Pennsylvania National Mutual Casualty Insurance Company filed suit against Roger D. Allen, Homeland Vinyl Products, Inc., and Deric Miner, individually and as the personal representative of the estate of Jane Miner, seeking a declaratory judgment that it owed no duty of defense or indemnity to Allen for claims arising out of a fatal automobile accident that occurred in New Jersey. Allen was a New Jersey resident, and moved to dismiss the claims against him for lack of personal jurisdiction. In response, the trial court dismissed the case in its entirety. The insurance company appealed that decision. But finding no reversible error, the Supreme Court affirmed. View "Pennsylvania National Mutual Casualty Insurance Company v. Allen " on Justia Law

In 2004 GEA, a German company, agreed to sell a subsidiary, DNK, to Flex‐N‐Gate, a U.S. manufacturer for €430 million. The contract required arbitration of all disputes in Germany. The sale did not close. GEA initiated arbitration before the Arbitral Tribunal of the German Institution of Arbitration. The arbitration was pending in 2009 when GEA filed suit in an Illinois federal district court, against Flex‐N‐Gate and its CEO, Khan, alleging that the defendants had fraudulently induced it to enter into the contract; that Khan stripped the company of assets so that it would be unable to pay any arbitration award; and that Khan was Flex‐N‐Gate’s alter ego. GEA then asked the district judge to stay proceedings, including discovery. The judge declined to stay discovery. GEA filed a notice of appeal after the German arbitration panel awarded GEA damages and costs totaling $293.3 million. The Seventh Circuit dismissed GEA’s appeal as moot, but the German Higher Regional Court in vacated the arbitration award. GEA renewed its motion. The district judge again denied the stay, stating that he was unsure how the arbitration would affect the case before him and didn’t want to wait to find out. The Seventh Circuit reversed. The district judge then imposed a stay, which it later lifted for the limited purpose of allowing Khan to conduct discovery aimed at preserving evidence that might be germane to GEA’s claims against him in the district court suit. The Seventh Circuit affirmed, first holding that it had appellate jurisdiction.View "GEA Group AG v. Baker" on Justia Law

Plaintiffs brought a breach of contract action against H&S Builders, Inc. and retained Defendants to defend them in the lawsuit. Plaintiffs fired Defendants during the proceedings and hired a new attorney to assist them. The case was eventually settled. Plaintiffs then commenced this legal malpractice case against Defendants, claiming that Defendant failed properly to represent their interests in the action brought against H&S. The circuit court entered a default judgment as to liability in favor of Plaintiffs but concluded that Plaintiffs failed to prove they suffered any damages that were proximately caused by Defendants’ negligent representation. The Supreme Court affirmed, holding that the circuit court did not clearly err in finding that Plaintiffs failed to prove damages sustained as a proximately result of Defendants’ conduct. View "Peterson v. Issenhuth" on Justia Law

In 2006, DLI Properties, LLC (DLI), hired Allen Tate, a real estate brokerage firm, and Faile, Allen Tate's licensee, to serve as its agents in connection with the sale of certain real property in Lancaster, South Carolina. Petitioners, using Sharon Davis of Davis Integrity Realty, Inc. as their broker, offered to purchase the property. Petitioners sued Respondents alleging fraud, negligent misrepresentation, and violations of the South Carolina Unfair Trade Practices Act (the SCUTPA) based on DLI's acceptance of an offer on the property and Faile's representation that DLI would accept Petitioner's offer. Petitioners claimed Respondents made misrepresentations concerning the validity and effectiveness of their agreement to purchase the property. Petitioners asserted Respondents had a duty of care to communicate truthful information to Petitioners, and breached that duty by failing to disclose the ultimately successful offer, and the fact that DLI had not signed Petitioners' offer. Petitioners further alleged Respondents demonstrated a pattern of behavior sufficient to establish a SCUTPA violation. Petitioners appealed the circuit court's decision that granted summary judgment in favor of the Respondents. After careful consideration of the circumstances of the deal, the Supreme Court affirmed, noting that the appellate court erred only by not addressing the merits of Petitioners' appeal. On the merits, the Court affirmed the circuit court as modified. View "Woodson v. DLI Properties" on Justia Law

Because of a property dispute, Petitioner filed a complaint against Respondents. The trial court granted Respondents judgment as a matter of law (JMOL) on Petitioner’s breach of fiduciary duty claim. The jury then rendered a special verdict against Petitioner on the remainder of Petitioner's claims. After the verdict was read into the record and the jury was discharged, the trial court recalled the jury. The jurors were polled, and one juror responded that the verdict as read did not reflect his verdict. The intermediate court of appeals (ICA) sustained the verdict, holding that a jury cannot be recalled following an order discharging the jury. The Supreme Court affirmed in part and vacated in part the judgment of the ICA, holding (1) a court may recall a jury following a formal discharge if the jury is subject to the control of the court; (2) the jurors’ statements that they misunderstood the legal effect of their answers to a special verdict question did not provide a basis for overturning the jury’s verdict in favor of Respondents; and (3) JMOL was correctly granted on Petitioner’s breach of fiduciary duty claim. View "Lahaina Fashions, Inc. v. Bank of Hawai'i" on Justia Law

In 2006, the Federal Bureau of Prisons issued a Request for Proposals for the “design-build” construction of a federal correctional institution. The project involved a “cut-to-fill” site, meaning that the ground had to be leveled by excavating materials from one area of the site and using those materials to fill lower areas. Based on information in the solicitation documents and prior experience, BH believed the New Hampshire Department of Environmental Sciences would approve a permit for a one-step-cut-to-fill construction plan and calculated its bid price, $238,175,000, accordingly. The contract provided liquidated damages of $8,000 for each day completion was overdue. The NHDES rejected the application. BH advised the government of the implications of NHDES restrictions, but did not refuse to proceed or request that the government intervene with the NHDES. According to BH, the restrictions were contrary to generally accepted industry practice. Upon completion of cut-to-fill operations, BH submitted a Request for Equitable Adjustment, seeking $7,724,885 for excess costs. The Contracting Officer and the Claims Court rejected the request, finding that the Permits and Responsibilities clause placed the burden of obtaining and complying with state and local permits on BH “without additional expense to the Government;” that BH had not alleged violation of the implied duty of good faith; and that, because the government did not control the NHDES, there was no basis for imposing liability for constructive change. The Federal Circuit affirmed. View "Bell/Heery v. United States" on Justia Law

Respondents filed a complaint for accounting against Petitioner, their employer, after a dispute over the terms of their employment agreement. In response, Petitioner filed a petition to compel arbitration, asserting that, because Respondents’ claims arose out of their employment agreements, the circuit court was required to compel arbitration under an arbitration clause contained in the employment agreement. The circuit court denied Petitioner’s petition. The intermediate appellate court dismissed Petitioner's appeal, concluding that the denial of Petitioner’s motion to compel arbitration did not constitute a final judgment. The Supreme Court affirmed, holding that an order denying a request to compel arbitration filed in an existing action is not a final judgment because the denial of the petition does not put the parties out of court or otherwise terminate the proceedings and does not deny the party requesting arbitration the means of further prosecuting or defending rights and interests in the subject matter of the proceeding. View "Am. Bank Holdings, Inc. v. Kavanaugh" on Justia Law

Plaintiffs, property owners, filed an action against Defendant, a bank, alleging eleven counts of state law violations for Defendant’s decision to deny Plaintiffs’ application for a loan modification under the Home Affordable Modification Program and to foreclose on Plaintiffs’ home. The district court granted Defendant’s motion to dismiss. The First Circuit Court of Appeals affirmed the district court’s dismissal of Plaintiffs’ amended complaint, holding that the district court properly dismissed Plaintiffs’ claims for breach of the implied obligation of good faith and fair dealing, violation of the Massachusetts Consumer Credit Cost Disclosure Act, rescission, negligence, and promissory estoppel. View "MacKenzie v. Flagstar Bank, FSB" on Justia Law

Atlantic, a Virginia corporation, entered into a construction subcontract with J-Crew, a Texas corporation, including a provision that all disputes between the parties would be litigated in Virginia. When a dispute arose, J-Crew filed suit in the Western District of Texas. Atlantic moved to dismiss, arguing that the forum-selection clause rendered venue “wrong” under 28 U. S. C. 406(a) and “improper” under FRCP 12(b)(3). In the alternative, Atlantic moved to transfer the case to Virginia under 28 U. S. C. 1404(a). The district court denied the motions, reasoning that section 1404(a) is the exclusive mechanism for enforcing a forum-selection clause that points to another federal forum; that Atlantic bore the burden of establishing that transfer would be appropriate; and that the court would consider both public- and private-interest factors, only one of which was the forum-selection clause. The Fifth Circuit agreed. The Supreme Court reversed and remanded. A forum-selection clause may be enforced by a motion to transfer under 1404(a). Section 1406(a) and Rule 12(b)(3) allow dismissal only when venue is “wrong” or “improper.” Whether venue is “wrong” or “improper” depends exclusively on whether the court in which the case was filed satisfies the requirements of 28 U. S. C. 1391. Whether a contract contains a forum-selection clause has no bearing on whether a case falls into a specified district. If a defendant files a 1404(a) motion, a district court should transfer the case unless extraordinary circumstances unrelated to convenience of the parties clearly disfavor a transfer. No such factors were present in this case. The district court improperly placed the burden on Atlantic to prove that transfer to the parties’ contractually preselected forum was appropriate instead of requiring J-Crew, the party acting in violation of the forum-selection clause, to show that public-interest factors overwhelmingly disfavored a transfer and erred in giving weight to the parties’ private interests outside those expressed in the forum-selection clause. Its holding that public interests favored keeping the case in Texas because Texas contract law is more familiar to Texas federal judges than to those in Virginia rested on a mistaken belief that the Virginia federal court would have been required to apply Texas’ choice-of-law rules instead of Virginia’s. View "Atlantic Marine Constr. Co. v. U.S. Dist. Court for Western Dist. of Tex." on Justia Law

Defendant-sellers obtained a policy from American Family Mutual Insurance Company insuring an apartment building. When preparing for the sale of the building, Defendants signed a real estate condition report stating that they were not aware of the presence of asbestos on the premises. After Plaintiff-buyers purchased the building, their contractor discovered asbestos in the building. Plaintiffs filed an action against Defendants for breach of contract/warranty and negligence in failing to adequately disclose defective conditions. The circuit court held that American Family had no duty to defend or indemnify Defendants because an asbestos exclusion in the American Family policy precluded coverage. The court of appeals affirmed, concluding that the policy precluded coverage. The Supreme Court affirmed, holding that the asbestos exclusion in the American Family policy precluded coverage for the losses alleged by Plaintiffs. View "Phillips v. Parmelee" on Justia Law