Justia Contracts Opinion Summaries

When P. Thomas Hoff, the founder of One Call Concepts, Inc. and Hanover Investments, Inc. (Hanover), terminated the employment of Susan Volkman and redeemed her shares of Hanover, Hoff and others brought this declaratory judgment action against Volkman in the circuit court to defend the procedures it followed to redeem her stock. At the time the declaratory judgment action was filed, Volkman had already filed, in a Minnesota state court, a breach of contract action against Hanover concerning the same issue. The circuit court refused to dismiss or stay the action in deference to the pending Minnesota action. The court then issued a declaratory judgment in favor of Hanover. The court of special appeals ruled that there were not unusual and compelling circumstances justifying the circuit court’s issuance of a declaratory judgment to resolve the same question at issue in the pending Minnesota litigation. The Court of Appeals affirmed, holding that this action did not create unusual and compelling circumstances that would justify an exception to the principle that a court should not entertain a declaratory judgment action when there was a pending lawsuit involving the same issues. View "Hanover Investments, Inc. v. Volkman" on Justia Law

In this business dispute, Plaintiff K’s Merchandise Mart, Inc. challenged orders by the district judge granting summary judgment for Defendants William Weinstein and Frank Morton and requiring Plaintiff to pay Defendants $35,000 in sanctions. The First Circuit affirmed the summary judgment rulings but vacated the sanctions order and remanded for reconsideration of the sanctions matter, holding (1) summary judgment was properly granted on Plaintiff’s claims for fraudulent inducement, breach of the implied covenant of good faith and fair dealing, and breach of contract; and (2) the judge erred when he ordered sanctions against Plaintiff rather than against its attorneys. View "Eldridge v. Gordon Brothers Group, LLC" on Justia Law

The Delaware Court of Chancery granted in part a motion for summary judgment in a breach of contract dispute regarding Duffield's involvement in the design of a wastewater treatment system. The court granted the motion as to Count I against defendants Don Lockwood and John Stanton, holding them jointly and severally liable for the total amount of $82,153.17 plus pre- and post-judgment interest; imposed a constructive trust over the assets transferred to defendants, ordered a full accounting of the proceeds of the distributions, and ordered disgorgement of any profits or proceeds from the transfers; denied the motion as it related to Count I claims against Pamala Stanton; and held that the motion for rule to show cause was moot. View "Duffield Associates, Inc. v. Lockwood Brothers, LLC" on Justia Law

This was a companion case to Green River Ranches, LLC v. Silva Land Company, LLC, Docket No. 43548. In an appeal arising out of Twin Falls County, Appellant Silva Dairy, LLC (“Silva Dairy”), challenged a district court’s holding that Silva Dairy’s claim against Respondent Jack McCall for herd management services was offset by amounts that Silva Dairy owed McCall for feed expenses and pasture rent. McCall owned a livestock business and used Silva Dairy’s herd management services. The district court found that McCall’s total claims against Silva Dairy were at least $492,464.77 and exceeded Silva Dairy’s claim by $287,487.12. Accordingly, the district court dismissed Silva Dairy’s claim with prejudice. Finding no reversible error in this, the Idaho Supreme Court affirmed the district court’s judgment. View "McCall v. Silva Dairy" on Justia Law

Freight entering the port of Savannah was trucked to Schneider Logistic’s building, unloaded on one side, sorted, and reloaded on the other side of the building onto outgoing trucks; such reloading is called “cross-docking.” Scheider hired Prime to do the cross‐docking work. Prime was usually not paid timely and not paid enough to break even. Prime complained about that and about a lack of communication from Schneider concerning assignments. Schneider’s failed, without explanation, to pay Prime $82,464.71 for services rendered. Prime removed its employees from Schneider’s Savannah building; and filed suit for $289,059.95. Schneider responded that Prime’s repudiation of the contract had caused Schneider damages of $853,401.49. A jury found that Prime had repudiated its contract but that Schneider had no damages. Schneider successfully sought a new trial under FRCP 59, limited to damages, in the “interest of justice.” A second jury awarded Schneider $853,401.49. reduced to $564,341.54. The Seventh Circuit vacated. A rational jury could find that a zero damages award would fairly compensate Schneider. The first jury may have concluded that Schneider had failed to mitigate its damages by paying Prime what it owed, “peanuts” to such a large firm as Schneider.. In the second trial, the judge arbitrarily excluded evidence favorable to Prime. View "Prime Choice Services Inc. v. Schneider Logistics Transloading & Distribution, Inc." on Justia Law

Lexington Insurance denied a claim by its insured, Double D Warehouse, for coverage of Double D’s liability to customers for contamination of warehoused products. One basis for denial was that Double D failed to document its warehousing transactions with warehouse receipts, storage agreements, or rate quotations, as required by the policies. PQ was a customer of Double D whose products were damaged while warehoused there. PQ settled its case against Double D by stepping into Double D’s shoes to try to collect on the policies. PQ argued that there were pragmatic reasons to excuse strict compliance with the policy’s terms. The Seventh Circuit affirmed summary judgment in favor of Lexington. PQ accurately claimed that the documentation Double D actually had (bills of lading and an online tracking system) should serve much the same purpose as the documentation required by the policies (especially warehouse receipts), but commercially sophisticated parties agreed to unambiguous terms and conditions of insurance. Courts hold them to those terms. To do otherwise would disrupt the risk allocations that are part and parcel of any contract, but particularly a commercial liability insurance contract. PQ offered no persuasive reason to depart from the plain language of the policies. View "PQ Corp. v. Lexington Insurance Co." on Justia Law

Chicago Bridge & Iron Company N.V. (“Chicago Bridge”) and Westinghouse Electric Company (“Westinghouse”) had an extensive collaboration and complicated commercial relationship involving the construction of nuclear power plants by Chicago Bridge’s subsidiary, CB&I Stone & Webster, Inc. (“Stone”). As delays and cost overruns mounted, this relationship became contentious. To resolve their differences, Chicago Bridge agreed to sell Stone to Westinghouse. The purchase agreement was unusual in a few key respects: (1) the purchase price at closing by Westinghouse was set in the contract at zero ; and (2) Westinghouse agreed that its sole remedy if Chicago Bridge breached its representations and warranties was to refuse to close, and that Chicago Bridge would have no liability for monetary damages post-closing (the “Liability Bar”). In contesting Chicago Bridge’s calculation of the Final Purchase Price, Westinghouse asserted that Chicago Bridge (which had been paid zero at closing and had invested approximately $1 billion in the plants in the six months leading to the December 31, 2015 closing) owed it nearly $2 billion. Westinghouse conceded the overwhelming percentage of its claims were based on the proposition that Chicago Bridge’s historical financial statements (the ones on which Westinghouse could make no post-closing claim) were not based on a proper application of generally accepted accounting principles (“GAAP”). Chicago Bridge and Westinghouse unsuccessfully attempted to resolve their differences. But, once it was clear that Westinghouse would seek to have the Independent Auditor review Chicago Bridge’s accounting practices, Chicago Bridge filed this action seeking a declaration that Westinghouse’s changes based on assertions that Stone’s financial statements and accounting methodologies were not GAAP compliant were not appropriate disputes for the Independent Auditor to resolve when those changes were, in essence, claims that Chicago Bridge breached the Purchase Agreement’s representations and warranties and therefore were foreclosed by the Liability Bar. Westinghouse moved for judgment on the pleadings, arguing that the Purchase Agreement established a mandatory process for resolving the parties’ disagreements. The Court of Chancery ruled in favor of Westinghouse, reading the process the Purchase Agreement set out for calculating certain payments (called the “True Up”) as providing Westinghouse with a wide-ranging right to challenge any accounting principle used by Chicago Bridge. The Delaware Supreme Court concluded the Court of Chancery erred in interpreting the Purchase Agreement this way. The Court therefore reversed and required entry of a judgment on the pleadings for Chicago Bridge. View "Chicago Bridge & Iron Company N.V. v. Westinghouse Electric Co." on Justia Law

Great Lakes Brewing sought to end its relationship with one of its distributors, Glazer’s., after it executed a corporate merger without seeking Great Lakes’ consent, as required by their contract. Glazer’s successor corporation sought to preliminarily enjoin the impending termination, arguing that the contract’s consent requirement was invalid under the Ohio Alcoholic Beverages Franchise Act, Ohio Rev. Code 1333.82–87. The district court agreed and found that the remaining equities weighed in favor of granting the preliminary injunction. The Sixth Circuit reversed. Because the parties’ consent provision is valid under state law, the distributor had no likelihood of success on the merits. Far from prohibiting such provisions section 1333.84(F) actually anticipates that parties will include such provisions in their written franchise agreements; the fact that it requires manufacturers to “act in good faith in accordance with reasonable standards for fair dealing” regarding the sale of a distributor’s business necessarily implies that manufacturers can have a say over the transaction. View "Southern Glazer's Distributors of Ohio, LLC v. Great Lakes Brewing Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals, which affirmed the circuit court’s judgment dismissing a lawsuit filed by Petitioners, four golf professionals, against the City of Madison (the City pursuant to the Wisconsin Fair Dealership Law (the WFDL). Petitioners filed a lawsuit against the City after the City informed them that it would not be renewing operating agreements with Petitioners to oversee clubhouse operations at certain golf courses. Petitioners alleged that the City failed to comply with the WFDL in ending the City’s relationship with them and seeking damages. The circuit court granted summary judgment to the City, concluding that the relationships between Petitioners and the City did not constitute “dealerships” protected by the WFDL. The court of appeals affirmed. The Supreme Court reversed, holding (1) the WFDL applies to the City; (2) the relationships between Petitioners and the City are “dealerships” under the WFDL; and (3) Petitioners’ lawsuit is not time-barred, and the City is not immune from the lawsuit. View "Benson v. City of Madison" on Justia Law

No fiduciary duty arises in a consumer transaction for the purchase of a whole life insurance policy based upon the advice of a financial advisor where the consumer purchasing the policy does not cede decision -making control over the purchase to the financial advisor. In 1995, Bryan Holland, a financial advisor for IDS Life Insurance Corporation, made an unsolicited telephone contact, a "cold call," to Eugene and Ruth Yenchi. At a subsequent meeting and for a fee of $350, Holland presented the Yenchis with a financial management proposal containing a notice that it had been prepared by "your American Express financial advisor" (Holland) and that "[alt your request, your American Express financial advisor can recommend products distributed by American Express Financial Advisors and its affiliates as investment alternatives for existing securities." The Proposal offered the Yenchis a number of general recommendations, including that they monitor monthly expenses, consolidate their debt, consider various savings plans, consolidate current life insurance policies into one policy, review long-term care coverage, keep accurate records for tax purposes (medical expenses and charitable contributions), transfer 401(k) funds into mutual funds, and continue estate planning with an attorney and their financial advisor. The Yenchis implemented some of these recommendations. In 2000, the Yenchis had their portfolio independently reviewed. Through this process, they were advised that Holland’s recommendations would be financially devastating to the Yenchis. In April 2001, the Yenchis sued Holland and his company, American Express Financial Services Corporation, American Express Financial Advisors Corporation, and IDS Life Insurance Company. The Yenchis' asserted claims of negligence/willful disregard, fraudulent misrepresentation, violation of the Uniform Trade Practices and Consumer Protection Law ("UTPCPL"), bad faith, negligent supervision, and breach of fiduciary duty. Of relevance here, with respect to the breach of fiduciary duty claim, the trial court held that no fiduciary relationship was established between the Yenchis and Holland because the Yenchis continued to make their own investment decisions. The Pennsylvania Supreme Court concluded that, consistent with its jurisprudence, no fiduciary duty arose in such a situation. Consequently, the Court reversed the Superior Court's decision to the contrary. View "Yenchi v. Ameriprise Financial" on Justia Law