Justia Contracts Opinion Summaries

Jeff Lokey and Mike Irwin were business partners in two Wyoming businesses. After the parties dissolved their shared business interests, Irwin filed suit against Lokey, alleging that Lokey had materially breached the terms of the agreement. When Lokey did not timely file an answer the district court entered a default judgment against Lokey that included a provision allowing the parties ten days to file objections to the judgment. Lokey filed an objection, which the district court denied. Lokey appealed, challenging the court’s denial of his objections. The Supreme Court dismissed the appeal, holding (1) the Court lacked jurisdiction to entertain the appeal because Lokey did not timely appeal an appealable order; but (2) the Court had jurisdiction to award, and Irwin was entitled to recover, reasonable attorney fees incurred as a result of this appeal. View "Lokey v. Irwin" on Justia Law

This appeal grew out of a conflict between the business models of Sprint Nextel Corporation and The Middle Man, Inc. Middle Man bought mobile telephones, including Sprint’s, and tries to resell them at a profit. Sprint brought a breach of contract lawsuit against Middle Man, and Middle Man counterclaimed seeking a declaration that its business model did not violate the contract that accompanied the purchase of Sprint telephones. The district court held as a matter of law that the contract unambiguously prohibited Middle Man from selling new mobile telephones purchased from Sprint regardless of whether they were active on Sprint’s network. In light of this holding, the district court: (1) granted judgment on the pleadings to Sprint on Middle Man’s counterclaim for a declaratory judgment; and (2) granted summary judgment to Sprint on its breach of contract claim, awarding Sprint nominal damages of $1. Middle Man appealed, contending that the entry of judgment on Sprint’s claim and Middle Man’s counterclaim was made in error and that the district court should have awarded judgment to Middle Man on both claims. The Tenth Circuit, after review of the contract at issue here, determined parts were ambiguous, and that the district court erred in ruling as a matter of law that it was not. As such, Sprint was not entitled to judgment on the pleadings or summary judgment. The district court's judgment was vacated and the matter remanded for further proceedings. View "Sprint Nextel Corp. v. Middle Man" on Justia Law

This was Defendants’ fourth appeal from a lawsuit in which Plaintiff obtained a $23 million judgment based on an an indemnification clause in an agreement. Plaintiff sought to secure payment on that judgment by bringing suit against Defendants. Defendants then began a series of attempts to evade payment to Plaintiff and to elude the power of the courts. As relevant to this appeal, Defendants violated a preliminary injunction, resulting in a civil contempt order entered by the district court. The contempt order included an escalating fines provision. The First Circuit affirmed the contempt order and remanded with directions to amend the sanction order so that the fines cease to accrue at some total amount. Defendants appealed the revised contempt order issued by the district court, arguing that the underlying preliminary injunction expired by its own terms so the district court could no longer coerce compliance with it. Defendants failed to raise this argument at any time prior to the present appeal. The First Circuit denied the appeal, holding that Defendants’ belated challenge was implicitly foreclosed by the Court’s prior decisions. View "AngioDynamics, Inc. v. Biolitec AG" on Justia Law

Plaintiff filed a complaint against Defendants alleging breach of fiduciary duty resulting from oppressive conduct, breach of fiduciary duty resulting from self-dealing, fraud in the inducement, and negligent misrepresentation. During trial, Plaintiff produced 155 pages of documents that had not been produced to Defendants during discovery. Defendants argued that they were denied a fair trial because the information contained in the documents would have permitted them to properly cross-examine Plaintiff. The district court dismissed the case with prejudice pursuant to Sup. Ct. R. Civ. P. 37(b) as a sanction for the mid-trial production of documents. The court subsequently denied Plaintiff’s motion to vacate the order of dismissal under Sup. Ct. R. Civ. P. 60(b). The Supreme Court affirmed, holding (1) the trial justice did not err in dismissing Plaintiff’s claim with prejudice pursuant to Rule 37; and (2) the trial justice did not abuse his discretion in denying Rule 60(b) relief. View "Joachim v. Straight Line Prods., LLC" on Justia Law

As part of a joint effort to construct a Zoroastrian worship center, the parties signed a ninety-nine-year lease on a parcel of property owned by Rustam Guiv in the Vienna area of Fairfax County, Virginia. After Rustam Guiv terminated the lease, the Center filed suit seeking a declaratory judgment to reinstate the lease. After removal, the district court granted summary judgment to Rustam Guiv and awarded attorneys’ fees. The court concluded that Rustam Guiv presented sufficient evidence to show complete diversity between the parties, thereby establishing subject matter jurisdiction in federal court. The court also concluded that the undisputed material facts show that The Center breached the lease. Therefore, the court affirmed the district court's dismissal of the complaint in its entirety. The court concluded, however, that the attorneys' fee award must be vacated where the district court correctly identified Rustam Guiv as the prevailing party but made no effort to narrow the fee award to its successful claims. Under Virginia law governing contractual fee-shifting provisions, the prevailing party is entitled to recover attorneys’ fees for work performed only on its successful claims. View "Zoroastrian Center v. Rustam Guiv Found." on Justia Law

Defendants were business entities that organize physically challenging obstacle course events in locations throughout the United States. The four named Plaintiffs registered to participate in one of those events. Plaintiffs filed suit in Massachusetts superior court alleging that they were unable to participate in the event because of a second change of location and that Defendants refused to refund Plaintiffs’ registration fees. Plaintiffs sought relief on behalf of themselves and a class of similarly situated persons. Defendants removed the case to federal court, asserting that removal was permitted under the Class Action Fairness Act because the matter in controversy exceeded $5 million. Plaintiffs moved to remand the case to state court arguing that Defendant failed to show that over $5 million was in controversy. The district court denied Plaintiffs’ motion to remand the case to state court. The district court then dismissed the case and compelled mediation and arbitration of the dispute. The First Circuit reversed, holding that the district court erred in concluding that Defendants met their burden of showing that over $5 million was in controversy in this matter. Remanded with instructions to remand the case to state court for lack of jurisdiction. View "Pazol v. Tough Mudder Inc." on Justia Law

When the main Youngstown-area crushed-stone supplier discontinued production, RGI, a Sandusky quarry, approached Hardrives, Sabatine's asphalt paving company, to discuss jointly establishing a large RGI distribution center and Hardrives production plant. In 1998, RGI’s representatives and Sabatine produced a draft agreement, with contingencies, such as the minimum amount of stone Hardrives was to buy, low-cost railroad transportation, and government incentives; it stated that it was subject to RGI senior management approval. Sabatine was unable to convince Norfolk Railroad to establish access and enlisted Congressman Traficant’s help.Unbeknownst to RGI, Sabatine paid Traficant a $2,400 bribe and was later indicted. Ultimately, the parties arrived at an acceptable rail rate and selected a Youngstown site. Hardrives began bidding on larger projects and purchasing new equipment. All the agreed contingencies were fulfilled, except RGI had arguably not given explicit senior management approval. Sabatine called RGI about ordering a $1.5 million asphalt plant for the site. According to Sabatine, RGI gave him the go ahead. Sabatine purchased the plant. Two months later RGI told Hardrives that it would no longer participate in the joint venture. Hardrives began losing money, and by 2001, became Cranmark and sold to McCourt. In 2004, Cranpark sued, alleging breach of contract and promissory estoppel. In 2010, the court granted RGI summary judgment, based on the limitations period, and holding RGI’s representations were not unambiguous promises. On remand, RGI argued that Cranpark was not the “proper party” because it had sold everything, including the right to bring the cause of action, to McCourt. The court denied the motion. A jury awarded $15.6 million, but the court then held that Cranmark lacked standing. The Sixth Circuit reversed, stating that the court failed to timely call the proof-of-standing issue to counsel’s attention, once RGI finally squarely presented the issue. View "Cranpark, Inc. v. Rogers Group, Inc." on Justia Law

In 2010, JSR Mechanical (JSR) filed a complaint against Aireco Supply alleging breach of contract and negligence. Aireco filed an answer, but there were no further pleadings filed for the next four years. In 2014, under the authority of Va. Code 8.01-335(B), the circuit court entered a final order stating that the case was discontinued and stricken from the docket. In 2015, JSR filed a motion to reinstate the case. The circuit court denied the motion, concluding that just cause and sufficient grounds did not exist for granting Plaintiff’s motion. The Supreme Court reversed, holding that, once a plaintiff has complied with the timeliness and notice requirements of Va. Code 8.01-335(B), the circuit court does not have discretion to deny a procedural motion to reinstate a case that has been discontinued or dismissed pursuant to the statute based on lack of “good cause” or “just cause.” Remanded. View "JSR Mechanical, Inc. v. Aireco Supply, Inc." on Justia Law

Grupo Famsa, S.A. de C.V. (Grupo), a Mexican company, agreed to guarantee a commercial lease entered into between Famsa, Inc. (Famsa) and Uno LLC (Uno). When Famsa failed to comply with the terms of the lease, Uno filed a complaint against Famsa and Grupo for breach of the commercial lease and guaranty. Uno served Grupo through the procedures outlined in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Convention). The Mexican Central Authority issued a certificate of proof of international service of process upon Grupo. Grupo filed a motion to quash service of process, arguing that service of process was constitutionally deficient. The district court denied Grupo’s motion to quash. Grupo subsequently petitioned the Supreme Court for a writ of prohibition seeking to prohibit the district court from exercising jurisdiction over Grupo. The Supreme Court granted the petition in part, holding (1) service of process on a foreign company pursuant to the Hague Convention does not satisfy constitutional due process when service depends solely upon a certificate of compliance issued by the foreign nation’s central authority; and (2) the district court failed to conduct the necessary fact-finding to determine whether service was constitutionally sufficient in this case. View "Grupo Famsa, S.A. de C.V. v. Eighth Judicial Dist. Court" on Justia Law

Appellant C. Tucker Cheadle, as administrator of the estate of Robert F. Obarr, appealed an order denying his motion to disqualify counsel for respondent DP Pham LLC. Pham made three loans to Obarr totaling nearly $3 million, and Obarr secured each loan by granting Pham a lien on a mobilehome park he owned in Westminster (Property). This action arose when Obarr allegedly agreed to sell the Property to two different buyers. In March 2013, Obarr allegedly contracted to sell the Property to S.C.D. Enterprises (SCD). SCD promptly assigned the purchase agreement to Westminster MHP Associates, LP (Westminster), which allegedly opened escrow on the Property with Obarr. According to Westminster, it satisfied all contingencies for the sale within 10 days of opening escrow. In April 2013, Westminster filed suit alleging contract claims against Obarr. Obarr died unexpectedly in August. The trial court appointed Cheadle as a special administrator for Obarr’s estate and in that capacity substituted Cheadle for Obarr as a party to this action. Cheadle then filed a cross-complaint alleging an interpleader claim against both Westminster and Pham concerning the Property. Based on Pham’s loans to Obarr, Cheadle also alleged claims against Pham for usury, intentional misrepresentation, negligent misrepresentation, money had and received, unjust enrichment, reformation, and violation of the unfair competition law. Cheadle contended disqualification was required because Pham’s counsel improperly obtained copies of privileged communications between Obarr and his attorney, and used those communications to oppose another party’s summary judgment motion in this case. The trial court denied the disqualification motion because it concluded the communications were not privileged. The Court of Appeal reversed. After reviewing copies of the communications, the trial court concluded they were not privileged based on their content. "A court, however, may not review the contents of a communication to determine whether the attorney-client privilege protects that communication. The attorney-client privilege is an absolute privilege that prevents disclosure, no matter how necessary or relevant to the lawsuit. The privilege attaches to all confidential communications between an attorney and a client regardless of whether the information communicated is in fact privileged. Accordingly, it is neither necessary nor appropriate to review a communication to determine whether the attorney-client privilege protects it." View "DP Pham v. Cheadle" on Justia Law