Justia Contracts Opinion Summaries

Ross worked as a sales representative for First Financial until 2018. Ross sued First Financial and two of its senior executives for sales commissions he claimed he was owed. Under the terms of his employment contract, Ross could earn a commission both when a customer first leased an item from First Financial and then at the end of a lease term, if the customer either extended the lease or purchased the equipment outright. In early 2017, First Financial acted to reduce future commission rates. Ross argued that First Financial breached his contract by applying the new, lower commission rates to end-of-lease transactions that occurred after the change took effect if the leases originally began before the change.The Seventh Circuit affirmed summary judgment in favor of the defendants. The company’s commission payments to Ross were correct because commissions on end-of-lease transactions are not earned until the customer actually agrees to and pays for the new transactions. Although Ross was reluctant to accept the new plan, he still accepted it by continuing to work for First Financial under its terms. View "Ross v. First Financial Corporate Services, Inc." on Justia Law

Stryker develops, manufactures, and sells spinal implants and products, and employed Abbas from 2013-2022. Abbas purports to have worked exclusively within Stryker’s finance department. Stryker claims that Abbas worked in various roles, including in sales. Abbas regularly used significant amounts of Stryker’s confidential information and trade secrets and supported Stryker’s litigation efforts. Abbas entered into confidentiality, noncompetition, and nonsolicitation agreements with Stryker when he commenced his employment, and again in 2022.Alphatec competes with Stryker. Stryker alleges that Alphatec "systematically misappropriate[s] Stryker[’s] confidential information, trade secrets, customer goodwill, and talent” and is litigating against Alphatec and former Stryker employees in several cases. Abbas resigned from Stryker to take a newly-developed position with Alphatec, a sales role, “crafted to protect Stryker’s confidential information.” Stryker sued for breach of contract and misappropriation of trade secrets.The Sixth Circuit affirmed the issuance of a preliminary injunction on behalf of Stryker. The district court crafted the injunction to preserve the status quo, reserving the possibility that other prospective jobs might be consistent with Abbas's employment agreement. It is not an impermissible industry-wide ban. Stryker is likely to succeed on the merits, based on findings that Abbas worked for Stryker in both sales and finance; Abbas had unfettered access to Stryker’s most sensitive sales and financial information, Stryker’s sales representatives, and key customer decision-makers; the Alphatec position involved work similar to the work Abbas performed for Stryker; and Abbas supported Stryker on litigation matters. View "Stryker Employment Co., LLC v. Abbas" on Justia Law

G Companies Management, LLC, a California limited liability company, appealed an order staying its cross-complaint against LREP Arizona, LLC, based on the forum selection clause in a loan agreement between the parties. The cross-complaint alleged multiple causes of action, all based on the assertion that the interest rates charged in the loan agreement were usurious under California law, and G Companies contended the trial court erred because a forum selection clause was not enforceable if doing so would deprive a California resident of the protections of the state's fundamental public policy. The trial court held enforcement of the selection clause was appropriate because: (1) the loan transaction was substantially related to the chosen forum (Arizona); and (2) California had a complicated relationship with usury and allowed unlimited interest rates to be charged in numerous circumstances. LREP contended the court’s decision was correct because the “many exceptions” to California’s interest rate limits demonstrate that the prohibition of usury “is not a fundamental policy” in California. To this, the Court of Appeal disagreed and therefore reversed. "By virtue of its inclusion in article XV, section 1, of our Constitution, and because it cannot be waived, we find that California’s usury law does reflect a significant public policy. It prohibits money lending at rates higher than specified, even while recognizing numerous exceptions to those rate limitations. The complexity of the law does not imply a lack of commitment to the policy. To the contrary, such a fine-tuned approach suggests that significant effort has gone into determining the circumstances under which interest rate limitations are necessary for the protection of Californians." View "G Companies Management, LLC v. LREP Arizona LLC" on Justia Law

In this appeal, the issue presented was whether a contract for the sale of business assets also contained language conveying an enforceable leasehold interest in real property in favor of the buyer. At summary judgment, the district court determined that the Ellis Family Trust owned the real property underlying this leasehold dispute, and that the contract selling the assets of Pullover Prints Corporation (“PPC”) to 616, Inc. (“616”) did not convey a leasehold interest to 616 because material terms necessary to form a valid and enforceable lease were missing. Instead, the district court concluded that the contract involving the sale of assets only contained an “agreement to agree” on the terms of a written lease at a later date. Accordingly, the district court entered judgment in favor of the Ellis Family Trust. 616 appealed, arguing that all material terms necessary to form a valid and enforceable lease could be found within the asset contract. Respondents PPC, Mae Properties, LLC (“Mae”), and Ellis in his individual capacity and in his capacity as trustee for the Ellis Family Trust, cross-appealed the district court’s decision regarding their collective motion for attorney fees. Finding no reversible error in either the appeal or cross-appeal, the Idaho Supreme Court affirmed. View "616 Inc. v. Mae Properties, LLC" on Justia Law

The Supreme Court affirmed the judgment of the trial court in this dispute over whether a property insurance policy providing coverage for "direct physical loss of or physical damage to" covered property provided coverage for business income losses arising from the suspension of business operations during the COVID-19 pandemic, holding that the trial court correctly granted Defendant's motion for summary judgment.Plaintiffs, who suspended their business operations during the COVID-19 pandemic and consequently lost business income and incurred other expenses, filed claims for losses with Defendants. After Defendants denied the claims Plaintiffs brought this actin seeking a judgment declaring that the relevant insurance policies covered their economic losses under the circumstances. The trial court granted summary judgment for Defendants. The Supreme Court affirmed, holding that because Plaintiffs did not suffer any "direct physical loss" of covered property, there was no genuine issue of material fact as to whether the policies did not cover Plaintiffs' claims. View "Connecticut Dermatology Group, PC v. Twin City Fire Insurance Co." on Justia Law

ResCap Liquidating Trust (“ResCap”) pursued indemnification claims against originator Primary Residential Mortgage, Inc. (“PRMI”), a Nevada corporation. ResCap asserted breach of contract and indemnification claims, seeking to recover a portion of the allowed bankruptcy claims for those holding units in the liquidating trust. The district court concluded that ResCap had established each element of its contractual indemnification claim. The district court awarded ResCap $10.6 million in attorney’s fees, $3.5 million in costs, $2 million in prejudgment interest, and $520,212 in what it termed “post-award prejudgment interest” for the period between entry of judgment and the order awarding attorney’s fees, costs, and prejudgment interest. Defendant appealed.   The Eighth Circuit remanded for a recalculation of postjudgment interest but otherwise affirmed. The court explained that the district court held that, as a matter of Minnesota law governed by Section 549.09, a final judgment was not “finally entered” until its Judgment in a Civil Case resolving attorney’s fees, costs, and interest was entered on April 28, 2021, and therefore Minnesota’s ten percent prejudgment rate applied in the interim period. But Section 1961(a) does not say “final judgment,” it says “money judgment.” The district court, on August 17, 2020, entered a “money judgment.” Thus, the district court erred in applying Minnesota law to calculate interest after August 17, 2020, rather than 28 U.S.C. Section 1961(a). View "ResCap Liquidating Trust v. Primary Residential Mortgage" on Justia Law

In 2014, EMS entered into a payment processing agreement with Procom, a business owned by Gaal that sold historical tours. The Agreement was executed by Gaal, who signed a personal-guaranty provision. It contained terms relating to “chargebacks,” which occurred when a Procom customer’s transaction was declined or canceled after EMS had credited Procom’s account for the purchase; EMS repaid the money to the Procom customer, then charged Procom for that money plus a fee. In 2019, EMS and Procom executed a second agreement, which contained an explicit integration clause; the guaranty provision was not signed by Gaal but by another Procom employee. During the COVID-19 pandemic, many customers canceled purchases with Procom, resulting in $10 million in chargebacks. Procom is involved in Chapter 7 bankruptcy proceedings. EMS filed a creditor’s proof of claim and sued Gaal. The district court dismissed for failure to state a claim, finding that the 2019 Agreement superseded the 2014 agreement “in all material respects,” including replacing Gaal’s guaranty.The Sixth Circuit affirmed in part, upholding the district court’s consideration of the bankruptcy filing for purposes of determining when chargebacks occurred and its finding that the 2019 Agreement replaced the 2014 Agreement rather than merely supplementing it. The court reversed in part, holding that any chargeback related to transactions occurring before the execution of the 2019 Agreement arose under the 2014 Agreement. View "Electronic Merchant Systems LLC v. Gaal" on Justia Law

The First Circuit affirmed the judgment of the district court determining that this case could not be adjudicated and dismissing the suit, holding that there was no error.Plaintiff, a foreign counterterrorism corporation, brought this lawsuit seeking an order freezing some of its Massachusetts assets based on allegations that a former government official misappropriated billions of dollars from the corporation. Defendants argued that the funds were lawfully received in connection with clandestine operations that were sometimes undertaken alongside the United States government. The United States government then asserted the state secrets privilege and successfully got state secrets and other information excluded from the case. The district court dismissed the suit, concluding that it could not examine the claims and defenses or award the preliminary equitable relief sought without weighing the privileged information and risking disclosure of state secrets. The First Circuit affirmed, holding that Plaintiff failed to demonstrate that it was entitled to any of the relief it requested. View "Sakab Saudi Holding Co. v. Aljabri" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the trial court's dismissal of the complaint and reinstated the judgment of the trial court dismissing all of Petitioner's claims against Respondents for breach of contract, fraud, and related torts, holding that the discovery rule did not defer accrual of Petitioner's cause of action until it knew that Respondents caused its injury.The trial court granted summary judgment in favor of Petitioner on the grounds that Respondents' claims were time-barred. The appellate court reversed, concluding that the discovery rule deferred accrual of Respondents' cause of action until it knew that Petitioner caused its injury. The Supreme Court reversed and reinstated the dismissal of all claims, holding that summary judgment was appropriate because, at the time of the breach of contract at issue, Respondent learned of facts that, if pursued, would have led to the discovery of Petitioner's alleged misrepresentations. View "Marcus & Millichap Real Estate Investment Services of Nev. v. Triex Texas Holdings, LLC" on Justia Law

Traders set up accounts with Trean, a Chicago Mercantile Exchange introducing broker, managing the customer side of the futures-trading business. Stone handled the trading side. The traders engaged in naked trading—speculating rather than hedging. Stone set a high margin accordingly. Stone was a principal in all trades and, with the clearing house bore, the immediate economic risk; Trean guaranteed Stone’s positions and shared in its commissions. The market did not cooperate. Trean learned that the traders had not met Stone’s margin call and were not cooperating with Stone. Trean told the traders that it would close their accounts but that they were free to deal directly with Stone. Stone thereafter prohibited any trades that would increase the holdings’ net risk. The traders liquidated. Of the $1,020,000 with which they began, they lost $548,000.The traders sued, contending that their contract with Trean did not allow it to cease dealing with them for the reason given and that Trean’s decision led Stone to impose unacceptable conditions. The Seventh Circuit affirmed summary judgment for Trean. Regardless of whether Trean was entitled to end its dealings with the traders, no reasonable jury could find that Trean injured them. Trean’s decision did not affect the value of their futures contracts; they did not have a greater loss than they would have by moving their accounts to a different introducing broker and retaining Stone. View "Daneshrad v. Trean Group, LLC" on Justia Law