Justia Contracts Opinion Summaries

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This case arose when plaintiff entered into an agreement with defendant under which he was entitled to advancement of expenses incurred in defending several actions arising out of his employment with defendant (Indemnification Agreement). At issue was whether the Special Master's fees fell within the definition of "Expenses" under the Indemnification Agreement. The court held that, in accordance with the terms of the Indemnification Agreement, defendant was solely responsible for any fees arising from a reasonableness review conducted by a special master. Therefore, the Special Master's fees were to be paid by defendant, along with any future amounts arising from similar proceedings before the Special Master.

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Plaintiff appealed the dismissal for lack of subject matter jurisdiction of its action against defendant, alleging tort, contract, and state statutory claims and seeking, among other remedies, a constructive trust and declaratory judgment over an oil and gas lease located on allotted land, wherein title to the land was held by the United States in trust for various Indian allottees. At issue was whether the district court had federal jurisdiction. The court held that 28 U.S.C. 1360(b), 28 U.S.C. 1331, and 25 U.S.C. 345 did not grant federal jurisdiction and therefore, plaintiff presented no basis for concluding that the action was within the "limited jurisdiction" of federal courts. Accordingly, the district court properly dismissed the suit based on lack of subject matter jurisdiction and the court did not need to reach any other issues raised by the parties, including exhaustion of tribal remedies. The court noted, however, that its holding did not preclude plaintiff from seeking relief in Blackfeet Tribal Court.

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Plaintiff brought suit against an airline alleging a common law breach of contract under the implied covenant of good faith and fair dealing. At issue was whether plaintiff's claim was preempted by the Airline Deregulation Act (ADA), 49 U.S.C. 41713(b)(1). The court reversed and held that the purpose, history, and language of the ADA, along with Supreme Court and Ninth Circuit precedent, lead the court to conclude that the ADA did not preempt a contract claim based on the doctrine of good faith and fair dealing.

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Black Warrior Minerals, Inc. sued Empire Coal Sales, Inc. and John Fay, Jr. Black Warrior sought money allegedly owed pursuant to a coal-purchase agreement between Black Warrior and Empire and a personal guaranty executed by Mr. Fay. A trial court entered summary judgment in favor of Black Warrior, awarding it damages plus attorney fees and costs. The trial court held a bench trial on the breach-of-guaranty claim against Mr. Fay, entering judgment in favor of Mr. Fay. Black Warrior appealed the latter, arguing that the trial court erred in finding the language of the guaranty was ambiguous and applied only to amounts in excess of $1.2 million owed by Empire to Black Warrior. Upon review of the language of the guaranty and the applicable legal authority, the Supreme Court concluded the trial court erred in its interpretation of the guaranty's terms. The Court reversed the lower court's judgment and remanded the case for further proceedings.

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Matador Holdings, Inc. and HoPo Realty Investments, LLC filed separate appeals to challenge elements of a circuit court's order involving commercial property owned by Matador. Matador sued HoPo for payment for materials and services Matador provided to HoPo's lessee Stratford Plastic Components of Alabama. The lease agreement contained provisions allowing for HoPo or its agents to enter the property during the lease-term to make inspections or repairs. Stratford had applied for and received a line of credit with Matador. After taking possession of the leased property, Stratford ordered materials from Matador to convert the property into one suitable for Stratford's production needs. Stratford vacated the property before the lease term expired without paying Matador for the materials. HoPo's agents testified that Stratford did not request any changes be made to the leased property and had no knowledge that Matador would supply materials to the lessee. To resolve the dispute, the trial court denied Matador's claim that HoPo was unjustly enriched by the services provided to Stratford that were unpaid, but the court placed a lien on HoPo's property for the unexpired portion of the Stratford lease. Upon review of the trial court record and its order, the Supreme Court affirmed the lower court's denial of Matador's unjust enrichment claim. Furthermore, the Court reversed the lower court's order insofar as it enforced any portion of a lien against HoPo's property or the improvements made to the property. The Court ruled the lien void.

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Spectrum Health -- Kent Community Campus (Spectrum) withdrew recognition from its employees' union after receiving a petition indicating that the union no longer had majority support. The NLRB found this action unlawful because it occurred within the first three years of the parties' collective bargaining agreement, during which time a union enjoyed a conclusive presumption of majority support. The court held that the NLRB properly interpreted the term of the collective bargaining agreement and that Spectrum waived its objections to the bargaining order by failing to raise them in a timely manner before the NLRB. Accordingly, the court denied Spectrum's petition for review and granted the NLRB's cross-application for enforcement.

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Defendants appealed from a district court's order confirming an arbitration award where plaintiffs, six business entities, claimed to have been defrauded by defendants. At issue was whether the arbitration panel had exceeded its jurisdiction by rendering an award against defendants because they had never consented to arbitration. The court reversed the district court's order because under ordinary principles of contract and agency law, defendants, as the CEO and CFO of the defendant corporations, were not personally bound by the arbitration agreements their corporations entered into. Therefore, the court held that the arbitration panel lacked jurisdiction to render an award against defendants.

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Las Vegas Metropolitan Police Department (LVMPD) was named as a defendant in an action alleging civil rights violations. LVMPD had an insurance policy with respondent Coregis Insurance to protect against liability for police officer actions when the damages exceeded a certain amount. Coregis denied LVMPD coverage for the civil rights claims because LVMPD did not notify Coregis of its potential liability until ten years after the incident that led to the lawsuit. After settling the action, LVMPD filed a declaratory-judgment action seeking a judicial determination that Coregis was required to defend and indemnify LVMPD for damages related to the civil rights claims. The district court entered summary judgment in favor of Coregis, concluding that LVMPD's notice was clearly late and that Coregis was prejudiced by the late notice. The Supreme Court reversed the summary judgment, holding (1) when an insurer denies coverage of a claim because the insured party failed to provide timely notice of the claim, the insurer must demonstrate that notice was late and that it was prejudiced by the late notice in order to assert a late-notice defense to coverage; and (2) there were genuine issues of material fact regarding the timeliness of LVMPD's notice. Remanded.

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Pedro Gallegos was injured by David Gonzalez in a car accident. At the time of the accident, Gonzalez was driving a car rented from respondent Malco Enterprises, for which he purchased a liability insurance policy issued by respondent First American and managed by respondent Knight Management. Gallegos obtained a default judgment against Gonzalez. After Gallegos was unable to collect on the judgment, he sought a judicial assignment of Gonzalez's unasserted claims against respondents, which was granted. Gallegos brought the assigned claims, which related to Gonzalez's insurance policy with respondents, in a separate district court action. Respondents moved for summary judgment on the basis that the previous district court could not assign the right of action in a proceeding supplementary to the execution of the judgment, and thus, Gallegos lacked standing to bring Gonzalez's claims. The district court granted the respondents' motion for summary judgment, vacating the earlier assignment order. The Supreme Court reversed, holding (1) rights of action held by a judgment debtor are subject to execution toward satisfaction of a judgment and may be judicially assigned; and (2) Gallegos properly asserted a right of action assigned to him by another district court. Remanded.

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This case arose from a contract for services between Defendant Erik Partin and Plaintiff Cody Schroeder under which Defendant assembled a specialty car engine for Plaintiff. A jury returned a verdict finding that Defendant assembled the engine improperly and breached the agreement which contained a liquidated damages clause. The district court granted Defendant's motion for judgment notwithstanding the verdict (JNOV), holding that no reasonable jury could find the liquidated damages clause to be valid. The court also awarded attorney fees to both parties. Plaintiff appealed the grant of JNOV and the award of attorney fees to Defendant. Upon review of the trial record, the Supreme Court found there was substantial evidence to support the jury's determination that the performance agreement was enforceable. Therefore, the Court vacated the trial court's grant of JNOV and reversed the lower court's order granting attorney fees to the parties. The Court remanded the case for further proceedings, and awarded attorney fees on appeal to Plaintiff.