Justia Contracts Opinion Summaries

Devon acquired the rights to distribute robotic medical devices, CytoCare and i.v. Station, from Robotics. DeViedma, Robotics's general counsel, negotiated the contracts. Each contained an arbitration clause. Robotics later agreed to provide management consulting services through DeViedma. DeViedma allegedly obstructed a possible sub-licensing contract with McKesson; Devon failed to make franchise payments, leading Robotics to draw down a $5 million line of credit from Itochu, guaranteed by Devon. Itochu eventually sued Devon. The parties terminated the management consulting services. Robotics terminated Devon's CytoCare contract and entered into an agreement with McKesson. Robotics also alleged breaches of the i.v. Station agreement. DeViedma e-mailed hospital customers telling them that Devon faced financial difficulties and lacked staff qualified to manage i.v. Station installations. Devon sued DeViedma and McKesson, claiming breach of fiduciary duty, tortious interference with current and prospective contractual relations, defamation, and conspiracy. The court rejected a motion to dismiss in favor of arbitration. DeViedma did not appeal that order. Extensive litigation followed. DeViedma later moved for summary judgment on the remaining claims for breach of fiduciary duty and tortious interference with contractual relations. The court rejected his arguments in favor of arbitration. The Third Circuit dismissed DeViedma’s interlocutory appeal, rejecting an argument that the denial of summary judgment was an appealable order under the Federal Arbitration Act, 9 U.S.C. 16(a)(1)(C). View "Devon Robotics LLC v. DeViedma" on Justia Law

At dispute in this case was a home inspection Don Hall performed of a home purchased by Gregory Hall. Gregory brought this action against Don, the seller of the home, and two real estate brokers, alleging that Defendants failed to disclose material defects in the property. The district court entered summary judgment in favor of all defendants with the exception of Don on the grounds that Gregory received a disclosure statement and had imputed knowledge of the defects. The district court entered default judgment against Don after determining that Don had not filed a sufficient answer to the complaint. After a writ of execution was issued, Don requested that the default judgment be set aside and later sought to claim exemptions. The district court denied the requests. The Supreme Court reversed the order of the district court striking Don’s motion to set aside default judgment, holding that, under the circumstances of this case and in the interests of justice, Don was entitled to relief from judgment. Remanded. View "Hall v. Hall" on Justia Law

Martha and Mario Madrigal sued the City of Mesa. After the case was settled by the Madrigals’ second attorney, Raymond Slomski, the Madrigals’ first attorney, Edward Fitzhugh, assigned his rights under the parties’ contingent fee agreement to Al Carranza. Carranza later sued the Madrigals (“the fee-collection action”). The Madrigals subsequently divorced pursuant to a decree that allocated the remaining funds from the as-yet-unresolved fee-collection action. Mario and Carranza then entered into a settlement agreement that called for a portion of the disputed funds to be released to Mario and Carranza. The superior court approved the agreement. Slomski filed an interpleader action contesting the settlement. Thereafter, Martha successfully moved to set aside the order approving the settlement. Carranza then moved to substitute Fitzhugh as the real party in interest in both the fee-collection action and the interpleader action. The superior court denied the substitution request and court granted summary judgment in favor of Martha in the fee-collection action. The court of appeals affirmed summary judgment but reversed the denial of Carranza’s motion to substitute in the fee-collection action. The Supreme Court vacated in part, holding that the trial court did not abuse its discretion in denying the motions to substitute. View "Carranza v. Madrigal" on Justia Law

In 1997, Quality Cleaning Products (QCP) entered into a distribution agreement with SCA Tissue North America (SCA) that designated QCP as a non-exclusive, authorized Puerto Rican distributor and wholesaler of SCA’s “Tork” brand product line. QCP claimed that SCA breached that agreement in 2001. In 2012, QCP filed this breach of contract action. The district court dismissed the action as time barred under the relevant three-year statute of limitations. The First Circuit affirmed after applying Puerto Rico’s statute of limitations and accrual rules, holding that QCP’s claim accrued in 2001, and thus the three-year statute of limitations had been far exceeded. View "Quality Cleaning Prods. R.C., Inc. v. SCA Tissue of N.A." on Justia Law

Plaintiff sued Defendants for breach of contract and related claims. Defendants failed to file a responsive pleading, and the clerk entered Defendants’ default. The court then entered a default judgment. Defendants filed an application for relief from default under Cal. Civ. Proc. Code 473(b) based on their attorney’s “sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.” The superior court denied the motion. Thereafter, Defendants filed a renewed application for relief from default. Accompaying both applications were affidavits submitted by Defendants’ attorney explaining his reasons for the default. Although Defendants had not satisfied the requirements of Cal. Civ. Proc. Code 1008, the superior court granted their renewed application for relief from default, concluding that section Cal. Code Civ. P. 473(b) takes precedence over section 1008, and relief under section 473(b) based on an attorney’s affidavit of fault is mandatory where no part of the fault is shown to be attributable to the attorney’s clients. The court of appeal reversed, concluding that Defendants’ failure to comply with section 1008 required the trial court to reject their renewed application for relief from default. The Supreme Court affirmed, holding (1) section 1008 governs renewed applications under section 473(b) for relief from default; and (2) Defendants’ renewed application did not satisfy section 1008. View "Even Zohar Constr. & Remodeling v. Bellaire Townhouses" on Justia Law

Appellant, Stilwyn, Inc., brought suit against the Respondents stating nine claims for relief arising out of a failed transaction to purchase an interest in a loan. The district court dismissed those claims, holding that they were barred by prior federal litigation involving Stilwyn, two of the Respondents, and the same failed transaction. It held the claims were barred by claim preclusion and because the claims were compulsory counterclaims in the federal litigation that were not asserted there. Stilwyn argued on appeal to the Idaho Supreme Court that the district court erred in both respects. Respondents cross-appealed to argue that the district court erred in failing to grant their requests for attorney fees. Respondents also requested attorney fees on appeal. Upon review, the Supreme Court concluded: (1) the district court erred in its conclusion that Stilwyn's claims were barred by claim preclusion; (2) the district court erred in concluding that Stilwyn's claims were compulsory in the federal litigation; and (3) the district court did not err in refusing to grant attorney fees. View "Stilwyn, Inc. v. Rokan Corporation" on Justia Law

Roy Caputo, Wade Faerber, and Matthew Neel leased commercial space from DKN Holdings LLC and were each jointly and severally liable on this contract. Caputo later sued DKN for, inter alia, breach of contract. DKN cross-complained for monies due. The court rejected Caputo’s claims and awarded $2.8 million in DKN’s cross-complaint. Before the statement of decision in the Caputo action was filed, DKN sued Faerber and Neel for breach of the lease. Faerber demurred, arguing that suit against him was barred by the rule against splitting a cause of action because DKN’s rights under the lease had been adjudicated in the Caputo action. The trial court sustained the demurrer and entered judgment for Faerber. The Court of Appeal affirmed, concluding that a second suit is barred after entry of judgment against one of the contracting parties. The Supreme Court reversed, holding (1) joint and several liability does not implicate the “primary rights” doctrine wherein a cause of action arises from the invasion of a primary right and gives rise to only one cause of action; (2) the facts of this case do not support preclusion; and (3) Plaintiff has separate breach of contract claims against each defendant alleged to be jointly and severally liable. View "DKN Holdings LLC v. Faerber" on Justia Law

Plaintiff filed suit against defendant, a wood manufacturer, alleging that wood he bought for a fence at his home was not properly pressure-treated and that it prematurely rotted. The district court dismissed plaintiff's claims under the Alabama Deceptive Trade Practices Act (ADTPA), Ala. Code 8-19-5(5), (7), and for breach of express warranty. The court held that where a conflict exists between Federal Rule of Civil Procedure 23, which authorizes class actions including for consumer claims of this kind, and the ADTPA, which creates a private right of action but forbids private class actions, Rule 23 controls. The court also concluded that Alabama law allows a consumer to recover for breach of an express warranty, even in the absence of privity, in some circumstances. In this case, the court held that the complaint adequately alleges the required circumstances and thus states an express warranty claim on which relief can be granted. Accordingly, the court reversed and remanded. View "Lisk v. Lumber One Wood Preserving" on Justia Law

This appeal concerns the District's construction of an ambitious project to impound water until it can be cleaned up and released safely: the Tunnel and Reservoir Plan (TARP). The United States and the State of Illinois jointly filed suit, under sections 301 and 309 of the Clean Water Act, 33 U.S.C. 1311, 1319, seeking an order that the District improve the TARP’s performance, accelerate its completion date, and do more to contain and mitigate overflows in the interim. The Alliance was permitted to intervene. The district court entered a proposed consent decree that accompanied the complaint and rejected the Alliance's protest of the proposal. The district judge also concluded that the settlement binds the Alliance. The Alliance appealed, arguing that it cannot be bound by the consent decree - essentially a contract - to which it did not agree. The court concluded that the consent decree that the district court has approved is reasonable in light of the current infrastructure, the costs of doing things differently (no one proposes to build a new sewer system or redo the Deep Tunnel project), and the limits of knowledge about what will happen when the system is completed. Because the decree is the outcome of diligent prosecution, it binds would-be private litigants such as the Alliance. Accordingly, the court affirmed the judgment. View "United States v. Metropolitan Water Reclamation" on Justia Law

In "Vinings Bank v. Brasfield & Gorrie, LLC," (759 SE2d 886 (2014)), the Court of Appeals affirmed, among other rulings, the trial court’s determination that Vinings Bank was not entitled to summary judgment with regard to a counterclaim for conversion brought against the Bank by Brasfield & Gorrie, LLC ("B&G"). This case stemmed from a defaulted $1.4 million business loan. The bank made the loan to Wagner Enterprises, Inc., which used as collateral, a security interest in all of its accounts and accounts receivable, including Wagner's contract to provide drywall services for general contractor B&G. Wagner defaulted on the loan, and the Bank filed suit against B&G seeking to collect on Wagner's accounts receivable. B&G counterclaimed for conversion, and the parties filed cross-motions for summary judgment. The bank appealed the denial of its motion. The Supreme Court affirmed in part, reversed in part, and remanded. In affirming the trial court's judgment, the Court of Appeals did not consider whether B&G had any right to assert a counterclaim against the bank for conversion of funds due to Wagner's subcontractors. The Supreme Court found that B&G had no direct relationship with the Bank, B&G was not, itself, a subcontractor of Wagner entitled to any of Wagner's funds, B&G did not have direct contractual relationships with any of Wagner's subcontractors, and B&G had no fiduciary relationship with any of Wagner's subcontractors. Furthermore, there was no evidence that Wagner or Wagner's affected subcontractors assigned B&G any of their rights. "Therefore, even if we assume without deciding that funds in [Wagner's] account were held in a constructive trust for the benefit of [Wagner's] subcontractors, B&G is not the party to assert those rights and had no standing to do so." View "Vinings Bank v. Brasfield & Gorrie, LLC" on Justia Law