Justia Contracts Opinion Summaries

Consolidated appeals arose from an employment dispute between Dr. Margot Potter and her former employer, Women's Care Specialists, P.C. ("Women's Care"), and out of a dispute between Potter and three Women's Care employees: Dr. Karla Kennedy, Dr. Elizabeth Barron, and Beth Ann Dorsett ("the WC employees"). In case no. CV-21-903797, Potter alleged claims of defamation, tortious interference with a business relationship, and breach of contract against Women's Care. In case no. CV-21-903798, Potter alleged claims of defamation and tortious interference with a business relationship against the WC employees. After the cases were consolidated by the circuit court, Women's Care and the WC employees moved to compel arbitration on the basis that Potter's claims were within the scope of the arbitration provision in Potter's employment agreement with Women's Care and that the arbitration provision governed their disputes even though Potter was no longer a Women's Care employee. The trial court denied those motions. In appeal no. SC-2022-0706, the Alabama Supreme Court held Potter's breach of-contract claim and her tort claims against Women's Care were subject to arbitration. In appeal no. SC-2022-0707, the Court likewise held Potter's tort claims against the WC employees were subject to arbitration. The trial court's orders were denied and the cases remanded for further proceedings. View "Women's Care Specialists, P.C. v. Potter" on Justia Law

The Supreme Court reversed the judgment of the trial court granting the IU Credit Union's (IUCU) motion to compel individual arbitration and finding an enforceable agreement to arbitrate between the parties, holding that Tonia Land's silence and inaction did not amount to acceptance of the agreement.When Land, who maintained at least two checking accounts with IUCU, registered for online banking for one of her accounts she received by email a an agreement (the disclosure) permitting ICU to modify the terms and conditions to its services and send any notice to Land via email. Under the disclosure, Land was deemed to have received any such notice three days after it was sent. IUCU later sent Land an addendum, which Land claimed never to have received. Land later filed a class action complaint alleging breach of contract and other claims based on the agreement's amendment. IUCU moved to compel individual arbitration, which the trial court granted. The Supreme Court reversed, holding (1) IUCU provided Land with reasonable written notice of its offer to amend the agreement; (2) Land's silence and inaction did not amount to an acceptance of IUCU's offer; and (3) therefore, there was no enforceable agreement to arbitrate. View "Land v. IU Credit Union" on Justia Law

Construction firm Brasfield & Gorrie, LLC, received the prime contract to expand the University of Mississippi Medical Center Children’s Hospital in 2017. Electrical contractor McInnis Electric Company secured the winning bid to install the electrical and low voltage systems package for the project and subsequently signed a subcontract with Brasfield & Gorrie. Terms of the subcontract incorporated the prime contract, which were related to the same project by reference. The contract provided that work was set to begin on the project on February 15, 2018. However, McInnis, was directed not to report on site until June 4, 2018, and, due to delays, was unable to begin until July 23, 2018. As work progressed, the schedule allegedly became delayed as a result of Brasfield & Gorrie’s failure to coordinate the work of the various subcontractors. McInnis averred that Brasfield & Gorrie’s failure to coordinate and facilitate the work of the various subcontractors worsened as the project progressed, and Brasfield & Gorrie experienced turnover in management. This failure allegedly delayed McInnis’s work, which was not on the path toward completion, supposedly through no fault of its own. Construction issues were amplified when on March 11, 2020, Mississippi experienced its first reported case of COVID-19. On April 1, 2020, the Mississippi Governor instituted a shelter in place order in response to the ongoing pandemic, requiring certain nonessential businesses to close and recommending social distancing to reduce the spread of the coronavirus in Mississippi. The children’s hospital was not classified as an existing infrastructure as it was a nonoperational work in progress and thus was not subject to the executive order’s exception to the governmental shutdowns. By May 8, 2020, McInnis had suffered an approximately 40 percent loss in its workforce due to employees testing positive for COVID-19. Despite the decrease in the available workforce, Brasfield & Gorrie demanded McInnis perform under its contractual obligation. McInnis took measures to continue the work. Brasfield & Gorrie further declined requests for accommodation and instead terminated McInnis on May 13, 2020. The case before the Mississippi Supreme Court here stemmed from disagreements and a broken contract between the parties, contesting whether arbitration was appropriate to settle their disputes. The trial court compelled arbitration, and the Supreme Court affirmed. View "McInnis Electric Company v. Brasfield & Gorrie, LLC et al." on Justia Law

Breadeaux’s Pisa, LLC (“Breadeaux”) initiated this action against its franchisee, Beckman Bros. Ltd. (“Main Street Pizza”), in federal court seeking a preliminary injunction, a permanent injunction, and a declaratory judgment. After litigating its preliminary injunction, mediating, and participating in discovery proceedings, Breadeaux filed a demand for arbitration in which it sought to relitigate its preliminary injunction and avoid the court’s adverse discovery rulings. Breadeaux then moved to stay all proceedings pending completion of arbitration. The district court denied Breadeaux’s motion.   The Eighth Circuit affirmed. The court explained that Section 3’s stay provision is mandatory when “the issue involved in such suit or proceeding is referable to arbitration” under a valid arbitration agreement. 9 U.S.C. Section 3. The court wrote that it is unpersuaded by Breadeaux’s assertion that the only reasonable reading of the arbitration provision in the Agreement is that all claims or disputes, besides Breadeaux’s equitable claims, must be arbitrated. Additionally, Breadeaux elected to enforce the Agreement by judicial process, not through mediation and arbitration. Under these circumstances, Breadeaux’s claims are not referable. View "Breadeaux's Pisa, LLC v. Beckman Bros. Ltd." on Justia Law

Jansen was a resident at a skilled nursing facility. Kotalik, with Jansen’s power of attorney for healthcare, signed a “Contract Between Resident and Facility” that provides all civil claims shall be resolved exclusively through mandatory mediation, and, if such mediation does not resolve the dispute, through binding arbitration. The contract waived claims for punitive damages and included a “termination upon death” provision. Jansen suffered several falls, resulting in injuries that contributed to or caused Jansen’s death. Her estate sued, arguing that the defendants had waived their right to mediate and/or arbitrate by participating in litigation for nearly a year, that the arbitration clause was procedurally and substantively unconscionable, and that Kotalik, as Jansen’s POA for healthcare, lacked the authority to execute an arbitration clause on Jansen’s behalf.The Illinois Supreme Court affirmed the denial of the motion. By the express terms of the contract, once the resident died, the contract ceased to exist, including the forum provision. The court did not address the other arguments. View "Clanton v. Oakbrook Healthcare Centre, Ltd." on Justia Law

Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this second lawsuit brought by AJZ's Hauling, LLC against TruNorth Warranty Programs of North American (TruNorth) affirming the decision of the trial court denying TruNorth's motion to stay and compel arbitration, holding that the claims filed by AJZ's Hauling against TruNorth were subject to arbitration.AJZ's Hauling purchased a truck that came with a TruNorth warranty. AJZ's Hauling later sued TruNorth, and the trial court granted TruNorth's motion to stay the proceedings and to compel arbitration. AJZ's then filed a second lawsuit raising the same claims it had alleged against TruNorth in the first lawsuit. TruNorth again filed a motion to stay and to compel arbitration, which the trial court denied. The court of appeals affirmed, concluding that application of the doctrine of res judicata would be unreasonable or unjust. The Supreme Court reversed, holding (1) AJZ's Hauling's claims filed against TruNorth in the second lawsuit were subject to arbitration; and (2) an exception to application of the doctrine of res judicata to avoid unjust results does not apply when the parties had a full opportunity to litigate the issue and chose not to do so. View "AJZ Hauling, LLC v. TruNorth Warranty Program of N. America" on Justia Law

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

Plaintiff sued The Savannah College of Art and Design, Inc. (“SCAD”) for race discrimination and retaliation after he was fired from his job as Head Fishing Coach. As part of his employment onboarding, however, Plaintiff signed a document agreeing to arbitrate—not litigate—all legal disputes that arose between him and SCAD. Accordingly, SCAD moved to dismiss and compel arbitration. The district court, approving and adopting the magistrate judge’s Report and Recommendation (“R & R”), granted SCAD’s motion. On appeal, Plaintiff argued that the district court erred by ignoring that his agreement with SCAD was unconscionable and that SCAD waived its right to arbitrate. He also argued that the district court abused its discretion in rejecting his early discovery request.   The Eleventh Circuit affirmed the district court’s order granting SCAD’s motion to dismiss and compel arbitration. The court concluded that the Plaintiff’s arbitration agreement is neither substantively nor procedurally unconscionable. Further, the court found that SCAD did not waive its right to enforce arbitration and that the district court did not abuse its discretion in overruling Plaintiff’s request for early discovery. In short, the court concluded that Plaintiff is bound by his agreement to arbitrate his legal claims against SCAD. View "Isaac Payne v. Savannah College of Art and Design, Inc." on Justia Law

Alliance Pipeline L.P. (“Alliance”) entered into contracts with four states (“State Agreements”) as well as contracts with individual landowners in order to build a natural gas pipeline. The contracts with landowners provide easements for the pipeline right-of-way. In 2018, some landowners on the pipeline right-of-way filed a class-action lawsuit against Alliance. After the class was certified, Alliance moved to compel arbitration for the approximately 73 percent of plaintiffs whose easements contain arbitration provisions. Alliance appealed, arguing the district court erred by not sending all issues to arbitration for the plaintiffs whose easements contain arbitration provisions.   The Eighth Circuit affirmed in part and reversed in part. The court explained that the district court that the damages issues are subject to arbitration for the plaintiffs whose easements contain an arbitration provision. Plaintiffs make two arguments against sending any issues to arbitration: (1) Plaintiffs’ claims cannot be within the scope of the arbitration provisions because the claims allege lack of compensation for “ongoing yield losses,” not “damages to crops” and (2) Plaintiffs’ claims arise under the State Agreements, which do not have arbitration provisions. The court found the arbitration agreements to be enforceable and to cover all issues. The court held that as to the arbitration class members, the claims should be dismissed without prejudice. As to the members of the class without arbitration provisions, the court saw no reason why these class members cannot proceed with the lawsuit in the normal course at the district court. View "H&T Fair Hills, Ltd. v. Alliance Pipeline L.P." on Justia Law