Justia Contracts Opinion Summaries

LS, a trucking company, also operates as a broker of construction trucking services. Under a 2009 oral agreement between LS and Cheema, Cheema purchased a Super Dump Truck, with the understanding that LS would purchase the truck’s detachable box from Cheema. As the box owner, LS would give priority to Cheema in dispatching assignments to Cheema as a subhauler. The parties entered a written “Subhauler and Trailer Rental Agreement” under which Cheema would submit to LS completed freight bills for all hauling that he performed for LS; LS would prepare statements showing the amount billed payable to Cheema, less a 7.5 percent brokerage fee and, if the work was performed with a box owned by LS, a 17.5 percent rental fee. Cheema began providing hauling services. Cheema claimed that because LS failed to pay him the $32,835.09 purchase price of the box, it remained his, and LS was not entitled to deduct rental fees from the payments due him. In June 2010, LS began paying Cheema $1,000 a month for nine months, noting on the checks that the payments were repayment of a “loan.” Cheema recovered damages from L.S. for having been underpaid and untimely payments. The court of appeal affirmed but remanded for calculation of prejudgment interest and penalty interest (Civil Code 3287, 3322.1), rejecting LS’s argument that the parties’ oral agreement for Cheema to sell it the box, justifying its deductions for rental, was enforceable. View "Cheema v. L.S. Trucking, Inc." on Justia Law

Sapa manufactures aluminum extruded profiles, pre-treats the metal and coats it with primer and topcoat. For decades, Sapa supplied “organically coated extruded aluminum profiles” to Marvin, which incorporated these extrusions with other materials to manufacture aluminum-clad windows and doors. This process was permanent, so if an extrusion was defective, it could not be swapped out; the whole window or door had to be replaced. In 2000-2010, Marvin bought about 28 million Sapa extrusions and incorporated them in about 8.5 million windows and doors. Marvin sometimes received complaints that the aluminum parts of its windows and doors would oxidize or corrode. The companies initially worked together to resolve the issues. In the mid-2000s, there was an increase in complaints, mostly from people who lived close to the ocean. In 2010, Marvin sued Sapa, alleging that Sapa had sold it extrusions that failed to meet Marvin’s specifications. In 2013, the companies settled their dispute for a large sum.Throughout the relevant period, Sapa maintained 28 commercial general liability insurance policies through eight carriers. Zurich accepted the defense under a reservation of rights, but the Insurers disclaimed coverage. Sapa sued them, asserting breach of contract. The district court held that Marvin’s claims were not an “occurrence” that triggered coverage. The Third Circuit vacated in part, citing Pennsylvania insurance law: whether a manufacturer may recover from its liability insurers the cost of settling a lawsuit alleging that the manufacturer’s product was defective turns on the language of the specific policies. Nineteen policies, containing an Accident Definition of “occurrence,” do not cover Marvin’s allegations, which are solely for faulty workmanship. Seven policies contain an Expected/Intended Definition that triggers a subjective-intent standard that must be considered on remand. Two policies with an Injurious Exposure Definition also include the Insured’s Intent Clause and require further consideration. View "Sapa Extrusions, Inc. v. Liberty Mutual Insurance Co." on Justia Law

Parke Bancorp (“Parke”) made a loan to 659 Chestnut LLC (“659 Chestnut”) in 2016 to finance the construction of an office building in Newark, Delaware. 659 Chestnut pleaded a claim in the Superior Court for money damages in the amount of a 1% prepayment penalty it had paid under protest when it paid off the loan. The basis of 659 Chestnut’s claim was that the parties were mutually mistaken as to the prepayment penalty provisions of the relevant loan documents. Parke counterclaimed for money damages in the amount of a 5% prepayment penalty, which it claimed was provided for in the agreement. After a bench trial, the Superior Court agreed with 659 Chestnut and entered judgment in its favor. After review, the Delaware Supreme Court reversed and directed entry of judgment in Parke’s favor on 659 Chestnut’s claim. Although Parke loan officer Timothy Cole negotiated on behalf of Parke and represented to 659 Chestnut during negotiations that there was a no-penalty window, the parties stipulated that: (1) everyone knew that Cole did not have authority to bind Parke to loan terms; and (2) everyone also knew that any terms proposed by Cole required both final documentation and approval by Parke’s loan committee. It was evident to the Supreme Court that 659 Chestnut did not offer clear and convincing evidence that Parke’s loan committee agreed to something other than the terms in the final loan documents. Accordingly, it Directed entry of judgment for Parke. View "Parke Bancorp Inc., et al. v. 659 Chestnut LLC" on Justia Law

This appeal involved a business dispute between two physicians. William Yost, M.D., owned and operated a pain-management clinic, Doctors Medical Center, LLC (DMC-Slidell). Within six months of opening DMC-Sidell, the Louisiana State Board of Medical Examiners (LSBME) began an investigation of Dr. Yost for illegally operating a pain-management clinic. Yost surrendered his Louisiana license, and closed DMC-Slidell. Yost then opened a new clinic, Doctors Medical Center of Picayune, LLC (DMC-Picayune), and began seeing patients, including his former patients from DMC-Slidell. The Mississippi State Board of Medical Licensure (MSBML) required that all pain-management clinics be registered and issued a certificate; Yost submitted an application for registration to the MSBML, but the certificate was not immediately issued. Mayor Okoloise, M.D. met with Yost to discuss affiliating. As a result of these discussions, Okoloise began practicing medicine with Yost at DMC-Picayune. They formalized their relationship and signed a “Personal Services Contract” in August 2012. At trial, Okoloise testified that, at the time he signed the agreement, he was unaware of the LSBME’s investigation of Yost,and he was unaware that Yost was not properly credentialed in Mississippi. The MSBML was not aware of the Louisiana investigation either and approved Yost’s application practice in pain management, issuing the required certificate. Dr. Okoloise resigned from DMC-Picayune; when he learned of the investigations, Okoloise testified the clinic was being operated illegally, and, thus he believed his contract to have been void at its inception. After Okoloise resigned, several other DMC-Picayune employees unexpectedly resigned. Testimony was presented that Okoloise made plans to open another clinic before he submitted his resignation, Hope Medical Services, LLC. Okoloise offered several members of the DMC-Picayune staff jobs at Hope Medical. The Drug Enforcement Agency (DEA) investigated Yost and DMC-Picayune, the result of which did not end in charges filed. But, on February 13, 2013, the DEA closed DMC-Picayune. That same day, Yost voluntarily surrendered his Mississippi medical license. Notwithstanding these investigations and the closure of his clinics, Yost sued Okoloise and Hope Medical and the DMC-Picayune employees that worked for Hope Medical. The chancellor determined there was sufficient evidence to sustain several claims against Okoloise and Hope Medical: trover/conversion, defamation, breach of contract, breach of duty of good faith, and misappropriation of trade secrets. The chancellor found “[Dr. Yost and DMC-Picayune] should be equitably compensated for the damages they incurred for these claims and losses.” He awarded a judgment against Okoloise and Hope Medical in the amount of $188,622. The Mississippi Supreme Court determined the chancellor’s findings were based on equitable measures, with no legal basis, and were therefore manifestly wrong. "The record evidence was insufficient to show losses attributable to Dr. Okoloise or Hope Medical. The judgment is manifestly wrong, clearly erroneous, and not supported by credible evidence. We reverse and render." View "Okoloise v. Yost" on Justia Law

At issue in this appeal was a tortious interference claim brought by Sprint against Wireless Buybacks, an arbitrager of upgraded phones from customers that then resells them at higher prices. Sprint alleged that its written contract with customers categorically prohibits them from reselling their phones, and Wireless Buybacks has wrongfully induced customers to do so. The district court found that the contract unambiguously barred resale and granted partial summary judgment for Sprint.The Fourth Circuit held that Sprint's terms and conditions did not unambiguously prohibit customers from reselling their phones, and thus Sprint was not entitled to judgment as a matter of law. In this case, the court rejected Sprint's two theories in support of why "Services" unambiguously included all upgraded phones, and Sprint failed to show that Wireless Buybacks bought phones from Sprint customers who agreed to activate their upgraded phones on Sprint's network. Therefore, the court vacated the district court's summary judgment order insofar as it found Wireless Buybacks liable for tortious interference and remanded for further proceedings. View "Sprint Nextel Corp. v. Wireless Buybacks Holdings, LLC" on Justia Law

Quidel Corporation (Quidel) petitioned for a writ of mandate and/or prohibition to direct the trial court to vacate its order granting summary judgment. Quidel contended the trial court incorrectly concluded a provision in its contract with Beckman Coulter, Inc. (Beckman) was an invalid restraint on trade in violation of Business and Professions Code section 16600. In 1996, Biosite Inc. (Biosite; Quidel is the successor in interest to Biosite) licensed patent rights and know-how related to a B-type natriuretic peptide (BNP), which can be measured in a person's blood. The semi-exclusive licensing agreement allowed Biosite to develop an immunoassay to determine the level of BNP in a person's blood sample, to help diagnose congestive heart failure. After acquiring the intellectual property rights and know-how, Biosite developed and created a BNP assay for use with its point-of-care analyzer device, and it obtained regulatory approval. By 2003, Beckman had developed a laboratory analyzer, but it did not have a license for a BNP assay compatible with its analyzer. Around this same time, other companies were also pursuing BNP assays for use with their larger analyzers, which could run multiple, different immunoassays at higher volumes than the point-of-care analyzer Biosite had. Collaborating would mean Biosite could expand its customer base to those who wanted to use the larger capacity laboratory analyzers and Beckman could include the BNP assay in its menu of immunoassay offerings. Biosite and Beckman negotiated the Agreement over several months, and they exchanged numerous drafts before executing it. The Agreement prohibited Biosite from engaging other manufacturers to provide the BNP assay for their competing lab analyzers. The term of the Agreement was negotiated to coincide with the term of a related licensing agreement Biosite had with another company, Scios. Section 5.2.3 of the Agreement prohibited Beckman from researching or developing an assay that detected the presence or absence of the BNP or NT-proBNP proteins or markers for use in diagnosing cardiac disease until two years before the Agreement's expiration. Beckman sued Quidel for declaratory relief for violation of section 16600 and violation of the Cartwright Act, asking the Court to declare section 5.2.3 of the Agreement was void and unenforceable and to issue a permanent injunction preventing the enforcement of section 5.2.3 of the Agreement. Quidel argued the trial court improperly extended the holding from Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008) beyond the employment context to section 5.2.3 of the Agreement. The Court of Appeal determined the trial court's per se application of section 16600 to section 5.2.3 of the Agreement between Quidel and Beckman was not correct, granted Quidel’s petition and issued a writ instructing the trial court to vacate the December 7, 2018 order granting summary adjudication on the first cause of action. View "Quidel Corporation v. Super. Ct." on Justia Law

After plaintiff disputed discounts applied by MultiPlan under his agreement with PHCS to charges for services he provided to patients that were covered by workers' compensation insurance, he filed suit against PHCS and Multiplan. Plaintiff's claims for civil conspiracy and breach of contract proceeded to trial and were subsequently dismissed after the district court granted defendants' motions for judgment as a matter of law.The Fifth Circuit held that plaintiff failed to show that the district court erred in determining that plaintiff did not establish an underlying "unlawful purpose" or unlawful activity on which to base his civil conspiracy claim. However, the court held that a reasonable jury could find based on the evidence presented that defendants breached the parties' agreement, and thus the district court erred in granting defendants' renewed motion for judgment as a matter of law as to the breach of contract claim. The court upheld the district court's ruling prohibiting additional evidence on punitive damages and the issue of punitive damage from reaching the jury. Finally, the court concluded that the district court's ruling prohibiting Attorney Gordon from participating in trial on plaintiff's behalf did not provide grounds for disturbing any of its judgments. Accordingly, the court affirmed in part, vacated in part, and remanded. View "MultiPlan, Inc. v. Holland" on Justia Law

C. Randall Caldwell, Jr. worked for George Woerner, who owned several businesses headquartered in Foley. In 2009, Caldwell was promoted to president of Woerner Landscape, Inc., one of those businesses. Caldwell stated that, at that time, he was a licensed attorney in good standing in Alabama even though he was not engaged in private practice. During his employment with Woerner, the BP oil spill occurred in the Gulf of Mexico. Caldwell contacted an attorney with Cunningham Bounds, LLC, a law firm in Mobile, regarding the possibility of referring Woerner's businesses to Cunningham Bounds for Cunningham Bounds to handle their claims arising out of the spill. In April 2011, the Woerner companies retained Cunningham Bounds; Cunningham Bounds executed representation agreements with each of the Woerner companies. Those agreements provided that Cunningham Bounds would be paid a contingency fee for the work. In 2014, the Woerner companies retained Sirote & Permutt, P.C. to assist Cunningham Bounds in the BP oil-spill litigation. Additionally, each of the Woerner companies sent Caldwell a letter in which they stated that Caldwell had previously assisted with a BP oil-spill claim asserted on behalf of that Woerner company; that the claim had been principally handled by Cunningham Bounds; and that at the time Caldwell provided assistance he was working as in-house counsel for one or more of the Woerner companies. Each letter went on to assert that the claim would have to be reworked "based on newly announced guidelines from appellate courts hearing BP's objections to some of the previously filed claims"; that the owners and management of the Woerner companies felt that it would be in their best interest to retain a firm with experienced tax and business attorneys to assist in the claims; that the Woerner companies wished to continue their representation by Cunningham Bounds; that they were terminating the attorney-client relationship between Caldwell and the Woerner companies; and that they were retaining Sirote to assist Cunningham Bounds in reworking the claims asserted by the Woerner companies. After receiving this letter, Caldwell contacted one of the attorneys at Cunningham Bounds and told him that it was his position that he was entitled to the referral fees discussed in the representation agreements because, he said, he had referred the Woerner companies' claims to Cunningham Bounds. Summary judgment was ultimately entered in favor of Caldwell; the Alabama Supreme Court determined the trial court erred in finding Caldwell was owed a referral fee. Judgment was reversed and the matter remanded for further proceedings. View "Sirote & Permutt, P.C. v. Caldwell" on Justia Law

R&W appealed a judgment entered after R&W allegedly defaulted in making payments to Osteroid Parties under a settlement agreement. The Court of Appeal held that the trial court erred in entering the stipulated judgment because the additional $700,000 was an unenforceable penalty under Civil Code section 1671. However, the court held that the trial court's factual determinations regarding R&W's breach of the agreement were supported by substantial evidence. Accordingly, the court reversed in part and remanded with directions to reduce the judgment, with further adjustments, plus interest. The court noted that its decision to publish was to remind practitioners whose clients settle a dispute involving payments over time how to incentivize prompt payment properly, and what may happen if done incorrectly. View "Red & White Distribution v. Osteroid Enterprises" on Justia Law

Lamar maintained and operated a billboard on land that it leased from R.E.D. After R.E.D. and Landmark executed an agreement under which Landmark agreed to pay R.E.D. in exchange for, among other things, the right to receive rent from Lamar, Landmark sued R.E.D. for breach of contract and sued R.E.D. and Defendant Van Stavern for fraudulent and negligent misrepresentation.The Eighth Circuit affirmed the district court's judgment and held that the district court did not err by excluding the testimony of defendants' expert witness where the expert's opinions were not relevant because they were not supported by facts in the record. Furthermore, the district court did not err by denying defendants' request for reconsideration, because the discovery deadlines had passed and defendants failed to offer a substantial justification for their delay. Finally, the court held that the damages award were not duplicative and affirmed the attorneys' fee award. View "Landmark Infrastructure Holding Co. v. R.E.D. Investments, LLC" on Justia Law