Justia Contracts Opinion Summaries

The Ninth Circuit affirmed the district court's dismissal of plaintiff's action based on a forum-selection clause in share purchase agreements that required disputes related to the parties' agreement be adjudicated in California state court, rather than Washington state court. The panel held that plaintiffs failed to carry their heavy burden of showing the sort of exceptional circumstances that would justify disregarding a forum-selection clause. Applying federal contract law to interpret the scope of the forum-selection clause, the panel held that the forum-selection clause here applied to any disputes arising out of or related to the Share Purchase Agreements and plaintiffs' claims that defendant violated the Washington State Securities Act constituted such a dispute. The panel rejected plaintiffs' claims to the contrary and held that the district court did not abuse its discretion in dismissing the complaint. View "Sun v. Advanced China Healthcare, Inc." on Justia Law

The Supreme Court reversed the circuit court’s judgment dismissing the the claims filed by the Board of Trustees of the Missouri Petroleum Storage Tank insurance Fund, by and through the Missouri attorney general (collectively, the State), against Pilot Travel Centers, LLC, holding that the appeal was timely and that the attorney general had authority to file this action on behalf of the Board.The State brought this action claiming breach of contract and, in the alternative, unjust enrichment. The circuit court sustained Pilot’s motion to dismiss for lack of standing, concluding that neither the Board nor the attorney general had authority to bring this lawsuit. The State appealed. The Supreme Court reversed, holding (1) under the procedural posture of this case, the State’s appeal was timely; and (2) the attorney general is authorized to sue Pilot on behalf of the Board under Mo. Rev. Stat. 27.060, and the Board had standing to sue Pilot for breach of contract. View "State ex rel. Attorney General v. Pilot Travel Centers, LLC" on Justia Law

In 2009 Blanchard, a Chicago law firm, provided legal services to an Indian pharmaceutical company, Lupin India, and its American subsidiary, Lupin USA, concerning the patentability of a generic birth‐control drug that Lupin India planned to launch in the U.S. through Lupin USA. When the Lupin companies initially sought Blanchard’s advice, the firm sent an engagement letter outlining its hourly fees and other terms. Neither Lupin India nor Lupin USA signed the letter, but Blanchard provided the requested legal services and the companies, at first, paid the firm for its work. In October 2009 Blanchard sent its two final invoices, which went unpaid. Seven years later Blanchard sued the Lupin companies for breach of contract and unjust enrichment. A district judge dismissed both claims as untimely. The Seventh Circuit affirmed in part. The unjust enrichment claim is untimely, having accrued in 2009 when Blanchard furnished the services and the Lupin companies did not pay. The five‐year statute of limitations expired long before suit was commenced. The contract claim is timely, however. Though the engagement letter is unsigned, it counts as a written contract under Illinois limitations law, and the claim for breach is therefore governed by a ten‐year statute of limitations. View "Blanchard & Associates v. Lupin Pharmaceuticals, Inc." on Justia Law

Paysys Atos non‐exclusive rights to use Paysys software and to grant licenses for that software within a specified territory. The agreement provided that in litigation with respect to a territorial violation, the prevailing party would be entitled to an award of its reasonable attorneys’ fees. Paysys sued Atos for breach, alleging multiple violations of those territorial restrictions. Three years later, 12 of Paysys’s 13 claims had been dismissed. Paysys sought a dismissal with prejudice of its remaining breach of contract claim, offering to provide Atos a perpetual, global software license. Atos asserted that it would consent if the court recognized Atos as the “prevailing party.” Paysys argued that if such a condition were imposed, it should be entitled to withdraw its motion. The district court granted Paysys’s motion on the condition that it pay Atos’s attorney’s fees, finding that Atos had succeeded in getting most of Paysys’s claims dismissed. The court held that Paysys was not entitled to withdraw its motion because the fee‐shifting obligation was a contractual one. The Second Circuit vacated. Paysys was entitled to an opportunity to withdraw its motion rather than acquiesce to the court’s terms. When a plaintiff files a motion for dismissal under Rule 41(a)(2), it takes on the risk is that its motion will be denied, not that the motion will carry additional consequences to which the plaintiff does not consent. View "Paysys International, Inc. v. Atos IT Servs. Ltd." on Justia Law

Allstate Insurance Company denied underinsured motorist (UIM) coverage to Nathan Ball for an accident involving his own vehicle after determining he was not an insured person under his then-fiancée’s parents’ Allstate automobile insurance policy. Ball contended that his fiancée was a “policyholder” for purposes of her parents’ policy, a necessary predicate to his argument for UIM coverage under the policy. But the policy declarations page did not list “policyholders,” it listed only “named insureds” and “drivers.” The superior court granted summary judgment on grounds that the policy language was not ambiguous because “policyholder” referred only to the parents, the “named insureds,” that the fiancée as only a listed driver, had no objectively reasonable expectation that she was a policyholder, and, therefore, that Allstate did not have a duty to provide Ball UIM coverage. The Alaska Supreme Court agreed “policyholder” encompassed only the named insureds, not listed drivers, and therefore affirmed the superior court’s decision. View "Ball v. Allstate Insurance Company" on Justia Law

Reading, a Pennsylvania not-for-profit health system, issued auction rate securities (ARSs) to finance capital projects. J.P. Morgan was the underwriter and broker-dealer. Reading claims that J.P. Morgan and others artificially propped up the ARS market through undisclosed support bidding; when they stopped in 2008, the market collapsed. Reading filed state law claims and demanded arbitration with the Financial Industry Regulatory Authority (FINRA). The 2005 and 2007 broker-dealer agreements state “all actions and proceedings arising out of” the agreements or ARS transactions must be filed in the Southern District of New York. Reading filed a claim under FINRA Rule 12200, which requires a FINRA member (J.P. Morgan) to arbitrate any dispute at the customer’s request. J.P. Morgan refused, arguing that the forum-selection clauses in the 2005 and 2007 broker-dealer agreements constituted a waiver of Reading’s right to arbitrate under Rule 12200. The Third Circuit affirmed the Eastern District of Pennsylvania, which resolved the transfer dispute before the arbitrability dispute, declined to transfer the action, and required J.P. Morgan to submit to arbitration. Reading’s right to arbitrate is not contractual but arises out of a binding, regulatory rule, adopted by FINRA and approved by the SEC. Condoning an implicit waiver of Reading’s regulatory right to arbitrate would erode investors’ ability to use a cost-effective means of resolving allegations of misconduct and undermine FINRA’s ability to oversee and remedy such misconduct. View "Reading Health System v. Bear Stearns & Co., Inc." on Justia Law

The Supreme Court affirmed the district court’s order awarding attorney fees and costs to Defendant on its counterclaim after the court determined Defendant to be the “prevailing party” following bifurcated trials, in which the parties settled as to damages on Plaintiff’s claims in an amount that exceeded Defendant’s damages judgment on its counterclaim.Specifically, the Court held that the district court did not abuse its discretion by failing to aggregate the settlement recovery and damages award in this case because (1) there is no Nevada statute or court rule that requires the trial court to offset a damages judgment on one party’s counterclaim by the amount recovered by another party in settling its claim to determine which side is the prevailing party; and (2) the most reasonable interpretation of Nev. Rev. Stat. 18.010(2)(a) and 18.020(3) precludes the use of settlement recovery for this purpose. View "Northern Nevada Homes, LLC v. GL Construction, Inc." on Justia Law

This appeal involved an Idaho district court’s denial of a jury trial under Rule 39(b) of the Idaho Rules of Civil Procedure and the decision to pierce the corporate veil. The dispute stemmed from a transaction between Kym Nelson, who acted on behalf of KDN Management Inc., (“KDN”), and WinCo, Foods, LLC (“WinCo”), for concrete floor work that KDN performed in several WinCo stores. The district court found that KDN had overcharged WinCo for the work, and awarded WinCo $2,929,383.31 in damages, including attorney fees. The district court also held Nelson and two entities associated with her, SealSource International, LLC, and KD3 Flooring LLC, jointly and severally liable for WinCo’s damages. Nelson, SealSource and KD3 argued on appeal to the Idaho Supreme Court that the trial court erred in concluding: (1) Nelson was personally liable for damages relating to this dispute; and (2) that KDN, SealSource and KD3 were alter egos of one another. Nelson and the corporate co-defendants also argued the district court abused its discretion by denying their motion for a jury trial under Rule of Civil Procedure 39(b). Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed the judgment and award of attorney fees to WinCo. View "KDN Management, Inc. v. WinCo" on Justia Law

CGI Technologies and Solutions, Inc. ("CGI"), and Clinton Carter, in his capacity as Director of the Alabama Department of Finance, separately petitioned the Alabama Supreme Court for a writ of mandamus directing the Montgomery Circuit Court to dismiss, for lack of subject-matter jurisdiction, an action filed by Jim Zeigler challenging a contract between CGI and the State of Alabama on the basis that the contract violated Alabama's competitive-bid law. In 1982, the State of Alabama, through the Department of Finance, entered into a software contract with American Management Systems, Inc. ("AMS"), that granted the State a license to install a local-government finance-system package on computers in the Finance Department. There was no dispute that the 1982 contract was competitively bid. In 2004, AMS was acquired by CGI. Over subsequent years, the 1982 contract was amended; Amendment 13 became known as the State of Alabama Accounting Resources System ("STAARS"). The State and CGI entered into four amendments addressing STAARS between March 2014 and September 2015. On March 31, 2017, the State and CGI entered into a letter agreement memorializing an understanding "relative to concluding work" on STAARS. The letter agreement noted that "CGI acknowledges the State's intent to begin transition to an in-house delivery plan or to award a new contract for operational services and support for STAARS within 90 days of the date of this letter, after which, CGI will provide Disengagement Services." Also, the letter agreement recognized a "winding down" of the contractual relationship between CGI and the State, which was to conclude by September 30, 2017. Other than the "winding-down period," the State agreed that "CGI has satisfied its contractual obligations with respect to the STAARS project and software and services provided by CGI under the STAARS Contract." The State contracted for further services from CGI after October 1, 2017, but not extending beyond November 29, 2017. According to Zeigler, in December 2015 he first learned that the amendments authorizing and implementing STAARS had not been competitively bid. CGI filed a motion to dismiss the amended complaint, arguing Zeigler lacked standing to bring this suit, and his statutory authority for his cause of action only allowed as remedy enjoining the contract that violated the competitive-bid law. The circuit court dismissed all but count one of Zeigler's complaint, leading to this request for mandamus relief. Because performance under the 1982 contract, including the STAARS amendments, was complete. the Alabama Supreme Court found there was no performance to enjoin, and no further remedy available to Zeigler for the alleged violation of the Competitive Bid Law. Therefore, the Court agreed with petitioners that Zeigler's claims were moot, and granted the writs. View "Ex parte Carter, in his capacity as Director of Finance for the State of Alabama." on Justia Law

This is the third appeal that comes to us in this case, which arises out of Patrick and Mary Lafferty’s purchase of a defective motor home from Geweke Auto & RV Group (Geweke) with an installment loan funded by Wells Fargo Bank, N.A. In Lafferty v. Wells Fargo Bank, 213 Cal.App.4th 545 (2013: "Lafferty I"), the Court of Appeal affirmed in part and reversed in part the action brought by the Laffertys against Wells Fargo. Lafferty I awarded costs on appeal to the Laffertys. On remand, the Laffertys moved for costs and attorney fees. The trial court granted costs in part but denied the Laffertys’ request for attorney fees as premature because some causes of action remained to be tried. The Laffertys appealed. In "Lafferty II," the Court of Appeal held the award of costs on appeal did not include an award of attorney fees. Lafferty II also held the Laffertys’ request for attorney fees was prematurely filed. After issuance of the remittitur in Lafferty II, the parties stipulated to a judgment that contained two key components: (1) their agreement the Laffertys had paid $68,000 to Wells Fargo under the loan for the motor home; and (2) Wells Fargo repaid $68,000 to the Laffertys. After entry of the stipulated judgment, the trial court awarded the Laffertys $40,596.93 in prejudgment interest and $8,384.33 in costs. The trial court denied the Laffertys’ motion for $1,980,070 in post-trial attorney fees, $464,220 in post-appeal attorney fees, and $16,816.15 in non-statutory costs. Wells Fargo appealed the award of prejudgment interest and costs, and the Laffertys cross-appealed the denial of their requests for attorney fees and nonstatutory costs. The Court of Appeal concluded resolution of this appeal and cross-appeal turned on the meaning of title 16, section 433.2 of the Code of Federal Regulations, or the "Holder Rule." The Court found the Laffertys were limited under the plain meaning of the Holder Rule to recovering no more than the $68,000 they paid under terms of the loan with Wells Fargo. Consequently, the trial court properly denied the Laffertys’ request for attorney fees and nonstatutory costs in excess of their recovery of the amount they actually paid under the loan to Wells Fargo. In holding the Laffertys were limited in their recovery against Wells Fargo, the Court of Appeal rejected the Laffertys’ claims the Holder Rule violated the First Amendment, due process, or equal protection guarantees of the federal Constitution. However, the Court concluded the trial court did not err in awarding costs of suit and prejudgment interest to the Laffertys. View "Lafferty v. Wells Fargo Bank, N.A." on Justia Law