Justia Contracts Opinion Summaries

Branson Machinery, LLC appealed a circuit court's decision that set aside a default judgment granted in its favor against Hilltop Tractor, LLC and Jeffrey Williams. According to Branson, Hilltop owed it money for equipment it had purchased. Because it had not received payment, Branson filed a breach-of-contract action against Hilltop and Mr. Williams. The Blount Circuit Court entered a default judgment in favor of Branson. Following the entry of the default judgment, Branson's counsel engaged Hilltop and Mr. Williams (acting without counsel) in settlement negotiations. The parties negotiated a "workout" agreement, and at some point, Hilltop became unable to meet the payment terms. Branson filed garnishment paperwork with the trial court seeking to enforce the original default judgment. Hilltop and Mr. Williams hired counsel and successfully moved the court to set aside the default judgment. Upon review, the Supreme Court found that the trial court exceeded its discretion in granting Hilltop and Mr. Williams' motion to set aside the default judgment. The Court reversed the trial court's decision and remanded the case to reinstate the original default judgment.

Plaintiff designs, manufactures, and sells computer mice and, in 1995, contracted with defendant to manufacture the products in bulk. The agreement identifies the "Product" as inventions, designs, methods and related information concerning computer mouse products and precludes defendant from disclosing, using, or copying "Confidential Information," or manufacturing, or otherwise commercially exploiting the Product, or developing other products derived from the Product. In 2009, defendant began to make near copies using plaintiff's production tooling, Plaintiff claimed violation of the New Hampshire Uniform Trade Secrets Act, N.H. Rev. Stat. 350-B:1 to -B:9 and breach of contract. The district court entered a preliminary injunction, ordering defendant to stop production of the copies. The First Circuit affirmed, holding that the relief was appropriate, based on the record.

Plaintiff Yvette Bouffard appealed a trial court's denial of her request for a declaratory judgment that she was entitled to uninsured motorist (UM) insurance coverage under her umbrella insurance policy issued by Defendant State Farm Fire & Casualty Company. Plaintiff was injured in 2006 from a car accident. She recovered $250,000 from the other party's insurer and her UM coverage under her personal automobile policy. Because her damages exceeded this sum, Plaintiff sought UM coverage under her umbrella policy. State Farm denied the claim because UM coverage was rejected on her original insurance application. The trial court found that Plaintiff authorized her husband to go to the insurance agency to purchase insurance for both of them, and that because the husband did not elect UM coverage, Plaintiff ratified his decision when she failed to object after reviewing the application in the car or after the policy arrived in the mail. Upon review, the Supreme Court found that the record supported the trial court's conclusion that the husband acted as Plaintiff's agent in rejecting UM coverage and affirmed the court's decision to deny Plaintiff declaratory relief.

This case arose when plaintiff alleged that Citigroup, along with various rating agencies, airlines, and municipalities, conspired to block the use of her finance structure to issue Airline Special Facility bonds. Plaintiff subsequently appealed from a judgment of the district court dismissing her complaint and from the district court's order denying her postjudgment motion for reargument and reconsideration of the dismissal and for leave to replead. On appeal, plaintiff argued that the district court erred by, inter alia, dismissing the complaint without granting leave to replead, denying the postjudgment motion, and exercising supplemental jurisdiction to deny the remaining state law claims. The court held that the district court, in denying the postjudgment motions, applied a standard that overemphasized considerations of finality at the expense of the liberal amendment policy embodied in the Federal Rules of Civil Procedure. Accordingly, the court vacated the order denying the postjudgment motion and so much of the judgment as retained supplemental jurisdiction and dismissed plaintiff's state law claims. The court remanded for further proceedings.

Plaintiffs challenged the district court's conclusion that they, as agents of Beacon Maritime, Inc. (Beacon), were bound by Beacon's agreement to arbitrate disputes with Aban Offshore Limited (Aban). The court held that under settled principles of agency and contract law, plaintiffs were not personally bound by Beacon's agreement with Aban and therefore, the court reversed the district court's order compelling arbitration and remanded for further proceedings.

This case arose when Shoe Show, Inc. (Shoe Show) entered into a lease as lessee of a store space in a shopping mall in Houston, Texas. The lease expressly prohibited Shoe Show from operating another business under the name "The SHOE DEPT." or any "substantially similar trade-name," within two miles of the leased premises. Shoe Show subsequently opened a retail footwear store under the name "SHOE SHOW" in a commercial center located less than a quarter mile from the mall in which the leased premises was located. At issue was whether the two trade names were substantially similar. The court held that, under the uncontested facts of the case and the discrete provisions of the lease, the trade name SHOE SHOW was not substantially similar to The SHOE DEPT. Therefore, the court reversed the district court's order of summary judgment and remanded for further proceedings.

Plaintiff ClearOne Communications, Inc. (ClearOne) filed suit against Defendant Biamp Systems (Biamp) alleging that Biamp misappropriated ClearOne's trade secrets by licensing a product from another company that incorporated those trade secrets. A jury found in ClearOne's favor on all of its claims against Biamp. The district court assessed damages for lost profits and unjust enrichment, and awarded ClearOne exemplary damages, attorneys' fees and nontaxable expenses. Biamp raised multiple issues on appeal pertaining to the trial court's application of the applicable statutory authority and in its award of damages. Upon review, the Tenth Circuit affirmed all aspects of the district court's judgment except for the lost profits and exemplary damages awards. The Court reversed and remanded the case for reconsideration of damages owed to ClearOne Communications.

Black Warrior Minerals, Inc. sued Empire Coal Sales, Inc. and John Fay, Jr. Black Warrior sought money allegedly owed pursuant to a coal-purchase agreement between Black Warrior and Empire and a personal guaranty executed by Mr. Fay. A trial court entered summary judgment in favor of Black Warrior, awarding it damages plus attorney fees and costs. The trial court held a bench trial on the breach-of-guaranty claim against Mr. Fay, entering judgment in favor of Mr. Fay. Black Warrior appealed the latter, arguing that the trial court erred in finding the language of the guaranty was ambiguous and applied only to amounts in excess of $1.2 million owed by Empire to Black Warrior. Upon review of the language of the guaranty and the applicable legal authority, the Supreme Court concluded the trial court erred in its interpretation of the guaranty's terms. The Court reversed the lower court's judgment and remanded the case for further proceedings.

Matador Holdings, Inc. and HoPo Realty Investments, LLC filed separate appeals to challenge elements of a circuit court's order involving commercial property owned by Matador. Matador sued HoPo for payment for materials and services Matador provided to HoPo's lessee Stratford Plastic Components of Alabama. The lease agreement contained provisions allowing for HoPo or its agents to enter the property during the lease-term to make inspections or repairs. Stratford had applied for and received a line of credit with Matador. After taking possession of the leased property, Stratford ordered materials from Matador to convert the property into one suitable for Stratford's production needs. Stratford vacated the property before the lease term expired without paying Matador for the materials. HoPo's agents testified that Stratford did not request any changes be made to the leased property and had no knowledge that Matador would supply materials to the lessee. To resolve the dispute, the trial court denied Matador's claim that HoPo was unjustly enriched by the services provided to Stratford that were unpaid, but the court placed a lien on HoPo's property for the unexpired portion of the Stratford lease. Upon review of the trial court record and its order, the Supreme Court affirmed the lower court's denial of Matador's unjust enrichment claim. Furthermore, the Court reversed the lower court's order insofar as it enforced any portion of a lien against HoPo's property or the improvements made to the property. The Court ruled the lien void.

Defendants appealed from a district court's order confirming an arbitration award where plaintiffs, six business entities, claimed to have been defrauded by defendants. At issue was whether the arbitration panel had exceeded its jurisdiction by rendering an award against defendants because they had never consented to arbitration. The court reversed the district court's order because under ordinary principles of contract and agency law, defendants, as the CEO and CFO of the defendant corporations, were not personally bound by the arbitration agreements their corporations entered into. Therefore, the court held that the arbitration panel lacked jurisdiction to render an award against defendants.