Justia Contracts Opinion Summaries

Defendants’ failure to fully comply with a temporary restraining order did not justify sanctions even more severe than death-penalty sanctions imposed by the trial court.Plaintiffs sought a temporary restraining order (TRO) against Defendants. Without taking evidence, the court signed a TRO prohibiting Defendants from engaging in certain conduct. Plaintiffs later filed a motion for contempt and sanctions, alleging that Defendants knowingly violated the TRO. The trial court granted the motion in an order stating that “death penalty sanctions should be imposed” against Defendants. The court then awarded sanctions of $897,938. The court of appeals affirmed. The Supreme Court reversed and remanded the case, holding (1) Defendants knowingly violated the TRO without a compelling excuse; but (2) the extreme sanction imposed for the violations of the TRO was an abuse of discretion. View "Altesse Healthcare Solutions, Inc. v. Wilson" on Justia Law

Dickinson Elks Building, LLC, appealed a judgment awarding Rick and Janan Snider, doing business as RJ Snider Construction ("RJ Snider"), $198,255.08 for unjust enrichment and quantum meruit claims. In 2011, RJ Snider contracted with Granville Brinkman to furnish materials and labor for construction work on real property owned by Dickinson Elks. RJ Snider's principal place of business was located in Washington. In 2012, RJ Snider applied for a contractor license from the North Dakota Secretary of State, and the license was issued on in February 2012. RJ Snider provided services and materials for Dickinson Elks' property from December 26, 2011, to November 30, 2012. Dickinson Elks paid RJ Snider for all of the services and materials it provided between December 26, 2011, and February 1, 2012. RJ Snider billed Dickinson Elks $174,642.10 for the services and materials it provided from March 15, 2012, until November 30, 2012. Dickinson Elks did not pay any of this amount. In January 2013, RJ Snider recorded a construction lien against Dickinson Elks' property. In May 2014, Dickinson Elks served RJ Snider with a demand to start a lawsuit to enforce the lien and record a lis pendens within 30 days of the demand. RJ Snider sued Dickinson Elks in June 2014, seeking foreclosure of the construction lien and a money judgment. RJ Snider recorded a notice of lis pendens on July 28, 2014. Dickinson Elks moved for summary judgment, arguing RJ Snider's complaint should be dismissed under N.D.C.C. 43-07-02 because RJ Snider was not a licensed contractor when it started work on the property. Dickinson Elks also argued RJ Snider did not have a valid construction lien, because RJ Snider did not record a lis pendens within 30 days of receiving the demand to enforce the lien. The district court partially granted the motion and entered a judgment forfeiting RJ Snider's construction lien because RJ Snider did not record a lis pendens within 30 days of receiving Dickinson Elks' demand to enforce the lien as required under N.D.C.C. 35-27-25. The court concluded RJ Snider's claims were not precluded under N.D.C.C. 43-07-02. RJ Snider amended its complaint, claiming it was entitled to a money judgment against Dickinson Elks under the principles of quantum meruit and unjust enrichment. The North Dakota Supreme Court concluded RJ Snider was not precluded from maintaining its claims; however, the Court reversed and remanded for the district court to determine whether any of the damages awarded were for services and materials provided before RJ Snider was licensed. View "Snider v. Dickinson Elks Building, LLC" on Justia Law

Plaintiffs Spring Creek Exploration & Production Company, LLC and Gold Coast Energy, LLC appealed four separate district court orders dismissing contract and tort claims against Defendants Hess Bakken Investments II, LLC and Statoil Oil & Gas, LP. Around January 2009, Statoil entered into two agreements with a Hess affiliate. One of those agreements, the “Rough Rider Agreement,” prohibited Hess for one year from acquiring any oil or gas interests in the Rough Rider Prospect (land in North Dakota’s McKenzie and Williams Counties) in exchange for Hess’s affiliate receiving certain proprietary information from Statoil. In October 2009, still within the one-year non-compete period, Hess entered into a series of agreements (collectively, the “Tomahawk Agreement”) with Spring Creek, Gold Coast, and non-party Coachman Energy relating to the Tomahawk Prospect, a collection of land lying entirely within the much larger Rough Rider Prospect. As one part of the Agreement, Spring Creek and Gold Coast sold all of their oil and gas leasehold interests in the Tomahawk Prospect to Hess in exchange for an overriding royalty interest (“ORRI”) in the hydrocarbons produced under the terms of the leases (the “First Assignment”). Hess’s plan for these leases was to drill enough exploratory wells to prove their value and then sell them to larger operators. In another part of the Tomahawk Agreement, Spring Creek, Gold Coast and Hess executed an “Area of Mutual Interest Agreement” ("AMI"). In 2010, Statoil alleged Hess breached the Rough Rider Agreement by acquiring leases in the Rough Rider Prospect during the non-compete period. That led to a settlement agreement in which Hess sold most of its Tomahawk Prospect leases to Statoil at a discount. Hess further agreed that any leases it acquired in the Tomahawk Prospect in the next three months would be offered to Statoil at cost. In connection with Statoil’s due diligence in executing the settlement agreement, Hess disclosed to Statoil the terms of the AMI Agreement. Neither Spring Creek nor Gold Coast was privy to the Hess-Statoil negotiations. After the agreement was finalized, Statoil publicly announced that it had acquired about 10,000 net acres in the Rough Rider Prospect. The underlying litigation was filed in 2013, when Spring Creek brought suit against Hess and Statoil in Colorado state court. After careful consideration, the Tenth Circuit determined summary judgment in favor of Hess and Statoil was proper, and affirmed the district court's judgment. View "Spring Creek Exploration v. Hess Bakken Investment" on Justia Law

The Third Circuit Court of Appeals certified a question of Pennsylvania law to the Pennsylvania Supreme Court. Appellant Jobe Danganan’s contracted with Appellee Guardian Protection Services (“Guardian”), a Pennsylvania-headquartered business, for home security equipment and services at his then-home in Washington, D.C. The contract signed by Appellant, a standardized form agreement employed by Guardian, contained, inter alia, a choice-of-law provision, stating that the “Agreement shall be governed by the laws of Pennsylvania.” Another clause required that any suit or legal proceeding pertaining to the Agreement be brought in the other party’s district or county of residence and mandated that the parties consent to jurisdiction in such venue. Prior to the expiration of the Agreement’s purported three-year initial term, Appellant moved to California and sold his Washington, D.C. house, notifying Guardian of his intent to cancel the contract and related home protection services. However, Guardian continued to bill Appellant, citing provisions of the Agreement that it claimed authorized ongoing charges through the contract’s term, regardless of cancellation attempts. Appellant filed a complaint in the Court of Common Pleas of Philadelphia County on behalf of himself and a putative class of nationwide plaintiffs who were subject to the same form contract. His claims for relief were predicated exclusively on Pennsylvania statutory grounds, namely, the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL") and Pennsylvania’s Fair Credit Extension Uniformity Act. The matter was removed to federal district court, and Guardian moved to dismiss, arguing that Appellant had not, pursuant to the UTPCPL, demonstrated a "sufficient nexus" between the Commonwealth and the improper conduct alleged in the complaint. In response to the first certified question, the Pennsylvania Supreme Court held that a non- Pennsylvania resident may bring suit under the UTPCPL against a Commonwealth-headquartered business based on transactions that occurred out-of-state. Furthermore, the Court concluded that its answer to the first issue eliminated the predicate to the second question certified for review. The matter was thus returned to the Third Circuit Court of Appeals. View "Danganan v. Guardian Protection Svc." on Justia Law

Area 51 used Alameda city property for events it planned for third-party companies. PM assisted the city with managing the license arrangements. Due to problems connected with Area 51 events, the city ceased doing business with it. Area 51 had committed to third-party entities based on PM’s previous confirmation of the city’s willingness to license space. Area 51 sued. Defendants (city, PM, and individuals) filed a demurrer and a motion to strike under Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuit against public participation) statute. The court denied that motion and granted the demurrer. The court of appeal reversed in part. While the thrust of the claims against the city is breach of contract, the individual defendants were not contracting parties; the sole basis for asserting liability against them is what they did on behalf of the city. That conduct is expressive in nature (emails confirming dates, and announcing termination of the leasing relationship), which qualify as “written or oral statement[s] . . . made in connection with an issue under consideration . . . by a[n] . . . executive . . . body,” under the anti-SLAPP law. Area 51 could not show a probability of prevailing on the merits. The case was remanded for consideration of an award of attorneys’ fees and costs. View "Area 51 Productions, Inc. v. City of Alameda" on Justia Law

The claim brought by Paramount Pictures Corporation, the plaintiff in this suit, was barred by res judicata because it should have been asserted as a counterclaim in an action involving the same parties brought in federal court nearly ten years.Paramount was the defendant in a federal action brought in 2008 by investors following an unsuccessful investment venture. The district court entered judgment in favor of Paramount, and the judgment was affirmed on appeal. While the investors’ appeal was pending, Paramount commenced this action in Supreme Court, alleging breach of contract. The investors moved to dismiss on the basis of res judicata. Supreme Court denied the motion, but the Appellate Division reversed. The Court of Appeals affirmed, holding (1) pursuant to federal principles of claim preclusion - the applicable rules of decision in this case - Paramount’s breach of contract claim was transactionally related to the investor’s claims in the federal case, amount to the same claim for purposes of res judicata; and (2) because Paramount’s claim was not asserted in the parties’ prior federal action, it was now barred. View "Paramount Pictures Corp. v. Allianz Risk Transfer AG" on Justia Law

Turtle Creek Crossing, LLC, a minority interest holder in Kimco Hattiesburg, L.P., filed an action in circuit court after it learned it would receive no distribution from the sale of the partnership’s only asset, a multimillion-dollar shopping center. In its complaint, Turtle Creek alleged its fellow partners breached their fiduciary duties and conspired with each other, the partnership, and a sister partnership to market and sell the asset in such a way as to keep Turtle Creek from profiting. According to the defendants, the predominant claim was for an accounting - an equitable claim that belonges in chancery court; had this case been filed in chancery court, there would be a strong argument for the chancery court’s original jurisdiction over the accounting claim, as well as pendant jurisdiction over the legal claims. Turtle Creek did not file this action in chancery court. It filed it in circuit court. And the circuit court also had original jurisdiction, not only over the accounting claim, but also Turtle Creek’s other legal claims. Because Turtle Creek chose a forum with proper subject-matter jurisdiction, the Mississippi Supreme Court determined that choice must be respected. The Supreme Court affirmed the circuit court’s denial of the motion to transfer and remanded for further proceedings. View "KD Hattiesburg 1128, Inc. v. Turtle Creek Crossing, LLC" on Justia Law

The Ninth Circuit affirmed the district court's judgment for EpiCept in an action brought by doctors, alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The doctors' claims relate to two patents for a non-FDA approved drug (NP-2) and EpiCept's failure to develop those patents into FDA-approved drugs. The doctors' arguments mainly center on the jury's determination that the doctors materially breached their contract with EpiCept by failing to disclose that Dr. Flores treated burn patients with NP-2. The panel held that the district court did not abuse its discretion in formulating the jury instructions, or in determining that the jury's verdict was not against the clear weight of the evidence; neither the jury instructions given in this case nor the evidence presented at trial warrant the do-over the doctors demanded; the district court's response to the jury's question also did not merit a new trial because the jury's question was essentially factual and the district court's answer appropriately directed the jury to consider its original instructions and the evidence presented at trial; and because the panel affirmed the jury's finding that the doctors materially breached the contract, the district court's exclusion of the doctor's damages expert was necessarily harmless. View "Crowley v. EpiCept Corp." on Justia Law

The Ninth Circuit affirmed the district court's judgment for EpiCept in an action brought by doctors, alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The doctors' claims relate to two patents for a non-FDA approved drug (NP-2) and EpiCept's failure to develop those patents into FDA-approved drugs. The doctors' arguments mainly center on the jury's determination that the doctors materially breached their contract with EpiCept by failing to disclose that Dr. Flores treated burn patients with NP-2. The panel held that the district court did not abuse its discretion in formulating the jury instructions, or in determining that the jury's verdict was not against the clear weight of the evidence; neither the jury instructions given in this case nor the evidence presented at trial warrant the do-over the doctors demanded; the district court's response to the jury's question also did not merit a new trial because the jury's question was essentially factual and the district court's answer appropriately directed the jury to consider its original instructions and the evidence presented at trial; and because the panel affirmed the jury's finding that the doctors materially breached the contract, the district court's exclusion of the doctor's damages expert was necessarily harmless. View "Crowley v. EpiCept Corp." on Justia Law

The plaintiffs were four companies with common owners and operators: Halifax-American Energy Company, LLC; PNE Energy Supply, LLC (PNE); Resident Power Natural Gas & Electric Solutions, LLC (Resident Power); and Freedom Logistics, LLC d/b/a Freedom Energy Logistics, LLC (collectively, the “Freedom Companies”). The defendants were three companies and their owners: Provider Power, LLC; Electricity N.H., LLC d/b/a E.N.H. Power; Electricity Maine, LLC; Emile Clavet; and Kevin Dean (collectively, the “Provider Power Companies”). The Freedom Companies and the Provider Power Companies were engaged in the same business, arranging for the supply of electricity and natural gas to commercial and residential customers in New Hampshire and other New England states. The parties’ current dispute centered on a Freedom Company employee whom the defendants hired, without the plaintiffs’ knowledge, allegedly to misappropriate the plaintiffs’ confidential and proprietary information. According to plaintiffs, defendants used the information obtained from the employee to harm the plaintiffs’ business by improperly interfering with their relationships with their customers and the employee. A jury returned verdicts in plaintiffs’ favor on many of their claims, including those for tortious interference with customer contracts, tortious interference with economic relations with customers, tortious interference with the employee’s contract, and misappropriation of trade secrets. The jury awarded compensatory damages to plaintiffs on each of these claims, except the misappropriation of trade secrets claim, and included in the damages award attorney’s fees incurred by plaintiffs in prior litigation against the employee for his wrongful conduct. Subsequently, the trial court awarded attorney’s fees to the plaintiffs under the New Hampshire Uniform Trade Secrets Act (NHUTSA). On appeal, defendants challenged: (1) the jury’s verdicts on plaintiffs’ claims for tortious interference with customer contracts and the employee’s contract; (2) the jury’s award of damages for tortious interference with customer contracts and tortious interference with economic relations, and its inclusion in that award of the attorney’s fees incurred in the plaintiffs’ prior litigation against the employee; and (3) the trial court’s award of attorney’s fees to plaintiffs under the NHUTSA. Finding no reversible error, the New Hampshire Supreme Court affirmed. View "Halifax-American Energy Company, LLC v. Provider Power, LLC" on Justia Law