Justia Contracts Opinion Summaries

The plaintiff, a cryptocurrency entrepreneur, initially filed a lawsuit in Puerto Rico against the defendants, alleging breach of fiduciary duty, fraud, breach of contract, promissory estoppel, and unjust enrichment. The Puerto Rico court dismissed the case, citing a forum selection clause in the agreement between the parties that mandated litigation in Delaware.Following the dismissal, the plaintiff filed a new lawsuit in Delaware. The defendants counterclaimed, alleging breach of the forum selection clause and seeking damages for the expenses incurred in the Puerto Rico litigation. The plaintiff moved to dismiss this counterclaim, arguing that the defendants could not recover these expenses.The Court of Chancery of the State of Delaware reviewed the case. The court held that the defendants could indeed seek damages for breach of the forum selection clause, measured by the expenses incurred in the Puerto Rico litigation. The court referenced the Delaware Supreme Court's decision in El Paso, which allowed for the recovery of such damages. The court also clarified that the American Rule, which generally requires parties to bear their own litigation costs, does not preclude the recovery of damages measured by litigation expenses when those expenses are the direct result of a breach of contract.The court further noted that the forum selection clause created a contractual right for the defendants to be free from litigation in any forum other than Delaware. The court rejected the plaintiff's argument that the defendants should have sought these expenses in the Puerto Rico court, affirming that the defendants were entitled to enforce their contractual rights in Delaware.Ultimately, the Court of Chancery denied the plaintiff's motion to dismiss the counterclaim, allowing the defendants to pursue their claim for damages resulting from the breach of the forum selection clause. View "Namdar v. Fried" on Justia Law

Matthew Bare sued his former employer, Rainforest Alliance, Inc., in the Superior Court of the District of Columbia, alleging that the company failed to pay him a redundancy settlement after his position was made redundant due to a reorganization. Bare claimed that he had agreed to resign in exchange for the settlement, which was contingent upon his execution of a release-of-claims agreement. However, after Bare made critical comments about the company, Rainforest Alliance terminated him and refused to pay the settlement, leading to claims of breach of contract and violation of the District of Columbia Wage Payment and Collection Law.The Superior Court dismissed Bare's complaint with prejudice, agreeing with Rainforest Alliance that Bare had failed to allege the occurrence of a condition precedent—specifically, the execution of a release agreement. The court found that without alleging this, Bare could not claim he had earned the redundancy payment under the contract or the wage law. Bare had argued that the issue of the condition precedent was a factual matter for summary judgment or trial and that Rainforest Alliance had waived the condition by not providing a release agreement. He also requested leave to amend his complaint if the motion to dismiss was granted.The District of Columbia Court of Appeals reviewed the case and held that the trial court should have granted Bare's request to amend his complaint. The appellate court found that Bare's request to amend was his first, the case had been pending for a short time, there was no evidence of bad faith or dilatory motives, and there was no prejudice to Rainforest Alliance. The court also determined that Bare's proposed amendment, which would include allegations that Rainforest Alliance waived the condition precedent by not providing a release agreement, was not futile. Consequently, the appellate court reversed the dismissal and remanded the case for further proceedings. View "Bare v. Rainforest Alliance, Inc." on Justia Law

R & J Sheet Metal, Inc. (R&J) appealed an order directing it to pay contribution to W.E. O’Neil Construction Co. of California (WEO), Continental Casualty Company (Continental), and Western Surety Company (Western) (collectively, the WEO defendants). R&J and the WEO defendants were co-debtors on a joint and several judgment in favor of Joseph Karscig, Inc., doing business as Architectural Systems, Inc. (ASI). R&J appealed the judgment, while the WEO defendants satisfied it and sought contribution from R&J. The trial court initially took the motion off calendar due to R&J’s pending appeal. After the appeal was resolved, the WEO defendants filed a second contribution motion, including postjudgment interest, which the trial court granted, ordering R&J to pay one-half of the judgment.The Superior Court of Los Angeles County granted the WEO defendants' motion for contribution, deeming them a single entity for liability purposes and ordering R&J to pay one-half of the judgment. R&J argued the motion was untimely and that the trial court should not have allocated liability pro rata without taking evidence on the judgment debtors’ proportionate liability. R&J also contended that Western should not have been included as a single entity with WEO and Continental.The California Court of Appeal, Second Appellate District, Division One, affirmed the trial court’s order. The appellate court held that the original contribution motion was valid despite being filed during the pendency of R&J’s appeal, as taking the motion off calendar did not affect the appeal’s status quo. The court also found that the second motion was a permissible update of the original motion to include postjudgment interest. The court rejected R&J’s argument that the trial court should have determined the judgment debtors’ proportionate liability through an evidentiary hearing, holding that pro rata contribution was proper in the absence of a judgment or underlying instrument allocating liability. The court also found that R&J had forfeited its argument regarding Western’s inclusion in a single entity with WEO and Continental by failing to raise it below. View "R & J Sheet Metal v. W.E. O'Neil Construction" on Justia Law

Epic Systems Corporation sued Tata Consultancy Services Limited and Tata America International Corporation for unauthorized use of confidential information. A jury awarded Epic $240 million in compensatory damages and $700 million in punitive damages. The district court reduced these amounts to $140 million and $280 million, respectively, and entered judgment in 2017. The Seventh Circuit affirmed the compensatory damages but limited the punitive damages to $140 million, leading to a new judgment in 2022. Tata agreed to pay postjudgment interest on the compensatory damages from 2017 but argued that interest on the punitive damages should start from 2022. The district court sided with Tata, and Epic appealed.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court noted that both the 2017 and 2022 judgments included $140 million in compensatory damages and at least $140 million in punitive damages. The court referenced the Supreme Court's decision in Kaiser Aluminum & Chemical Corp. v. Bonjorno, which held that postjudgment interest should be based on the date when damages became ascertainable. The Seventh Circuit concluded that the $140 million punitive damages were ascertainable from the 2017 judgment, as neither the district court nor the appellate court had ever deemed this amount excessive.The Seventh Circuit reversed the district court's decision and remanded the case with instructions to award postjudgment interest on the $140 million punitive damages starting from October 3, 2017. View "Epic Systems Corporation v Tata Consultancy Services Limited" on Justia Law

Karen Orr tripped on a soft drink display at a Dollar General store in Ackerman, Mississippi, and subsequently fell. After Orr's death, Sandie Keister, on behalf of Orr's estate, sued Dolgencorp for premises-liability negligence, negligent infliction of emotional distress, and breach of contract. During discovery, Dolgencorp failed to produce security camera footage, data from the store’s daily planner, and safety-check data. The district court found that Dolgencorp lost or could not access this evidence. Both parties filed motions for summary judgment, and Keister also filed a motion for sanctions for spoliation of evidence.The United States District Court for the Northern District of Mississippi granted summary judgment for Dolgencorp on all claims and denied Keister’s motions for summary judgment and sanctions. Keister appealed, arguing that the district court erred in granting summary judgment for Dolgencorp on her premises liability claim and in denying her motion for sanctions.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s grant of summary judgment de novo and affirmed the decision. The court held that Keister failed to provide evidence that Dolgencorp breached its duty to warn Orr of the dangerous condition. Keister's arguments, including the mode-of-operation theory and the duration of the dangerous condition, were insufficient to establish Dolgencorp's liability. The court also affirmed the denial of Keister’s motion for sanctions, finding no evidence that Dolgencorp intended to deprive her of the missing evidence and noting that the request for a jury instruction became moot after summary judgment was granted.The judgment of the district court was affirmed. View "Keister v. Dolgencorp" on Justia Law

Rick Holloway and John Hoskin entered into a Commercial Sales Agreement to purchase the UXU Resort Ranch from Hidden Creek Outfitters, LLC. The sale included a special use permit from the U.S.D.A. Forest Service, which required a bridge inspection and load test before transfer. Due to the inspection's delay, the parties postponed closing and placed $200,000 in escrow for bridge-related expenses. After inspections, Park County Title released the escrow funds to Hidden Creek without H&H's consent, despite unresolved bridge issues.The District Court of Park County found that Hidden Creek and H&H each breached the implied covenant of good faith and fair dealing, and Park County Title breached the escrow agreement by releasing funds without H&H's approval. However, the court determined H&H failed to prove actual damages with sufficient certainty, awarding only nominal damages. The court also denied attorney’s fees to all parties.The Supreme Court of Wyoming reviewed the case and affirmed the district court's findings. The court held that H&H did not prove actual damages because the inspections did not conclusively identify necessary or required repairs. The court also upheld the denial of attorney’s fees, finding no abuse of discretion, as both parties bore some fault in the litigation. The Supreme Court denied any attorney’s fees associated with the appeal. View "Holloway v. Hidden Creek Outfitters, LLC" on Justia Law

An egg farm owned by Rembrandt Enterprises, Inc. experienced a collapse of its poultry cage system in 2020, resulting in significant damage and the death of a farm worker. Rembrandt had contracted with Tecno Poultry Equipment, SpA in 2006 to design and manufacture the cage system, which included a provision for Tecno to supervise its installation. The installation was completed in 2007. Rembrandt sued Tecno in 2021, alleging strict products liability, breach of implied warranties, and negligence. The district court allowed the negligence claim to proceed to trial, where a jury found that Tecno did not breach its duty to supervise the installation.The United States District Court for the Northern District of Iowa granted summary judgment for Tecno on the strict products liability and breach of implied warranties claims. At trial, the jury heard conflicting expert testimony regarding the cause of the collapse. Rembrandt's expert attributed the collapse to missing screws and misplaced bolts, while Tecno's experts blamed improper manure disposal by Rembrandt. The jury ultimately sided with Tecno, and the district court entered judgment in favor of Tecno.The United States Court of Appeals for the Eighth Circuit reviewed the case. Rembrandt argued that the district court erred in denying its motions for judgment as a matter of law and in excluding a screenshot of Tecno's website. The appellate court held that Rembrandt failed to preserve its challenge to the sufficiency of the evidence by not renewing its motion under Rule 50(b) after the jury verdict. The court also found that the district court did not abuse its discretion in excluding the website screenshot, as it was not relevant to the 2006 contract. The Eighth Circuit affirmed the district court's judgment. View "Rembrandt Enterprises, Inc. v. Tecno Poultry Equipment, SpA" on Justia Law

A creditor and a debtor’s law firm both claimed settlement funds held by the superior court. The creditor had a charging order against the debtor’s distributions from a limited liability company (LLC), while the law firm had an attorney’s lien on the funds. In a previous appeal, the attorney’s lien was deemed valid, but the case was remanded to determine if the funds were LLC distributions subject to the charging order and the value of the attorney’s lien.The superior court ruled that the funds were LLC distributions and subject to the charging order. It also found that the debtor failed to prove any money was owed to the law firm for work performed, thus invalidating the attorney’s lien. The court mistakenly released the funds to the creditor, who returned them within two days, but was sanctioned with attorney’s fees for temporarily keeping the funds.The debtor appealed, and the creditor cross-appealed the attorney’s fee award. The Supreme Court of Alaska affirmed the superior court’s rulings on the merits but reversed the attorney’s fee award. The court held that the funds were indeed LLC distributions subject to the charging order and that the debtor and law firm failed to prove the value of the attorney’s lien. The court also vacated the second final judgment and the attorney’s fee award against the creditor, finding no rule violation by the creditor. View "Baker v. Duffus" on Justia Law

Casey Cotton was involved in a car collision with Caleb and Adriane Crabtree, resulting in severe injuries to Caleb. The Crabtrees filed a lawsuit against Cotton and his insurer, Allstate, alleging that Allstate refused early settlement offers and failed to inform Cotton of these offers. While the claims against Allstate were dismissed, the claims against Cotton proceeded in the Lamar County Circuit Court. During the personal injury suit, Cotton declared bankruptcy, and his bankruptcy estate included a potential bad faith claim against Allstate. The Crabtrees, as unsecured creditors, petitioned the bankruptcy court to allow the personal injury suit to proceed to trial.The bankruptcy court directed that the suit against Cotton be liquidated by jury trial to pursue claims against Allstate for any resulting excess judgment. The Crabtrees sought an assignment of Cotton’s bad faith claim as a settlement of their unsecured claims in Cotton’s bankruptcy estate. Unable to afford the $10,000 up-front cost, they engaged Court Properties, LLC, to assist with financing. Court Properties paid the trustee $10,000 to acquire the bad faith claim, then assigned it to the Crabtrees in exchange for $10,000 plus interest, contingent on successful recovery from Allstate. Cotton was discharged from bankruptcy, and a jury verdict awarded the Crabtrees $4,605,000 in the personal injury suit.The Crabtrees filed an action in the United States District Court for the Southern District of Mississippi, which dismissed the case for lack of subject matter jurisdiction, finding the assignments champertous and void under Mississippi Code Section 97-9-11. The Crabtrees appealed to the United States Court of Appeals for the Fifth Circuit, which certified a question to the Supreme Court of Mississippi.The Supreme Court of Mississippi held that Mississippi Code Section 97-9-11 prohibits a creditor in bankruptcy from engaging a disinterested third party to purchase a cause of action from a debtor. The court clarified that solicitation of a disinterested third party to prosecute a case in which it has no legitimate interest violates the statute. View "Crabtree v. Allstate Property and Casualty Insurance Company" on Justia Law

Neely, acting as his own general contractor, hired Grosvold to perform excavation work on his property under an oral contract. Grosvold worked from April to October 2021, but their relationship deteriorated, and Neely refused to pay for an invoice amounting to $55,858. Neely sent Grosvold a notice of alleged defects in the work, which Grosvold disputed. Grosvold then filed a complaint for breach of contract and prejudgment interest, while Neely counterclaimed for breach of contract, negligence, and construction defect.The District Court of the Third Judicial District in Anaconda-Deer Lodge County tried the case before a jury. The court refused to instruct the jury on Neely’s construction defect and negligence claims, reasoning that the evidence did not substantiate the work was done to a residence and that the case was strictly a breach of contract matter. The jury found Neely had breached the contract and awarded Grosvold $60,512.60 in damages. The court denied Grosvold’s request for prejudgment interest, finding the damages were not certain until the jury’s determination.The Supreme Court of the State of Montana reviewed the case. It affirmed the District Court’s decision not to instruct the jury on the construction defect claim, holding that the residential construction defect statute did not create an independent cause of action beyond breach of contract or tort. The court also affirmed the refusal to instruct the jury on negligence, finding that Neely’s substantial rights were not affected as the breach of contract instructions adequately covered the disputed subject matter. Finally, the court upheld the denial of prejudgment interest, concluding the amount of recovery was not capable of being made certain until the jury’s verdict. View "Grosvold v. Neely" on Justia Law