Justia Contracts Opinion Summaries

When a federal court sitting in diversity confirms an arbitration award, the preclusion law of the state where that court sits determines the preclusive effect of the award. Plaintiff previously arbitrated breach of contract and related claims against ZTE USA, a wholly-owned subsidiary of defendant ZTE Corp. ZTE Corp. was not a party to the arbitration. After the arbitrator denied plaintiff's claims, the district court confirmed the award under the Federal Arbitration Act (FAA) and the Eleventh Circuit affirmed.In this case, the Ninth Circuit affirmed the district court's dismissal of plaintiff's claim against ZTE Corp., and held that the arbitration award and its confirmation by the district court together barred plaintiff from pursuing its current claims against ZTE Corp under the doctrine of claim preclusion. The panel explained that, because a district court in Florida confirmed the award, Florida law applied. Under Florida law, the court held that claim preclusion barred plaintiff's claims because it sought the same remedy it had previously sought in arbitration. Furthermore, ZTE Corp. is in privity with ZTE USA, and the parties were suing in the same capacity as in the arbitration. View "NTCH-WA, Inc. V. ZTE Corp." on Justia Law

Illinois residents Matlin and Waring (Plaintiffs) co-founded Gray Matter and developed products. In 1999, with the company facing failure, Plaintiffs executed a Withdrawal Agreement, assigning Plaintiffs' intellectual property and patent rights to Gray Matter, but entitling them to royalties on sales. In the following years, Plaintiffs frequently brought Gray Matter to arbitration to enforce their royalty rights. In 2002, Gray Matter filed an assignment of the intellectual property rights with the U.S. Patent and Trademark Office, allegedly without Plaintiff's knowledge, by forging Waring's signature. Gray Matter then sold assets to Swimways, including patent rights. A 2014 binding arbitration determined that Gray Matter did not assign the Withdrawal Agreement to Swimways and that Plaintiffs were owed no further royalties. In 2016, Spin Master acquired Swimways and its intellectual property rights. Plaintiffs sued. Swimways is a Virginia corporation with its principal place of business in Virginia Beach. The Spin Master defendants are Canadian companies with their principal places of business in Toronto. None of the defendants are registered to conduct business in, have employees in, or have registered agents for service of process in Illinois. In response to defendants’ motion to dismiss for lack of personal jurisdiction, Plaintiffs' counsel submitted an online purchase receipt from Swimways’ website and a declaration that he purchased and received a patented product in Illinois. The court dismissed, reasoning that Illinois law governed whether it had personal jurisdiction over the defendants. The Seventh Circuit affirmed, holding that the defendants had insufficient contacts with Illinois to establish either general or specific personal jurisdiction in that state. View "Matlin v. Spin Master Corp." on Justia Law

Lonnie Beal sued his former employer, Shoals Extrusion, LLC, an aluminum-extrusion business in Florence, Alabama after his employment there was terminated in November 2015. Beal alleged that Shoals Extrusion breached the terms of his employment agreement by refusing to give him severance compensation and benefits to which he claims he was entitled. The Circuit Court entered a summary judgment in favor of Beal and awarded him $80,800. The Alabama Supreme Court found, however, a genuine issue of material fact about whether Beal first breached the terms of the employment agreement and whether such breach excused further performance by Shoals Extrusion under that agreement. Accordingly, the summary judgment was reversed and the case remanded for further proceedings. View "Shoals Extrusion, LLC v. Beal" on Justia Law

The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court concerning premises liability. Shannon Adamson, an employee of the Alaska Marine Highway System (AMHS), fell approximately 15 feet when the passenger ramp at the Port of Bellingham's (Port) Bellingham Cruise Terminal (BCT) collapsed. The accident caused severe, life-changing injuries. The State of Alaska leased the BCT from the Port, allowing ferries to dock at the BCT and load and unload passengers and their vehicles. The Port elected to not implement an interlock device; when Adamson was operating the passenger ramp, slack was created in some attached cables. When she removed the locking pins, the ramp collapsed, snapped the cables, and Adamson and the ramp fell approximately 15 feet until the ramp caught on the ferry. Adamson and her husband sued the Port in federal court, alleging negligence and seeking damages for medical expenses, loss of wages, pain and suffering and loss of consortium. The federal court determined Adamson was the Port's business invitee; the jury returned a verdict in favor of Adamson and awarded over $16 million in damages. The court found the Port under three separate theories of liability: duty to a business invitee, duty as a landlord, and a promise to perform repairs under the lease contract. The issue presented to the Washington Supreme Court centered on whether a property owner-landlord was liable for injuries that occur on its property when the lessee has exclusive possession at the time of the accident but only priority use under the lease and the landlord has contracted to maintain and repair the premises. The Supreme Court answered the first certified question in the affirmative and consequently, did not address the second question. View "Adamson v. Port of Bellingham" on Justia Law

David Calvert was disbarred for various ethical violations, including entering into an oral agreement with a client without complying with the requisite safeguards of Colorado Rule of Professional Conduct 1.8(a). After being disbarred, Calvert sued his former client, Diane Mayberry, for breach of that same oral agreement, claiming that there was a contract between them. The trial court granted Mayberry’s motion for summary judgment, and the court of appeals affirmed. On appeal to the Colorado Supreme Court, Calvert challenged: (1) whether an attorney who was found to have violated Rule 1.8(a) in a disciplinary proceeding was estopped from relitigating the same factual issues in a civil proceeding; (2) whether a contract between an attorney and a client entered into in violation of Rule 1.8(a) was enforceable; and (3) whether the trial court abused its discretion in awarding attorney’s fees against Calvert after finding his lawsuit groundless and frivolous. The Colorado Supreme Court declined the issue preclusion issue raised because Calvert conceded he could not relitigate whether he entered into an agreement with a client without meeting Rule 1.8(a)’s requirements. The Court held that when an attorney enters into a contract without complying with Rule 1.8(a), the contract was presumptively void as against public policy; however, a lawyer may rebut that presumption by showing that, under the circumstances, the contract does not contravene the public policy underlying Rule 1.8(a). Further, the Court held the trial court did not abuse its discretion in awarding attorney’s fees at the trial level because the record supported the finding that the case was groundless, frivolous, and brought in bad faith. But as to attorney’s fees at the appellate level, because the questions of whether issue preclusion applied in this proceeding and whether a contract made in violation of Rule 1.8(a) is void as against public policy were legitimately appealable issues, thereby making a grant of appellate attorney’s fees inappropriate. Therefore, the Supreme Court affirmed the court of appeals as to the merits on other grounds, affirmed the award of attorney’s fees at the trial level, and reversed the court of appeals’ order remanding for a determination of appellate attorney’s fees. View "Calvert v. Mayberry" on Justia Law

The Supreme Court reversed the judgment of the court of appeals that the parol evidence rule barred evidence and enforcement of an agreement through which Plaintiff claims to have satisfied his debt to Defendant, holding that the parol evidence rule did not preclude enforcement of the agreement, and therefore, Plaintiff met his burden to establish a prima facie case for the falsity of Defendant's liens.Plaintiff brought this action claiming that after he fully satisfied his debt to Defendant, Defendant filed fraudulent liens and knowingly and intentionally slandered Plaintiff's title to mineral interests that secured that debt. Defendant filed a motion to dismiss the claims, arguing that Plaintiff could not establish prima facie support for his slander-of-title and fraudulent-lien claims because the parol evidence rule applied and precluded Plaintiff from establishing any enforceable agreement that satisfied his debt. The trial court denied the motion. The court of appeals affirmed. The Supreme Court reversed, holding that the parol evidence rule did not preclude enforcement of the agreement through which Plaintiff claimed to have satisfied his debt to Defendant, and that Plaintiff thus met his burden to establish a prima facie case for the falsity of Defendant's liens. View "West v. Quintanilla" on Justia Law

Ryze’s headquarters and principal place of business was in Noblesville, Indiana. In 2014, Ryze hired Nedd, a California resident, to work for Ryze in El Cerrito. In 2017, Ryze terminated Nedd’s employment. Nedd filed a wrongful termination suit in Contra Costa County, under the Fair Employment and Housing Act (FEHA). The Employment Agreement between Ryze and Nedd contained a forum selection clause, stating that “any claim of any type brought by Employee against [Ryze] … must be maintained only in a court sitting in" Indiana. The court declined to stay or dismiss the case, stating that forum selection clauses will not be enforced when contrary to California public policy and that enforcing the forum selection clause would be contrary to Labor Code section 925 and Government Code section 12965 (governing venue in FEHA cases). The court of appeal directed the trial court to vacate its order. Labor Code section 925 establishes a policy prohibiting employers from requiring California employees from agreeing to litigate in a different forum as a prerequisite to employment, but by its plain language states that it applies to agreements “entered into, modified, or extended on or after January 1, 2017.” The FEHA venue statute has no bearing on the forum selection clause. View "Ryze Claim Solutions LLC v. Superior Court" on Justia Law

Yuri Vanetik and his father, Anatoly (Tony), were involved with a number of interrelated companies in the business of oil exploration in Russia. Yuri approached his friend, Elliot Broidy, about investing in one of those companies, Terra Resources (Terra). Broidy agreed to invest $750,000, with the written agreement his investment would go only to efforts to start production on the oil wells. Farmers & Merchants Trust Company (F&M Trust) was the trustee and administrator of the simplified employee pension plan (SEP) for Broidy’s individual retirement account (IRA). F&M Trust acquired stock in Terra. Broidy later learned that his investment had not been used in connection with the oil wells - it had been used to pay off Yuri’s and Tony’s preexisting debts. Broidy and Tony orally agreed that Tony would pay back the $750,000, but Tony failed to do so. F&M Trust then sued Yuri and Tony for breach of written and oral contracts, and for fraud. F&M Trust also sued Richard Weed (the attorney for Yuri, Tony, and the oil exploration companies) for fraud. The jury found in favor of F&M Trust on all causes of action, and awarded compensatory and punitive damages against Yuri, Tony, and the Weed defendants. Judgment was entered against Yuri and Tony; the trial court granted judgment notwithstanding the verdict (JNOV) in favor of the Weed defendants. On appeal, the Court of Appeal concluded substantial evidence supported the jury’s verdict against Yuri and Tony on the claims for breach of written contract, breach of oral contract, and fraud. The jury’s special verdict findings on the contract and fraud claims neither resulted in inconsistent verdicts, nor required F&M Trust to make an election of remedies. However, F&M Trust failed to offer substantial evidence supporting the punitive damages awards against Tony and Yuri, so the Court reversed those punitive damage awards. The trial court properly granted JNOV in favor of the Weed defendants on the fraud causes of action. View "Farmers & Merchants Trust Co. v. Vanetik" on Justia Law

The Supreme Court affirmed the decision of the circuit court denying Petitioner's motion to set aside a default judgment entered against him, holding that the circuit court did not abuse its discretion in denying Petitioner's motion to set aside the default judgment.Respondent filed a breach of contract claim against Petitioner for allegedly failing to pay insurance premiums. Petitioner did not respond to Respondent's properly served complaint, and Respondent obtained a default judgment against him. Nearly sixteen months later, Petitioner filed a motion to set aside the default judgment on the grounds that he was not a proper party to the action. The circuit court denied the motion as untimely because the grounds on which Petitioner sought to have the judgment set aside were subject to a one-year limitation period under W. Va. Rule 60(b). The Supreme Court affirmed, holding (1) Petitioner's grounds to set aside the judgment were untimely under Rule 60(b); and (2) while void judgments are not subject to the strict time frame set forth in Rule 60(b), the circuit court did not lack personal jurisdiction over Petitioner so as to render the judgment void. View "Amoruso v. Commerce & Industry Insurance Co." on Justia Law

PetroChina Canada bought ten large heat-exchanger units from Kelvion’s Oklahoma plant for use in PetroChina’s oil and gas operations. Their contract included a mandatory forum-selection clause subjecting the parties to Canadian jurisdiction. After a dispute over unanticipated delivery costs that PetroChina refused to pay, Kelvion brought suit in Oklahoma. It asserted quantum meruit and unjust enrichment claims, arguing the forum-selection clause did not apply to its equitable claims. The district court disagreed, concluding the forum-selection clause applied, and dismissed the suit under the doctrine of forum non conveniens. Finding no error in judgment, the Tenth Circuit affirmed the district court’s dismissal for forum non conveniens. View "Kelvion, Inc. v. PetroChina Canada Ltd." on Justia Law