
Justia
Justia Contracts Opinion Summaries
Yannacopoulos v. Gen. Dynamics
The qui tam suit, brought by a former contractor for one of the defendants, alleges that defendants violated the False Claims Act, 31 U.S.C. 3729(a)(1) in connection with a sale of F-16 fighter jets to Greece, which paid for the jets with money borrowed from the United States. The district court granted summary judgment in favor of defendants. The Seventh Circuit affirmed. An FCA claim requires proof of an objective falsehood. There was no evidence to support allegations: that defendant lied about use of funds loaned by the U.S. to capitalize a Greek business development company; that defendant failed to disclose promptly its decision to delete a price adjustment clause from the draft contract; that defendant made misrepresentations relating to provisions concerning spare part purchases and an ill-fated "depot program;" and concerning a number of misrepresentations in two amendments to the contract.
In re XMH Corp.
XMH sought Chapter 11 bankruptcy relief and obtained permission to sell a subsidiary's assets (11 U.S.C. 363), indicating that a contract between the subsidiary and WG would be assigned to purchasers. WG objected, claiming that the contract was a sublicense of a trademark and could not be assigned without permission. The bankruptcy judge agreed with WG, but allowed XMH to renegotiate so that the subsidiary would retain title to the contract but the purchasers would assume all duties and receive all fees. The district court granted a motion substituting the purchasers for XMH and ruled that the order barring assignment was erroneous. First holding that the order was appealable and that it should exercise jurisdiction despite the absence of the bankruptcy trustee as a party, the Seventh Circuit affirmed. If WG had wanted to prevent assignment, it could have identified the contract as a trademark sublicense to trigger a default rule that trademark licenses are assumed to be not assignable. The contract was not simply a sublicense: WG retained control over "all other aspects of the production and sale of the Trademarked Apparel." Such a designation would have been more effective than a clause forbidding assignment because it would have survived bankruptcy.
Golchin v. Liberty Mutual Ins. Co.
Plaintiff filed suit against Liberty Mutual, both personally and on behalf of a putative class of similarly situated individuals, alleging that the company's failure to disburse "medical payments" coverage (MedPay) benefits to her constituted a breach of contract, a breach of implied covenant of good faith and fair dealing, and a violation of G.L.c. 93A, 2. At issue was whether a claimant could seek medical expense benefits under the MedPay of a standard Massachusetts automobile insurance policy where she had already recovered for those expenses under a separate policy of health insurance. The court held that plaintiff's complaint and the extrinsic materials submitted by Liberty Mutual contained alleged facts sufficient to "raise a right to relief above the speculative level." The court also held that Liberty Mutual had not demonstrated as a matter of law that plaintiff could not receive MedPay benefits when she already had received medical expense benefits under her policy of health insurance. Accordingly, the order allowing Liberty Mutual's motion to dismiss was reversed and the matter remanded.
Posted in:
Class Action, Contracts, Health Law, Injury Law, Insurance Law, Massachusetts Supreme Court
BP America Prod. Co., et al. v. Marshall, et al.
This case involved two related oil and gas mineral lease disputes that were jointly tried. At issue was whether limitations barred the Marshalls' (respondents and lessors) fraud claim against BP America Production Co., et al. (the lessee and operator), and whether Vaquillas Ranch Co., Ltd., et al. (lessors) lost title by adverse possession after Wagner Oil Co. (successors-in-interest) succeeded to BP's interests, took over the operations, and produced and paid Vaquillas royalties for nearly twenty years. The court held that because the Marshalls' injury was not inherently undiscoverable and BP's fraudulent representations about its good faith efforts to develop the well could have been discovered with reasonable diligence before limitations expired, neither the discovery rule nor fraudulent concealment extended limitations. Accordingly, the Marshalls' fraud claims against BP were time-barred. The court further held that by paying a clearly labeled royalty to Vaquillas, Wagner sufficiently asserted its intent to oust Vaquillas to acquire the lease by adverse possession.
Miller v. Handle Construction Company
Landowner Appellant Charles Miller contracted with Handle Construction Company, a manufacturer of pre-fabricated steel hangars, to erect a steel hangar on his land. After completing its work, the Company sued Appellant for unanticipated costs it incurred as a result of manufacturing defects in the hangar. Appellant made an offer of judgment which the Company accepted. When the Company received a separate payment from the hangar's manufacturer, Appellant refused to pay the full amount, arguing that an offset was warranted. The superior court rejected Appellant's argument and ordered him to pay the full amount of the offer. The case was submitted to the Supreme Court for review, but the Court determined that the basis for the superior court's decision was unclear. The Court reversed the decision and remanded the case for additional factual findings.
U.S. Bank National Association v. Kimball
Plaintiff US Bank National Association appealed a trial court order that granted summary judgment to Defendant Homeowner Christine Kimball and dismissed with prejudice US Bankâs foreclosure complaint for lack of standing. On appeal, US Bank argued that it had standing to prosecute the foreclosure claim and that the courtâs dismissal with prejudice was in error. Homeowner cross-appealed, arguing that the court erred in not addressing her claim for attorneyâs fees. Homeowner purchased the property in question in June 2005. To finance the purchase, she executed an adjustable rate promissory note in favor of Accredited Home Lenders, Inc. (Accredited). The note was secured by a mortgage deed to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Accredited. In 2009, US Bank filed a foreclosure complaint for Homeownerâs failure to make required payments. The complaint alleged that the mortgage and note were assigned to US Bank by MERS, as nominee for Accredited. Attached to the complaint was a copy of the instrument signed by a "Duly Authorized Agent" of MERS. The promissory note was also attached to the complaint and appended to it was an undated allonge signed by a corporate officer of Accredited, endorsing the note in blank. Homeowner moved for summary judgment claiming, among other things, that US Bank failed to present sufficient evidence that it held homeownerâs note and corresponding mortgage. Because neither note submitted by US Bank was dated, the court concluded that there was no evidence that the note was endorsed to US Bank before the complaint was filed. Therefore, the court held that US Bank lacked standing to bring the foreclosure action. Following a hearing, the court denied the motions for reconsideration and to amend the complaint. The court concluded that US Bank had submitted a defective complaint and the deficiencies were not mere technicalities, but essential items, without which the case could not proceed. The court held that US Bank lacked standing when the complaint was filed, and dismissed the complaint âwith prejudice.â Upon review of the trial record and briefs submitted by the parties, the Supreme Court affirmed the trial court's decision in all respects but for the 'with prejudice': "this may be but an ephemeral victory for homeowner. Absent adjudication on the underlying indebtedness, the dismissal cannot cancel her obligation arising from an authenticated note, or insulate her from foreclosure proceedings based on proven delinquency." The Court dismissed the foreclosure complaint and remanded the case for consideration of the parties' fees dispute.
Park v. Stanford
This case concerned the application of payments made in connection with a real estate transaction between Kang Park and Marsha Park and Gary Stanford. The district court granted summary judgment to the Parks, determining, as a matter of law, that none of the payments Stanford submitted to the Parks could be credited toward a personal guaranty Stanford had made on the note payable to the Parks. The court of appeals affirmed the district court's grant of summary judgment, concluding that no evidence indicated the Parks had actual knowledge that Stanford intended for the past payments to apply to his guaranty and no agreement or contractual provision expressly required the Parks to make such an application. On certiorari, the Supreme Court reversed, holding (1) the court of appeals applied the wrong test in its holding, and rather, a rule in which payments are credited toward a personal guaranty when the recipient of the payments has a reasonable basis to know the payments were submitted in satisfaction of the guaranty governed the application of payments toward a personal guaranty; and (2) genuine issues of material fact precluded summary judgment under the rule and the record required further development. Remanded.
Poulin, et al. v. Balise Auto Sales Inc., et al.
Plaintiffs, seeking to represent a class of customers with poor credit who purchased used automobiles from defendants, appealed from a judgment of the district court dismissing their complaint for failure to state a claim upon which relief could be granted. The complaint asserted that defendants violated the Truth in Lending Act (TILA), 15 U.S.C. 1601, et seq., and various state laws by burying hidden finance charges in the prices that plaintiffs were charged for these automobiles where defendant advertised the newer, more valuable used cars in its inventory at market prices, but sold the older, less valuable used cars to subprime credit customers for prices substantially higher than the market prices listed in the same guide. The court held that because the complaint did not contain any allegation for which it could plausibly be inferred that defendants failed to disclose a finance charge to plaintiffs, the judgment of the district court was affirmed.
Wells Fargo Bank NA v. Stewart, et al.
This case arose when elderly widow Dorothy Chase Stewart filed for bankruptcy in 2007 and Wells Fargo Bank filed a proof of claim with the bankruptcy court reciting debts owed from an outstanding mortgage on Ms. Stewart's house. The bankruptcy court subsequently found that Wells Fargo's mortgage claims exhibited systematic errors arising from its highly automated, computerized loan-administration program and issued an injunction requiring Wells Fargo to audit every proof of claim it had filed on or filed after April 13, 2007; to provide a complete loan history on every account and file that history with the appropriate court; and "to amend...proofs of claim already on file to comply with the principles established in this case and [In re] Jones." Wells Fargo appealed, challenging the claim amount and the injunction. The court vacated the injunction as exceeding the reach of the bankruptcy court. Because neither the injunction nor the calculation of Ms. Stewart's debt was properly before the court, the court dismissed as moot Wells Fargo's appeal of legal rulings underlying the bankruptcy court's interpretation of the mortgage.
Demaray v. De Smet Farm Mutual Ins. Co.
Appellees Floyd Demaray and James Hagemann were sued for repeated tortious activity in discharging of pollutants into lakes and streams of a nearby property. Appellees, who owned separate but identical insurance policies with De Smet Farm Mutual Insurance, notified De Smet of the lawsuit. De Smet declined defense of the suit, asserting it owed no duty to defend under the insurance contract. Appellees obtained their own defense counsel and defended the matter through trial, where a jury ruled in their favor. Appellees then sued De Smet, alleging that the company breached its duty to defend them in the previous lawsuit and seeking indemnification for all costs and fees incurred as a result. The trial court granted Appellees' motion for summary judgment, holding that De Smet owed Appellees a duty to defend because the alleged claim, if true, fell within policy coverage. On appeal, the Supreme Court reversed, holding that the policy language was unambiguous and the complaint asserted no claim that would arguably invoke coverage. Remanded with directions to grant summary judgment for De Smet.