Justia Contracts Opinion Summaries

Plaintiff Pro Done, Inc. appealed a superior court order dismissing its amended complaint against defendants Teresa Basham, individually and as non-independent trustee of the Paul R. Hooper 1998 GST Exempt Trust, Terrence Hooper, Timothy Hooper, and John Ransmeier, trustee of the Paul R. Hooper 1997 Trust, for breach of contract, tortious interference with contractual relations, and civil conspiracy. Specifically, plaintiff challenged the trial court’s ruling that an alleged violation of a certain contractual provision did not provide a basis for plaintiff’s claims. After their father's death, defendant each received a portion of their father’s one-third ownership interest in three companies known as the Pro-Cut entities, to be held in trust by John Ransmeier. In 2012, the sibling defendants negotiated with Joseph Willey, another owner of the Pro-Cut entities, to sell their ownership interests. They eventually agreed upon a sale price, and in November 2013, Ransmeier, on the sibling defendants’ behalf, executed fifteen Securities Redemption Agreements (SRAs) with the Pro-Cut entities, the terms of which were stated to be binding upon “the heirs, personal representatives, successors and assigns of the parties.” After these transactions, one of the Pro-Cut entities, Brake Solutions, Inc., acquired another Pro-Cut entity. It then changed its name to Pro-Cut International, Inc. In May 2014, three unrelated companies, collectively known as Snap-on, purchased the Pro-Cut entities. Pro-Cut was renamed Pro Done, Inc. Plaintiff alleged it was a successor to the Pro-Cut entities. After Snap-on’s purchase of the Pro-Cut entities, the sibling defendants filed a lawsuit, with the assistance of Ransmeier, in federal district court, against Willey and trustees of trusts that were members of the Pro-Cut entities at the time of the Snap-on transaction. Plaintiff thereafter filed the underlying lawsuit to this appeal. Its central arguments were mainly the trial court erred by ignoring express terms of the release agreements - in which the defendants “covenant[ed] not to sue and otherwise agree[d] not to enforce any claim” against the plaintiff - and denied the plaintiff the opportunity to seek consequential damages for breach of the contract, contrary to New Hampshire law. The parties’ arguments presented a question of first impression for this the New Hampshire Supreme Court: whether New Hampshire law recognized a cause of action for breach of contract based upon a covenant not to sue where the contract did not expressly provide that the non-breaching party was entitled to consequential damages for breach of the covenant. The Court held that it did, reversed the trial court, and remanded for further proceedings. View "Pro Done, Inc. v. Basham" on Justia Law

In 2008, Invenergy Wind LLC, a wind energy developer, was raising money for a Series B investment round, and Leaf Clean Energy Company (“Leaf Parent”), an investment fund, expressed interest. After extensive negotiations, Leaf Parent invested $30 million in Invenergy Series B notes through a vehicle called Leaf Invenergy Company (“Leaf”). The agreement governing the Series B notes gave noteholders such as Leaf the right to convert to equity and incorporated an LLC agreement that the noteholders and Invenergy would execute upon conversion. The Series B Note Agreement and the Series B LLCA also included provisions that prohibited Invenergy from conducting a “Material Partial Sale” without Leaf’s consent unless Invenergy paid Leaf a premium called a “Target Multiple.” Although the parties renegotiated several aspects of their agreements with one another over the next few years, the consent provisions persisted in substantially similar form into a Third Amended and Restated LLC Agreement, which was the operative agreement in this dispute. Leaf filed suit after Invenergy closed a $1.8 billion asset sale - a transaction that Invenergy conceded was a Material Partial Sale - without first obtaining Leaf’s consent or redeeming Leaf’s interest for the Target Multiple. After a trial, the Court of Chancery concluded that, although Invenergy had breached the Material Partial Sale consent provisions, Leaf was not entitled to the Target Multiple. The court then awarded only nominal damages because, according to the court, Invenergy had engaged in an “efficient breach.” The Court of Chancery directed the parties to complete a buyout of Leaf’s interests pursuant to another LLC Agreement provision that Invenergy had invoked after Leaf had filed suit. The Delaware Supreme Court disagreed with the Court of Chancery’s interpretation of the consent provision and its award of nominal damages and therefore reversed. Because Invenergy conducted a Material Partial Sale without Leaf’s consent and without paying Leaf the Target Multiple, Leaf was entitled to the Target Multiple as contractual damages. The Court awarded Leaf the Target Multiple in damages on condition that it surrenderd its membership interests in Invenergy. View "Leaf Invenergy Co. v. Invenergy Renewables LLC" on Justia Law

The Supreme Court affirmed in part and vacated in part the judgment of the intermediate court of appeals (ICA) finding that no evidence was introduced at trial to support the jury's findings that Regal Capital Corporation (Regal Corp.) violated the terms of agreements of sale it entered into with Elesther Calipjo for two parcels of land, Regal Capital Co., LLC (Regal LLC) engaged in unfair and deceptive acts or practices, and Jack Purdy was the alter ego of Regal Corp. and Regal LLC, holding that the ICA's holding was error.Based on the alter ego finding, the jury determined that Purdy, too violated the agreements for the two properties and committed unfair and deceptive acts or practices. The Supreme Court held (1) there was evidence to support the jury's verdict that Regal Corp. violated the terms of the agreements, Regal LLC engaged in unfair and deceptive acts or practices, and Purdy was the alter ego of Regal Corp. and Regal LLC; and (2) the ICA erred when it reversed the circuit court's final judgment against Purdy on the breach of contract and unfair and deceptive acts or practices claims. View "Calipjo v. Purdy" on Justia Law

The Supreme Court affirmed the decision of the court of appeals in this case alleging tortious interference involving a parent corporation and its wholly-owned subsidiary, holding that a parent company has a qualified privilege to interfere with the contractual relations of its wholly-owned subsidiary unless it employs wrongful means or its interference is not in the economic interest of the subsidiary.Plaintiff brought suit against against CONSOL of Kentucky Inc. (CKI), the wholly-owned subsidiary of CONSOL Energy, Inc. (Energy), Energy, and others, alleging that Energy interfered with the contractual relation between Plaintiff and CKI. The jury found for Plaintiff. The court of appeals concluded that a parent company cannot tortiously interfere with a wholly-owned subsidiary unless it employs wrongful means when interfering and that Energy was entitled to interfere in this case. The Supreme Court affirmed, holding that Plaintiff adduced no proof as to the required element of wrongful means in a tortious interference claim involving a parent and its wholly-owned subsidiary. View "Sparkman v. Consol Energy, Inc." on Justia Law

The Eighth Circuit affirmed the district court's denial, on remand, of Qwest's unjust enrichment claim against FC. The court held that the district court did not abuse its discretion by concluding that it would not be inequitable for FC to retain the benefit conferred by Qwest. In this case, the district court explained that FC earned the benefit conferred by Qwest because it provided conference-calling services, 24-hour customer support, and access to a website in exchange for two cents per minute for calls placed to FC's conferencing bridges at Sancom. Furthermore, Qwest paid its own conference-calling vendor between two and four-and-a-half cents per minute. View "Qwest Communications Corp. v. Free Conferencing Corp." on Justia Law

In December 2007, Kia Motors America, Inc. (Kia) and TS & A Motors, LLC d/b/a Kia of Somersworth (Somersworth) entered into a Dealer Sales and Service Agreement (Dealer Agreement), which governed the franchise relationship between the parties. Under this agreement, Somersworth was required to employ certain parts and service personnel. In 2011 and Kia sent a series of letters notifying Somersworth of perceived staffing and training deficiencies. These letters referenced Somersworth’s failure to meet technician training requirements in 2009 and 2010, to adequately staff and train personnel in its parts and service department, and to meet the minimum number of technicians required to participate in Kia’s “Optima Hybrid Program.” During Somersworth’s tenure as a dealer, Kia employees overseeing Somersworth made note of its high employee turnover rates. The Board determined that over the course of its operations as a dealer, Somersworth violated the provision of the Dealer Agreement that required certain parts and service personnel “on an almost constant basis.” Kia management worked with Somersworth to remedy its staffing deficiencies. It sent numerous written notifications to Somersworth referencing the inadequacy of its parts and service staffing, met with Somersworth to discuss its concerns over staffing, and gave Somersworth the “benefit of the doubt” when the dealer promised to hire the appropriate number of staff members. Somerset appealed a superior court decision to affirm a New Hampshire Motor Vehicle Industry Board ruling that Kia properly terminated its franchise agreement with Somersworth. Finding no reversible error, the New Hampshire Supreme Court affirmed the Board's decision. View "TS & A Motors, LLC v. Kia Motors America, Inc." on Justia Law

Johnson Electric sued Robinson Electric Supply for numerous claims, including breach of contract, fraud, and a variety of other torts. Johnson asserted that Robinson Electric Supply carried out a fraudulent scheme to overcharge Johnson. Robinson Electric Supply counterclaimed for balances due on Johnson’s accounts. Both parties requested an accounting. The chancellor appointed a special master to hear the case due to its complexity and size of the amount in controversy. The chancellor stayed discovery until the special master could release her findings; however, the chancellor also ordered Robinson to release numerous business records sought by Johnson. Before the accounting was concluded by the special master, Johnson Electric was administratively dissolved, and as a result, the chancellor dismissed the claims brought on behalf of the corporation. After the special master released her recommendations and a supplemental report, the chancellor agreed with the special master’s findings and adopted the report. On appeal, Johnson challenged the chancellor’s decision to dismiss Johnson Electric from the lawsuit, the chancellor’s adoption of the special master’s report, and the chancellor’s decision to stay discovery until an accounting could be conducted by the special master. The Mississippi Supreme Court found that because Johnson Electric was administratively dissolved, it could not "maintain" a claim as a corporation under Mississippi law. Furthermore, the Court determined neither the chancellor's acceptance of the special master's report nor the chancellor's discovery rulings were an abuse of discretion. View "Wayne Johnson Electric Inc. v. Robinson Electric Supply Company, Inc." on Justia Law

Encompass filed suit against Blue Cross for violations of the Employee Retirement Income Security Act (ERISA), breach of contract, defamation, and tortious interference with business relations. After Blue Cross largely prevailed at trial, the district court granted a new trial because of error in the jury charge. At the second trial, Encompass prevailed on all claims.The Fifth Circuit held that charging the jury with an incorrect standard of liability supported granting a new trial, and thus the district court did not abuse its discretion by granting Encompass a new trial on the breach of contract claims. The court also held that the district court did not abuse its discretion by granting a new trial on the tort claims considering the interdependence of the tort and contract issues. Finally, the court held that the application of contra non valentem was not wrong as a matter of law, and Blue Cross abused its discretion by arbitrarily denying Encompass's claims for covered services under ERISA. View "Encompass Off Solutions, Inc. v. Louisiana Health Service & Indemnity Co." on Justia Law

The Supreme Court reversed the order of the circuit court certifying as final the prior orders that granted summary judgment to Respondents in this civil action arising out of the modification of covenants pertaining to a residential subdivision developed by RJM Holdings, LLC, holding that the genuine issues of material fact precluded summary judgment.On appeal, Petitioners argued that the circuit court erred by granting summary judgment because genuine issues of material fact existed regarding whether Respondents were engaged in a joint venture with RJM to develop the subdivision and whether the corporate veils of the respondent businesses should be pierced to hold certain individuals personally liable. The Supreme Court agreed and reversed, holding that genuine issues of material fact existed with respect to the conduct of Respondents and the use of the various business entities to develop the subdivision. View "Dailey v. RJM Holdings, LLC" on Justia Law

PetroChina Canada bought ten large heat-exchanger units from Kelvion’s Oklahoma plant for use in PetroChina’s oil and gas operations. Their contract included a mandatory forum-selection clause subjecting the parties to Canadian jurisdiction. After a dispute over unanticipated delivery costs that PetroChina refused to pay, Kelvion brought suit in Oklahoma. It asserted quantum meruit and unjust enrichment claims, arguing the forum-selection clause did not apply to its equitable claims. The district court disagreed, concluding the forum-selection clause applied, and dismissed the suit under the doctrine of forum non conveniens. Finding no error in judgment, the Tenth Circuit affirmed the district court’s dismissal for forum non conveniens. View "Kelvion, Inc. v. PetroChina Canada Ltd." on Justia Law