Justia Contracts Opinion Summaries

KOKO Development, LLC, a real estate developer, contracted with Phillips & Jordan, Inc., DW Excavating, Inc., and Thomas Dean & Hoskins, Inc. (TD&H) to develop a 180-acre tract of land in North Dakota. However, the project faced numerous issues, leading KOKO to sue the defendants for breach of contract and negligence. KOKO did not disclose any expert witnesses before the trial, leading the district court to rule that none of its witnesses could give expert testimony. Consequently, the district court granted the defendants' motion for summary judgment, finding that without expert witnesses, KOKO could not establish its claims.The district court's decision was based on the complexity of the issues involved in the case, which required expert testimony. The court found that KOKO's negligence and breach of contract claims required complex infrastructure and engineering analysis, which was beyond the common knowledge or lay comprehension. KOKO appealed the decision, arguing that the district court erred in finding that it did not properly disclose witnesses providing expert testimony and that expert testimony was necessary for the case.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The appellate court found that KOKO did not identify the witnesses that would provide expert testimony and did not meet the requirements of Rule 26(a)(2). The court also agreed with the district court that the negligence and breach of contract claims required expert testimony due to the complexity of the issues in the case. The court concluded that the district court did not abuse its discretion by excluding the three witnesses' expert testimony and requiring expert testimony for the negligence and breach of contract claims. View "KOKO Development, LLC v. Phillips & Jordan, Inc." on Justia Law

In 2011, James Buchl and Doren Chatinover, electrical engineers with experience in oil fields, entered into an oral contract with Gascoyne Materials Handling & Recycling to work as project managers for a division of Gascoyne. After five years, Gascoyne stopped making monthly payments under the contract, leading the plaintiffs to end the relationship and file a lawsuit. The plaintiffs' initial complaint alleged eleven causes of action, including fraud and deceit, which were dismissed by the district court. The case proceeded to a bench trial on the remaining claims for breach of contract and conversion, and on Gascoyne’s counterclaims.The district court found that Gascoyne had underpaid the plaintiffs by $822,199 and entered judgment in their favor for that amount, plus prejudgment and post-judgment interest. The court dismissed Gascoyne’s counterclaims. Gascoyne filed a post-trial motion to alter or amend, raising the issues now presented on appeal. The district court modified the award of post-judgment interest but otherwise denied the motion.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed all but $14,650 of the award of contract damages and the award of costs, reversed the grant of prejudgment interest, and remanded for entry of an amended judgment. The court found that the district court had not made a clear error in calculating the profits due to the plaintiffs, except for failing to include $29,300 in expenses for a particular project, which would reduce the plaintiffs' share of the profits by $14,650. The court also held that the plaintiffs' contract damages were not certain and were not capable of being made certain by calculation, so the district court erred in awarding prejudgment interest. View "Buchl v. Gascoyne Materials" on Justia Law

HotChalk, LLC filed a lawsuit against the Lutheran Church—Missouri Synod and 22 other defendants, alleging breach of contract and fraud in relation to the closure of Concordia University - Portland. HotChalk claimed that the Synod orchestrated the university’s closure to financially benefit itself and its affiliates while leaving the university’s creditors out in the cold. During discovery, the Synod sought a protective order to prevent the disclosure of certain documents related to internal religious matters. The trial court granted the protective order, effectively denying a motion to compel discovery of those documents. HotChalk then filed a petition for mandamus.The trial court's decision to grant the protective order was based on an in-camera review of the documents in question. The court equated the Synod's motion to a motion to restrict discovery to protect a party from embarrassment. After completing its final in-camera review, the trial court granted the Synod's motion for a protective order. HotChalk then filed a timely petition for mandamus in the Supreme Court of the State of Oregon.The Supreme Court of the State of Oregon issued an alternative writ of mandamus, directing the trial court to either vacate its order or show cause why it should not do so. The trial court declined to vacate its order, leading to arguments in the Supreme Court. The Synod argued that the writ should be dismissed because HotChalk has a plain, speedy, and adequate remedy in the ordinary course of the law. The Supreme Court agreed with the Synod, stating that HotChalk had not established that the normal appellate process would not constitute a plain, speedy, and adequate remedy in this case. Therefore, the Supreme Court dismissed the alternative writ as improvidently allowed. View "Hotchalk, Inc. v. Lutheran Church--Missouri Synod" on Justia Law

The case involves a dispute between BMC Software, Inc. (BMC) and International Business Machines Corporation (IBM) over a Master Licensing Agreement (MLA) and an Outsourcing Attachment. BMC, a software company, and IBM, an information technology company, directly compete in developing and selling mainframe software. However, IBM also provides necessary outsourcing services to BMC and its customers, including AT&T. In 2008, IBM and BMC entered into an MLA and an Outsourcing Attachment, which were amended in 2013 and 2015. The dispute centers around the 2015 amendment, particularly three provisions that govern IBM's use of BMC's software.The case was first heard in the United States District Court for the Southern District of Texas. The district court awarded summary judgment to IBM on the claim for breach of Section 1.1 of the 2015 amendment, but denied IBM's motion for summary judgment on BMC’s Section 5.1 breach-of-contract claim. The court concluded that Section 5.4 of the 2015 amendment unambiguously prevented IBM from “displacing” BMC products with IBM software. The court granted partial summary judgment to BMC because IBM “displaced BMC Customer Licenses with IBM products when it implemented Project Swallowtail at AT&T.” After a bench trial, the district court awarded BMC approximately $1.6 billion in damages.The case was then appealed to the United States Court of Appeals for the Fifth Circuit. The appellate court disagreed with the district court's interpretation of Section 5.4 of the 2015 amendment. The court held that “other valid business reasons” under Section 5.4 supported IBM’s service in effecting AT&T’s switchover, which partially included IBM software. The court concluded that IBM did not breach Section 5.4 by agreeing to provide IT services to perform this task. Therefore, the judgment of the district court was reversed. View "BMC Software v. IBM" on Justia Law

A motor vehicle manufacturer, General Motors LLC (GM), sought to terminate its franchise agreement with Mall Chevrolet, Inc., a successful car dealership in New Jersey, after discovering that the dealership had submitted false warranty claims for vehicle repairs. GM also intended to recoup the amounts it paid in disputed warranty claims through a chargeback process. In response, Mall Chevrolet sued GM under the New Jersey Franchise Practices Act to prevent the termination of the franchise agreement and the chargebacks. However, the dealership's claims did not survive summary judgment.The District Court found that there was no genuine dispute of material fact – the dealership did submit false claims for warranty repairs – and GM was entitled to judgment as a matter of law on each of the appealed claims. The dealership then appealed the District Court’s summary-judgment rulings.The United States Court of Appeals for the Third Circuit affirmed the judgment of the District Court. The court found that GM had good cause to terminate the franchise agreement because Mall Chevrolet had materially breached the contract by submitting false claims for warranty work. The court also found that the dealership's remaining statutory claims were barred by the defense provided in the New Jersey Franchise Practices Act, which allows a franchisor to avoid liability for any claim under the Act if the franchisee has not substantially complied with the franchise agreement. View "Mall Chevrolet Inc v. General Motors LLC" on Justia Law

The case revolves around a dispute between Private Jet Services Group, LLC (PJS), a private aircraft booking agent, and Tauck, Inc., a provider of domestic and international guided tours. The parties had entered into an "Air Charter Services Blanket Purchase Agreement" (BPA) in January 2018, which established the terms under which Tauck would book and pay for air transportation for the New Zealand portion of its Australia and New Zealand tours. In May 2018, they executed a Statement of Work (SOW) that required Tauck to guarantee a minimum of fifty tours per year and to pay PJS an agreed-upon sum for each "missed" tour. The SOW also included a force majeure clause that protected PJS from delays, losses, or damages caused in whole or in part by force majeure events, including epidemics and acts of civil or military authority.The dispute arose when the COVID-19 pandemic prevented Tauck from conducting tours in New Zealand. After Tauck cancelled its remaining 2020 tours, PJS sued Tauck in the New Hampshire federal court alleging a breach of contract. Tauck responded by invoking the doctrines of impossibility and frustration of purpose to excuse performance of its obligations under the contracts. Both parties moved for summary judgment on the count relating to the 2020 tour season, which the district court denied without prejudice. The district court then certified a question to the Supreme Court of New Hampshire regarding the interpretation of the force majeure clause and its impact on the common law defenses of impossibility, impracticability, and frustration of commercial purpose.The Supreme Court of New Hampshire held that the common law contract defenses of impossibility, impracticability, and frustration of commercial purpose are so fundamentally related to contract formation and purpose that they remain viable unless expressly waived. Therefore, a force majeure clause that protects only one party to a contract should not be deemed, in and of itself, a relinquishment of the other party’s right to interpose those common law defenses. The case was remanded back to the lower court for further proceedings. View "Private Jet Services Group, LLC v. Tauck, Inc." on Justia Law

A group of neurosurgeons and their practice group, Comprehensive Neurosurgical, P.C., sued The Valley Hospital after the hospital granted another group of neurosurgeons exclusive privileges in areas where the plaintiffs had previously held privileges. The plaintiffs claimed that the hospital did not deal with them fairly or act in good faith when it granted these exclusive privileges. The plaintiffs had joined the hospital's medical staff in 2003 and had helped grow the hospital's neurosurgical programs and facilities. They primarily derived their practice from treating "unassigned" ER patients and also received "specialized privileges" to use certain equipment. In 2015, the hospital granted a different group of neurosurgeons exclusive rights to use this equipment and to treat "unassigned" ER patients, thereby revoking the plaintiffs' privileges in those areas.The plaintiffs filed a complaint against the hospital. Following summary judgment motions, two claims reached the jury: a breach of contract claim and a breach of the implied covenant of good faith and fair dealing claim. The jury found no cause of action on the breach of contract claim but awarded damages based on the breach of implied covenant claim. The hospital appealed, and the Appellate Division affirmed both the denial of summary judgment and the jury’s verdict. The hospital then petitioned for certification.The Supreme Court of New Jersey held that the plaintiffs’ good faith and fair dealing claim properly survived summary judgment, but the jury was not correctly charged or asked to rule on that claim. The court found that the trial judge failed to instruct the jury that the only underlying contract to which the implied covenant could attach had to be one beyond the rights afforded by the Bylaws. The court also found that the improper admission into evidence of privileged emails and the improper remarks by plaintiffs’ attorney had the capacity to lead the jury to reach a verdict it would not have otherwise reached and thus deprived the hospital of a fair trial. The court reversed the verdict on the implied covenant claim, vacated it, and remanded the matter for further proceedings. View "Comprehensive Neurosurgical, P.C. v. The Valley Hospital" on Justia Law

The case involves a dispute between Firexo Group Limited (FGL), a British company that manufactures fire extinguishers, and Firexo, Inc., a Florida-based company that was created to sell FGL's products in the United States. Scot Smith, a resident of Ohio, purchased 70% of Firexo, Inc. from FGL under a Joint Venture Agreement (JVA). The JVA included a forum-selection clause designating England or Wales as the exclusive jurisdiction for any disputes arising from the agreement. Firexo, Inc., which was not a signatory to the JVA, later sued FGL in an Ohio court over issues with the fire extinguishers. FGL sought to dismiss the case based on the forum-selection clause in the JVA.The district court granted FGL's motion to dismiss, applying the "closely related" doctrine. This doctrine allows a non-signatory to a contract to be bound by a forum-selection clause if the non-signatory is sufficiently closely related to the contract. The district court found that Firexo, Inc. was closely related to the JVA and therefore subject to the forum-selection clause. Firexo, Inc. appealed this decision, arguing that the district court applied the wrong law and analytical approach in determining the applicability of the contract.The United States Court of Appeals for the Sixth Circuit reversed the district court's decision. The appellate court agreed with Firexo, Inc. that the district court had applied the wrong law. The court held that the "closely related" doctrine, a federal common law rule, should not have been used to interpret the JVA's forum-selection clause. Instead, the court should have applied the law specified in the JVA, which was English law. Under English law, contracts do not apply to non-signatories unless certain exceptions apply, none of which were present in this case. Therefore, the forum-selection clause in the JVA did not apply to Firexo, Inc., and the case was remanded for further proceedings. View "Firexo, Inc. v. Firexo Group Limited" on Justia Law

This case involves a dispute among Players Recreation Group, LLC, an Alabama limited-liability company, three of its members, Jason L. McCarty, Felix McCarty, and Doyle Sadler, and S&M Associates, Inc., a company owned by Sadler. The LLC, established in 1999, owns and operates a bowling alley known as 'the Super Bowl.' In 2003, S&M, a company owned by Sadler, loaned the LLC $150,000, which is evidenced by a promissory note. In 2006, the Super Bowl began incurring substantial losses, and the LLC ultimately defaulted on the promissory note payable to S&M. In July 2015, S&M and Sadler sued the LLC and the other members of the LLC, asserting a breach-of-contract claim and a claim seeking an accounting. In August 2015, the LLC, Jason, and Felix filed an answer and a counterclaim, alleging that Sadler had breached his duty of loyalty and his duty of care to the LLC.The case proceeded to a bench trial. The parties initially stipulated that the LLC owed S&M a total of $310,139.66 on the promissory note; the trial court ultimately entered a judgment against the LLC for that amount based on the parties' stipulation. The case was then tried solely on the counterclaims asserted against Sadler by the LLC, Jason, and Felix. The trial court entered a judgment against Sadler on the counterclaims, based on its findings that Sadler had breached not only a duty of loyalty and a duty of care to the LLC, but also the implied covenant of good faith and fair dealing owed to the LLC. The trial court assessed damages against Sadler in the amount of $368,167.92.On appeal to the Supreme Court of Alabama, Sadler argued that the trial court erred insofar as it entered a judgment against him on the counterclaims asserted against him by the LLC, Jason, and Felix. The Supreme Court of Alabama agreed and reversed the judgment entered against Sadler on the counterclaims asserted against him because there was no evidence to support findings that Sadler had breached the duty of loyalty and the duty of care owed to the LLC or the implied covenant of good faith and fair dealing, and remanded the case to the trial court for the entry of a judgment consistent with this opinion.On remand, S&M and Sadler filed a motion for attorney's fees, costs, and expenses. The trial court denied the motions for attorney's fees, costs, and expenses. The trial court also found that the LLC had incurred $2,713,230.33 in expenses without contribution by Sadler or Scott Montgomery. That finding was not disturbed on appeal and has become the law of the case. The trial court took judicial notice that Jason and Felix McCarty have perfected, as the remaining members of the LLC, that claim or debt by filing a second mortgage with the Probate Court of Jefferson County, which second mortgage is inferior to the mortgage held by the late Ferris Ritchey’s real estate company, and the perfection of this claim makes it a priority over and superior to the claims of other creditors, including S&M.S&M and Sadler appealed the trial court's order on remand. The Supreme Court of Alabama affirmed the trial court's order on remand insofar as it denied S&M's and Sadler's requests for attorney's fees and costs, reversed the order insofar as it addressed the LLC's mortgage executed in favor of Jason and Felix and its purported priority, and remanded this case with instructions for the trial court to set aside that portion of its order that addressed the LLC's mortgage and its purported priority. View "S&M Associates, Inc. v. Players Recreation Group, LLC" on Justia Law

The United States Department of Justice (DOJ) initiated an investigation into potentially anti-competitive practices in the real estate industry by the National Association of Realtors (NAR). In November 2020, the DOJ and NAR reached a settlement, and the DOJ sent a letter to NAR stating that it had closed its investigation and that NAR was not required to respond to two outstanding investigative subpoenas. However, in July 2021, the DOJ withdrew the proposed consent judgment, reopened its investigation, and issued a new investigative subpoena. NAR petitioned the district court to set aside the subpoena, arguing that its issuance violated a promise made by the DOJ in the 2020 closing letter. The district court granted NAR’s petition, concluding that the new subpoena was barred by a validly executed settlement agreement.The United States Court of Appeals for the District of Columbia Circuit disagreed with the district court's decision. The court held that the plain language of the disputed 2020 letter permits the DOJ to reopen its investigation. The court noted that the closing of an investigation does not guarantee that the investigation would stay closed forever. The court also pointed out that NAR gained several benefits from the closing of the DOJ’s pending investigation in 2020, including relief from its obligation to respond to the two outstanding subpoenas. Therefore, the court reversed the judgment of the district court. View "National Association of Realtors v. United States" on Justia Law