Justia Contracts Opinion Summaries

This appeal challenged the small employer group health coverage act (Act), which establishes requirements for insurance carriers to offer health insurance benefit plans to small employers in Michigan. Priority Health sought a declaratory judgment from the Office of Financial and Insurance Services (OFIS) so that it could allocate a small portion of insurance premiumsâ costs to employers, lessening the financial burden on employees. Priority Health would not renew contracts with employers who did not agree to pay a portion of the premiums. Both the Court of Appeals and the Commissioner of the Office of Financial and Insurance Services (OFIS) concluded that âminimum employer contribution provisionsâ are inconsistent with the Act. They reasoned that an employerâs failure to pay a minimum percentage of its employeesâ premiums is not among the reasons in the Act that a carrier can use to refuse to renew an insurance plan. The Supreme Court disagreed with the appellate court and OFISâ interpretation of the Act. The Court found that just because the Michigan Legislature did not include an employerâs refusal to pay according to a minimum contribution provision as among the reasons for not renewing a contract for benefits, the [Priority Health] provision was unreasonable or inconsistent with the Act. In general, âunless a provision directly conflicts with the enumerated reasons [of the Act], it may be included in a plan so long as it is reasonable and not inconsistent.â The Court remanded the case to the OFIS for further proceedings.

Appellant Kim Crockett appealed the circuit courtâs order in favor of Appellee C.A.G. Investments, Inc. (CAG). CAG was created as an investment vehicle to provide funds to Omni Holding and Development Corporation (Omni). Omni operated a crop-dusting and farm-equipment export business. CAG purchased equipment and land for Omniâs operations and a house for Omniâs manager. Ms. Crockett became Omniâs sole stockholder, president and chairman of the board in 2005. CAG made a series of loans to Omni. The loans were secured by the property Omni used in the businessâ operation, and by the house in which Ms. Crockett lived. In late summer 2003, Omni suffered numerous financial difficulties, resulting in the deterioration of the business relationship between the management of CAG and Omni. While Omni contemplated filing for bankruptcy protection, CAG sought to recover the collateral pledged for the loans it had made to Omni. CAG asked Omni to remove all personal property Omni owned from the premises, and demanded to take possession of the real property. Omni refused to comply, and CAG sued for possession, believing the property to be unlawfully detained. The circuit court entered an order against Omni for unlawful detainer, and found that CAG was entitled to a writ of possession. Omni did not vacate the premises, and appealed the circuit courtâs order. The appellate court dismissed Omniâs appeal. Upon review, the Supreme Court affirmed the decisions of the circuit and appellate courts.

In 2006, Respondent Cordillera Fund, LP, purchased shares in Appellant American Ethanol for $3 per share. In 2007, shareholders of American Ethanol sought to merge with AE Biofuels, and notified their shareholders of its intent. Respondent notified American Ethanol of its intent to dissent, and demanded payment for its shares. The merger was approved by the shareholders. When the merged company refused to pay, Respondent filed suit at the district court. Ultimately the issue for the district court to resolve involved the fair value of Respondentâs shares at the time of the merger. Appellants offered respondent $0.15 per share; Respondent maintained the fair value was $3 per share. The parties went to court because neither could agree on the value. The court entered a judgment in favor of Respondent, determining that $3 per share was the fair value. On appeal, Appellants contended that the district court abused its discretion in determining the fair value of the shares. The Supreme Court concluded that appellants did not demonstrate that the district court abused its discretion, and affirmed the courtâs ruling in favor of Respondent.

Plaintiff appealed from a judgment dismissing a three-count complaint arising from the renegotiation of certain investment-advisory agreements. The court certified a question to the Supreme Judicial Court of Massachusetts as to the circumstances under which that state's business judgment rule could be asserted in response to a shareholder derivative suit under the Massachusetts Business Corporations Act, Mass. Gen. Laws ch. 156D, 5.44. Upon the receipt of the answer, the court affirmed the district court's dismissal of two of plaintiff's claims brought pursuant to various provisions of the Investment Company Act, 15, U.S.C. 80a-15(a), and Massachusetts state law. Regarding the third claim, a derivative state law claim for breach of fiduciary duty to which the certified question related and as to which the district court granted a motion to dismiss, the court vacated the judgement and remanded with instructions to convert the motion to dismiss to a motion for summary judgment, and to rule on that motion, after further discovery if further discovery was warranted.

Plaintiffs Markyl Lee and Promises to Keep, LLC, failed to produce documents in response to a discovery request. They then proceeded to violate two judicial orders compelling production of those documents. After âpatiently affording the plaintiffs chance after chance,â the district court dismissed the case as a sanction against Plaintiffs. Plaintiffs appealed the dismissal. The Tenth Circuit held that â[o]ur justice system has a strong preference for resolving cases on their merits whenever possible, but no one. . .should count on more than three chances to make good a discovery obligation.â The Court affirmed the lower courtâs dismissal of Plaintiffsâ case.

Joe's Concrete and Lumber, Inc. ("Joe's Concrete") sought attorneys fees from Concrete Works of Colorado, Inc. ("CWC") after CWC breached its contract with Joe's concrete. At issue was whether the district court properly denied attorneys fees. The court held that Joe's Concrete was entitled to recover its attorneys fees where the attorneys fees were not an element of damages to be proved at trial but were collateral to the merits of the case.

Appellant, Retail Holdings, N.V. (together with its predecessors, "New Singer"), appealed from a judgment in favor of appellee, Lockheed Martin Corporation (together with its predecessors, "Old Singer"), regarding a dispute revolving around the interpretation of a 1986 Reorganization and Distribution Agreement ("Spin-off Agreement") between appellee's predecessor, The Singer Company, and appellant's predecessor, SSMC, Inc. At issue was whether the Spin-off Agreement transferred a particular pension plan, the Executive Office Foreign Service Retirement Plan ("Plan"), from Old Singer to New Singer. The court reversed the judgment and held that the district court erred in considering extrinsic evidence of the parties' post-contract conduct where the contract admitted only one reasonable interpretation when the Plan was transferred to New Singer by clear and unambiguous terms.

Plaintiffs, a West Virginia coal sales company, sued Mountain State Carbon, LLC ("Mountain State")and its member companies, on of which was Severstal Wheeling, Inc. ("Severstal Wheeling") in federal district court alleging that Mountain State wrongfully refused to accept coal deliveries in breach of a coal supply agreement with plaintiffs. At issue was whether the district court erred by determining that Severstal Wheeling's principal place of business was in Wheeling, West Virginia for diversity jurisdiction purposes under Hertz Corp. v Friend. The court held that the district court erred by determining that Severstal Wheeling's principal place of business was in Wheeling, West Virginia where the touchstone for determining a corporation's principal place of business for diversity purposes was "the place where the corporation's high level officers direct, control, and coordinate the corporation's activities." Therefore, Dearborn, Michigan was Severstal Wheeling's principal place of business where seven of its eight officers, including its chief executive officer, chief operating officer, and chief financial officer, set corporate policies and oversaw significant corporate decisions out of Dearborn, Michigan.