Justia Contracts Opinion Summaries

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

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