Justia Contracts Opinion Summaries

Darian McKinney, a health and physical education teacher, was employed by the District of Columbia Public Schools (DCPS) for four years. During his tenure, he was investigated for sexual harassment, leading to a grievance he filed against DCPS. Both disputes were resolved through a Settlement Agreement, under which McKinney resigned but was allowed to reapply for teaching positions. However, when he reapplied, DCPS blocked his return, citing a failed background check.McKinney sued the District of Columbia, alleging that DCPS breached the Settlement Agreement by not fairly considering his employment applications and deprived him of property and liberty without due process. The United States District Court for the District of Columbia dismissed his complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court held that the Settlement Agreement did not obligate DCPS to fairly consider McKinney’s applications, only to allow him to apply. The court found no basis in the contract’s language or law for McKinney’s demand for fair consideration. Additionally, the court ruled that McKinney did not have a constitutionally protected property interest in his original job, the contingent job offers, or his eligibility for DCPS positions. The court also found that McKinney’s claim of deprivation of liberty without due process was forfeited as it was not raised in the lower court.The court affirmed the district court’s dismissal of McKinney’s complaint. View "Darian McKinney v. DC" on Justia Law

In 2008, the former Attorney General of Mississippi entered into a retention agreement with the Kilborn Firm to sue Entergy Corporation over electricity rates. The Kilborn Firm then agreed to split any compensation with Roedel Parsons, a Louisiana law firm. After years of litigation, the trial judge granted Entergy’s motion for summary judgment, dismissing the case with prejudice. The State did not appeal. Roedel Parsons then sued the State, claiming it was entitled to $34,625,000 as a third-party beneficiary under the retention agreement or, alternatively, for unjust enrichment and quantum meruit recovery.The Hinds County Circuit Court granted the State’s motion to dismiss under Mississippi Rule of Civil Procedure 12(b)(6) for failure to state a claim. The court found that Roedel Parsons was not a third-party beneficiary under the retention agreement, as the agreement specified that any associated attorneys would be at the Kilborn Firm’s expense and at no cost to the State. The court also found that Roedel Parsons failed to state a claim for unjust enrichment and quantum meruit recovery, as the State had no obligation to compensate Roedel Parsons under the terms of the agreement.The Supreme Court of Mississippi reviewed the case and affirmed the lower court’s decision. The court held that Roedel Parsons was not a third-party beneficiary under the retention agreement and had no standing to sue the State for breach of contract. The court also held that Roedel Parsons failed to state a claim for unjust enrichment and quantum meruit recovery, as the State had no reasonable expectation to compensate Roedel Parsons. The court further found that the common-fund doctrine did not apply, as Roedel Parsons failed to identify a specific fund or class of beneficiaries. View "Roedel Parsons Blache Fontana Piontek & Pisano v. State of Mississippi" on Justia Law

In 2016, Tucker Cianchette secured a multimillion-dollar judgment in Maine Superior Court against his father, step-mother, and two LLCs after they backed out of a 2015 agreement that would have given him sole control of a Ford dealership. Following this, in 2021, Eric and Peggy Cianchette, along with Cianchette Family, LLC, and Better Way Ford, LLC, filed a lawsuit alleging that Ford Motor Company violated state and federal laws during the failed 2015 negotiations and through false testimony by Ford employees in Tucker's 2016 suit.The 2021 lawsuit was initially filed in Maine Superior Court but was removed to the United States District Court for the District of Maine. The District Court dismissed all claims against Ford, leading the plaintiffs to appeal. The plaintiffs argued that Ford's actions during the 2015 negotiations and the 2016 lawsuit constituted violations of Maine's civil perjury statute, the Dealers Act, the federal Automobile Dealers' Day in Court Act, and also amounted to breach of contract and tortious interference with contract.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the District Court's dismissal. The Court of Appeals held that the plaintiffs failed to plausibly allege that Ford made any false representations or that any reliance on such representations was justified. The court also found that the plaintiffs' claims under the Dealers Act were barred by res judicata due to a prior ruling by the Maine Motor Vehicle Franchise Board. Additionally, the court concluded that the implied covenant of good faith and fair dealing did not apply to the breach of contract claims under Michigan law, as the SSA explicitly granted Ford the right to approve changes in ownership. View "Better Way Ford, LLC v. Ford Motor Company" on Justia Law

The plaintiff, a Belgian company, agreed to ship car parts made in Mexico to a Mexican plant operated by the defendants, a Delaware LLC and a Delaware corporation. The initial contract documents included a forum-selection clause pointing to a Mexican venue. However, the plaintiff later sued in Michigan, alleging that the parties had switched to a Michigan forum-selection clause during their transactions. The defendants moved to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6) and the forum non conveniens doctrine, arguing that the Mexican forum-selection clause applied.The United States District Court for the Eastern District of Michigan granted the defendants' Rule 12(b)(6) motion, dismissing the suit without conducting a forum non conveniens analysis. The court found that the forum-selection clause in the initial contract documents, which pointed to a Mexican venue, was controlling.The United States Court of Appeals for the Sixth Circuit reviewed the case and found that the complaint plausibly alleged that the parties had switched to a Michigan forum-selection clause. The court noted that a factual dispute existed over which forum-selection clause applied to the plaintiff’s breach-of-contract claims. The court held that this venue issue could not be resolved on the pleadings under Rule 12(b)(6) or under the forum non conveniens doctrine without factual findings. Therefore, the Sixth Circuit reversed the district court's decision and remanded the case for further proceedings to resolve the factual disputes regarding the applicable forum-selection clause. View "VCST Int'l B.V. v. BorgWarner Noblesville, LLC" on Justia Law

Power Rental Op Co, LLC ("Power Rental") is a Florida-based company providing water and energy services. The Virgin Islands Water and Power Authority ("WAPA") is a municipal corporation in the U.S. Virgin Islands. In 2012, WAPA entered into a rental agreement with General Electric International, which Power Rental later acquired. By 2019, WAPA owed Power Rental over $14 million, which was reduced to approximately $9.3 million through a promissory note governed by New York law. WAPA defaulted on the note in 2020, leading Power Rental to sue in Florida state court for breach of the note and other claims.The case was removed to the Middle District of Florida, which dissolved pre-judgment writs of garnishment issued by the state court, granted partial summary judgment in favor of Power Rental, and ordered WAPA to complete a fact information sheet. The court found that WAPA waived its sovereign immunity defenses under the terms of the note. WAPA's appeal to the Eleventh Circuit was voluntarily dismissed.Power Rental registered the judgment in the U.S. District Court for the District of Puerto Rico, which issued a writ of execution served on WAPA's account at FirstBank in Puerto Rico. WAPA filed an emergency motion to quash the writ, arguing that the funds were exempt under Virgin Islands law and that the Puerto Rico court lacked jurisdiction. The District of Puerto Rico denied the motion, finding that the separate entity rule did not apply and that it had jurisdiction to issue the writ.The United States Court of Appeals for the First Circuit affirmed the District of Puerto Rico's order. The court held that the separate entity rule was outdated and did not apply, allowing the Puerto Rico court to have jurisdiction over the writ. The court also upheld the lower court's finding that WAPA had waived its statutory immunity defenses. View "Power Rental OP CO, LLC v. Virgin Islands Water and Power Authority" on Justia Law

A general contractor, Keluco General Contractors, Inc., secured a workers’ compensation and employers’ liability policy through Travelers Property Casualty Company of America. The policy was set to last one year, expiring on March 5, 2017. After the policy expired, a Keluco employee was injured at work. Keluco attempted to make a claim on its workers’ compensation policy and discovered it had expired. Travelers claimed to have sent a notice of nonrenewal to Keluco and its insurance agent, Gretchen Santerre, but Keluco claimed it never received the notice.Keluco sued Santerre and her employer, Country Mutual Insurance Company, for failing to inform it of the nonrenewal notice. Santerre filed a third-party complaint against Travelers. The Superior Court of Alaska granted partial summary judgment against Travelers, ruling that it failed to send the nonrenewal notice in the manner required by statute, specifically by not obtaining a certificate of mailing from the United States Postal Service (USPS). The court found that Travelers breached its contract with Keluco.The Supreme Court of the State of Alaska reviewed the case. The court affirmed the Superior Court’s rulings on summary judgment, agreeing that Travelers violated AS 21.36.260 by not obtaining a certificate of mailing from USPS and thus breached its contract with Keluco. The court also affirmed the dismissal of Travelers’ contribution claim against Santerre, noting that Alaska law allows for the allocation of fault to a party who has settled out of a case.However, the Supreme Court reversed the Superior Court’s determination of when prejudgment interest began to accrue. The Supreme Court held that prejudgment interest should begin to accrue on September 20, 2017, the date the Keluco employee was injured and entitled to workers’ compensation benefits, rather than January 9, 2017. The case was remanded for recalculation of prejudgment interest. View "Travelers Property Casualty Company of America v. Keluco General Contractors" on Justia Law

James Jurgensen sustained a work injury on July 29, 2021, while employed by Dave Perkins Contracting, Inc. He hired attorney Joshua E. Borken, who agreed to a contingent fee of 20% of the first $130,000 of compensation and 20% of any excess amount, subject to approval. Minnesota Statutes § 176.081, subd. 1(a) (2022), caps attorney fees in workers’ compensation cases at $26,000. The parties settled for $150,000, and Borken sought $30,000 in fees, including $4,000 in excess fees. The compensation judge approved $26,000 but denied the excess fees after applying the Irwin factors.The Workers’ Compensation Court of Appeals (WCCA) affirmed the compensation judge’s decision, finding no abuse of discretion in denying the excess fees. The WCCA also concluded that automatic approval of unobjected-to excess fees is inconsistent with section 176.081, which provides a presumptive cap on attorney fees. The WCCA did not address the constitutional issue due to a lack of jurisdiction.The Minnesota Supreme Court reviewed the case. The court held that the 2024 amendment to Minn. Stat. § 176.081, which increases the cap on attorney fees, does not apply retroactively. The court also held that the WCCA did not err by declining to automatically approve the requested excess fee. Additionally, the court found that Minn. Stat. § 176.081, subd. 1(a) (2022), does not violate the Contracts Clause of the Minnesota Constitution. Finally, the court concluded that the WCCA did not err by affirming the compensation judge’s denial of excess attorney fees under the Irwin factors.The Minnesota Supreme Court affirmed the decision of the WCCA, upholding the denial of the $4,000 in excess attorney fees. View "Jurgensen vs. Dave Perkins Contracting, Inc." on Justia Law

Katherine Fratello loaned Russell A. Mann $60,000 under a secured promissory note, with Mann agreeing to make monthly payments starting October 15, 2023. Mann provided a cashier’s check for $3,500 on September 29, 2023, claiming it covered the first two payments and other loans. Fratello disputed the validity of the check and considered Mann in default for missing the first two payments. She served Mann with a default notice on November 29, 2023, and filed a complaint on January 5, 2024, alleging Mann’s failure to make the required payments.Mann counterclaimed, asserting that Fratello breached their contract by not cashing the cashier’s check, which he claimed covered the first two payments. He argued that Fratello’s refusal to accept the payment and the subsequent default notice were unlawful. Fratello filed a special motion to dismiss Mann’s counterclaim under Maine’s anti-SLAPP statute, arguing that the counterclaim was based on her protected petitioning activity, namely the default notice and the complaint.The Superior Court (Cumberland County) denied Fratello’s special motion to dismiss, concluding that the default notice was not petitioning activity and that Mann’s counterclaim was not based on Fratello’s filing of the complaint or any other petitioning activity. Fratello appealed the decision.The Maine Supreme Judicial Court reviewed the denial of the anti-SLAPP motion de novo and affirmed the lower court’s decision. The court held that Mann’s counterclaim was based on Fratello’s refusal to accept the cashier’s check, not on her petitioning activity. Therefore, Fratello did not meet her burden to demonstrate that Mann’s counterclaim was based on protected petitioning activity under the anti-SLAPP statute. View "Fratello v. Mann" on Justia Law

The case involves a dispute where Pranay Bajjuri and others (appellees) sued Anand Karney, Sudha Karney (appellants), and others for unjust enrichment, fraud, and civil conspiracy. The appellees alleged that the appellants fraudulently induced them to invest in various limited liability companies (LLCs) for purchasing and operating rental properties, but the appellants diverted the investments for personal gain. The appellants failed to produce financial and organizational documents related to the LLCs during discovery, leading to the current appeal.The District Court for Douglas County issued a scheduling order for discovery and trial. Despite repeated requests and a court order to compel, the appellants did not produce the required documents. The appellees filed a motion for sanctions, seeking default judgment and attorney fees. The district court found that the appellants had repeatedly violated discovery rules and had been previously warned of sanctions. The court granted the motion for sanctions, entering a default judgment of $2,201,385.82 and awarding attorney fees of $180,645.68 against the appellants.The Nebraska Supreme Court reviewed the case and upheld the district court's decision. The court found that the appellants had frustrated the discovery process and failed to comply with the court's order to compel. The court determined that the appellants, as members and managers of the LLCs, had the ability to obtain and produce the required documents but did not do so. The court concluded that the sanctions of default judgment and attorney fees were appropriate given the appellants' inexcusable recalcitrance and history of discovery abuse. The Nebraska Supreme Court affirmed the district court's orders, finding no abuse of discretion. View "Bajjuri v. Karney" on Justia Law

Michael Reilly approached William G. Harris III, a developmentally disabled individual, to purchase his home for $30,000, significantly below its appraised value. Harris, unable to understand the value of money, signed the contract. Reilly attempted to finalize the sale but was informed by the Sheltered Workshop, where Harris was a client, of Harris's disability and was denied further contact with him. Harris passed away in December 2021, and Reilly sued Harris's Estate for specific performance of the contract. The Estate counterclaimed, alleging negligence, violations of the Montana Consumer Protection Act (CPA), and sought punitive damages.The Second Judicial District Court, Butte-Silver Bow County, dismissed Reilly's complaint without imposing sanctions and denied the Estate's request for treble damages and attorney fees. The jury awarded the Estate $28,900 in compensatory damages and $45,000 in punitive damages. Reilly moved to dismiss his complaint just before the trial, which the District Court granted, but the Estate objected, seeking sanctions for the late dismissal. The District Court did not rule on the objection. The jury found Reilly exploited Harris and violated the CPA, awarding damages accordingly. The District Court later denied the Estate's request for treble damages and attorney fees, citing the substantial jury award as sufficient.The Supreme Court of the State of Montana reviewed the case. It held that the District Court abused its discretion by dismissing Reilly's complaint without imposing sanctions, given the late timing and the Estate's incurred costs. However, it affirmed the District Court's denial of treble damages and attorney fees under the CPA, agreeing that the jury's award was substantial. The Supreme Court affirmed the compensatory and punitive damages awarded to the Estate and remanded the case to the District Court to award the Estate its full costs and attorney fees incurred before Reilly's motion to dismiss. View "Harris Estate v. Reilly" on Justia Law