Justia Contracts Opinion Summaries

Appellants, Sorokine and Koudriavtseva, are husband and wife. DBS and Kornach are California licensed contractors; DBS worked on their San Rafael house, while Kornach did not. Kornach, a longtime friend of Sorokine’s, had purchased materials for DIY projects at the property because of the discounts afforded to licensed general contractors. Sorokine does not speak English; Kornach often interpreted for Sorokine. After Koudriavtseva fired DBS, she hired unlicensed builders to complete the work and remedy alleged defects. DBS sued, alleging breach of contract and foreclosure of mechanic’s lien. Appellants’ response named as cross-defendants DBS, Komach, and ACIC, which had issued a surety bond to Kornach. The court of appeal reversed a directed verdict against appellants on a claim they violated an Internal Revenue Code provision and awarding $20,000 in sanctions and $122,995 in attorney fees against them. There was no evidence that appellants knew that 1099s issued to Komach were incorrect. The court also reversed directed verdicts against appellants on claims they had asserted against others; appellants were unable to prove damage because the trial court had granted a motion in limine preventing appellants from introducing evidence of payments made to an unlicensed contractor. The court also reversed an award of cost of proof damages to Kornach based on requests for admissions propounded by a different party. View "Design Built Systems v. Sorokine" on Justia Law

In this dispute regarding the commercialization of a patent covering a method for pooling insurance policies the Court of Chancery granted Defendants’ motion for judgment on the pleadings in which they argued that they did not owe any of the contractual or fiduciary obligations that Plaintiff sought to enforce, holding that Defendants were entitled to judgment as a matter of law.Plaintiff brought this action asserting claims for breach of contract and breach of fiduciary duties related to Defendants’ business development of a patent-holding entity and Defendants’ failure to provide certain information to Plaintiff. The Court of Chancery granted Defendants’ motion for judgment on the pleadings, thus mooting Plaintiff’s motion to compel and motion for default judgment, holding That Defendants carried their burden to show that Plaintiff could prove no set of facts in support of his claims that would entitle him to relief and that Defendants were entitled to judgment as a matter of law. View "Ross v. Institutional Longevity Assets LLC" on Justia Law

Sköld coined the name “Restoraderm” for a proprietary drug-delivery formulation that he developed for potential use in skin-care products. He entered into a 2001 letter of intent with CollaGenex, a skin-care company, stating that “[a]ll trademarks associated with the drug delivery system … shall be applied for and registered in the name of CollaGenex and be the exclusive property of CollaGenex.” Their 2002 contract reiterated those provisions and stated that termination of the agreement would not affect any vested rights. With Sköld’s cooperation, CollaGenex applied to register the Restoraderm mark. Under a 2004 Agreement, Sköld transferred Restoraderm patent rights and goodwill to CollaGenex, without mentioning trademark rights. After Galderma bought CollaGenex it used Restoraderm as a brand name on products employing other technologies. In 2009, Galderma terminated the 2004 Agreement, asserting that it owned the trade name and that Sköld should not use the name. Sköld markets products based on the original Restoraderm technology that do not bear the Restoraderm mark. Galderma’s Restoraderm product line has enjoyed international success. Sköld sued, alleging trademark infringement, false advertising, unfair competition, breach of contract, and unjust enrichment. Only Sköld’s unjust enrichment claim was successful. The Third Circuit reversed in part, absolving Galderma of liability. The 2004 agreement, rather than voiding CollaGenex’s ownership of the mark by implication, confirmed that CollaGenex owned the Restoraderm mark. Galderma succeeded to those vested rights. View "Skold v. Galderma Laboratories L.P." on Justia Law

In 2006, T3 Enterprises entered into the Distributor Agreement with Safeguard Business Systems (SBS). In 2014, T3 filed suit alleging SBS had breached the Distributor Agreement by failing to prevent other SBS distributors from selling to T3’s customers and for paying commissions to the interfering distributors rather than to T3. The Distributor Agreement between SBS and T3 contained an arbitration clause indicating disputes must be resolved in a Dallas, Texas based arbitration procedure. The Distributor Agreement also contained a forum selection clause indicating that the Federal Arbitration Act (FAA) and Texas law would apply to any disputes between the parties. Pursuant to this agreement, SBS moved the district court to compel arbitration in Dallas. The district court determined the parties had to submit to arbitration, but that the Dallas forum selection clause was unenforceable, and arbitration was to take place in Idaho. The Arbitration Panel (the Panel) found for T3 and the district court confirmed the award in the amount of $4,362,041.95. The district court denied SBS’s motion to vacate or modify the award. SBS appealed, but finding no reversible error, the Idaho Supreme Court affirmed the district court. View "T3 Enterprises v. Safeguard Business Sys" on Justia Law

This appeal arose in the context of Safeguard Business Systems, Inc.’s (“SBS”) alleged breach of its distributorship agreement with Thurston Enterprises, Inc. (“Thurston”). After a jury trial Thurston was awarded approximately $6.8 million in damages. SBS filed a motion for post-judgment relief, which the district court denied. The Idaho Supreme Court determined the district court correctly decided that SBS breached Thurston’s account protection rights under the Agreement as a matter of law. Furthermore, the district court properly denied SBS’s motions for post-judgment relief on Thurston’s claim for fraud in the inducement of the March 2014 agreement, on Thurston’s claim that SBS breached the pricing guarantee in the Agreement, and on Thurston's claim for good faith and fair dealing because the jury’s findings were supported by substantial evidence. The Supreme Court, therefore, affirmed the district court's judgment. View "Thurston and T3 v. Safeguard" on Justia Law

ARC, a distributor of compressed gases, sold its assets to American. Because ARC leased asset cylinders to customers, it was not immediately able to identify the number of cylinders included in the purchase; the Agreement estimated 6,500 cylinders and provided that American would hold back $150,000 for 180 days to protect against a shortage of up to 1,200 cylinders, at $125 per cylinder. When American began billing the customers it acquired, it learned that many of them paid only to have cylinders refilled but did not pay rent on the cylinders they used. An audit revealed that ARC owned and transferred 4,663 asset cylinders--1,837 cylinders short of the 6,500 promised. In an ensuing breach of contract suit, ARC argued that American breached the contract because it did not complete its audit within the specified 180-day period. The district court disagreed, concluding that ARC extended that deadline and that, because only 4,663 cylinders were delivered, ARC was never entitled to receive any portion of the Cylinder Deferred Payment. The court granted American’s counterclaim for breach of contract, holding that American was entitled to the entire $150,000 and to recover $125 for each cylinder it failed to receive under the threshold of 5,300. The Seventh Circuit affirmed. Because ARC was not entitled to any of the Cylinder Deferred Payment in that it provided less than the 5,300 cylinders, it could not have been damaged by the delay in completing the audit. View "ARC Welding Supply, Co. Inc. v. American Welding & Gas, Inc." on Justia Law

US Bank appealed the district court's dismissal of its second amended consolidated complaint as untimely. The Second Circuit affirmed and held that ACE Secs. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015), and Deutsche Bank Nat'l Tr. Co. v. Quicken Loans Inc., 810 F.3d 861, 868 n.8 (2d Cir. 2015), governed U.S. Bank's contractual claims in this case.The court held that the district court properly granted summary judgment to GreenPoint where the first two causes of action for breach of contract were untimely under settled New York law, because they were filed over six years after the statute of limitations began running. The court also held that the district court properly dismissed the third cause of action for indemnification under section 9 of the Flow Mortgage Loan Purchase and Warranties Agreement, because U.S. Bank's claim was in reality a repackaged version of its breach of contract claims. Finally, the court held that the fourth cause of action for breach of the indemnification agreements did relate back to the original filing for claims based on any of the Trusts, and was therefore untimely asserted. View "Lehman XS Trust v. Greenpoint Mortgage Funding, Inc." on Justia Law

In this appeal, plaintiffs, an individual and his limited liability towing company, entered into a contract for the purchase of a customized medium-duty 4x4 truck with autoloader tow unit. Ultimately, the truck did not perform as expected and plaintiffs filed suit. The issue this case presented for the New Jersey Supreme Court's review centered on whether determine whether New Jersey’s Consumer Fraud Act (CFA or the Act) covered the transaction as a sale of “merchandise.” The New Jersey Supreme Court agreed with the Appellate Division that the trial court took too narrow an approach in assessing what constituted "merchandise" under the remedial CFA. The customized tow truck and rig fit within the CFA’s expansive definition of “merchandise” and, therefore, plaintiff’s CFA claim should not have foundered based on an application of that term. Furthermore, the Court agreed with the appellate panel’s remand to the trial court for a determination of whether defendants’ other bases for seeking summary judgment were meritorious. View "All The Way Towing, LLC v. Bucks County International, Inc." on Justia Law

Land Holdings I, LLC, d/b/a Scarlet Pearl, LLC (“Casino”), sought to expunge a lien filed by GSI Services, LLC (“GSI”). The chancellor denied the Casino’s petition to expunge the lien because GSI performed work at the Casino within ninety days of filing its lien. Finding no error, the Mississippi Supreme Court affirmed the chancellor’s order. View "Land Holdings I, LLC d/b/a Scarlet Pearl, LLC v. GSI Services, LLC" on Justia Law

BankDirect and Capital make loans to finance insurance premiums. In 2010, Capital, having exhausted the line of credit, approached BankDirect, which was willing to purchase Capital's loans and pay Capital to service those loans. BankDirect had a right to purchase Capital’s business after five years. If BankDirect did not purchase Capital, either party could extend the term by notice before January 4, 2016; otherwise, the agreement would terminate on January 31, 2016. Any extension could not go beyond June 1, 2018. BankDirect exercised the option in November 2015, but Capital refused to honor it. BankDirect sued. Capital sought an injunction to require BankDirect to continue purchasing loans and paying it to service them. BankDirect continued the arrangement through May 1, 2017, when it seized several Capital accounts and stated that it would no longer buy Capital's loans. BankDirect withdrew its request for specific performance. The district court concluded that Capital was entitled to a preliminary injunction so that the purchase‐and‐service arrangement would continue pending a judgment but did not address the 2018 terminal date or other disputes; failed to enter an injunction as a separate document under Fed. R. Civ. P. 65(d)(1)(C); and did not require Capital to post a bond (Rule 65(c)). The Seventh Circuit declined to address the merits or Rules 65(c) and (d), stating that the “injunction” should have contained a terminal date: June 1, 2018, and remanded for a determination of whether damages are available. View "Bankdirect Capital Finance, Inc. v. Texas Capital Bank National LLC" on Justia Law