Justia Contracts Opinion Summaries

Manpower, an international staffing firm, is the parent of Right Management in Paris, France. A building in which Right leased space collapsed, so that Right’s offices were inaccessible. Right relocated without having access and incurred replacement costs and lost income from the interruption of operations. A local insurance policy, issued by ISOP’s French affiliate, provided primary coverage, and a master policy, issued by ISOP and covering Manpower’s operations worldwide, provided excess coverage over the local policy’s limits. Right received $250,000 under the local policy pursuant to a provision covering losses caused by lack of access by order of a civil authority. Another $250,000 was paid under the master policy, exhausting the $500,000 sublimit under a similar lack‐of‐access provision. Manpower also claimed that, under the master policy, it was entitled to reimbursement for business interruption losses and the loss of business personal property: about $12 million. ISOP denied the claim. The district court held that Manpower was covered under the master policy for business interruption losses and loss of business personal property and improvements, but excluded Manpower’s accounting expert, without whom Manpower could not establish those damages and held that the master policy was not triggered because the losses were also covered under the local policy, which had to be fully exhausted before master policy coverage was available. The Seventh Circuit reversed exclusion of the expert and entry of judgment against Manpower on the business interruption claim, but affirmed judgment for ISOP on the property loss claim. The master policy did not provide coverage for Manpower’s property losses.View "Manpower, Inc. v. Ins. Co. of the State of PA" on Justia Law

Pam, Allan, and Charles and Mary Lou Dees (the Dees) started a business, Great Falls Portables, Inc. (GFP), with Allan acting as sole manager of the business. Pam subsequently took over management. The Dees later filed a complaint against Pam, GFP, and others. A month later, Pam and Allan, who were married but separated, entered into a settlement agreement that provided that Pam would be responsible to the Dees for any obligation owed them in connection with their interest in GFP. In litigation with the Dees, Pam filed a third-party complaint against Allan, alleging (1) the Dees' complaint arose out of Allan's fraudulent activity (Count I), (2) Allan had fraudulently induced Pam to enter the agreement assigning responsibility for the Dees' interest (Count II), and (3) Allan must indemnify her from liability to the Dees (Count III). The district court granted summary judgment to Allan on all three counts. The Supreme Court affirmed, holding that the district court correctly determined that (1) Pam failed to plead fraud with sufficient particularity; (2) Pam failed to show reliance on Allan's representations; and (3) Count III of Pam's complaint was dependent on and related back to Counts I and II. View "Fossen v. Fossen" on Justia Law

The issue on appeal to the Supreme Court centered on whether Lincoln Farm, L. L. C. breached a contract to sell potatoes to Farming Technology Corporation, and whether certain provisions of the Uniform Commercial Code involving the unavailability of a carrier and a commercially impracticable method of delivery were applicable to the parties. Farming Technology argued at trial that Lincoln Farm was required to build a private rail spur in order to fulfill Lincoln Farm's contractual obligation to load potatoes on railcars or trucks furnished by Farming Technology Corporation to take delivery of the potatoes. After review of the contract in question, the Supreme Court held that the contract unambiguously stated that Farming Technology Corporation would furnish railcars or trucks to take delivery of the potatoes, and that the contract did not state that Farming Technology had the right to insist on delivery solely by rail, or to insist that Lincoln Farm build a private rail spur. View "Lincoln Farm, LLC v. Oppliger" on Justia Law

Muse, Nelson, and Weiss, and two others formed DGP. The five individuals were DGP’s limited partners; its general partner was MNW LLC, consisting of Muse, Nelson, and Weiss. DGP contracted to buy Gas Solutions and Prospect agreed to lend DGP 95% of the purchase price, subject to due diligence. The agreement prevented DGP from negotiating with other lenders. Prospect’s investigation raised concerns and it informed DGP that it would not make the loan. After DGP threatened to sue, Prospect agreed to pay DGP $3.295 million as reimbursement for DGP’s expenses and DGP agreed to assign Prospect its right to buy Gas Solutions. DGP assigned the purchase contract to DGP’s general partner, MNW, owned by Muse, Nelson and Weiss, who then sold Prospect their individual membership interests, transferring the contract to Prospect. Despite a mutual release, DGP sued Prospect alleging fraud, breach of fiduciary duty, and tortious interference with contract. Prospect counterclaimed alleging breach of the covenant not to sue. The district court granted summary judgment in favor of Prospect and awarded attorneys’ fees in its award. The Fifth Circuit affirmed, rejecting an argument that the covenants did not bind the individuals. Under an interpretation of the agreement giving effect to all its terms, Nelson and Muse breached the agreement by funding DGP’s lawsuits and violated the release and covenant not to sue.View "Dallas Gas Partners, L.P. v. Prospect Energy Corp" on Justia Law

Spectera is a vision care insurer that provides eye care benefits coverage to Georgia residents. Appellee Steven M. Wilson is a licensed optometrist who provides eye care services in Lowndes County as Wilson Eye Center ("WEC"). Appellees Cynthia McMurray, Jodie E. Summers, and David Price are also licensed optometrists that work for WEC. Prior to 2010, Spectera had entered provider contracts ("Patriot contracts") with Wilson and McMurray and they became members of Spectera's panel of eye care providers. In 2010, Spectera decided to terminate its Patriot contracts and replace them with independent participating provider (IPP) agreements. Under the new agreement "[appellees] would no longer receive the reimbursement for materials from Spectera and would no longer be entitled to retain the materials co[-]pays from Spectera insureds." Appellees sued Spectera contending that Spectera's proposed IPP agreement violated various subsections of Georgia's Patient Access to Eye Care Act. While the case was pending, the trial court issued a temporary injunction prohibiting Spectera from forcing its panel of independent participating providers in Georgia to abide by the IPP agreement. After the trial court temporarily enjoined Spectera from enforcing its IPP agreement, Spectera sought to remove appellees Wilson, Summers, and McMurray from its approved panel of providers altogether; but the trial court enjoined Spectera from taking such action. Although appellee Price was not on Spectera's provider panel, he alleged Spectera violated the Act by denying him membership on its panel because of his refusal to sign the IPP agreement. The trial court granted the appellees' motions for summary judgment, denied Spectera's motion for summary judgment and issued a permanent injunction precluding Spectera from enforcing the restrictions contained in the IPP agreement as to "any other licensed eye care provider on [Spectera's] provider panel" or those who had applied to be on the panel. Spectera appealed the trial court's decision to the Court of Appeals which affirmed in part and reversed in part. The Court of Appeals found that the covered materials requirement in the IPP agreement violated subsections (c)(2) and (c)(5) of the Act in regard to independent optometrists. The issue before the Supreme Court was whether the Court of Appeals correctly construed OCGA 33-24-59.12 (c) of the Act. Because the IPP agreement did not create the type of impermissible discrimination between classes of licensed eye care providers contemplated by subsection (c)(5), the Court of Appeals was incorrect in its conclusion that the IPP agreement violated that subsection of the Act. Accordingly, the Court reversed that portion of the Court of Appeals' decision. The Act does not preclude insurers from terminating contracts with its existing eye care providers. "While Spectera's terminating its contracts with appellees Wilson, McMurray, and Summers may be an unpopular or ill-advised course of action, it cannot be said such action violates the Act." Therefore, that portion of the permanent injunction against Spectera was vacated. View "Spectera, Inc. v. Wilson" on Justia Law

In 2009, Sirius SM Radio Inc. negotiated a capital infusion (the investment agreement) from Liberty Media Corporation in return for Liberty Media receiving preferred stock in Sirius. Under the investment agreement, Liberty Media secured the ability to take control of Sirius in 2012 without paying a premium to Sirius stockholders by purchasing additional shares needed to obtain control in the market. When Liberty Media announced in 2012 that it intended to acquire majority control, Plaintiffs sued, contending that the Sirius board had breached its fiduciary duties by adhering to the provisions of the investment agreement and that Liberty Media breached its fiduciary duties by purchasing shares on the open market to acquire majority control of Sirius without paying a premium. The Court of Chancery granted Defendants' motion to dismiss, holding (1) Plaintiffs' challenge to the investment agreement was time-barred, as it was filed after the three-year limitations period expired; and (2) Liberty Media's decision to give valuable consideration in exchange for the right to make open market purchases after the standstill period expired provided no basis for a cause of action against it. View "In Re Sirius XM S'holder Litig." on Justia Law

Satyam approached the Trust about forming a joint venture to provide engineering services to the automotive industry. Satyam represented that it was an IT-services provider with a base of automotive customers, that it was publicly-traded, audited, and financially stable. The Trust formed VGE, a separate legal entity; in 2000, VGE and Satyam formed SVES under the laws of India; VGE contributed $735,000. VGE and Satyam signed agreements calling for binding arbitration. In 2005, Satyam initiated arbitration. VGE counterclaimed that Satyam had breached its obligations. The arbitrator rejected VGE’s counterclaims, found that Satyam never competed with SVES, and found an event of default entitling Satyam to purchase VGE’s shares in the joint venture for book value. Satyam filed an enforcement action. The district court ordered VGE to comply with the award. The Sixth Circuit affirmed. Following a 2007 contempt proceeding, VGE complied. In 2010, VGE and the Trust sued, alleging that, starting before the joint venture, Satyam engaged in a massive fraud scheme about its financial stability, and claiming civil violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961–1968. The district court dismissed, based on res judicata defense, and denied leave to amend. The Sixth Circuit reversed. The complaint adequately alleged that Satyam wrongfully concealed the factual predicate to claims, so the defense of claim preclusion does not apply. View "Venture Global Eng'g, LLC v. Satyam Computer Servs., Ltd." on Justia Law

In 2008 and 2009, Dr. Raley was employed by Minimally Invasive Spine Institute, PLLC (MISI), a medical practice owned and managed by Haider. Raley claimed MISI had failed to pay him all the money he earned and filed suit in 2010, claiming breach of contract and breach of implied contract against MISI. In Count II, Raley sued MISI as well as Haider, alleging that Haider wrongfully distributed money from MISI to himself, depleting MISI of funds in violation of Code § 13.1-1035, which governs distributions made by Virginia LLCs. The trial court agreed that Raley, who was not a member of MISI, could not bring a cause of action under Code § 13.1-1035, and dismissed Raley’s Count II claim. Raley was awarded $395,428.70 plus interest against MISI., but has been unable to collect the judgment. He filed a garnishment proceeding, naming Haider as the garnishee. Raley also filed a second complaint against Haider, Minimally Invasive Pain Institute, PLLC (MIPI) and Wise, LLC (Wise). The cases were consolidated. The trial court dismissed all counts, based upon the dismissal with prejudice of Count II of the original case. The Virginia Supreme Court affirmed in part, holding that res judicata does not bar claims against MIPI and Wise and Raley’s Count I or garnishment claims against Haider, but does bar other claims against Haider. View "Raley v. Haider" on Justia Law

Target Media Partners Operating Company, LLC and Specialty Marketing Corporation d/b/a Truck Market News, have litigated a commercial contract dispute since 2007. Each party alleged breach-of-contract claims against the other. The litigation ended with a jury verdict in favor of Ed Leader, Target Media's vice president of trucking on the promissory-fraud claim against him; in favor of Specialty Marketing on its fraudulent misrepresentation claim, and in favor of Target Media on its breach of contract counterclaim. Target Media and Leader appealed the judgment entered in favor of Specialty Marketing on its claims against Target Media and Leader. After careful review of the trial court record, the Supreme Court affirmed the trial court's order that denied Target Media and Leader's postjudgment motion, but the case was remanded for re-review of the punitive damages award. View "Target Media Partners Operating Company, LLC v. Specialty Marketing Corporation" on Justia Law

Plaintiffs Costantini, Jr. and Kahn sought indemnification for their fees and costs in underlying litigation involving Swiss Farm. The court concluded that Costantini was entitled to indemnification under Article 14 of the Operating Agreement because he was a manager of Swiss Farm and was sued by Swiss Farm in that capacity and prevailed. However, the court concluded that, although Kahn was sued for breach of fiduciary duty and prevailed, he was not a member of the Board of Managers, an officer, an employee or an agent of the company and, therefore, was not entitled to indemnification under the Operating Agreement. Accordingly, the court granted in part and denied in part plaintiffs' motion for judgment on the pleadings. View "Costantini, et al. v. Swiss Farm Stores Acquisition LLC" on Justia Law