Justia Contracts Opinion Summaries

Three West Virginia residents, dissatisfied with their cable and internet service provided by Suddenlink, sued Cebridge Acquisition, LLC, Cequel III Communications I, LLC, Cequel III Communications II, LLC, and Altice USA, Inc. They alleged that Suddenlink failed to provide reliable services and sought damages for negligence, unjust enrichment, and breach of contract. Suddenlink moved to compel arbitration based on the arbitration agreement in its 2021 Residential Services Agreement (RSA). The district court denied the motions, concluding that a 2017 arbitration agreement controlled, was unconscionable, and could not be enforced.The United States District Court for the Southern District of West Virginia found the 2017 arbitration agreement procedurally and substantively unconscionable, citing the unequal bargaining power between the parties, the adhesive nature of the contract, and the complexity of the terms. The court also noted that the 2017 agreement lacked an opt-out provision and included terms that were overly harsh and lacked mutuality. Consequently, the district court denied Suddenlink’s motions to compel arbitration in all three cases.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the 2021 arbitration agreement, not the 2017 version, governed the disputes. The court found that the 2021 agreement was valid and enforceable, as it satisfied all elements of contract formation, including mutual assent and valuable consideration. The court also concluded that the 2021 arbitration agreement was not procedurally or substantively unconscionable. The court reversed the district court’s judgments and remanded the cases with instructions to compel arbitration. View "Meadows v. Cebridge Acquisition, LLC" on Justia Law

Trista Carter entered into a contract with Johnny Mack Morrow and Martha Morrow to purchase a house and 245 acres for $1,600,000. The contract included provisions for earnest money and an arbitration clause. The sale did not close, and the Morrows sued Carter for breach of contract and sought damages, including the earnest money. They also named Crye-Leike, Inc., the company holding the earnest money, as a defendant.The Franklin Circuit Court reviewed the case and denied Carter's motion to compel arbitration. The court found that the arbitration clause did not apply to disputes arising under paragraphs 11 and 12 of the contract, which included the earnest money dispute. Carter filed a motion to alter, amend, or vacate the judgment, arguing that the breach-of-contract claim was not solely an interpleader action regarding the earnest money. The trial court denied Carter's postjudgment motions by operation of law.The Supreme Court of Alabama reviewed the case and held that the arbitration agreement in the contract specifically excluded disputes related to the earnest money, as outlined in paragraph 12. Therefore, the trial court properly denied the motion to compel arbitration for the interpleader claim. However, the court found that the breach-of-contract claim, which sought damages beyond the earnest money, was subject to arbitration under the contract's arbitration clause. The Supreme Court of Alabama affirmed the trial court's decision regarding the interpleader claim but reversed the decision regarding the breach-of-contract claim and remanded the case for further proceedings consistent with its opinion. View "Carter v. Morrow" on Justia Law

Piedmont Comprehensive Pain Management Group, LLC ("Piedmont") provides pain-management care and had a business arrangement with DocRx Dispensing, Inc. ("DRD") for billing and collection services. DRD collected payments from insurance companies for medications dispensed by Piedmont and kept a portion as compensation. In 2022, Piedmont sued DRD and other related entities and individuals, alleging breach of contract, unjust enrichment, and various tort-based claims, accusing them of improperly depriving Piedmont of funds owed for dispensing medications.The Mobile Circuit Court initially granted the defendants' motion to compel arbitration based on an April 2017 agreement between Piedmont and DRD, which included an arbitration clause. The court stayed the action pending arbitration. During arbitration, the defendants produced a later August 2017 agreement, which also contained an arbitration clause and was signed by both parties. Piedmont then requested the trial court to lift the stay, arguing that the defendants could not insist on arbitration while denying the existence of the April 2017 agreement. The trial court lifted the stay, and the defendants appealed.The Supreme Court of Alabama reviewed the case de novo. The court held that claims based on the August 2017 agreement, which was signed by both parties, must be arbitrated. The court also noted that the trial court's initial order compelling arbitration of claims based on the April 2017 agreement was a final judgment, and Piedmont's failure to appeal within the required time frame meant the trial court had no jurisdiction to set aside that order. Consequently, the Supreme Court of Alabama reversed the trial court's order lifting the stay and remanded the case for further proceedings consistent with its opinion. View "DocRx, Inc. v. Piedmont Comprehensive Pain Management Group, LLC" on Justia Law

Mark Lovil, the manager of R.K. Metals, LLC, signed a commercial lease with E&E, Co. Inc. in 2015 in his representative capacity. The lease did not include a personal guaranty or arbitration clause. R.K. Metals became delinquent in rent payments, leading E&E to require a new lease in 2018, which included both a personal guaranty and an arbitration clause. Lovil signed the new lease as president of R.K. Metals, but R.K. Metals claimed they were unaware of the new clauses until the final version was delivered.R.K. Metals filed a complaint in the Lee County Circuit Court in May 2020, seeking declaratory relief and asserting breach-of-contract claims. The circuit court found the lease enforceable and ordered arbitration. E&E sought to include Lovil personally in the arbitration, leading to a determination of his status as guarantor. The circuit court granted E&E’s Motion for Summary Judgment, finding Lovil personally liable as guarantor and a necessary party to arbitration.The Supreme Court of Mississippi reviewed the case de novo. The court held that Lovil’s signature on the lease, despite his corporate designation, bound him personally as guarantor due to the clear language of the guaranty clause. The court also found that Lovil, as personal guarantor, was bound by the arbitration clause. The court applied the doctrine of equitable estoppel, noting Lovil’s close legal relationship with R.K. Metals, and concluded that he must participate in arbitration.The Supreme Court of Mississippi affirmed the circuit court’s judgment, holding that Lovil is personally bound as guarantor and compelled to participate in arbitration. View "R.K. Metals, LLC v. E & E Co., Inc." on Justia Law

Nicole Lampo was hired by Amedisys Holding, LLC as a physical therapist. A month after her hiring, Amedisys sent an email to all employees introducing an arbitration program. The email required employees to acknowledge the arbitration materials and provided an opt-out option within 30 days. Lampo acknowledged the email but did not opt out. She continued working for Amedisys until her termination in March 2018, after which she filed a lawsuit against Amedisys and her former supervisor for wrongful discharge, tortious interference, and defamation. Amedisys moved to compel arbitration based on the arbitration agreement.The Circuit Court of Georgetown County denied Amedisys's motion to compel arbitration, concluding that Lampo's failure to opt out did not constitute acceptance of the arbitration agreement. The Court of Appeals reversed this decision, finding that Lampo had accepted the arbitration agreement as a matter of law by not opting out and continuing to work.The Supreme Court of South Carolina reviewed the case and reversed the Court of Appeals' decision. The Supreme Court held that Lampo did not accept Amedisys's offer to form an arbitration agreement by merely failing to opt out and continuing to work. The court emphasized that silence and inaction do not constitute acceptance of an offer unless specific circumstances indicate a manifestation of assent, which were not present in this case. The court concluded that there was no evidence of Lampo's intent to be bound by the arbitration agreement, and thus, no valid arbitration agreement was formed. The case was remanded for further proceedings consistent with this opinion. View "Lampo v. Amedisys Holding, LLC" on Justia Law

Jason and Kacie Highsmith hired Shelter, LLC to manage a home renovation project and later contracted with Design Gaps, Inc. to design and install cabinets and closets. The contracts required arbitration for disputes but did not specify completion dates. Design Gaps failed to meet multiple promised deadlines, leading the Highsmiths to terminate the contracts and hire another company. The Highsmiths shared Design Gaps' copyrighted drawings with the new contractor. They then filed for arbitration, alleging breach of contract and other claims, while Design Gaps counterclaimed for various issues, including copyright infringement.The arbitrator held a three-day hearing, during which the Highsmiths presented multiple witnesses, while Design Gaps only presented David Glover. The arbitrator found in favor of the Highsmiths, awarding them damages and attorney’s fees, and denied Design Gaps' counterclaims, including the copyright claim, citing fair use and lack of evidence for copyright registration.Design Gaps petitioned the United States District Court for the District of South Carolina to vacate the arbitration award, arguing the arbitrator disregarded the law and failed to issue a reasoned award. The district court denied the petition and confirmed the arbitration award, also granting the Highsmiths' motion for attorney’s fees.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court dismissed the appeal, citing lack of federal jurisdiction based on the precedent set in Friedler v. Stifel, Nicolaus, & Co., which held that federal courts do not have jurisdiction over motions to vacate arbitration awards unless there is an independent basis for federal jurisdiction beyond the Federal Arbitration Act. The court concluded that the petition did not meet this requirement. View "Design Gaps, Inc. v. Shelter, LLC" on Justia Law

Francine Pickett sued American Bankers Insurance Company of Florida, American Modern Property and Casualty Insurance Company, Davison Insurance Agency, and various fictitiously named defendants. Pickett alleged that she sought to replace her existing mobile home insurance policy with American Bankers for a lower premium through Davison. She claimed that Davison advised her to purchase a policy from American Modern, which she did. However, American Bankers canceled her previous policy for nonpayment without her knowledge. When her mobile home was damaged by fire, American Modern refused to pay the claim, alleging fraud due to non-disclosure of the previous policy's cancellation. Pickett alleged bad faith, breach of contract, negligent procurement of insurance, civil conspiracy, and negligence against the defendants.The Wilcox Circuit Court denied American Bankers' motion to compel arbitration and stay litigation. American Bankers argued that Pickett had agreed to arbitration through a binder and previous insurance applications. The trial court found that Pickett never received a policy or arbitration agreement in 2022 and thus could not have accepted or rejected the arbitration clause. The court also found that previous policies or arbitration agreements were irrelevant to the current matter.The Supreme Court of Alabama reviewed the case and reversed the trial court's decision. The court held that the binder, which included an arbitration agreement, was a contract that Pickett relied upon for her claims. Therefore, she could not seek the benefits of the binder while avoiding its arbitration provision. The court concluded that Pickett's claims against American Bankers arose from and relied on the binder, making her bound by its terms, including the arbitration agreement. The case was remanded for further proceedings consistent with this opinion. View "American Bankers Insurance Co. of Florida v. Pickett" on Justia Law

The plaintiff, New England Property Services Group, LLC (NEPSG), appealed from a summary judgment in favor of the defendant, NGM Insurance Company (NGM). NEPSG had been assigned the insurance claim benefits by the policyholders, Stephen and Betty Callahan, for storm-related damage to their residence. NGM initially covered some damages but denied others, leading to a series of inspections and disagreements over the loss amount. Eventually, an appraisal process was conducted, resulting in an award that NEPSG found unsatisfactory due to updated labor costs published after the award was signed.The Superior Court granted summary judgment to NGM, finding that NEPSG was not entitled to a modification of the appraisal award or a second appraisal. The court also found that NEPSG failed to establish its claims for breach of contract, bad faith, unjust enrichment, and tortious interference with contractual relations. NEPSG argued that the award should be modified due to a miscalculation of labor costs and that NGM acted in bad faith by using unlicensed appraisers, among other claims.The Rhode Island Supreme Court reviewed the case de novo and affirmed the Superior Court's judgment. The court held that the appraisal award was akin to an arbitration award and thus subject to limited judicial review. NEPSG's request for modification based on post-award labor cost updates was not supported by admissible evidence. The court also found no basis for a second appraisal or for NEPSG's claims of breach of contract and bad faith, as NGM had fulfilled its contractual obligations and there was no evidence of bad faith. Additionally, the court rejected NEPSG's claims of unjust enrichment and tortious interference, finding no inequitable benefit retained by NGM and no evidence of intentional harm to NEPSG's contract with the policyholders. View "New England Property Services Group, LLC v. NGM Insurance Company" on Justia Law

Plaintiff Jenny-Ashley Colon-Perez sued her former employer, Security Industry Specialists, Inc. (SIS), alleging multiple causes of action related to her employment. After SIS moved to compel arbitration, the parties agreed to arbitrate, and the trial court ordered the claims to arbitration and stayed the court action. SIS paid two arbitration fee invoices but failed to pay the third invoice within the 30-day period required by California Code of Civil Procedure section 1281.98. Colon-Perez elected to withdraw from arbitration and moved to vacate the arbitration and stay order. The trial court granted the motion, ruling that SIS had materially breached the arbitration agreement and Colon-Perez was entitled to proceed with her claims in court. SIS then moved to vacate the order under section 473(b), which the trial court denied.The trial court ruled that the Federal Arbitration Act (FAA) did not preempt section 1281.98 and that SIS had materially breached the arbitration agreement by failing to pay the fees on time. The court also found that section 1281.98 did not violate the contracts clause of the United States and California Constitutions. SIS appealed, arguing that the FAA preempted section 1281.98, that section 1281.98 violated the contracts clause, and that it was entitled to relief under section 473(b).The California Court of Appeal, First Appellate District, Division One, affirmed the trial court's orders. The court held that the FAA did not preempt section 1281.98, as the state law could be applied concurrently with federal law. The court also found that section 1281.98 did not violate the contracts clause because it served a significant and legitimate public purpose and was appropriately tailored to achieve that purpose. Additionally, the court ruled that section 473(b) relief was not available for SIS's failure to timely pay arbitration fees, as the statute's strict 30-day deadline was intended to be inflexible. View "Colon-Perez v. Security Industry Specialists" on Justia Law

The case involves a dispute between Hyundai Construction Equipment North America, Inc. and Hyundai Heavy Industries Co., Ltd. (collectively "Hyundai") and Southern Lift Trucks, LLC ("Southern"). Southern sued Hyundai after Hyundai terminated one of their agreements and appointed another dealer in Southern's sales territory. Southern's claims included breach of contract, tort claims, and claims under the Alabama Heavy Equipment Dealer Act (AHEDA). The agreements between the parties included an arbitration clause for resolving disputes.The Washington Circuit Court initially denied Hyundai's motion to compel arbitration. Hyundai appealed, and the Supreme Court of Alabama held that all of Southern's claims, except for portions of the declaratory-judgment claim relating to the enforceability of the dealer agreements, should be sent to arbitration. The trial court then entered an order compelling arbitration for all claims except the declaratory-judgment claim. Southern did not initiate arbitration and instead filed a motion to enjoin or stay the arbitration proceedings initiated by Hyundai.The Supreme Court of Alabama reviewed the trial court's order enjoining the arbitration. The court held that the arbitration provision required all disputes to be resolved by arbitration, except for declaratory judgments on the enforceability of any provision of the agreements. The court found that the trial court erred in enjoining the arbitration, as the arbitration provision did not prevent arbitrators from adjudicating disputes over the agreements' enforceability. The court emphasized that the Federal Arbitration Act requires arbitration of all claims except for the non-arbitrable portions of the declaratory-judgment claim and that judicial economy or the possibility of inconsistent results does not justify staying arbitration.The Supreme Court of Alabama reversed the trial court's order enjoining the arbitration and remanded the case for further proceedings consistent with its opinion. View "HD Hyundai Construction Equipment North America, Inc. v. Southern Lift Trucks, LLC" on Justia Law