Justia Contracts Opinion Summaries

Gulf LNG Energy, LLC owned and operated a liquefied natural gas (“LNG”) terminal in Mississippi (the “Pascagoula Facility”). Gulf LNG Pipeline, LLC (collectively with Gulf LNG Energy, LLC, “Gulf”), owned and operated a five-mile long pipeline that distributed LNG from the Pascagoula Facility to downstream inland pipelines. Eni USA Gas Marketing LLC (“Eni”), marketed natural gas products and offered related services to customers in the U.S. In 2007, Gulf and Eni entered into a Terminal Use Agreement (the “TUA”), whereby Gulf would construct the Pascagoula Facility, and Eni would use the Facility to receive, store, regasify, and deliver imported LNG to downstream businesses. Under the TUA, Eni agreed to pay Gulf fees for using the Facility, including monthly Reservation Fees and Operating Fees. In 2016, Eni filed for arbitration, alleging the U.S. natural gas market had undergone a “radical change” due to “unforeseen, vast new production and supply of shale gas in the United States [that] made import of LNG into the United States economically irrational and unsustainable.” Eni alleged the essential purpose of the TUA had been frustrated and thus terminated because of “fundamental and unforeseeable change in the United States natural gas/LNG market,” and sought a declaration that Eni could terminate the TUA at any time because Gulf breached warranties and covenants. After the first arbitration, the panel order Eni to pay Gulf "just compensation ...for the value their partial performance of the TUA conferred upon Eni." Gulf subsequently sued Eni to collect the arbitration award; judgment was entered in Gulf's favor. Eni initiated a second arbitration, again asserting breaches of the TUA. Gulf moved to dismiss the second arbitration. The Court of Chancery ruled the issues raised in the second arbitration were already decided in the first (and subsequent court case). The Delaware Supreme Court, after its review of these proceedings, determined: (1) the Court of Chancery had jurisidction to enjoin a collateral attack on the first arbitration award; and (2) the Court of Chancery should have enjoined all claims in the second arbitration between the parties, because the admitted goal of the second arbitration was to "raise irregularities and revisit the financial award in the first arbitration." The Court, therefore, affirmed part of the Court of Chancery's judgment affirming dismissal of the second arbitration, and reversed any part of the lower court's judgment allowing certain issues in the second arbitration to be considered. View "Gulf LNG Energy v. ENI USA Gas Marketing" on Justia Law

TM Wood Products, M Wood Products, Inc., Marty Wood, and Kim Whitlow (collectively, “TM Wood”) appeal the trial court’s denial of their motion to set aside the judgment under Mississippi Rule of Civil Procedure 60(b)(6). Marietta Wood Supply, Inc., and Marietta Dry Kiln, LLC (collectively, “Marietta”), contracted with TM Wood to sell lumber. TM Wood acted as broker and agreed to sell Marietta’s green lumber and dry kiln for a $10-$40 commission per thousand feet. Under the agreement, TM Wood also hired or employed various trucking companies to haul the lumber after it was sold. Marietta filed a complaint against TM Wood alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty, as well as fraudulent inducement, concealment, misrepresentation, and negligence. Marietta alleged that TM Wood had been wrongfully billing both the purchaser and the seller for shipping costs. It also alleged that TM Wood had been charging and receiving extra commissions on the lumber units TM Wood sold for Marietta from 2004 to 2012. After a bench trial, the court entered a final judgment in favor of Marietta in the amount of $800,000. The trial court found that TM Wood had been properly served at the addresses provided in an Agreed Order Allowing Withdrawal of Counsel. Marietta alleged that it sent a copy of the final judgment to Wood and Whitlow the following day. Marietta then hired an attorney in Arkansas to collect the judgment. TM Wood retained new counsel the following business day and served its motion to set aside the Mississippi judgment. TM Wood argued on appeal to the Mississippi Supreme Court that its right to a jury trial was violated, that it failed to receive notice of the bench trial, and that the judgment was excessive. The Supreme Court found the circuit clerk failed to send notice of the impending trial to TM Wood in accordance with Mississippi Rule of Civil Procedure 40(b), therefore, it reversed the trial court’s decision. View "TM Wood Products v. Marietta Wood Supply, Inc." on Justia Law

Plaintiffs Hillarie and Keith Levy appealed the dismissal of their lawsuit filed against defendant, Only Cremations for Pets, Inc. Plaintiffs alleged it agreed to cremate individually two of their dogs, but then intentionally sent them random ashes instead. Plaintiffs sought recovery of emotional distress damages under contract and tort law. The Court of Appeal determined: the complaint failed to state a cause of action under any contract theory; and there were no factual allegations showing the existence of any contract between plaintiffs and defendant. Plaintiffs’ veterinarian, not plaintiffs, contracted with defendant. However, the complaint adequately pled two tort theories: trespass to chattel and negligence. The Court found allegations here "fit comfortably" in a cause of action for trespass to chattel claim, which permitted recovery of emotional distress damages. The allegations also supported a negligence cause of action because defendant advertised its services as providing emotional solace, and thus it was foreseeable that a failure to use reasonable care with the ashes would result in emotional distress. The Court reversed and remanded, giving plaintiffs an opportunity to plead more fully a third-party beneficiary cause of action. View "Levy v. Only Cremations for Pets, Inc." on Justia Law

The Supreme Court affirmed the decision of the district court granting judgment in favor of an accountant and his new firm on his claims against his former firm, holding that the judgment was not in error.After Plaintiff left one firm to join another, he sued Defendant, his former firm, with whom he was a shareholder and officer. Plaintiff alleged that Defendant failed to perform a mandatory provision in the shareholder agreement to buy out a departing shareholder's corporate shares at a price that accounted for lost billings by virtue of clients following a departing shareholder. Defendant brought counterclaims for breach of fiduciary duty and misappropriation of confidential information and third-party claims against Plaintiff's new firm, including tortious interference with business expectations. All claims presented to the jury were determined in favor of Plaintiff and his new firm. The Supreme Court affirmed, holding that all claims were correctly decided in favor of Plaintiff and his new firm. View "Dick v. Koski Professional Group, P.C." on Justia Law

The Supreme Court affirmed the circuit court's grant of summary judgment in favor of Defendants with respect all of Plaintiff's claims except for counts four and five, holding that the circuit court did not err in granting summary judgment.This litigation arose from Aqreva, LLC's purchase of medical practice management service from Eide Bailly, LLP. Aqreva sued Eide Bailly, Shelly Kampmann, Lee Brandt, and LJB, Inc. claiming breach of contract and various torts, alleging that Defendants violated non-compete, non-solicitation, and confidentiality clauses in several contracts and that Defendants committed, among other torts, civil conspiracy and fraud. The circuit court granted summary judgment in favor of Defendants with respect to all claims except for those concerning Kampmann's employment agreement and the alleged tortious interference with a contract by Brandt and LJB. The Supreme Court affirmed, holding the the circuit court properly granted summary judgment on counts one through three and six through nine. View "Aqreva, LLC v. Eide Bailly, LLP" on Justia Law

Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law

Following two operation-disabling accidents, Noranda Aluminum Holding Corporation, an insured aluminum-products manufacturer, whose “all-risks” property-insurance policy included business- interruption coverage, did not rebuild its damaged facility and consequently did not resume operations. Noranda and its insurers agreed that the failure to rebuild and resume operations did not negate the business-interruption coverage. But when Noranda submitted its business-interruption claim, the parties could not agree on how to calculate the Noranda's gross-earnings loss, which was the measure of the insurers’ liability under the relevant policy. After a seven-day trial, a jury found in favor of Noranda, and the insurers appealed. At trial, Noranda's damages expert employed a model that measured the insured’s gross-earnings loss by comparing the value of the insured’s production had the accident not occurred with the value of its production after the accidents had it repaired and resumed operations with due diligence. Although the parties disputed whether the insurers took issue with this methodology at trial in this appeal, the insurers contended that the model was inconsistent with the policy’s formula for calculating gross-earnings loss and that it grossly exaggerated the amount of the Noranda's claim. The insurers also challenged Noranda's expert’s factual assumptions and claimed he improperly included amounts that the insured had waived in an earlier property-damage settlement. The Delaware Supreme Court concluded Noranda's expert's damages model was consistent with the relevant policy provisions, and that the trial court's determination that the factual assumptions made by the expert were sufficiently reliable for the jury to consider was not an abuse of discretion. Likewise, the Court held the insurers' claim that the earlier property-damage settlement precluded a portion of Noranda's recovery was without merit. Therefore, the Supreme Court affirmed. View "XL Insurance America, Inc., et al. v. Noranda Aluminum Holding Corporation" on Justia Law

Plaintiff Mentis Sciences, Inc. appealed a superior court order dismissing its claims for damages representing the cost of recreating lost data and lost business and negligence against defendant Pittsburgh Networks, LLC. Plaintiff was an engineering firm that, among other things, designed, developed, and tested advanced composite materials for United States Department of Defense customers. Since entering this sector in 1996, plaintiff acquired “a vast amount of valuable data that was utilized in its operations.” In 2010, the defendant began providing the plaintiff with technological support or “IT” services. In August 2014, defendant notified plaintiff that a drive in one of its servers had failed and would need to be replaced; a controller malfunctioned, causing the corruption of some of plaintiff’s data. Defendant attempted to recover the corrupted data; however, the data was permanently lost because defendant had failed to properly back it up. Plaintiff filed suit against defendant, alleging breach of contract and negligence. In its complaint, plaintiff alleged that the lost data “represents valuable intellectual property compiled over many years and is of daily critical use in [the plaintiff’s] business.” Further, plaintiff alleged that, as a result of the data loss, it was required to conduct “massively expensive” testing in order to recreate the data and that, without the lost data, it was “unable to bid or participate in various projects worth potentially millions of dollars.” Plaintiff argued on appeal of the dismissal of its suit that the trial court erred by: (1) concluding that the damages representing the cost of recreating lost data and lost business were consequential; (2) concluding that the limitation of liability clause in the parties’ contract is enforceable; and (3) dismissing its claim for negligence. The New Hampshire Supreme Court affirmed because the damages sought by plaintiff were consequential and the limitation of liability clause in the parties' contract precluded plaintiff from recovering consequential damages. The Court also concluded the economic loss doctrine barred plaintiff’s negligence claim. View "Mentis Sciences, Inc. v. Pittsburgh Networks, LLC" on Justia Law

Two business owners executed a series of transactions to sell a regional airline business. Within two years of the sale, one of the buyer-controlled business entities declared bankruptcy, and the seller commenced litigation to resolve disputes over their agreements. The parties settled before trial. But another buyer-controlled entity later defaulted and declared bankruptcy, and the seller reinitiated litigation. The issue presented to the Alaska Supreme Court was the extent to which the buyers personally guaranteed the obligations of the second bankrupt entity. The superior court granted summary judgment in favor of the seller and held the buyers personally liable for those obligations. The Supreme Court held that whether the parties intended the buyers to personally guarantee the bankrupt entity’s obligations was a disputed material fact, making the issue inappropriate for summary judgment. Judgment was reversed and the matter remanded for further proceedings. View "Beardsley v. Jacobsen" on Justia Law

Porter Scott, P.C. (hereafter, “Porter Scott”) defended The Johnson Group Staffing Company, Inc. (hereafter, “TJG” or “Johnson Group”) through two rounds of litigation with its chief competitor, Aerotek, Inc. (hereafter, “Aerotek”). Aerotek first sued TJG after TJG’s founder, Chris Johnson, left Aerotek to form TJG. In the lawsuit, Aerotek alleged that TJG and Johnson, among other things, misappropriated trade secrets by soliciting Aerotek’s customers. TJG and Johnson settled with Aerotek a little over a year later. The issue presented for the Court of Appeal's review concerned the ownership of fees awarded under Civil Code 3426.4, and whether the prevailing litigant (here, The Johnson Group Staffing Company, Inc.) or the prevailing litigant’s attorney (here, Porter Scott, P.C.) were entitled to the fees awarded to the “prevailing party.” The Court concluded that, absent an enforceable agreement to the contrary, these fees belonged to the attorney to the extent they exceeded the fees the litigant already paid. Furthermore, the Court concluded that, although the parties here entered into a fee agreement, that agreement did not alter the default disposition of fees in favor of the attorney. Because the trial court reached the same conclusion, the Court of Appeal affirmed its judgment. View "Aerotek v. Johnson Group Staffing Co." on Justia Law