Justia Contracts Opinion Summaries

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Dentist purchased dental practice management software from Company to aid his patient data requirement. The contract between Dentist and Company limited Dentist's remedies for damages in tort caused by defects in the Company's software. Although Company warned Dentist to back up his patient data, Dentist's patient data was lost when installing the software. Dentist sued Company under several theories, and the district court granted Company's motion for summary judgment. Dentist appealed only the order granting summary judgment on his tort claims. The Supreme Court affirmed, concluding that the limitation of liabilities clause in the contract was enforceable, as provisions in software contracts allocating the risk of such a loss to the consumer are enforceable.

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In 2005, Forest Park formulated a concept for a television show called "Housecall," in which a doctor, after being expelled from the medical community for treating patients who could not pay, moved to Malibu, California, and became a concierge doctor to the rich and famous. Forest Park created character biographies, themes, and storylines, which it mailed to Sepiol, who worked for USA Network. Initial discussions failed. A little less than four years later, USA Network produced and aired a television show called "Royal Pains," in which a doctor, after being expelled from the medical community for treating patients who could not pay, became a concierge doctor to the rich and famous in the Hamptons. Forest Park sued USA Network for breach of contract. The district court held that the claim was preempted by the Copyright Act, 17 U.S.C.101, and dismissed. The Second Circuit reversed. Forest Park adequately alleged the breach of a contract that included an implied promise to pay; the claim is based on rights that are not the equivalent of those protected by the Copyright Act and is not preempted.

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Access to the Ambassador Bridge between Detroit and Windsor, Ontario necessitated traversing city streets. The state contracted with the Company, which owns the Bridge, to construct new approaches from interstate roads. The contract specified separate jobs for the state and the Company. In 2010, the state obtained a state court order, finding the Company in breach of contract and requiring specific performance. The Company sought an order to open ramps constructed by the state, asserting that this was necessary to complete its work. The court denied the motion and held Company officials in contempt. In a 2012 settlement, the court ordered the Company to relinquish its responsibilities to the state and establish a $16 million fund to ensure completion. Plaintiffs, trucking companies that use the bridge, sought an injunction requiring the state to immediately open the ramps. The district court dismissed claims under the dormant Commerce Clause, the motor carriers statute, 49 U.S.C. 14501(c), and the Surface Transportation Assistance Act, 49 U.S.C. 31114(a)(2). The Sixth Circuit affirmed. For purposes of the Commerce Clause and statutory claims, the state is acting in a proprietary capacity and, like the private company, is a market participant when it joins the bridge company in constructing ramps.

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This case arose from a foreign shipping contract billing dispute between Consorcio Ecuatoriano de Telecomunicaciones S.A. (CONECEL) and Jet Air Service Equador S.A. (JASE). CONECEL filed an application in the Southern District of Florida under 28 U.S.C. 1782 to obtain discovery for use in foreign proceedings in Ecuador. According to CONECEL, the foreign proceedings included both a pending arbitration brought by JASE against CONECEL for nonpayment under the contract, and contemplated civil and private criminal suits CONECEL might bring against two of its former employees who, CONECEL claims, may have violated Ecuador's collusion laws in connection with processing and approving JASE's allegedly inflated invoices. CONECEL's application sought discovery from JASE's United States counterpart, JAS Forwarding (USA), Inc. (JAS USA), which does business in Miami and was involved in the invoicing operations at issue in the dispute. The district court granted the application and authorized CONECEL to issue a subpoena. Thereafter, JASE intervened and moved to quash the subpoena and vacate the order granting the application. The district court denied the motion, as well as a subsequent motion for reconsideration. JASE appealed the denial of both. After thorough review and having had the benefit of oral argument, the Eleventh Circuit affirmed the orders of the district court. the Court concluded that the panel before which which JASE and CONECEL's dispute was pending acts as a first-instance decisionmaker; it permits the gathering and submission of evidence; it resolves the dispute; it issues a binding order; and its order is subject to judicial review. The discovery statute requires nothing more. The Court also held that the district court did not abuse its considerable discretion in granting the section 1782 discovery application over JASE's objections that it would be forced to produce proprietary and confidential information. The application was narrowly tailored and primarily requested information concerning JASE's billing of CONECEL, which was undeniably at issue in the current dispute between the parties." Finally, the district court did not abuse its discretion in denying JASE's motion for reconsideration.

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The Supreme Court granted certiorari in this case to determine, whether an attorney owes fiduciary duties to third parties who are entitled to funds from Colorado Lawyer Trust Account Foundation (COLTAF) trust accounts. The court of appeals reversed a trial court judgment and held that an attorney did not owe fiduciary duties to a group of medical service providers who were owed funds held in the attorney's COLTAF account. The Providers and the attorney, David J. Mintz,had an extensive and often contentious personal and business relationship over several years. Typically, Mintz would refer an uninsured victim of a motor vehicle accident to the Providers for medical services, paying himself and his clients' medical costs out of proceeds he secured after negotiating insurance settlements for the clients. The relationship turned sour due to a dispute about costs of a joint advertising arrangement, and, for reasons disputed by the parties, Mintz began withholding funds owed to the Providers for his clients' medical costs. Mintz eventually initiated an interpleader action for the withheld funds, naming as defendants his clients and the Providers. The Providers answered with several counterclaims, including breach of fiduciary duty. The trial court bifurcated the action and first determined that the Providers were entitled to the specific amount withheld in Mintz's COLTAF account but no more. In the second trial, the trial court found for the Providers on their abuse of process and breach of fiduciary duty counterclaims.The court of appeals reversed the trial court's holdings for the Providers in the second trial. Upon review, the Supreme Court agreed with the court of appeals and affirmed judgment: "the Providers may not maintain a breach of fiduciary duty tort action against Mintz based on his obligations as trustee of his COLTAF account. The attorney-client relationship creates fiduciary obligations with corresponding liabilities on the part of the attorney to the client, not to third parties such as the medical providers in this case. Although Mintz may have had ethical or contractual obligations to disburse money that clients owed to the Providers out of insurance settlement proceeds placed into his COLTAF account, Mintz did not owe the Providers the duties of a fiduciary that give rise to tort liability."

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The United States Court of Appeals for the Eleventh Circuit certified two questions to the Georgia Supreme Court: "(1) Did the Georgia Insurance Commissioner act within his legal authority when he promulgated Ga. Comp. R. & Regs. 120-2-20-.02, such that a multiple-line insurance policy providing first-party insurance coverage for theft-related property damage must be reformed to conform with the two-year limitation period provided for in Georgia's Standard Fire Policy, Ga. Comp. R. & Regs. 120-2-19-.01?; and, (2) is this action barred by the Policy's one-year limitation period?" These questions arose from a dispute over Petitioner Ricardo White's purchase of a homeowner's insurance policy from Respondent State Farm Fire and Casualty Company. The insurance policy was a first-party insurance contract that provided multiple-line coverage, including coverage for loss or damage caused by both fire and theft. The policy contained a limitation provision stating that a lawsuit against State Farm must be brought "within one year of the date of loss or damage." After his home was burglarized in January 2008 (within the period of coverage), Petitioner filed a claim for the loss of more than $135,000 in personal property. State Farm denied the claim based on its determination that Petitioner misrepresented material information in filing his claim. Waiting more than one year after his date of loss, Petitioner filed a June 2009 complaint against State Farm in state court alleging claims for breach of contract, bad faith, and fraud. Upon review of the facts of this case, the Supreme Court found that: (1) the Georgia Insurance Commissioner did not act within his legal authority and (2) this action was barred by the one-year limitation period in his insurance policy.

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In the recent decision in Bates v. Cohn, the Court of Appeals reiterated that a borrower challenging a foreclosure action must ordinarily assert known and ripe defenses to the conduct of the foreclosure sale in advance of the sale. After the sale, the borrower is ordinarily limited to raising procedural irregulatories in the conduct of the sale, although the Court left open the possibility that a borrower could assert a post-sale exception that the deed of trust was itself the product of fraud. This case arose out of the foreclosure of a deed of trust for the residence of Darnella and Charles Thomas by Jeffrey Nadel and others. In apparent hope of fitting their post-sale exceptions within the question left open in Bates, the Thomases alleged certain defects in the chain of title of the note evidencing their debt and characterized them as a "fraud on the judicial system." The Court of Appeals affirmed, holding that the alleged defects did not establish that the Thomases' deed of trust was the product of fraud.

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Defendant Michael A. Langlois appealed a Superior Court's declaratory judgment entered in favor of Plaintiff Townhouses at Bonnet Shores Condominium Association. The judgment decreed that a lease agreement that Defendant had entered into violated the "Declaration of Condominium of Townhouses at Bonnet Shores Condominiums." Defendant asserted on appeal that the declaration was ambiguous and that, therefore, the trial justice incorrectly interpreted it to exclude the lease agreement. Upon review of the lease agreement in question, the Supreme Court concluded the trial justice did not incorrectly interpret the language, and affirmed that court's decision.

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In this case, the Supreme Court was asked to decide whether the decedent Robert Daniel George, who was struck and killed by an uninsured motorist in 2006, qualified as an insured under an insurance policy provided by Harleysville Worcester Insurance Company, which policy was procured by The Cormack-Routhier Agency, Inc. Plaintiffs Pamela A. Riel and Glenn N. George, as co-administrators of the decedent’s estate, and Pamela A. Riel, on behalf of her and the decedent’s minor daughter, Kara George, brought a complaint against Defendants Harleysville and Cormack for declaratory and other relief, but a Superior Court justice granted summary judgment in favor of the defendants. Plaintiffs appealed, arguing that the trial justice erred in dismissing their claims against Harleysville because a genuine issue of material fact existed with respect to whether the decedent should be considered a named insured under the policy. Plaintiffs further asserted that the trial justice erred in dismissing their claims against Cormack because, even if they failed to establish that the decedent was a named insured, they still were entitled to pursue their claims against Cormack for failing to procure adequate coverage. After considering the parties' written and oral submissions and reviewing the record, the Court affirmed the judgment of the Superior Court.

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The issue before the Supreme Court in this case concerned the applicability of an assault and/or battery exclusion in a commercial general liability insurance policy. Great American E&S Insurance Company filed a declaratory-judgment action against its insured, End Zone Pub & Grill of Narragansett, Inc. and Defendant Michael Gondusky. Gondusky previously had filed a civil suit against End Zone alleging that he had been seriously injured by two doormen who were employed by End Zone. The Superior Court entered both an order granting Great American's motion for summary judgment and a declaratory judgment decreeing that Great American "owe[d] no duty to defend or obligation to indemnify relative to the underlying action brought by Michael Gondusky against End Zone * * *." Gondusky appealed the Superior Court’s judgment. This case came before the Supreme Court pursuant to an order directing the parties to show cause why the issues raised in this appeal should not summarily be decided. After considering the parties' written and oral submissions and reviewing the record, the Court concluded that cause had not been shown and that this case could be decided without further briefing or argument. The Court affirmed the judgment of the Superior Court.