Justia Contracts Opinion Summaries

The issue this case presented for the Mississippi Supreme Court was whether Jackson Ramelli Waste LLC was entitled to additional compensation “over and above [the] amounts agreed upon by the parties, invoiced by [Jackson Ramelli], and accepted as payment by [Jackson Ramelli], in the absence of a contract, but under a quantum meruit theory[.]” From October 2009 to September 2015, Waste Management contracted with the City of Jackson to collect solid waste from all residential units and light commercial entities in the city. The contract required Waste Management to subcontract 35.802 percent of the work to minority-owned or women-owned businesses and to adhere to the requirements of the City’s equal business opportunity (EBO) plan. Waste Management entered a subcontract with Jackson Ramelli and Metro Waste Disposal to perform certain portions of the waste-collection services and to fulfill this obligation. Jackson Ramelli’s payment rate would be adjusted annually in accordance with any increase or decrease in the Consumer Price Index (CPI). Both parties were prohibited from the assignment of the subcontract without the other party’s consent. Unbeknownst to Waste Management, after entering into the subcontract with Waste Management, Jackson Ramelli subcontracted all of its work to RKC LLC, a Louisiana company that was neither a minority- nor women-owned company. It is undisputed that RKC performed all of the residential waste-collection services that Waste Management hired Jackson Ramelli to perform. The subcontract between Waste Management and Jackson Ramelli expired at the end of September 2010; the parties continued services on a month-to-month basis. In January 2012, Jackson Ramelli purchased the right to assume Metro Waste’s routes related to the contract. As a result, Jackson Ramelli increased the amount it invoiced Waste Management to reflect the additional houses it acquired through its acquisition of Metro Waste’s routes. While Jackson Ramelli submitted monthly invoices to Waste Management for services rendered, it did not invoice Waste Management for any CPI adjustments or for any further houses serviced. But during this time, Jackson Ramelli raised the possibility of additional compensation to reflect (1) the changes in the CPI and (2) the increase in the number of houses Jackson Ramelli claimed to be servicing. Jackson Ramelli filed a complaint against Waste Management in July 2015 claiming Waste Management’s: (1) nonpayment of CPI increases between 2012 and 2015; (2) nonpayment of waste-collection services for additional houses between 2012 and 2015; and (3) nonpayment of work performed in March 2015. Because the record established that the additional work claimed by Jackson Ramelli was contemplated by its contract and because Jackson Ramelli did not have a reasonable expectation of additional compensation, the Supreme Court reversed its quantum meruit claim, and final judgment was entered in favor of Waste Management. View "Waste Management of Mississippi Inc. v. Jackson Ramelli Waste LLC" on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law

Carrier manufactures residential Heating, Ventilation, and Air Conditioning (HVAC) systems. ECIMOS produced the quality-control system that tested completed HVAC units at the end of Carrier’s assembly line. ECIMOS alleged that Carrier infringed on its copyright on its database-script source code—a part of ECIMOS’s software that stores test results. ECIMOS alleges that Carrier improperly used the database and copied certain aspects of the code to aid a third-party’s development of new testing software that Carrier now employs in its Collierville, Tennessee manufacturing facility.ECIMOS won a $7.5 million jury award. The court reduced Carrier’s total damages liability to $6,782,800; enjoined Carrier from using its new database, but stayed the injunction until Carrier could develop a new, non-infringing database subject to the supervision of a special master; and enjoined Carrier from disclosing ECIMOS’s trade secrets while holding that certain elements of ECIMOS’s system were not protectable as trade secrets (such as ECIMOS’s assembled hardware). The Sixth Circuit affirmed in part and reversed in part. There are sufficient reasons to conclude that Carrier did infringe on ECIMOS’s copyright, but Carrier’s liability to ECIMOS based on its copyright infringement and its breach of contract can total no more than $5,566,050. The district court did not err when it crafted its post-trial injunctions. View "ECIMOS, LLC v. Carrier Corp." on Justia Law

DWM agreed to purchase 30 gasoline station-convenience stores from Smart for $67 million. It was understood that it was a "flip" because Smart did not yet own the properties. Both parties were represented by counsel. The Agreement requires DWM to deposit $300,000 into an escrow account. At the close of the due diligence period, DWM is to pay a second deposit of $450,000. DWM never paid the initial earnest money deposit but the parties continued their due diligence investigations and negotiations. The Agreement requires DWM to provide Smart with written notice to terminate the Agreement if, after its investigations, DWM disapproved of the purchase. If DWM did not provide that written notice, the Agreement states that Smart is entitled to keep the earnest money if the deal falls through. DWM failed to provide notice of disapproval and did not pay the second deposit. In the meantime, Smart executed contracts to acquire the properties. When the DWM-Smart deal fell through, Smart sued DWM for breach of contract, arguing it was entitled to $750,000 in earnest money as liquidated damages. DWM counterclaimed for breach of contract and fraudulent inducement, for failure to provide adequate due diligence materials.The Seventh Circuit affirmed holdings that DWM breached the contract, that DWM’s obligation to pay the earnest money remained, and that Smart was entitled to the earnest money as liquidated damages under Illinois law. View "Smart Oil, LLC v. DW Mazel, LLC" on Justia Law

The parties to this appeal were a Bolivian company, Compania de Inversiones Mercantiles S.A. (“CIMSA”), and Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively “GCC”). Plaintiff-appellant CIMSA brought a district court action pursuant to the Federal Arbitration Act to confirm a foreign arbitral award issued in Bolivia against Defendant-appellee GCC. The underlying dispute stemmed from an agreement under which CIMSA and GCC arranged to give each other a right of first refusal if either party decided to sell its shares in a Bolivian cement company known as Sociedad Boliviana de Cemento, S.A. (“SOBOCE”). GCC sold its SOBOCE shares to a third party after taking the position that CIMSA failed to properly exercise its right of first refusal. In 2011, CIMSA initiated an arbitration proceeding in Bolivia. The arbitration tribunal determined that GCC violated the contract and the parties’ expectations. GCC then initiated Bolivian and Mexican court actions to challenge the arbitration tribunal’s decisions. A Bolivian trial judge rejected GCC’s challenge to the arbitration tribunal’s decision on the merits. A Bolivian appellate court reversed and remanded. During the pendency of the remand proceedings, Bolivia’s highest court reversed the appellate court and affirmed the original trial judge. But as a result of the simultaneous remand proceedings, the high court also issued arguably contradictory orders suggesting the second trial judge’s ruling on the merits remained in effect. GCC filed a separate Bolivian court action challenging the arbitration tribunal’s damages award. That case made its way to Bolivia’s highest court too, which reversed an intermediate appellate court’s nullification of the award and remanded for further proceedings. Invoking the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, CIMSA filed a confirmation action in the United States District Court for the District of Colorado. After encountering difficulties with conventional service of process in Mexico under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, CIMSA sought and received permission from the district court to serve GCC through its American counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). The district court then rejected GCC’s challenges to personal jurisdiction, holding (among other things) that: (1) it was appropriate to aggregate GCC’s contacts with the United States; (2) CIMSA’s injury arose out of GCC’s contacts; (3) exercising jurisdiction was consistent with fair play and substantial justice; and (4) alternative service was proper. The district court rejected GCC's defenses to CIMSA's claim under the New York Convention. Before the Tenth Circuit Court of Appeals, the Court affirmed the district court: the district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts. "The district court correctly decided that exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary." The Court also affirmed the district court's confirmation of the arbitration tribunal's decisions. View "Compania De Inversiones v. Grupo Cementos de Chihuahua" on Justia Law

FEI, Crop Venture's successor-in-interest, filed suit alleging that the individual defendants took proprietary information they developed at Crop Ventures after they left the company and co-founded Farmobile (the corporate defendant). Specifically, FEI alleges that the individual defendants' behavior constituted a breach of explicit or implicit contracts with the company; defendants were obligated to assign to their employer the ownership rights of products they worked to develop; the individual defendants breached their duty of loyalty to their employer; and the individual defendants misappropriated trade secrets. The district court denied in full FEI's motion, and granted in part and denied in part Farmobile's motion.The Eighth Circuit affirmed and held that because no contract bound the parties during Defendant Nuss' term of employment, Nuss was not in breach of an explicit contract; FEI has not shown that any of the individual defendants was similarly "specifically directed" during their product-development process, so no implied contracts were created under the hired-to-invent doctrine; FEI failed to show the individual defendants breached their duty of loyalty to their employer; FEI cannot maintain a trade secret claim under the Nebraska Trade Secrets Act (NTSA) or the federal Defend Trade Secrets Act (DTSA); and the remaining claims are unpersuasive. View "Farmers Edge Inc. v. Farmobile, LLC" on Justia Law

The Supreme Court modified and affirmed the decision of the Business Court dismissing Defendant's crossclaims against a co-defendant, holding that the Business Court correctly dismissed the crossclaims.This appeal arose from litigation between Kenneth Nelson, Alliance Hospitality Management, LLC, and Orlando Residence, Ltd. Orlando filed this lawsuit against Alliance and Nelson seeking recovery of funds that Alliance allegedly wrongfully transferred. Nelson, appearing pro se, filed a document in which he asserted eighteen crossclaims against Alliance seeking damages and various forms of equitable relief. The Business Court dismissed the claims asserted by Orlando and all of Nelson's crossclaims. Nelson appealed, arguing that the Business Court incorrectly ruled that a crossclaim asserted by one defendant against a co-defendant automatically ceases to be viable once the plaintiff's original claims against the defendants are dismissed. The Supreme Court agreed, holding (1) with the exception of certain crossclaims, the dismissal of the original action does not, by itself, mandate the dismissal of a crossclaim so long as the crossclaim meets the Rule 13(g) prerequisites for bringing such a claim; and (2) because res judicata barred Nelson's "qualifying claims," the dismissal of Nelson's remaining fifteen crossclaims was proper. View "Orlando Residence, Ltd. v. Alliance Hospitality Management, LLC" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment against a real estate agency on its complaint against the seller and buyers of certain property for breach of an exclusive listing agreement and tortious interference with a contract, business relationship, or expectation, holding that summary judgment was properly granted.The sale of the property occurred after the listing period and after the protection period of the agreement, and no commission was paid. The negotiations for the sale were conducted directly between the seller and buyers, with the real estate agent's knowledge. The district court granted Defendants' motions for summary judgment. On appeal, the real estate agency argued that summary judgment was inappropriate because the district court held the summary judgment hearing before the real estate company had conducted depositions. The Supreme Court affirmed, holding (1) the district court did not prematurely address Defendants' motions for summary judgment; and (2) the district court erred in awarding attorney fees. View "George Clift Enterprises, Inc. v. Oshkosh Feedyard Corp." on Justia Law

Six Dimensions filed suit against a former employee and a competitor, Perficient, alleging claims for breach of contracts, unfair competition, and misappropriation of trade secrets.The Fifth Circuit reversed the part of the judgment holding that the employee breached an employment contract and owed damages to Six Dimensions. The court held that the district court abused its discretion in denying the employee an opportunity to extend the arguments she had already made about the 2014 Agreement and have them apply to the 2015 Agreement. However, the court held that the district court did not reversibly err in interpreting California law and concluding that California's strict antipathy towards restraint of trade of any kind in California Business and Professions Code section 16600 voids the nonsolicitation provision here. The court also found no error in the district court's refusal to apply California's Unfair Competition Law, and held that the district court did not abuse its discretion in refusing to find the jury's verdict contrary to the weight of the great evidence as to the misappropriation claim. Therefore, the court otherwise affirmed the district court's judgment. View "Six Dimensions, Inc. v. Perficient, Inc." on Justia Law

Defendants-tenants John and Rosa Castro (the tenants) leased a residential property from plaintiff-landlord Fred Graylee. The landlord brought an unlawful detainer action against the tenants, alleging they owed him $27,100 in unpaid rent. The day of trial, the parties entered into a stipulated judgment in which the tenants agreed to vacate the property by a certain date and time. If they failed to do so, the landlord would be entitled to enter a $28,970 judgment against them. The tenants missed their move-out deadline by a few hours and the landlord filed a motion seeking entry of judgment. The trial court granted the motion and entered a $28,970 judgment against the tenants under the terms of the stipulation. The tenants appealed, arguing the judgment constituted an unenforceable penalty because it bore no reasonable relationship to the range of actual damages the parties could have anticipated would flow from a breach of the stipulation. To this, the Court of Appeal agreed, and reversed and remanded this matter for further proceedings. View "Graylee v. Castro" on Justia Law