Justia Contracts Opinion Summaries

The Supreme Judicial Court affirmed the judgment of the superior court allowing Defendants' motion for judgment on the pleadings on the ground that the claims in this case were based on issues that had been litigating and decided in previous litigation between the same parties, holding that this action was precluded.In 2014, Plaintiff, the owner of the closely held corporation at the center of the parties' dispute, filed a complaint alleging that Defendants breached a contract and their fiduciary duties. The superior court judge found against Plaintiffs on his claims and found in favor of Defendants on their counterclaims. In 2017, Plaintiff brought this action alleging breach of contract and breach of fiduciary duty and asserting derivative claims. The superior court judge allowed Defendants' motion for judgment on the pleadings. The Supreme Judicial Court affirmed, holding (1) issue preclusion applied in this case; and (2) where the interests of the parties fully coincided with that of the closely held corporation, Plaintiff was precluded from asserting his claims by means of a derivative action. View "Mullins v. Corcoran" on Justia Law

James Hughes twice invested in the Shipp family’s efforts to develop their property near Bentonia, Mississippi, into a gated community called Rose Lake, in exchange for lots in the future subdivision. Twice, he came up empty handed and sued the Shipps. At the close of Hughes came up empty handed. Hughes sued the Shipps. At the close of Hughes’s case, the chancellor found the situation “very inequitable.” Yet he still denied Hughes any equitable relief based on the running of the statute of limitations. The Court of Appeals affirmed on alternate grounds. The Mississippi Supreme Court granted certiorari review specifically to address Hughes’s unjust-enrichment claim. And after review, the Supreme Court agreed with the Court of Appeals that the statute of limitations should not have run from the date Hughes cut the checks for the lots, but from the time his cause of action for unjust enrichment actually accrued. But the Court disagreed with the Court of Appeals’ deciding to resolve this fact-intensive question on appeal. Furthermore, the Court disagreed that the dismissal of this claim should have been affirmed on alternate grounds, namely Hughes’s failure to “identify a promise.” Hughes’ unjust-enrichment claim was reversed and remanded that claim to the trial court for further proceedings. The trial court was affirmed in all other respects. View "Hughes v. Shipp, et al." on Justia Law

Hetronic International, Inc., a U.S. company, manufactured radio remote controls, the kind used to remotely operate heavy-duty construction equipment. Defendants, none of whom were U.S. citizens, distributed Hetronic’s products, mostly in Europe. After about a ten-year relationship, one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a “creative legal interpretation” of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they owned the rights to Hetronic’s trademarks and other intellectual property. Defendants then began manufacturing their own products—identical to Hetronic’s—and selling them under the Hetronic brand, mostly in Europe. Hetronic terminated the parties’ distribution agreements, but that didn’t stop Defendants from making tens of millions of dollars selling their copycat products. Hetronic asserted numerous claims against Defendants, but the issue presented on appeal to the Tenth Circuit centered on its trademark claims under the Lanham Act. A jury awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants ignored the injunction. In the district court and before the Tenth Circuit, Defendants focused on one defense in particular: Though they accepted that the Lanham Act could sometimes apply extraterritorially, they insisted the Act’s reach didn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Reviewing this matter as one of first impression in the Tenth Circuit, and after considering the Supreme Court’s lone decision on the issue and persuasive authority from other circuits, the Tenth Circuit concluded the district court properly applied the Lanham Act to Defendants’ conduct. But the Court narrowed the district court’s expansive injunction. Affirming in part, and reversing in part, the Court remanded the case for further consideration. View "Hetronic International v. Hetronic Germany GmbH, et al." on Justia Law

The Court of Chancery granted in part an anti-suit injunction sought by a buyer and a parent corporation with whom the buyer contracted to acquire a wholly owned subsidiary (the Company) to bar the seller and its subsidiary from pursuing their claims in a Texas lawsuit, holding that the forum selection provision in the stock purchase agreement applied.Under the stock purchase agreement, the buyer contracted with a Company and caused the Company to enter into a supply agreement with a wholly owned subsidiary of the seller. The stock purchase agreement contained a forum selection provision. The seller signed the stock purchase agreement and did not sign the supply agreement. The seller's subsidiary signed the supply agreement but did not sign the stock purchase agreement. The seller and its subsidiary later filed a lawsuit in Texas state court seeking rescission of the supply agreement. The buyer and the Company then brought this action asking the court to apply the forum selection provision in the stock purchase agreement to the claims implicating the supply agreement. The Court of Chancery granted the request for an anti-suit injunction against the seller and against a non-signatory signatory, holding that an injunction was warranted. View "Florida Chemical Company, LLC v. Flotek Industries, Inc." on Justia Law

Healthcare revenue cycle management contractors manage billing and behind-the-scenes aspects of patient care, from pre-registering patients to reviewing and approving documentation upon release. Reid Hospital contracted with Dell, a revenue cycle management contractor. Their contract limited both sides’ damages in a breach of contract action in the absence of willful misconduct or gross negligence. Dell sold much of its portfolio to Conifer in 2012 while Dell was still losing money on the Reid contract. Conifer began reducing staff and neglecting duties; there was a slowdown throughout the revenue-management cycle and in processing patients’ discharge forms, leading to longer hospital stays that third-party payors refused to reimburse fully. After two years, Reid took its revenue operation back in-house. Reid's consultant found significant errors in Conifer’s work. Reid sued for breach of contract, claiming that Conifer’s actions caused the hospital to lose tens of millions of dollars. The court granted Conifer summary judgment, reading the contract as defining all claims for lost revenue as claims for “consequential damages,” prohibited absent “willful misconduct.”The Seventh Circuit reversed. Even if lost revenue is often considered consequential, this was a contract for revenue collection services and did not define all lost revenue as an indirect result of any breach. Lost revenue would have been the direct and expected result of Conifer’s failure to collect and process that revenue as required under the contract. The parties did not intend to insulate Conifer entirely from damages. View "Reid Hospital and Health Care, Inc. v. Conifer Revenue Cycle Solutions, LLC" on Justia Law

Petrobras, the American subsidiary of a Brazilian oil and gas producer, alleges that Samsung, a Korean shipbuilder, secretly bribed Petrobras executives to finalize a contract between Petrobras and Pride. In a 2007 contract, Samsung had an option to build a deep-sea drillship if Pride secured a drilling-services contract with another company. Samsung arranged to bribe Petrobras executives to secure Pride's contract for the construction of DS-5. After Petrobras put DS-5 on permanent standby and conducted an internal audit, it informed Brazilian prosecutors. A 2014 investigation into corruption throughout Brazil, included a separate bribery scheme in which Samsung contracted with Petrobras to construct two other ships.In 2019, Petrobras sued Samsung for its role in the bribery that led to the Petrobras–Pride DS-5 contract, citing common-law fraud under Texas law and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c),(d). The district court took judicial notice of Petrobras’s 2014 SEC filing and Washington Post and Reuters articles, describing the bribery schemes underlying other Samsung–Petrobras contracts that did not mention the Petrobras–Pride DS-5 contract. From those, the court inferred that Petrobras was on notice by 2014 that the DS-5 contract was suspect. Holding that “the specific drillship in this case is not subject to its own limitations clock,” the district court dismissed the suit. The Fifth Circuit reversed. The pleadings do not establish as a matter of law that Petrobras had actual or constructive notice of its injury before March 2015, so dismissal at the pleading stage was improper. View "Petrobras America, Inc. v. Samsung Heavy Industries Co., Ltd." on Justia Law

The Zylstras purchased their RV from a non-party dealership for $91,559.15. A one-year warranty covered portions of the RV manufactured by DRV. “Written notice of defects subject to warranty coverage must be given to the selling dealer or DRV … within 30 days after the defect is discovered.” The owner is required to take the RV to the selling dealer or factory for repair. Each DRV vehicle is custom-built for the purchaser. The Zylstras took the vehicle in for punch-list items and for warranty repairs. During a subsequent long trip, Zylstra discovered that the black waste tank valve was leaking and that sewage had been leaking into the insulation throughout the RV's underbelly. He could not find a DRV authorized dealer but an independent mobile technician came and completed the repair. After the leak, the Zylstras stopped using the RV out of concern for their health. They contend that it is not, and never has been, fit for its ordinary purpose of recreational use.They filed a complaint alleging breach of express and implied warranty, violation of the Magnuson-Moss Warranty Act (MMWA), and violation of state consumer protection laws. The Seventh Circuit affirmed summary judgment in favor of DRV. Even in the light most favorable to the Zylstras, DRV never had a reasonable opportunity to repair the defects as required under the warranty. View "Zylstra v. DRV, LLC" on Justia Law

Eric Parish and Parish Transport LLC (Parish Transport) emailed Doug Jordan, the Vice President of Jordan Carriers Inc. (Jordan Carriers), to inquire about purchasing heavy haul equipment from Jordan Carriers. After several email exchanges, Doug Jordan offered to sell the equipment for $1,443,000. Months later, Eric Parish responded, submitting Parish Transport’s offer to buy the equipment for $1,250,000. Later that day, Jordan replied, informing Parish Transport that he needed to discuss the offer and would get back with an answer. Jordan concluded his email with his name and contact information. After discussing the deal with his partner, Jordan replied to Parish’s email, stating, “Ok. Let’s do it.” But this time, Jordan’s email concluded with “Sent from my iPhone” instead of his name and contact information. The next day, Jordan received a higher bid for the equipment from Lone Star Transportation LLC (Lone Star), which Jordan accepted verbally over the telephone. After receiving a confirmation email from Lone Star, Jordan emailed Parish Transport informing the company that “a contract has already been entered into for the sale of [the equipment].” Parish Transport sued for breach of contract and negligent misrepresentation. The matter was later transferred and consolidated with Jordan Carriers’ motion for declaratory judgment. After the cases were consolidated, Jordan Carriers moved for summary judgment, arguing “that it did not have an enforceable contract with Parish [Transport] for the sale of the equipment.” The circuit court agreed and granted Jordan Carriers’ motion for summary judgment. Parish Transport appealed. The Court of Appeals affirmed the trial court’s grant of summary judgment because “[w]ithout a signature, an enforceable contract does not exist.” The Court of Appeals determined that “[m]erely sending an email does not satisfy the signature requirement” and that “[a]n email that states ‘Sent from my iPhone’ does not indicate that the sender intended to sign the record.” The Mississippi Supreme Court granted certiorari to address an issue of first impression: an interpretation or application of Mississippi’s Uniform Electronic Transactions Act (UETA). After careful analysis, the Court found the UETA permitted contracts to be formed by electronic means, i.e, emails. Further, the Court found that the determination of whether an email was electronically signed pursuant to the UETA was a question of fact that turned on a party’s intent to adopt or accept the writing, which was a determination for the fact finder. Because there was a genuine issue of material fact about Doug Jordan’s intent, judgment was reversed and the matter remanded for further proceedings. View "Parish Transport LLC, et al. v. Jordan Carriers Inc." on Justia Law

SRM Arms, Inc. (“SRM”) filed suit against GSA Direct, LLC, (“GSA”) and FFL Design, LLC, (“FFL”) (collectively, the “Entity Defendants”), and Anthony Turlington, David Lehman, and Ryan Fitzgerald (collectively the “Individual Defendants”), alleging breach of contract, breach of the covenant of good faith and fair dealing, fraud, aiding and abetting in the commission of fraud, and unjust enrichment. After the jury awarded verdicts for SRM, all Defendants asked the court to modify the judgments or grant a new trial. The district court entered a remittitur for the claims against the Entity Defendants because it found the amount the jury awarded was excessive and not supported by sufficient evidence at trial. On appeal, SRM argued the district court erred in reducing the awarded damages. In their cross-appeal, the Entity Defendants argued the jury improperly found fraud and improperly found FFL liable for GSA’s debts. The Entity Defendants also argued the damages should have been reduced further. Additionally, the district court granted the Individual Defendants’ motion for a new trial on liability and damages because it found the jury instructions were inadequate to distinguish between direct liability and alter-ego liability. On appeal, SRM argues the jury correctly determined direct liability and associated damages. The Idaho Supreme Court affirmed in part, reversed in part and remanded in part. Regarding the Entity Defendants, the Supreme Court reversed and remanded for reconsideration of the remittitur, or in the alternative, a new trial, in light of the Supreme Court's conclusion that a possible alternate basis for the jury’s verdict could exist. The Supreme Court affirmed the district court’s decision upholding the verdict of fraud against GSA and FFL. The district court’s decision to uphold the verdict that FFL is liable to SRM was also affirmed; the Court found the statute of frauds was satisfied and not, as the jury decided, because an exception to the statute of frauds applied. The Court reversed the district court’s decision to uphold the finding of unjust enrichment and remanded for further consideration of whether there was substantial and competent evidence in the record supporting the jury’s award of damages against FFL for both breach of an implied-in-fact contract and unjust enrichment. Regarding the Individual Defendants, the Supreme Court affirmed the district court’s granting of a new trial on liability against the Individual Defendants. The district court’s award of a new trial on damages against the Individual Defendants was also affirmed. View "SRM Arms, Inc. v. GSA Direct, LLC" on Justia Law

Meinders offers chiropractic services. United provides or administers insurance plans nationwide. In 2006, Meinders became a “participating provider” with United to expand his customer base; he signed a provider agreement with ACN. which provided administrative and network management services for chiropractors, and had a preexisting master services agreement with United. The agreement allowed ACN, “in its sole discretion,” to “assign its rights, duties or obligations” under the agreement.“ The agreement stated that if a dispute arose, either party “may” submit the issue “to arbitration” and any arbitration decision would be “final and binding.”Meinders submitted claims for United-insured patients directly to United; United paid those claims. Those claims were submitted on United forms and if an explanation of benefits was requested, United provided it. Meinders confirmed a patient’s eligibility either through United’s website or through a United phone number. ACN became a wholly-owned subsidiary of United.In 2013, United sent a fax to Meinders, who believed that United had violated the Telephone Consumer Protection Act and filed suit. After remands, the district court held that “United … assumed the material obligations of ACN …, a wholly-owned subsidiary of United, under the Provider Agreement, which authorizes United to enforce the arbitration clause.” The Third Circuit affirmed. View "Dr. Robert L. Meinders, D.C., Ltd. v. United HealthCare Services, Inc." on Justia Law