Justia Contracts Opinion Summaries

The Illinois Business Brokers Act of 1995 requires brokers for the sale of businesses in the state to register. Brokerage agreements must be in writing. Promises to pay unregistered brokers for their services are unenforceable. Global Technology, apparently unaware of the statute, orally agreed with Satyam Computer Services (based in India) to act as a broker in the purchase of Bridge Strategy, an Illinois business. Global brokered the acquisition, but Satyam refused to pay. Global sued, seeking a 3% commission ($600,000). Satyam contended that Bridge had compensated Global for its services as an intermediary and that it had never promised any additional compensation. When the litigation was four years old, Satyam moved for summary judgment with a new argument: that Global is not registered under the Act. Global argued that the Act is an affirmative defense, which under Fed. R. Civ. P. 8(c) had to appear in Satyam’s answer. Finding that Global had not suffered prejudice, the court excused Satyam’s delay and entered judgment in its favor. The Seventh Circuit affirmed. Rule 8(c) does not provide a consequence for delay. District judges have authority to authorize a litigant to assert an affirmative defense despite its omission from the answer. View "Global Tech. & Trading, inc. v. Tech Mahindra Ltd." on Justia Law

At issue in this residential construction dispute was whether the statutory cap on exemplary damages is waived if not pleaded as an affirmative defense or avoidance. The trial court affirmed an exemplary damages award in excess of the statutory cap because Petitioner did not assert the cap until her motion for a new trial. The court of appeals affirmed the exemplary damages award, concluding that the statutory cap on exemplary damages did not apply because Petitioner failed to expressly plead the cap as an affirmative defense. The Supreme Court (1) reversed the court of appeals’ judgment in relation to the exemplary cap, holding (i) the exemplary damages cap is not a matter ”constituting an avoidance or affirmative defense” and need not be affirmatively pleaded because it applies automatically when invoked and does not require proof of additional facts, and (ii) because Petitioner timely asserted the cap in her motion for new trial, the exemplary damages must be capped at $200,000; and (2) affirmed in all other respects. View "Zorilla v. Aypco Constr. II, LLC" on Justia Law

Two certificateholders in ACE Securities Corp., Home Equity Loan Trust sued DB Structured Products (DBSP) for failure to repurchase loans that purportedly did not conform to the representations and warranties of DBSP, which sponsored the transaction. The Trust later sought to substitute itself as plaintiff in place of the certificateholders. DBSP moved to dismiss the complaint as untimely, arguing that the Trust’s claims accrued as of March 28, 2006, more than six years before the Trust filed its complaint. DBSP further contended that the certificateholders did not validly commence this action and lacked standing to sue. Supreme Court denied DBSP’s motion to dismiss and held the Trust’s action to be timely.The Appellate Division reversed. The Court of Appeals affirmed, holding (1) the Trust’s cause of action against DBSP for breach of representations and warranties accrued at the point of contract execution on March 28, 2006; and (2) even assuming that the certificateholders possessed standing to sue, the two certificateholders did not validly commence this action because they failed to comply with the contractual condition precedent to suit. View "ACE Sec. Corp. v DB Structured Prods., Inc." on Justia Law

Plaintiff Fraser Trebilcock Davis & Dunlap, P.C. provided legal services to the defendants, a group of trusts, in connection with the financing and purchase of four hydroelectric dams. Dissatisfied with the representation they received, defendants refused to pay the full sum of fees billed by Fraser Trebilcock. To recover these unpaid fees, Fraser Trebilcock brought the underlying suit against defendants for breach of contract. Pursuant to MCR 2.403, the matter was submitted for a case evaluation, which resulted in an evaluation of $60,000 in favor of Fraser Trebilcock. Fraser Trebilcock accepted the evaluation, but defendants rejected it. The case proceeded to trial, resulting in a verdict for Fraser Trebilcock and a judgment totaling $73,501.90. Throughout the litigation of this breach-of-contract action, Fraser Trebilcock appeared through Michael Perry (a shareholder of the firm) and other lawyers affiliated with the firm. At no point did Fraser Trebilcock retain outside counsel, and there was no indication that the firm entered into a retainer agreement with its member lawyers or received or paid a bill for their services in connection with the litigation. After receiving the verdict, the parties filed posttrial motions: defendants moved for a new trial, and Fraser Trebilcock moved for case-evaluation sanctions under MCR 2.403(O), seeking to recover, inter alia, a “reasonable attorney fee” under MCR 2.403(O)(6)(b) for the legal services performed by its member lawyers. The trial court denied the defendants’ motion for a new trial, and granted Fraser Trebilcock’s motion for case-evaluation sanctions, ruling in particular that Fraser Trebilcock could recover an attorney fee as part of its sanctions. The issue on appeal to the Supreme Court was whether the plaintiff law firm could recover, as case-evaluation sanctions under MCR 2.403(O)(6)(b), a “reasonable attorney fee” for the legal services performed by its own member lawyers in connection with its suit to recover unpaid fees from defendants. Contrary to the determinations of the trial court and the Court of Appeals majority, the Supreme Court concluded it could not. Accordingly, the Court of Appeals was reversed in part, the trial court's award of fees was vacated, and the case remanded for further proceedings. View "Frazier Trebilcock Davis & Dunlap, P.C. v. Boyce Trust 2350" on Justia Law

Durukan America, a Texas candy company, sued Rain Trading, an Illinois wholesaler, and its president, Canbulat, breach of contract and deceptive practices for allegedly refusing to pay for $86,000 in merchandise. To prove service, Durukan filed with the court two affidavits from a process server. After a month passed without an answer from the defendants, the district court entered a default judgment for Durukan. About a year later, after Canbulat was arrested for failing to respond to a citation to discover evidence, the defendants moved to vacate the default judgment, submitting an affidavit and records to show that they were never served. Canbulat provided corroboration that he was not at the location where service purportedly occurred. Without holding a hearing to address the dueling affidavits, the district court denied the motion. The Seventh Circuit vacated and remanded, holding that the district court should have held a hearing to resolve the factual conflict in the affidavits. View "Durukan Am., LLC v. Rain Trading, Inc." on Justia Law

Union Electric is a power company, and EIM is a trade-association-owned excess carrier for power companies. Union, as an association member, is a partial owner of EIM and is the named insured in a $100 million excess liability policy issued by EIM. Union and other power companies drafted the general form policy; Union negotiated the present policy with EIM. The policy requires that coverage disputes go through a mini-trial and arbitration. An exclusive forum-selection clause and a choice-of-law clause named New York. After failure of a Missouri reservoir caused extensive damage, Union paid to settle claims; EIM paid $68 million of the policy's $100 million limit. Union filed suit in Missouri seeking the remaining $32 million plus damages for breach of contract and vexatious refusal to pay. The district court dismissed, based on the forum-selection clause, The Eighth Circuit reversed and remanded for consideration of the relationship between the mini-trial requirement, the arbitration provision, and a public policy argument. On remand, the court denied the motion to dismiss, noting that arbitration agreements in insurance contracts are unenforceable under Missouri law and that contractual choice-of-law provisions have been held unenforceable if they would allow enforcement of such an agreement. The Supreme Court, in a different case, subsequently supported enforcement of contractual forum-selection clauses "[i]n all but the most unusual cases." Relying on that case, EIM moved for a transfer stating that it would not seek enforcement of the arbitration provision. The court held that the motion was not untimely and that the forum-selection clause was enforceable. The Eighth Circuit denied a writ of prohibition or mandamus to prevent the transfer, stating that Union did not establish entitlement to extraordinary relief. View "Union Elec. Co. v. Energy Mut. Ins. Ltd." on Justia Law

This case stemmed from Ward Farms' purchase of Enerbase Cooperative Resource's tractor at a third-party auction sale. Michael Ward, a partner of Ward Farms, attended an auction sale, and bid on the tractor. Shortly after the sale, Ward Farms discovered the tractor required significant repairs. At Ward Farms' request, Enerbase inspected the tractor and estimated the repair costs as ranging from $19,550 to $31,430. Subsequently, Ward Farms sued Enerbase alleging fraud, misrepresentation, deceit, and breach of express and implied warranties. Ward Farms sought alternative remedies of rescission or damages. Ward Farms appealed the district court judgment denying its motion to amend its complaint and granting a summary judgment motion in favor of Enerbase. Upon review, the Supreme Court concluded the district court did not abuse its discretion in denying Ward Farms' motion to amend, and the district court did not err in granting Enerbase's summary judgment motion because Ward Farms did not raise an issue of material fact regarding its claim. View "Ward Farms v. Enerbase Cooperative Resource" on Justia Law

Appellant sued Southern Farm Bureau Casualty Insurance Company (SFB) for breach of contract. SFB answered, alleging that Appellant’s claims were spurious and were made for an improper purpose. The circuit court granted summary judgment to SFB, concluding that Appellant had filed a frivolous claim against SFB without proper and reasonable investigation and imposed sanctions in the form of awarding attorney’s fees to SFB. The Supreme Court affirmed in part and reversed in part, holding (1) Appellant was not entitled to an award of attorney’s fees because he did not prevail on the issue of his entitlement to the payment of a sum he sought; and (2) because SFB failed to comply with the requirements of Ark. R. Civ. P. 11 in seeking Rule 11 sanctions, the circuit court erred in imposing Rule 11 sanctions. View "Swindle v. State" on Justia Law

The underlying lawsuit in this case, "Retailers’ Credit Association of Grass Valley, Inc. v. Leonard," was filed by real party in interest Retailers’ Credit Association of Grass Valley, Inc., and alleged petitioner Kathleen Leonard breached a contract by failing to pay $2,340.41 for medical services provided by additional real party in interest, Dignity Health, which was doing business as Sierra Nevada Memorial Hospital. Retailers’ Credit Association was the local collection agency providing collection services for Sierra Nevada Memorial Hospital. Leonard filed a pro. per. cross-complaint against Retailers’ Credit Association, alleging a violation of the Health Insurance Portability and Accountability Act of 1996 by negligent disclosure of private medical information (i.e. “date of medical visits, medical record number, [and] account numbers”). On the front page of her cross-complaint, Leonard checked the box on the form that stated, “ACTION IS A LIMITED CIVIL CASE ($25,000 or less).” In the complaint itself, Leonard checked the box requesting “compensatory damages” for “limited civil cases.” She also requested injunctive relief in the form of a court order requiring Retailers’ Credit Association to remove the allegedly private information from its complaint. Leonard later filed a pro. per. motion to amend her cross-complaint. In the caption of the motion, she stated the amendment was to “NAME SIERRA NEVADA MEMORIAL HOSPITAL AS A CROSS-DEFENDANT and TO REMOVE THIS CASE TO A COURT OF GENERAL JURISDICTION.” The memorandum of points and authorities alleged that the documents attached to the complaint contained her medical record number and were not necessary for the prosecution of the collection claim and at the very least could have been redacted to protect her privacy. When she reviewed the complaint, she “noticed the attachment to the complaint contained [her] medical records and medical record number” and that the complaint with the attachment had been filed publically at the courthouse. The trial court denied Leonard’s motion to amend the cross-complaint and “[t]ransfer to [u]nlimited [j]urisdiction” without prejudice. Leonard “failed to attach the proposed [a]mended [c]ross-[c]omplaint to the motion” and as a result, the court was “unable to determine what the proposed changes include.” The court was “unable to determine if an additional [c]ross-[d]efendant [wa]s sought to be named or if damages sought exceed $25,000. Thus, th[e] Court [w]as unable to determine if [Leonard] [wa]s entitled to the relief sought.” This case involves how a limited civil case (here a cross-complaint) gets reclassified as an unlimited civil case. After review, the Court of Appeal held that where Leonard filed, through counsel, an amended cross-complaint that added a cross-defendant and added causes of action that increased the amount in controversy to over $25,000 and tried twice to pay the court clerk the reclassification fee, the trial court was required to reclassify the case. Here, the trial court refused to reclassify the case and went on to deny Leonard’s later-filed motion for reclassification, a motion that was unnecessary because the trial court should have already reclassified the case (and in any event, the motion was the inappropriate vehicle by which to change the classification here). The Court therefore granted Leonard’s petition and issued a peremptory writ of mandate directing the trial court to reclassify the case upon Leonard paying the reclassification fee. View "Leonard v. Super. Ct." on Justia Law

This case arose from a dispute over a construction contract entered into between Contractors Edge, Inc. and the City of Mankato. Contractors Edge sued the City alleging, as relevant to this appeal, breach of contract and violation of the Prompt Payment Act. The district court dismissed the breach of contract claim in an order (the October 2012 order) that concluded, “let judgment be entered accordingly.” Neither party asked for a certification of final judgment under Minn. R. Civ. P. 54.02. The parties subsequently settled the remaining Prompt Payment Act claim. The district court entered final judgment in January 2014. Contractors Edge appealed, challenging the October 2012 order. The court of appeals dismissed the appeal as time barred, holding (1) regardless of whether the district court properly certified the October 2012 order, the partial judgment was immediately appealable, and (2) Contractors Edge’s appeal time had expired. The Supreme Court reversed, holding (1) the district court abused its discretion in certifying the October 2012 order as a final partial judgment under Rule 54.02; and (2) when a district court abuses the discretion given in Rule 54.02 to certify an order as a final partial judgment, the resulting judgment is not final and is not immediately appealable. View "Contractors Edge, Inc. v. City of Mankato" on Justia Law