Justia Contracts Opinion Summaries

Vehicle Market Research, Inc. (VMR) sued Mitchell International, Inc. (Mitchell) to recover royalties Mitchell allegedly owed pursuant to a software licensing agreement. The jury returned a verdict for Mitchell, and VMR appealed. VMR argued: (1) the district court erred by allowing Mitchell, contrary to the law of the case doctrine, to cross-examine VMR’s sole shareholder on the value of VMR as he stated in his personal bankruptcy; and (2) the district court erred in omitting part of VMR’s proposed jury instruction on Rule 30(b)(6) witnesses. Finding no error, the Tenth Circuit affirmed. View "Vehicle Market Research v. Mitchell International" on Justia Law

Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff, James Duhon, was such a customer, and was injured in the course of participating in the park’s activities. After plaintiff filed suit seeking damages, Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception, but the court of appeal reversed, finding the arbitration provision should be enforced. After review, the Supreme Court found that the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. View "Duhon v. Activelaf, LLC" on Justia Law

Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff Theresa Alicea executed the Agreement prior to her husband, Roger Alicea, taking their minor sons to Sky Zone. The Aliceas’ son, Logan, was injured while jumping on a trampoline. The Aliceas filed suit against Sky Zone, individually and on behalf of Logan. Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception and the court of appeal denied Sky Zone’s writ application. After review, the Supreme Court held the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. Accordingly, the Court affirmed the rulings of the lower courts. View "Alicea v. Activelaf, LLC" on Justia Law

A holdover franchisee is a franchisee who receives the benefits of an expired franchise agreement but fails to make payments to the franchisor per the agreement. Donut Holdings, Inc. (DHI) was the Nebraska parent corporation of LaMar’s Donuts International, Inc. (LaMar’s). LaMar’s was a franchise company with nine franchisees, including one in Springfield Missouri that was purchased by Risberg Stores, LLC, a Missouri entity, in 2002. At the time of the purchase, the store was operating under the terms of a 1994 franchise agreement entered into by Risberg Store’s predecessor. DHI filed a claim against Risberg Stores for royalty and marketing fees accruing after June 2009. Risberg Stores argued that it did not owe DHI fees because the parties’ written agreement ended in 2004. The district court ruled in favor of Risberg Stores, concluding that the franchise agreement ended in June 2009 and that DHI was not entitled to any payments thereafter. The Supreme Court affirmed, holding (1) DHI, the franchisor, did not have a breach of contract claim against Risberg Stores, the holdover franchisee; and (2) therefore, DHI was not entitled to fees under the contract. View "Donut Holdings, Inc. v. Risberg" on Justia Law

CommScope Credit Union (Plaintiff), a state-chartered credit union, hired Butler & Burke, LLP (Defendant), a certified public accounting firm, to conduct annual independent audits of its financial statements. Plaintiff later filed a complaint alleging breach of contract, negligence, breach of fiduciary duty, and professional malpractice. Defendant pleaded seven affirmative defenses, including contributory negligence and in pari delicto. The trial court subsequently granted Defendant’s motion to dismiss and for judgment on the pleadings. The court of appeals reversed, concluding (1) the specific allegations in Plaintiff’s complaint were sufficient to state a claim for breach of fiduciary duty, and (2) Defendant’s affirmative defenses would not entitle Defendant to dismissal at this stage. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) Plaintiff’s allegations did not establish that Defendant owed it a fiduciary duty in fact, and therefore, the trial court correctly dismissed Plaintiff’s breach of fiduciary duty claim; and (2) the members of the Court are equally divided on whether the facts alleged in the complaint established the defenses of contributory negligence and in pari delicto, and therefore, the court of appeals’ decision on this issue is left undisturbed. View "CommScope Credit Union v. Butler & Burke, LLP" on Justia Law

Jani-King, the world’s largest commercial cleaning franchisor, classifies its franchisees as independent contractors. Its cleaning contracts are between Jani-King and the customer; the franchisee is not a party, but may elect to provide or not provide services under a contract. Jani-King exercises a significant amount of control over how franchisees operate and controls billing and accounting. Two Jani-King franchisees assert that they are misclassified and should be treated as employees. On behalf of a class of Jani-King franchisees in the Philadelphia area (approximately 300 franchisees), they sought unpaid wages under the Pennsylvania Wage Payment and Collection Law (WPCL), 43 Pa. Stat. 260.1–260.12. The Third Circuit affirmed certification of the class under Federal Rule of Civil Procedure 23(f). The misclassification claim can be made on a class-wide basis through common evidence, primarily the franchise agreement and manuals. Under Pennsylvania law, no special treatment is accorded to the franchise relationship. A franchisee may be an employee or an independent contractor depending on the nature of the franchise system controls. View "Williams v. Jani-King of Philadelphia Inc" on Justia Law

The district court found third-party plaintiff Qwest failed to prove its claims for intentional interference with a business relationship, unfair competition, and unjust enrichment against third-party defendant FC. The court agreed with the district court that FC did not act with an improper purpose when it contracted with Sancom, a local exchange carrier (LEC), because FC was simply attempting to take advantage of the uncertain regulatory scheme at the time; FC had a legitimate argument that it could be considered an “end user,” and thus Sancom could bill Qwest under its tariff for calls delivered to FC’s call bridges; and thus the district court did not err in finding for FC on Qwest's claim for intentional interference with a business relationship. The court predicted that the South Dakota Supreme Court would not recognize a tort of unfair competition under these circumstances, and found that the district court properly rejected this new tort. The court concluded, however, that the district court incorrectly found FC’s conduct was “neither illegal nor inequitable” because it was simply taking advantage of a loophole until the loophole closed, and the district court improperly considered Sancom’s settlement payments to Qwest when it found FC was not unjustly enriched. Therefore, the court reversed and remanded for reconsideration of whether FC was unjustly enriched. View "Qwest v. Free Conferencing Corp." on Justia Law

Kenneth and Sally Eyer and Idaho Forest Group, LLC (IFG) entered into a Log Purchase Agreement in which IFG agreed to purchase timber harvested from the Eyers’ land. Before logging, IFG sent an agent to the Eyers’ property to assist them in locating property lines. When the logging occurred, the loggers mistakenly cut timber located on neighboring land. The neighbors sued the Eyers for timber trespass and the Eyers brought a third-party action against IFG for breach of an assumed duty to properly mark the property lines. A jury found in favor of IFG, finding that IFG had not assumed a duty to the Eyers. The district court then awarded IFG $95,608 in attorney fees. On appeal, the Eyers argued the district court erred in awarding fees under Idaho Code section 12-120(3), contending: (1) the gravamen of the Eyers’ complaint was not a commercial transaction; and (2) the Eyers did not sell timber for a “commercial purpose” since they used the proceeds of the sale to pay medical bills. Finding no reversible error, the Supreme Court affirmed. View "Eyer v. Idaho Forest Group" on Justia Law

Junkermeir, Clark, Campanella, Stevens, P.C. (Junkermeir) was a Montana accounting firm with offices in several Montana cities. Junkermeir lost its Bozeman branch office after the majority of its Bozeman shareholders decided to start their own firm, taking a significant number of Junkermier’s clients with them. Junkermeir filed a complaint against the former shareholders, claiming breach of contract and breach of fiduciary duty. The district court dismissed the breach of contract claim on summary judgment, concluding that the contractual covenant restricting competition that Junkermeir sought to enforce was unenforceable. After a trial, the district court ruled that most of the former shareholders owed no legal duty to Junkermeir and that while the remaining former shareholder breached his fiduciary duty to Junkermeir, Junkermeir failed to prove awardable damages from that breach. The Supreme Court reversed in part and affirmed in part, holding that the district court (1) erred in ruling that the agreement was not an enforceable contract; and (2) did not err in concluding that only one former shareholder breached a fiduciary duty but erred in concluding that Junkermeir was not entitled to collect any damages stemming from that breach. View "Junkermier, Clark, Campanella, Stevens, P.C. v. Alborn, Uithoven, Riekenberg, P.C." on Justia Law

This letter opinion addressed Third-Party Defendants’ motions to dismiss Third-Party Plaintiffs’ amended third-party complaint. The Third-Party Defendants advanced four bases on which the amended complaint should be dismissed, including lack of personal jurisdiction, failure to state a claim, failure to comply with Court of Chancery Rule 23.1, and an unreasonable delay in bringing the amended complaint. The Court of Chancery granted the Third-Party Defendants’ motions to dismiss, holding that the Third-Party Plaintiffs’ claims were time-barred because the Third-Party Plaintiffs failed to identify a tolling doctrine or extraordinary circumstances sufficient to avoid application of laches. View "CMS Inv. Holdings, LLC v. Castle" on Justia Law