Justia Contracts Opinion Summaries

Contitech USA, Inc., a division of tire manufacturer Continental AG, contracted with a trucking company, McLaughlin Freight Services, Inc., and its owner, Dan McLaughlin, to deliver rubber between two of its facilities. The fee schedule included a base rate and a higher "rounder" rate, which required pre-approval from Contitech. Over three years, McLaughlin submitted 645 unapproved "rounder" bills to the third-party payments administrator, using fraudulent emails that purported to show pre-approval from Contitech. Contitech discovered the scheme and sued for fraud, unjust enrichment, and breach of contract.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that there was sufficient evidence for a reasonable jury to find for Contitech on the fraud and unjust-enrichment counts. The court rejected McLaughlin's argument that Contitech failed to prove proximate cause and damages, noting that under Iowa law, a defrauding defendant cannot claim that its misrepresentations did not cause any damages to the plaintiff. Furthermore, McLaughlin was contractually obligated not to charge rounder rates without pre-approval from Contitech. Thus, a reasonable jury could have found that the difference between the contractual base rate and the actual billed amount was the amount of money McLaughlin received, which in equity and good conscience belonged to Contitech.The court also affirmed the district court's decision to remit Contitech's unjust-enrichment award to $0 and to remit McLaughlin’s damages award to prevent double recovery. The court reasoned that while a party is entitled to proceed on various theories of recovery, it is not entitled to collect multiple awards for the same injury. Furthermore, the court held that the district court did not abuse its discretion in granting pre-judgment interest to Contitech, and that postjudgment interest is mandatory under 28 U.S.C. § 1961 and should be awarded regardless of whether the district court orders it. View "Contitech USA, Inc. v. McLaughlin Freight Services, Inc." on Justia Law

In a dispute between K&S Staffing Solutions, Inc. (K&S) and The Western Surety Company (Western) and VSS International, Inc. (VSSI), the Court of Appeal of the State of California Third Appellate District upheld the Superior Court of San Joaquin County's decision that K&S was not a “laborer” within the meaning of the mechanics’ lien law and that payment bonds issued for the projects in question were subject to the mechanics' lien law’s requirements.K&S, a staffing company, sued VSSI and Western to recover unpaid amounts for services provided on state projects, arguing it was a “laborer” under the mechanics' lien law and thus entitled to assert a claim against payment bonds for the projects. The court disagreed, interpreting the term “laborer” in the law as a person "acting as an employee" performing labor or bestowing necessary services on a work of improvement, and concluded K&S, as an employer, did not qualify.Furthermore, K&S argued that the payment bonds issued for these state projects were not subject to the mechanics' lien law’s requirements because they were not "payment bonds" within the meaning of the law. However, the court disagreed, ruling that the bond requirements of the mechanics' lien law apply to state projects that require a bond under Public Contract Code section 7103 and other public entity projects that require a bond under section 9550. Consequently, the court affirmed the lower court's attorney fee award to the defendants under section 9564, which mandates attorney fees be awarded to the prevailing party in any action to enforce the liability on a payment bond. View "K & S Staffing Solutions v. The Western Surety Co." on Justia Law

In November 2015, Joseph H. Reeves contracted with Wilson Floor & Wallcovering, Inc. ("Wilson Floor") and its owner, Tom Wilson, to replace the wood flooring in his home. After the work was completed, Reeves found the new flooring to be unlevel and claimed that Wilson Floor and Tom Wilson refused to make further repairs. Reeves filed a complaint against "Tom Wilson" and "Wilson Flooring" in May 2017, alleging negligence, fraudulent suppression, fraudulent inducement, and breach of contract.The Supreme Court of Alabama reviewed the case after the Autauga Circuit Court dismissed Reeves's claims against Wilson Floor due to "lack of service" under Rule 4, Ala. R. Civ. P. Although it was undisputed that Reeves's attempted service on Wilson Floor was ineffective, the Supreme Court of Alabama concluded that Wilson Floor was adequately informed of Reeves's action against it, and hence, the trial court's dismissal of his claims against Wilson Floor was prohibited under Rule 4(i)(2)(C).The Court noted that while Tina Wilson, Tom Wilson's wife, was not Wilson Floor's registered agent, she was one of the company's listed officers and could accept service on its behalf. As Tina had actually received the summons and the complaint, the Court established that Wilson Floor was informed of Reeves's action within time to avoid default. Therefore, the Supreme Court of Alabama reversed the trial court's order dismissing Reeves's action against Wilson Floor and remanded the case for further proceedings. View "Reeves v. Wilson Floor and Wallcovering, Inc." on Justia Law

The case revolves around a dispute between Harvest Group, LLC ("Harvest") and Love’s Travel Stops & Country Stores, Inc. and Musket Corp. (collectively, "Love’s") over a breach-of-contract claim. Harvest, a company that assists businesses in acquiring economic development incentives, entered into a contract with Love’s to help secure incentives for a renewable diesel facility. In return, Harvest would receive a fee of 10% of the value of any incentives it helped Love's secure.A property tax assessment for the project, which significantly reduced the estimated tax burden, was at the center of the dispute. Harvest claimed that this assessment qualified as an incentive under their agreement, and thus they were entitled to a fee. Love’s, however, argued that the assessment was not an incentive as defined by their contract and that it was not the product of Harvest’s efforts, but simply the result of the assessor’s application of Nebraska tax law.The United States Court of Appeals for the Tenth Circuit reversed the lower court's grant of summary judgment to Love’s on the issue of whether the assessment was an incentive/benefit under the Agreement and whether the assessment was the product of Harvest’s efforts. There were genuine disputes of material fact about these issues, meaning they must be decided at trial, not on summary judgment. The court also reversed the lower court on the issues of Harvest’s entitlement to interest and whether Harvest was the prevailing party. The case was sent back to the lower court for further proceedings. View "Harvest Group v. Love's Travel Stops & Country Stores" on Justia Law

The case involves Green Plains Trade Group, LLC, who appealed the district court's dismissal of their claim for tortious interference with contract against Archer Daniels Midland Company (ADM). Green Plains alleged that ADM unlawfully manipulated the price of ethanol, causing Green Plains to receive less money for the ethanol it sold to third parties. The district court dismissed the case, saying Green Plains hadn't specified the contracts ADM interfered with or shown a breach of contract. Green Plains argued that under Nebraska law, tortious interference doesn't always require a breach and that ADM's actions made its performance under its contracts "more expensive or burdensome."The United States Court of Appeals for the Seventh Circuit vacated the district court's dismissal and remanded the case for further proceedings. The Court of Appeals found that while the district court was correct to require Green Plains to plead more than general allegations about its contracts, it may have required too much specificity. The Court of Appeals also found that the district court erred in not recognizing section 766A of the Restatement (Second) of Torts as part of Nebraska's law, which allows a plaintiff to bring a successful tortious interference with contract claim even if the contract was not breached. The Court of Appeals held that the district court must apply the law as it believes the highest court of the state would apply it if the case were now before it, and it should not fear adopting the less restrictive approach if it believes the state's highest court would adopt that approach. View "Green Plains Trade Group, LLC v. Archer Daniels Midland Co." on Justia Law

In a dispute between Jonathan H. Paul and Rockpoint Group, LLC, the Delaware Court of Chancery denied Rockpoint's motion to dismiss Count III and granted Paul's cross-motion for partial summary judgement. The case stemmed from a disagreement about how to divide the proceeds from a transaction involving the investment fund complex that Paul co-founded and later left. After Paul's departure, he and his former partners agreed to an amendment to the company’s limited liability agreement, which stipulated Paul would receive a share of the proceeds from certain future transactions. A dispute arose over the calculation of Paul’s share when a qualifying transaction occurred. The court determined that the dispute resolution mechanism in the agreement called for an expert determination, not a plenary arbitration. The court also affirmed that the third amended and restated LLC agreement, not the first, governed the dispute. The court ruled that the appraiser could not consider extrinsic evidence, such as legal arguments and affidavits, presented by Rockpoint in its valuation. The court further directed that Rockpoint's appraisal must be redacted to omit the offending material. View "Paul v. Rockpoint Group, LLC" on Justia Law

This case involves a dispute between Griggs & Browne Pest Control Co., Inc. (plaintiff), and its former employee, Brian Walls (defendant). Upon hiring Walls in 2011, the parties entered into a noncompetition agreement, which was updated in 2020. The agreement stipulated that, in return for his training and access to the company's client list, Walls would refrain from soliciting business from or performing services for the company's current or former customers for 24 months after ending his employment with the company.In 2021, the company introduced a new policy requiring all employees to receive the COVID-19 vaccination or terminate their employment. Walls vocally opposed the policy and was told he could no longer resume his employment. A month later, the company discovered that Walls was contacting their former clients and performing pest-control services for them, in violation of the noncompetition agreement. The company initiated a lawsuit to prevent Walls from further violating the agreement.The Superior Court of Rhode Island granted a preliminary injunction in favor of the plaintiff, which Walls appealed. The Supreme Court of Rhode Island affirmed the lower court's decision, determining that the noncompetition agreement was valid and enforceable. The court rejected Walls' argument that he had been improperly terminated due to his refusal to receive the COVID-19 vaccine, noting that the circumstances surrounding his departure were immaterial to the enforcement of the noncompetition agreement. The court also found that the plaintiff would suffer irreparable harm due to loss of customer goodwill if Walls were allowed to continue servicing the company's clients. The balance of equities favored the plaintiff, and the injunction was necessary to uphold the status quo. Therefore, the court affirmed the lower court's decision to grant a preliminary injunction in favor of the plaintiff. View "Griggs & Browne Pest Control Co., Inc. v. Walls" on Justia Law

In the case, Remy Holdings International, LLC ("Remy") sued Fisher Auto Parts, Inc. ("Fisher") after Fisher terminated their business relationship and sold its inventory to a different manufacturer. Remy claimed that Fisher wrongfully terminated their agreement and that the inventory Fisher sold belonged to Remy. Remy brought claims for breach of contract, unjust enrichment, and conversion. Fisher counterclaimed for breach of contract due to Remy's poor performance.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decisions, which were all in Fisher's favor. The court found that Remy committed the first material breach of the contract by failing to keep Fisher competitive in the marketplace. Furthermore, Fisher did not waive its right to assert the first material breach defense by continuing to order from Remy and occasionally waiving the order-fill penalty. Therefore, Remy was precluded from enforcing the contract and its breach of contract claim related to ownership of the inventory was dismissed.The court also rejected Remy's argument that the district court should have reinstated its unjust enrichment claim after declaring its contractual rights unenforceable. Remy had failed to respond to Fisher's motion for summary judgment seeking the dismissal of the unjust enrichment claim, and as a result, forfeited any opposition to its dismissal.Lastly, the court found no error with the district court's evidentiary rulings, including the admission of expert testimony and the USA Core Policy, and its refusal to instruct the jury on certain defenses. View "Remy Holdings International, LLC v. Fisher Auto Parts, Inc" on Justia Law

In this case, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the United States District Court for the Southern District of Iowa to dismiss the lawsuit of Iowa-based livestock feed seller Hawkeye Gold, LLC against China National Materials Industry Import and Export Corporation, also known as Sinoma, for lack of personal jurisdiction. Hawkeye Gold sued Sinoma to recover an unpaid default judgment it obtained against Sinoma's now-defunct wholly owned United States subsidiary, Non-Metals, Inc., for breach of a contract to purchase livestock feed. After six years of litigation, the District Court dismissed the case because it did not have personal jurisdiction over Sinoma, a decision which Hawkeye Gold appealed. The Appeals Court, after reviewing the evidence, agreed with the District Court's conclusion that Sinoma had insufficient minimum contacts with Iowa to support personal jurisdiction. The Court also rejected Hawkeye Gold's argument that Sinoma was a party to the contract or that Non-Metals was the alter-ego of Sinoma. Furthermore, the Court affirmed the District Court's denial of Hawkeye Gold's request for sanctions against Sinoma for alleged discovery violations. View "Hawkeye Gold, LLC v. China National Materials" on Justia Law

The Supreme Court of North Carolina was required to decide whether a trial court can refuse to hear oral testimony during a summary judgment hearing on the mistaken belief that the North Carolina Rules of Civil Procedure prohibit the receipt of such testimony. The plaintiff, a corporation, had sued the defendants for breach of a commercial lease, and the defendants counterclaimed for fraud. During the summary judgment hearing, the trial court declined a request by the defendants to introduce live testimony, asserting that it was not permitted during a summary judgment hearing. The defendants appealed, and the Court of Appeals vacated the trial court's summary judgment order and remanded the case, leading to this appeal.The Supreme Court of North Carolina held that a trial court errs if it fails to exercise its discretion under the misapprehension that it has no such discretion, referring to Rule 43(e) of the North Carolina Rules of Civil Procedure that allows for the introduction of live oral testimony during a summary judgment hearing at the discretion of the trial court. The court found that the trial court was mistaken in its belief that it could not allow oral testimony, and this error warranted vacatur and remand for reconsideration. The Supreme Court thereby modified and affirmed the decision of the Court of Appeals to vacate the trial court's summary judgment order and remand the case. View "D.V. Shah Corp. v. VroomBrands, LLC" on Justia Law