Justia Contracts Opinion Summaries

Michigan First Credit Union reimbursed its customers for unauthorized electronic fund transfers resulting from a SIM Swap scam involving T-Mobile USA, Inc. Michigan First sought to recover these funds from T-Mobile, claiming indemnification or contribution under the Electronic Fund Transfer Act (EFTA) and state law. The district court dismissed the complaint, ruling that Michigan First failed to state a claim for indemnification or contribution under both the EFTA and state law.The United States District Court for the Eastern District of Michigan dismissed Michigan First’s claims, finding no basis for indemnification or contribution under the EFTA or state law. Michigan First appealed, arguing that the EFTA implies a right to indemnification or contribution, that the Michigan Electronic Funds Transfer Act (MEFTA) is not preempted by the EFTA, and that its state common-law indemnification claim should stand.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that the EFTA does not imply a right to indemnification or contribution for financial institutions, as the statute is designed to protect consumers, not financial institutions. The court also found that the EFTA preempts the MEFTA and any state common-law claims for indemnification or contribution, as allowing such claims would conflict with the EFTA’s comprehensive regulatory scheme. Consequently, the Sixth Circuit affirmed the district court’s dismissal of Michigan First’s complaint. View "Michigan First Credit Union v. T-Mobile USA, Inc." on Justia Law

The case revolves around a dispute over the calculation of postjudgment interest on a series of loans between David Meiergerd and Qatalyst Corporation and Roland Pinto. Meiergerd had filed a complaint in 2007 seeking to recover on a series of loans that occurred between him and the appellees. In 2008, the district court granted Meiergerd’s motion for default judgment, ordering the appellees to pay Meiergerd a certain amount plus postjudgment interest “at the rate of 16% compounded annually ($58.97 per day).”The appellees initiated a separate proceeding in 2022, seeking to vacate or amend the judgment from the earlier proceedings. This new action was ultimately dismissed. Subsequently, in the original case, the court granted the appellees’ motion for revivor. The appellees then filed a “Motion for Satisfaction and Discharge of Judgments” related to the judgment against them. The district court calculated the amount of postjudgment interest due to Meiergerd by multiplying the per diem rate stated in the 2008 order, $58.97, by the number of days between the date of the 2008 order and the date of payment. The court found that the appellees’ checks had satisfied the amount due on the judgment, including postjudgment interest, costs, and attorney fees.Meiergerd appealed to the Nebraska Court of Appeals, asserting that the computation of the amount due and owing in the satisfaction of judgment improperly used the specified per diem rate, but failed to apply compound interest on the postjudgment amount. He contended that the district court’s approval of this daily rate disregards the language in the 2008 order that stated that postjudgment interest would be “compounded annually.” The Court of Appeals affirmed the order of the district court, and Meiergerd petitioned for further review.The Nebraska Supreme Court affirmed the decision of the Court of Appeals. The court concluded that the 2008 order was ambiguous with respect to the manner of calculating postjudgment interest, and determined that the 2008 order provided for simple interest and did not introduce compound interest that had not been requested by Meiergerd or supported by prior conduct between the parties. View "Meiergerd v. Qatalyst Corp." on Justia Law

In this case, a Delaware statutory trust, NB Taylor Bend, DST (Taylor Bend), borrowed $13 million from Prudential Mortgage Capital Company, LLC (Prudential) to acquire property in Lafayette County, Mississippi. Patrick and Brian Nelson, who were guarantors of the loan, signed an Indemnity and Guaranty Agreement (the Guaranty) in December 2014, personally guaranteeing the loan. After the loan documents were executed, Prudential assigned the loan to Liberty Island Group I, LLC (Liberty), which in turn assigned the loan to North American Savings Bank, FSB (NASB). By May 2020, Taylor Bend struggled to find tenants for the property due to the COVID-19 pandemic and informed NASB of their financial problems. In May 2021, NASB declared Taylor Bend to be in default after the borrower continually failed to make timely loan payments. NASB then filed an action against the Nelsons in the United States District Court for the Northern District of Mississippi, asserting claims for breach of the Guaranty, for recovery of the loan balance, and for declaratory judgment.The district court entered partial summary judgment for NASB, holding the Nelsons “breached the [G]uaranty and thus owe[d] to [NASB] the amount remaining due on the subject loan.” The court determined that the Guaranty was “freely assignable” and that Prudential adequately assigned all of its rights and interests to Liberty, which in turn assigned all of its rights and interests to NASB, including those conferred by the Guaranty. The court also concluded that the defenses raised by the Nelsons were “unavailable given the borrower’s absence from this litigation.” The court also granted Brian’s motion for summary judgment against Patrick, ruling that the indemnity agreement between the brothers was valid and binding and that Patrick was contractually required to indemnify Brian for “any and all obligations arising out of or relating to this litigation.”The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The court held that the Guaranty was properly assigned from Prudential to Liberty and from Liberty to NASB. NASB could therefore properly bring its claims for breach of guaranty and declaratory judgment against the Nelsons to recover the loan deficiency. Moreover, under Mississippi law, Patrick may not interpose equitable defenses that were available only to Taylor Bend to defeat his liability under the Guaranty. The court also held that the deficiency judgment awarded to NASB pursuant to the Guaranty need not be reduced by the third-party sale of the Apartments to Kirkland. NASB had no duty to mitigate its damages under either Mississippi law or the terms of the Guaranty. View "North American Savings Bank v. Nelson" on Justia Law

The case involves a dispute over a contract between a plaintiff, Pamela Phillips, and the defendant, Charlotte Metro Credit Union. In 2014, Phillips opened a checking account with the Credit Union and agreed to a standard membership agreement. This agreement included a "Notice of Amendments" provision, which allowed the Credit Union to change the terms of the agreement upon notice to Phillips. In 2021, the Credit Union amended its membership agreement to require arbitration for certain disputes and to waive members' right to file class actions. Phillips did not opt out of this amendment within the given 30-day window. Later that year, Phillips filed a class action complaint against the Credit Union for the collection of overdraft fees on accounts that were never overdrawn. The Credit Union responded by filing a motion to stay the action and compel arbitration.The trial court denied the Credit Union's motion to stay and compel arbitration, concluding that the "Notice of Amendments" provision did not permit the Credit Union to unilaterally add an arbitration provision. The Credit Union appealed this decision to the Court of Appeals, which reversed the trial court's determination and remanded the case to the trial court to stay the action pending arbitration.The Supreme Court of North Carolina affirmed the decision of the Court of Appeals. The court concluded that the Arbitration Amendment was within the universe of terms of the contract between the parties, and thus complies with the implied covenant of good faith and fair dealing and does not render the contract illusory. As such, the Arbitration Amendment is a binding and enforceable agreement between Phillips and the Credit Union. View "Canteen v. Charlotte Metro Credit Union" on Justia Law

The case revolves around Intellectual Tech LLC (IT), a wholly owned subsidiary of OnAsset Intelligence, Inc. (OnAsset), and its patent dispute with Zebra Technologies Corporation (Zebra). In 2019, IT asserted U.S. Patent No. 7,233,247 against Zebra, claiming that it was the owner and assignee of the patent. However, Zebra moved to dismiss the complaint, arguing that IT lacked standing. The district court initially denied the motion, but later granted it based on its determination that IT lacked constitutional standing, leading to the dismissal of all claims without prejudice.Previously, OnAsset had granted Main Street Capital Corporation (Main Street), a lender, a security interest in its patents, including the one in question, as part of a loan agreement. When OnAsset defaulted on the loan, Main Street gained certain rights. Subsequently, OnAsset assigned the patent to IT, which also defaulted on its obligations. The district court found that Main Street's ability to license the patent upon default deprived IT of all its exclusionary rights, leading to a lack of constitutional standing.The United States Court of Appeals for the Federal Circuit disagreed with the district court's interpretation. The appellate court found that IT retained at least one exclusionary right, even considering the rights Main Street gained upon default. The court clarified that a patent owner has exclusionary rights as a baseline matter unless it has transferred all exclusionary rights away. The court concluded that IT still suffered an injury in fact from infringement even if IT and Main Street could both license the patent. Therefore, the appellate court reversed the district court's decision and remanded the case for further proceedings. View "Intellectual Tech LLC v. Zebra Technologies Corp." on Justia Law

In the case before the Supreme Court of the State of Alaska, MJ Corporation, the owner of an automated teller machine (ATM), sued Societe Financial, LLC, an ATM processor, and its owner, James Dainis, for breach of contract, conversion, and for piercing the corporate veil. MJ Corp. alleged that it had not been receiving its full share of transaction fees and reimbursement for vault cash dispensed by the ATM as per their agreement.The court reversed summary judgment on the breach of contract claim and piercing the corporate veil, as the processor presented genuine issues of material fact pertaining to those claims. The court held that while MJ Corp. presented admissible evidence of an implied contract and breach of the same, Dainis's affidavit raised a genuine dispute of material fact regarding the damages, thus barring summary judgment on the breach of contract claim.The court affirmed the superior court’s decision to grant summary judgment on the conversion claim. It found that MJ Corp. satisfied its prima facie burden for summary judgment, and Societe's evidence was too conclusory to present a genuine dispute of material fact regarding conversion.Regarding the claim to pierce the corporate veil, the court found that there was insufficient evidence on summary judgment to hold Dainis personally liable or to pierce the corporate veils of Societe's subsidiary company and another company owned by Dainis. The case was remanded for further proceedings in line with the court's opinion. View "Societe Financial, LLC v. MJ Corporation" on Justia Law

This case concerns a foreclosure proceeding related to a property in Bristol, Rhode Island. The plaintiff, Steven Serenska, obtained a mortgage from Wells Fargo Bank, N.A. and defaulted on his payments. Wells Fargo and HSBC Bank USA, National Association as Trustee, initiated foreclosure proceedings. The plaintiff filed a complaint, alleging that there was an ambiguity in the mortgage document and that he had not received proper notice before the foreclosure.The Supreme Court of Rhode Island held that there was no ambiguity in the mortgage contract. The court found that the notice of default sent to the plaintiff strictly complied with the requirements of the mortgage agreement. The court noted that the plaintiff's alleged prejudice (claiming he would have paid the sum due had he received notice of the deadline for reinstating the mortgage) was irrelevant in this context. The court also found that an issue raised by the plaintiff on appeal (concerning additional language in the notice of default) was not properly presented before the lower court and was therefore waived.The court thus affirmed the order of the Superior Court granting the defendants' motions to dismiss the plaintiff's complaint. View "Serenska v. Wells Fargo Bank, N.A." on Justia Law

The Indiana Supreme Court heard a case involving a dispute between Tonia Land and the IU Credit Union (IUCU). When Land became a customer at the credit union, she was given an account agreement that could be modified at any time. Later, when she registered for online banking, she accepted another agreement that allowed the IUCU to modify the terms and conditions of the services. In 2019, the IUCU proposed changes to these agreements, which would require disputes to be resolved through arbitration and prevent Land from initiating or participating in a class-action lawsuit. Land did not opt out of these changes within thirty days as required, which, according to the IUCU, made the terms binding. However, Land later filed a class-action lawsuit against the credit union, which attempted to compel arbitration based on the addendum.The court held that while the IUCU did provide Land with reasonable notice of its offer to amend the original agreements, Land's subsequent silence and inaction did not result in her assent to that offer, according to Section 69 of the Restatement (Second) of Contracts. The credit union petitioned for rehearing, claiming that the court failed to address certain legal authorities and arguments raised on appeal and in the transfer proceedings.Upon rehearing, the court affirmed its original decision, rejecting the credit union's arguments. However, the court also expressed a willingness to consider a different standard governing the offer and acceptance of unilateral contracts between businesses and consumers in future cases. The court found no merit in the credit union's arguments on rehearing and affirmed its original opinion in full. View "Land v. IU Credit Union" on Justia Law

In South Carolina, Phillip Francis Luke Hughes, on behalf of the estate of his late mother, Jane Hughes, sued Bank of America for fraud, fraudulent concealment, and breach of contract, alleging that the bank charged insurance premiums in connection with a home equity line of credit his parents obtained in 2006, even though they declined the insurance offer. The bank argued that the claims did not survive Jane Hughes's death, were barred by res judicata and the statute of limitations, and that their motion for sanctions was not premature.The Supreme Court of South Carolina held that the claims for fraud and fraudulent concealment survived Jane Hughes's death. However, it also held that all three claims were barred by the res judicata effect of rulings in related federal court litigation. The court affirmed as modified in part and reversed in part the lower court's decision. The court also affirmed the lower court's decision that the sanctions motion was not premature. The court further held that the claim for breach of contract accompanied by a fraudulent act survived Jane Hughes's death, but was also barred by res judicata.As for the statute of limitations issue, the court held that the statute of limitations had expired before the action was commenced and that the plaintiff was precluded from relitigating the equitable tolling issue. The court remanded Bank of America's sanctions motion to the lower court for disposition. View "Hughes v. Bank of America" on Justia Law

In this case, the Supreme Court of the State of Montana had to decide if the Thirteenth Judicial District Court erred by disallowing a stipulated agreement for entry of a consent judgment between American Express National Bank (Amex) and Jocelyn Born (Born), and subsequently dismissing the action with prejudice.Born had accumulated a debt of $20,754.69 on her American Express credit card that she failed to repay, despite Amex’s demands for repayment. The parties had entered into a stipulation and consent agreement where Born agreed to the entry of judgment for the amount of her debt, plus costs. After some payments by Born, the amount owed had reduced to $19,368.19. The District Court initially entered a consent judgment for the reduced amount but later the same day vacated the judgment and dismissed the litigation with prejudice.Amex appealed this decision arguing that the District Court misunderstood the nature of the stipulation and consent agreement and treated it as a "cognovit judgment" - a judgment entered in advance of legal action in case of default, rather than a "judgment on consent" - an agreed judgment entered after action is commenced.The Supreme Court of the State of Montana agreed with Amex's argument, finding that the stipulation was a valid consent judgment and constituted a contract between the parties. The court held that the District Court erred in vacating the judgment and abused its discretion by denying Amex's motion for relief. The court reversed the order of dismissal and remanded the matter for entry of a consent judgment as contemplated by the parties' stipulation. View "American Express v. Born" on Justia Law