Justia Contracts Opinion Summaries

by
Plaintiff Leonard Brown entered into an employment agreement with the Yellowstone Club that employed Brown for a term of three years and provided that Brown's employment could be terminated at any time without cause. After six months, the Club terminated Brown's employment without cause. Brown brought an action for damages against the Club under the Wrongful Discharge from Employment Act. The district court granted the Club's motion to dismiss the action based upon Mont. Code Ann. 39-2-912(2), which exempts from the Act an employee covered by a "written contract of employment for a specified term." The Supreme Court reversed the judgment of the district court, holding that if an employment contract for a specific term also allows the employer to terminate at will, it is not a "written contract for a specific term" under Section 39-2-912. Therefore, a discharged employee covered by such a contract is not excluded by the statute from bringing a claim under the Act.

by
This case stemmed from a dispute over the status of a negotiated settlement agreement pertaining to New York City's duty to provide mental health services to certain inmates in its jails. At issue was whether the terms of the agreement expired before plaintiffs filed a motion in Supreme Court seeking to extend the City's obligations. Applying the state's traditional principles of contract interpretation, the court held that plaintiffs sought relief prior to termination of the settlement agreement and their motion was therefore timely filed.

by
Twenty three former tribal employees sued the Seneca-Cayuga Tribe of Oklahoma for breach of employment contracts. The contracts contained a limited waiver of sovereign immunity. Tribal law requires that waiver of sovereign immunity must be consented to by the Business Committee of the Tribe by resolution. The trial judge, on motion for reconsideration, granted the Tribe's motion to dismiss for lack of subject matter jurisdiction and dismissed the case. On appeal, the question before the Supreme Court was whether the Tribe expressly and unequivocally waived its sovereign immunity with respect to Plaintiffs' employment contracts. Upon review of the contracts and the applicable tribal resolutions and legal standards, the Supreme Court held that waiver of sovereign immunity was neither expressed nor consented to in the Business Committee's resolutions that authorized the Chief to sign the employment contracts. The Court affirmed the lower courtâs decision.

by
1/2 Price Checks Cashed (Half-Price) brought a suit in a Dallas County justice court asserting breach of contract on the basis of the obligation owed by the drawer of a check under Tex. Bus. & Com. 3.414 and requested attorney's fees. At issue was whether a holder of a dishonored check could recover attorney's fees under Texas Civil Practice and Remedies Code section 38.001(8) in an action against a check's drawer under section 3.414. The court held that Half-Price's section 3.414 claim was a suit on a contract to which section 38.001(a) applied and applying section 38.001(8) to the claim did not disrupt Article 3 of the Uniform Commercial Code's statutory scheme. Therefore, the court reversed the judgment and remanded for a determination of attorney's fees.

by
Claimant Anthony Traugott, a Kentucky resident, filed an application for benefits alleging that he injured his left arm in Missouri while working for defendant-employer under a contract of hire. The employer was headquartered in Rhode Island and had no office in Kentucky. The employer denied the claim on the grounds that Kentucky lacked extraterritorial jurisdiction over the matter under Ky. Rev. Stat. 342.670. The ALJ dismissed the claim based on findings that the claimant's employment was not principally localized in Kentucky and that the contract for hire was not made in Kentucky. The claimant appealed, and the Workers' Compensation Board affirmed, noting that the claimant failed to petition for reconsideration and that the record contained substantial evidence to support the ALJ's legal decision. The Court of Appeals affirmed. On appeal, the claimant maintained that the court erred by failing to find that contract for hire was made in Kentucky. The Supreme Court affirmed, finding the record contained no evidence to support claimant's argument.

by
In this case the Kentucky Supreme Court considered whether to adopt the "economic loss rule," which prevents the commercial purchaser of a product from suing in tort to recover for the economic losses arising from the malfunction of the product itself. The case involved a claim to insurers for a damaged piece of machinery. The insurers sued the manufacturers to recover the amount paid, claiming several causes of action including negligence, strict liability, and negligent misrepresentation. The trial court held the economic loss rule barred the tort claims. The court of appeals affirmed the trial court's adoption and application of the rule. The Supreme Court affirmed the judgment of the trial court, holding (1) the economic loss rule applies to claims arising from a defective product sold in a commercial transaction, and that the relevant product is the entire item bargained for by the parties and placed in the stream of commerce by the manufacturer; and (2) the economic loss rule applies regardless of whether the product fails over a period of time or destroys itself in a calamitous event, and the rule's application is not limited to negligence and strict liability claims but also encompasses negligent misrepresentation claims.

by
ALC filed suit against Lamex in commonwealth court under Puerto Rico's Dealers' Contract Act (Law 75), which prohibits a principal from terminating a business relationship with a dealer without just cause. Before service of process, Lamex filed suit in federal court. The federal district court denied Lamex's requests to pierce the corporate veil and for preliminary and permanent injunctive relief, but granted Lamex's request for a declaratory judgment absolving it from liability under Law 75, ordered ALC to pay, and ordered the Superior Court of San Juan to release the money ALC consigned. The First Circuit affirmed the imposition of sanctions against ALC and the monetary judgment in favor of Lamex, but vacated the judgment with respect to Lamex's claims for a declaratory judgment and to pierce ALC's corporate veil. The district court erred in failing to provide indisputably clear notice of its intent to consolidate the preliminary injunction hearing with a trial on the merits under Rule 65(a)(2) and, in so doing, abrogated ALC's right to a jury trial.

by
A discovery dispute arose out of claims for legal malpractice and breach of fiduciary duty brought by Moreland/Manoogian, LLC and Tamsen Investments, LLC (collectively "M/M"). Richard Judd, Stephen Waters and their firm Robinson Waters & O'Dorisio, PC (RWO) represented M/M in a real estate development deal. Cedar Street Venture, LLC and M/M sought to solidify their partnership, but in the final phases of the deal, Cedar Street's attorney withdrew. RWO continued to represent M/M in the transaction but at times also advised and acted on behalf of Cedar Street. Because of these actions, Cedar Street viewed RWO as its attorney. Eventually the relationship between M/M and Cedar Street soured, and the parties went to arbitration to settle their differences. The basis of M/M and Cedar Street's complaints pertained to RWO's fees. During discovery, M/M sought RWO's financial records. RWO refused to turn them over. With minimal explanation, the trial court found that these documents were directly relevant to the case. In its holding, the Supreme Court took the opportunity to set the framework that trial courts should use when deciding on discovery requests that implicate the right to privacy: (1) the party requesting the information must prove the information is relevant to case; (2) the party opposing the request must show that the materials are confidential and will not otherwise be disclosed; (3) if the court determines there is a legitimate expectation of privacy in the materials, the requesting party must prove disclosure serves a compelling interest; and (4) if successful, the requesting party must show that the information is not available through other sources.

by
Barbara Roberts sued Steve Lanier and his firm Steve Lanier, PC, and Rodney Stallings and his firm Coggin & Stallings, LLC. In 2006, Ms. Roberts was arrested on murder charges and sent to the Cherokee County jail. She contacted Attorney Lanier, who then met with her and agreed to represent her in her criminal proceedings. The contract between them provided that Ms. Roberts would pay a "nonrefundable retainer" of $50,000. At that time, Ms. Roberts executed a power-of-attorney authorizing Mr. Lanier to withdraw the retainer from her bank accounts. Ms. Roberts testified at trial that she first learned that Mr. Lanier was not licensed to practice law in Alabama when she appeared for her first hearing at the district court. It was then that she was introduced to Mr. Stallings, who "associated" on her case. Seeing no need for two lawyers, she tried to terminate Mr. Lanier's representation. Mr. Stallings eventually managed Ms. Roberts' case, having all her mail sent to his office so that he could "oversee every aspect" of her personal life, including payment of all outstanding bills and expenses. Ms. Roberts alleged that instead of using her money for the purposes she intended, Mr. Stallings misappropriated approximately $100,000 of her funds. Ms. Roberts was eventually convicted of capital murder and sentenced to life without parole. She later learned that the "nonrefundable retainer" language in her contract with Mr. Lanier was unenforceable under Alabama law, and sued her former lawyers for legal malpractice. The circuit court granted summary judgment to the lawyers. Upon review, the Supreme Court reversed the circuit court's grant of summary judgment in favor of the lawyers only with respect to employment contract and the "nonrefundable retainer" and the misappropriation of Ms. Roberts' money for expenses while she awaited trial. The Court remanded the case for further proceedings.

by
Plaintiff ClearOne Communications, Inc. (ClearOne) filed suit against Defendants Andrew Chiang, Jun Yan, Lonny Bowers, WideBand Solutions, Inc. and Versatile DSP, Inc. (collectively the WideBand Defendants), alleging misappropriation of trade secrets. Mssrs. Chiang, Yan and Bowers are all former engineers of ClearOne who had a hand in developing "acoustic echo cancelling" technology. Prior to their departure, the technology had been licensed from ClearOne by WideBand. When WideBand ended its licensing agreement with ClearOne, ClearOne became suspicious and conducted an internal investigation to find that its former engineers were now associated with WideBand. Furthermore, WideBand was using the proprietary technology it had once licensed. The case proceeded to trial, and ClearOne prevailed on all of its claims. The district court entered a final judgment, as well as a permanent injunction in favor of ClearOne. The court later learned that the Defendants along with several interested parties violated the terms of the injunction. The WideBand Defendants and the interested parties filed a number of appeals. The Tenth Circuit consolidated twelve cases into its holding, taking each Defendant-Appellant's arguments in turn. After careful consideration of the parties' arguments, the Court found no abuse of discretion by the trial court. The Court affirmed the trial court's decision in favor of ClearOne.