Uber's mobile application to secure a ride. On April 25, 2021, when Good opened Uber's app, he was presented with a screen notifying him of Uber's updated terms of use. The screen required Good to check a box indicating that he had reviewed and agreed to the terms before he could continue using the app. Five days later, Good used Uber's app to order a ride home from work. During the ride, Yohou's car collided with another vehicle, causing Good to suffer severe injuries.Good filed a negligence lawsuit against Uber and Yohou in the Superior Court Department. The defendants filed a motion to compel arbitration based on the terms of use that Good had agreed to. The motion judge denied the motion, finding that a contract had not been formed because Good neither had reasonable notice of Uber's terms of use nor had manifested assent to the terms.The Supreme Judicial Court of Massachusetts reversed the lower court's decision. The court found that Uber's "clickwrap" contract formation process provided Good with reasonable notice of Uber's terms of use, including the agreement to arbitrate disputes. The court also found that Good's selection of the checkbox and his activation of the "Confirm" button reasonably manifested his assent to the terms. The court remanded the case for entry of an order to submit the claims to arbitration. View "Good v. Uber Technologies, Inc." on Justia Law

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In 2020, Albert Omstead contracted BPG Inspection, LLC to inspect a property he and his wife, Jessique Omstead, intended to purchase. The contract included a one-year limitation clause preventing Mr. Omstead from suing BPG Inspection or its employees more than one year after the inspection. After the inspection, the Omsteads purchased the property. Over a year later, Mr. Omstead died when a retaining wall on the property collapsed. Mrs. Omstead filed a wrongful death suit against BPG Inspection and one of its inspectors.The trial court found the one-year limitation unenforceable, but the Court of Appeals reversed this decision. The Supreme Court of Georgia granted review to consider whether the Court of Appeals erred in approving the one-year limitation and whether the limitation is void as against public policy.The Supreme Court of Georgia affirmed the Court of Appeals' decision. The court found that the one-year limitation was enforceable and not void as against public policy. The court rejected Mrs. Omstead's arguments that the limitation only applied to contract claims and not claims involving bodily injury or wrongful death, that the limitation functioned as a “contractually-effectuated statute of repose,” and that the limitation impermissibly voided “professional standards of conduct.” The court concluded that the one-year limitation did not violate OCGA § 13-8-2 (b) and was not void as against public policy. View "OMSTEAD v. BPG INSPECTION, LLC" on Justia Law

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The Choctaw Nation and several pharmacies it owns and operates entered into agreements with Caremark, LLC, and its affiliates to facilitate insurance reimbursements for the Nation’s costs for pharmacy services for its members. The Nation filed a lawsuit in the Eastern District of Oklahoma, alleging that Caremark unlawfully denied pharmacy reimbursement claims in violation of the Recovery Act. After the matter was stayed in the Eastern District of Oklahoma, Caremark petitioned to compel arbitration of the Nation’s claims in the District of Arizona. The district court granted the petition, concluding that the parties’ agreements included arbitration provisions with delegation clauses and therefore an arbitrator must decide the Nation’s arguments that its claims are not arbitrable.The Ninth Circuit Court of Appeals affirmed the district court’s decision. The court held that most of the Nation’s arguments challenging the district court’s arbitration order were foreclosed by a previous case, Caremark, LLC v. Chickasaw Nation, which addressed the enforceability of identical arbitration provisions. The court also held that the Nation’s remaining argument that the District of Arizona lacked subject-matter jurisdiction over the petition to compel arbitration failed because the Nation contractually agreed to arbitrate its claims against Caremark in Arizona, and in those contracts specifically “agree[d] to such jurisdiction.” Thus, the Nation expressly waived its tribal sovereign immunity as a bar to arbitration in the District of Arizona. View "CAREMARK, LLC V. CHOCTAW NATION" on Justia Law