Justia Contracts Opinion Summaries

After allowing discovery on the issue of whether Kansas courts could exercise personal jurisdiction over some of the defendants in this case, the district court granted defendant Tel-Instrument Electronics Corp.'s (TIC) motion to dismiss for lack of personal jurisdiction. At issue on interlocutory appeal was the correct standard for judging a motion to dismiss for lack of personal jurisdiction when that motion is decided after discovery but without an evidentiary hearing. The Supreme Court reversed, holding (1) plaintiff Aeroflex Wichita, as the party with the ultimate burden of establishing jurisdiction and as the party responding to a motion to dismiss presented to the court without an evidentiary hearing, need only establish a prima facie basis for jurisdiction; (2) in determining if that prima facie burden has been met, a district court should view factual disputes in the light most favorable to the nonmoving party, and an appellate court applies the same standard de novo; and (3) in this case, the district court erred erred by weighing the evidence rather than granting all favorable inferences to Aeroflex, and Aeroflex presented a prima facie case of jurisdiction based on a conspiracy between TIC and its codefendants, over whom the court had jurisdiction.

At issue in this consumer protection case was which Tennessee Rule of Civil Procedure applied to a motion that sought relief from a default judgment of liability on a counter-complaint, where the motion was filed within thirty days of entry of the default, the trial court did not expressly direct the entry of judgment on the counter-complaint pursuant to Tenn. R. Civ. P. 54.02, and neither liability on the original complaint nor damages on the counter-complaint were determined. The trial court entered default judgment in favor of the consumer on her counterclaims against Discover Bank and awarded the consumer damages. The court of appeals upheld the default judgment, vacated the award of damages, and remanded the case for a new hearing on damages. The Supreme Court affirmed, holding (1) Rule 54.02, rather than Tenn. R. Civ. P. 60.02, applies in this situation, but the same test applies to motions seeking relief from default judgment, under either rule, on the basis of "excusable neglect"; and (2) actual damages are recoverable for loss of available credit under Tennessee Consumer Protection Act where the plaintiff suffers a demonstrable loss of credit, proximately caused by the defendant, resulting in actual harm.

This action arose from practices employed in connection with the handling of claims made under retrocessional reinsurance treaties providing what was known as "non-life" coverage. At issue was the sufficiency and extra-territorial reach of plaintiff's claim under New York State's antitrust statute (Donnelly Act), General Business Law 340 et seq. Plaintiff, a New York branch of a German reinsurance corporation, sued defendants, English based entities engaged in the business of providing retrocessionary reinsurance. The Appellate Division found that the complaint adequately pled a worldwide market. And, while acknowledging that the crucial allegations contained in paragraph 36 of the amended pleading did not separately allege market power, the allegations read together and liberally construed were adequate to that purpose. The Appellate Division granted plaintiff leave to appeal, certifying to the court the question of whether its order reversing the order of Supreme Court was properly made. The court answered in the negative and reversed. Even if the pleading deficiency at issue could be cured and the court perceived no reason to suppose that the formidable hurdle of alleging market power could be surmounted by plaintiff there would remain as an immovable obstacle to the action's maintenance, the circumstance that the Donnelly Act could not be understood to extend to the foreign conspiracy plaintiff purported to described.

Stephan Odders and Gerald Kerber were former employees of Loparex, a corporation in the release liner industry. Both employees were subject to a one-year noncompetition agreement upon termination of employment. After ceasing employment at Loparex, both employees began employment with MPI Release Technologies, a competitor in the release liner industry. Loparex sued Kerber and Odders (Defendants) in the U.S. district court, seeking injunctive relief under the Illinois Trade Secrets Act and damages resulting from Defendants' breach of the noncompetition agreement. Defendants filed amended answers and counterclaims accusing Loparex of blacklisting in violation of Indiana law. The Supreme Court accepted certification to answer questions of state law and held (1) Wabash Railroad Co. v. Young, which held that Indiana's Blacklisting Statute did not provide a cause of action to individuals who voluntarily leave their employment, is no longer good law and individuals who voluntarily leave employment are not barred from making a claim under the Blacklisting Statute; (2) attorney fees are not an element of compensatory damages under the Blacklisting Statute; and (3) an employer's suit against a former employee to protect trade secrets is not a basis for recovery under the Blacklisting Statute.

Metropolitan National Bank (MNB) loaned Grand Valley Ridge several million dollars for the completion of a subdivision. After Grand Valley failed to make its interest payments, MNB filed a petition for foreclosure. Grand Valley and Thomas Terminella, a member of Grand Valley (collectively, Appellants), filed an amended counterclaim alleging various causes of action. During the trial, the circuit court granted Appellants' motion to take a voluntary nonsuit of their claims of negligence and tortious interference with contract. The circuit court held in favor of MNB. The court subsequently granted MNB's petition for foreclosure and awarded a judgment against Appellants. Thereafter, Appellants filed a complaint alleging their original nonsuited counterclaims and adding additional claims. MNB moved to dismiss Appellants' complaint and filed a motion for sanctions. The circuit court granted both motions. The Supreme Court affirmed, holding, inter alia, (1) because Appellants brought claims clearly barred by the statute of limitations, the circuit court did not abuse its discretion in awarding sanctions; and (2) the circuit court properly granted summary judgment for MNB on Grand Valley's nonsuited issues based on the applicable statute of limitations.

When Employee left his employment, Employee and Employer entered into a consulting agreement containing restrictive covenants prohibiting Employee from disclosing Employer's confidential information. After Employee purchased another competing company, Employer filed a motion alleging breach of the agreement and seeking a preliminary injunction to enforce the Agreement's covenants. The district court granted Employer's request, concluding that Employee had likely violated several provisions of the agreement and had misappropriated trade secrets in violation of Nevada's Uniform Trade Secrets Act. Employee then filed a motion to dissolve the preliminary injunction upon termination of the agreement, which the district court denied. The Supreme Court (1) affirmed the court's order granting preliminary injunctive relief; and (2) reversed the court's order denying Employee's motion to dissolve the injunctive provisions, finding that the court improperly relied on the terminated agreement in declining to dissolve the injunction and failed to make findings as to the continued existence of a trade secret and for what constitutes a "reasonable period of time" for maintaining an injunction under the Act.

In 2009 the fire protection district adopted an ordinance requiring commercial buildings and multi-family residences to have fire alarms equipped with wireless radio technology to send alarm signals directly to the district's central monitoring board. The ordinance provided that the district would contract with one private alarm company to provide and service signaling equipment, displacing several private fire alarm companies that have competed for these customers. The alarm companies sued on claims under the U.S. Constitution, federal antitrust law, and state law. The district court granted summary judgment for the alarm companies on the basis of state law and enjoined the district from implementing the ordinance. The Seventh Circuit affirmed in part, holding that the district has statutory authority to require that commercial and multi-family buildings connect directly to its monitoring board through wireless radio technology. The district does not, however, have authority to displace the entire private market by requiring all customers to buy services and equipment from itself or just one private company.

Following published stories about an investigation of their business practices, principals of a waste-management company improved their chances of winning a bid for a contract to refurbish garbage carts for the City of Chicago by slashing their bid. They encouraged other companies to bid in hopes of being hired as a subcontractor if another company won the bid. Each bidder had to certify that it had not entered into any agreement with any other bidder or prospective bidder relating to the price, nor any agreement restraining free competition among bidders. The company won the bid, and after a Justice Department investigation for antitrust violations, the principals were convicted of mail and wire fraud. The Seventh Circuit reversed, reasoning that the purpose of "colluding" with other potential bidders had not been to prevent them from underbidding but to provide insurance against the bid being rejected based on the earlier investigation. There was no harm as a result of the company encouraging additional bidders.

In 2006, BP began converting company-operated gas and convenience stores into franchisee-operated stores. From 2006 to 2008, plaintiffs purchased gas station sites and entered into long-term contracts with BP for fuel and use of BP's brand name and marks. In 2009 plaintiffs sued under the Illinois Franchise Disclosure Act. Consolidated cases were removed to federal court when plaintiffs added claims under the federal Petroleum Marketing Practices Act. They later added price discrimination claims under the Robinson-Patman Act. Before trial, all federal claims were withdrawn. The district judge relinquished supplemental jurisdiction and remanded to Illinois state court. The Seventh Circuit affirmed. A district court has broad discretion and the general presumption in favor of relinquishment was particularly strong because the state-law claims are complex and raise unsettled legal issues.

Rudolph Slater was killed while operating a Yanmar tractor he purchased from Chris Elder Enterprises. The tractor had been manfactured by Yanmar Japan and later sold to Chris Elder Enterprises. Slater's wife, Wanda, filed a wrongful-death action against, among others, Yanmar Japan and Yanmar America, alleging claims for, inter alia, fraud, strict liability, breach of implied and express warranties, and negligence. The circuit court entered judgment in favor of Wanda, awarding her damages in the amount of $2.5 million. The Yanmar defendants appealed. The Supreme Court reversed and dismissed the case, holding (1) the circuit court lacked personal jurisdiction over Yanmar Japan, as there was no evidence to establish that Yanmar Japan had the requisite minimum contacts with the forum to warrant the exercise of general jurisdiction, and there was insufficient proof to show that personal jurisdiction could be predicated on the relationship between Yanmar Japan and its subsidiary, Yanmar America; and (2) the jury's finding that Yanmar America was negligent was not supported by substantial evidence, as Yanmar America owed no duty of care to Rudolph.