Justia Contracts Opinion Summaries

In 2010, after decades of cooperation in selling their hardware and software, HP and Oracle had a disagreement over Oracle’s decision to hire HP’s former CEO. The companies negotiated a confidential settlement agreement, including a “reaffirmation clause,” stating each company’s commitment to their strategic relationship and support of their shared customer base. Six months later, Oracle announced it would discontinue software development on one of HP’s server platforms.The trial judge held that the reaffirmation clause requires Oracle to continue to offer its product suite on certain HP server platforms until HP discontinues their sale. A jury subsequently found that Oracle had breached both the express terms of the settlement agreement and the implied covenant of good faith and fair dealing; it awarded HP $3.014 billion in damages. The court denied HP’s request for prejudgment interest. The court of appeal affirmed. The reaffirmation clause requires Oracle to continue to offer its product suite on certain HP server platforms. The trial court did not err in submitting to the jury the breach of contract and implied covenant claims. The court rejected Oracle’s argument that the judgment must be reversed based on violations of its constitutional right to petition and because HP’s expert’s testimony on damages was impermissibly speculative under California law and should have been excluded. View "Hewlett-Packard Co. v. Oracle Corp." on Justia Law

Beginning in the 1980s and 1990s, two Idaho businesses did roofing work under substantially similar names: one, Gem State Roofing, Inc., performed work primarily in Blaine County (Gem State-Blaine); the other was a corporation operating under the name Gem State Roofing and Asphalt Maintenance, which also did business as Gem State Roofing. The latter was based in Boise, Idaho, and performed work in a significantly larger area. In 2011, Gem State Roofing and Asphalt Maintenance was succeeded in interest by United Components, Inc. (UCI.) Notwithstanding its change of name, it continued to do business as Gem State Roofing. In 2005, prior to UCI’s name change, the two businesses with similar names entered into a Trademark Settlement Agreement (TSA), prohibiting UCI from advertising, soliciting, or performing business in Blaine County, with exceptions for certain services (i.e., warranty, maintenance work, or work performed for previous customers). In addition, UCI agreed that if it received a request for work it was contractually unable to fulfil because of the TSA, it would refer the work to Gem State-Blaine. In 2018, Gem State-Blaine sued UCI, alleging it had breached the TSA when it advertised, solicited, bid on, and performed roofing work in Blaine County, and had failed to refer requests for work as required under the TSA. After a bench trial, the district court concluded that, despite UCI’s breach of the TSA and the implied covenant of good faith and fair dealing, Gem State-Blaine had failed to prove damages or that it was entitled to a permanent injunction. The district court further found that Gem State-Blaine had no protectable common-law trademark. Finally, the district court concluded that there was no prevailing party and declined to award attorney fees and costs. Gem State-Blaine timely appealed. UCI timely cross-appealed the district court’s denial of its request for attorney fees and costs. After review, the Idaho Supreme Court reversed in part, affirmed in part, vacated in part, and remanded for further proceedings. The district court’s refusal to enter a permanent injunction was reversed, and the court directed to enter a permanent injunction to enjoin UCI from any further breach of the TSA. The district court’s refusal to award attorney fees and costs as a sanction for UCI’s discovery violations, and the district court’s conclusion that Gem State-Blaine did not have a protectable common-law trademark against UCI were also reversed. The Supreme Court vacated the district court’s determination that neither party prevailed. The matter was remanded for the district court to determine whether there was a prevailing party, and to determine if attorney fees and costs should be awarded. The district court’s decision denying damages was affirmed. View "Gem State Roofing, Incorp. v. United Components, Inc." on Justia Law

Plaintiff filed suit against HealthEast and others, alleging multiple causes of action related to peer review determinations stemming from his practice of neurosurgery. After the district court granted defendants' motion for judgment on the pleadings, three claims remained against appellees: defamation, tortious interference with prospective economic relationship, and tortious interference with contract. Appellees moved for summary judgment on the remaining claims and the district court granted their motion.As to the defamation claims, the Eighth Circuit concluded that only three statements are before the court on appeal because plaintiff did not amend his complaint to incorporate the additional allegedly defamatory statements identified during discovery and, given the requirement that defamation claims be pleaded with specificity, only the statements included in the amended complaint can form the basis of plaintiff's claim. As to the first remaining statement, the court concluded that it was waived. In regard to the two remaining statements, the court concluded that Minnesota peer review immunity applies.As to the tortious interference claims, the court concluded that to the extent these alleged interferences occurred solely through the peer review process itself, appellees are entitled to peer review immunity. In the event peer review immunity does not fully shield appellees, these claims failed on the merits. Accordingly, the district court properly concluded that appellees were entitled to summary judgment on all of plaintiff's claims, and the court affirmed its judgment. View "Sherr v. HealthEast Care System" on Justia Law

In 2009, Carhartt contracted with Innovative to create a flame-resistant fleece fabric for use in its line of flame-resistant garments. The fabric that Innovative developed for Carhartt, “Style 2015," contained a modacrylic fiber, “Protex-C.” Innovative agreed that it would conduct flame-resistance testing on the Style 2015 fabric before shipping it to Carhartt, using the industry-standard test, ASTM D6413. Carhartt sent Innovative emails in 2008, 2010, 2011, 2012, and 2013 stating that Carhartt would do “regular, random testing on the product that is received.” Carhartt performed visual inspections but did not conduct flame-resistance testing until 2016. The Style 2015 fabric failed the D6413 test. Carhartt notified Innovative, which then conducted its own testing and concluded that Style 2015 fabrics dating back to 2014 did not pass flame-resistance testing. In 2013, Innovative stopped using Protex-C and began using a different modacrylic fiber without notice to Carhartt.The district court granted Innovative summary judgment on Carhartt’s negligence, fraud, misrepresentation, false advertising claims. breach of contract and warranty claims. The court reasoned that Carhartt did not notify Innovative of the suspected breach within a reasonable amount of time after Carhartt should have discovered the defect, as required by Michigan’s Uniform Commercial Code. The Sixth Circuit reversed. Reasonable minds could differ as to whether Carhartt should have discovered the breach sooner by performing regular, destructive fire-resistance testing on the fabric. View "Carhartt, Inc. v. Innovative Textiles, Inc." on Justia Law

Pillar hired Epiphyte to convert its cryptocurrency into Euros. Epiphyte informed Pillar that it used Payward’s online exchange to convert its clients’ cryptocurrencies. Pillar transferred its cryptocurrency into Epiphyte’s account on Payward’s platform. After Epiphyte converted the currency but before the exchanged funds were transferred to Pillar’s bank account, four million Euros belonging to Pillar were stolen from Epiphyte’s account.Pillar sued Payward, alleging Payward knew or should have known that Epiphyte was using its Payward account on Pillar's behalf, failed to use standard security measures that would have prevented the theft, and falsely advertised that it provided the best security in the business. Payward moved to compel arbitration, claiming that Epiphyte agreed to Payward’s “Terms of Service” when it created an account, as required for all users, that those Terms included an arbitration agreement, and that Pillar was bound by that agreement.The court of appeal affirmed the denial of Payward’s motion. There is no evidence Epiphyte was acting as Pillar’s agent when it agreed to the Terms two years before Pillar hired it or that the agency relationship automatically bound the principal to the agent’s prior acts. There is no evidence Pillar knew the arbitration agreements existed or had a right to rescind them. No ratification occurred. There was no intent to benefit Pillar or similar parties. Pillar’s claims are not inextricably intertwined with the Terms. View "Pillar Project AG v. Payward Ventures, Inc." on Justia Law

In March 2018, following sexual misconduct allegations against TWC’s co-founder Harvey Weinstein, TWC sought bankruptcy protection. TWC and Spyglass signed the Asset Purchase Agreement (APA). The sale closed in July 2018. Spyglass paid $287 million. Spyglass agreed to assume all liabilities associated with the Purchased Assets, including some “Contracts.” The APA identifies “Assumed Contracts,” as those Contracts that Spyglass would designate in writing, by November 2018.In May 2018, TWC filed an Assumed Contracts Schedule, with a disclaimer that the inclusion of a contract did not constitute an admission that such contract is executory or unexpired. A June 2018 Contract Notice, listed eight Investment Agreements as “non-executory contracts that are being removed from the Assumed Contracts Schedule.” The Investment Agreements, between TWC and Investors, had provided funding for TWC films in exchange for shares of future profits. Spyglass’s November 2018 Contract Notice listed nine Investment Agreements as “Excluded Contracts,”In January 2019, the Investors requested payments from Spyglass--their asserted share of a film’s profits. The Bankruptcy Court rejected the Investors’ claim that Spyglass bought all the Investment Agreements under the APA. The district court and Third Circuit affirmed. The Investment Agreements are not “Purchased Assets” and the associated obligations are not “Assumed Liabilities.” The Investment Agreements are not executory contracts under the Bankruptcy Code. View "The Weinstein Co. Holdings, LLC v. Y Movie, LLC" on Justia Law

In this case involving the scope of the attorney-immunity defense, the Supreme Court held that attorney immunity applies in all adversarial contexts in which an attorney has a duty to zealously represent a client, including in a business-transactional context, but only when the claim against the attorney is based on the type of conduct attorney immunity protects.At issue was whether the attorney-immunity defense applies to a non-client's claims that are based on an attorney's conduct performed outside of the context of litigation. The court of appeals reversed the trial court's summary judgment in this case, concluding that attorney immunity does not extend beyond the litigation context and should not be extended to a business transaction. The Supreme Court reversed, holding (1) attorney immunity provides a defense to a non-client's claims based on an attorney's conduct that constitutes the provision of legal services involving the unique office of an attorney and the conduct that the attorney engages in to fulfill the attorney's duties in representing the client within an adversarial context in which the client and the non-client do not share the same interests; and (2) attorney immunity applies to claims based on conduct the attorney performed in a non-litigation context so long as the conduct qualifies as this "kind" of conduct. View "Hayes & Boone, LLP v. NFTD, LLC" on Justia Law

GXP Capital, LLC filed two lawsuits against defendants in different federal courts. GXP alleged defendants violated non-disclosure agreements by using confidential information to buy key assets at bargain prices from GXP’s parent company. Those cases were dismissed for lack of personal and subject matter jurisdiction. GXP then filed a third suit in Delaware Superior Court, which stayed the case on forum non conveniens grounds to allow GXP to file the same case in California state court - a forum the court decided had a greater connection to the dispute and was more convenient for the parties. On appeal GXP argued: (1) the Superior Court did not apply the correct forum non conveniens analysis when Delaware was not the first-filed action, the prior-filed lawsuits have been dismissed, and no litigation was pending in another forum; and (2) defendants waived any inconvenience objections in Delaware under the forum selection clause in their non-disclosure agreements. The Delaware Supreme Court affirmed, finding the trial court properly exercised its discretion in this case’s procedural posture to stay the Delaware case in lieu of dismissal when another forum with jurisdiction existed and that forum was the more convenient forum to resolve the dispute. “And certain of the defendants’ consent to non-exclusive jurisdiction in California did not waive their right to object to venue in other jurisdictions, including Delaware.” View "GXP Capital v. Argonaut Manufacturing Services, et al" on Justia Law

In 2012, Bishop Lawrence sought to disaffiliate his South Carolina-based diocese from the Episcopal “Mother Church”. Some parishes followed suit. The Mother Church purported to remove Lawrence and selected a new bishop. The Disassociated Diocese and Parishes sued the Mother Church to clarify their property rights in diocesan. The Mother Church filed counterclaims and separately filed trademark and false-advertising claims. Both cases are ongoing.The Church Insurance Company, wholly owned by the Church Pension Fund, is a freestanding nonprofit affiliated with the Mother Church. Captive insurance companies may only cover the risks of their parent companies and related entities. Before the schism, the Company issued a Diocesan Program Master Policy, listing as “named insured” the Episcopal diocese and listing 56 participant parishes, including the now-Disassociated Parishes, in its declarations. Each parish has a separate, individualized insurance policy and paid premiums directly to the Company. The policies provide liability coverage for injuries arising out of “infringement of copyright, title, slogan, trademark, or trade name” and include a broad duty to defend. The Company has reimbursed the Disassociated Parishes’ defense costs in connection with both lawsuits.The Associated Diocese sued the Company, alleging breach of contract, bad faith, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty. The Fourth Circuit affirmed the dismissal of that suit for lack of standing. The Company has not strayed beyond its limitations as a captive insurer or breached its obligations under the policies, so there is no injury traceable to such conduct. View "Episcopal Church in South Carolina v. Church Insurance Company of Vermont" on Justia Law

The Supreme Court reversed the judgment of the court of appeals denying Defendants' motion to dismiss under the Texas Citizens Participation Act (TCPA), Tex. Civ. Proc. & Rem. Code 27.001-.011, as untimely, holding that because Plaintiff's amended petition in this case asserted new legal claims, Defendants' motion to dismiss those claims was timely.In his original petition, Plaintiff asserted claims for deceptive trade practice, negligence, and negligent misrepresentation. Plaintiff subsequently filed an amended petition reasserting the same claims, adding new claims for fraud, conspiracy to commit fraud, fraudulent concealment, and breach of contract, and alleging the same essential facts alleged in the original petition and requesting the same relief. The trial court denied Defendants' TCPA dismissal motion, concluding that the motion was untimely. The court of appeals affirmed. The Supreme Court reversed, holding that the court of appeals erred in holding that Defendant's motion to dismiss the new claims was untimely because the amended petition asserted new legal actions and thus triggered new sixty-day period for Defendants to file a motion to dismiss those new claims. View "Monteglongo v. Abrea" on Justia Law