Justia Contracts Opinion Summaries

Plaintiffs William Pace and Robert Walters leased apartments at Hamilton Cove, a complex in Weehawken, New Jersey, based on advertisements claiming 24/7 security. After moving in, they discovered that the security was not as advertised. They filed a complaint in March 2022, alleging common law fraud and violations of the Consumer Fraud Act (CFA), seeking to certify a class of similarly affected tenants. The leases included a class action waiver, which defendants argued should prevent the class action. Plaintiffs contended the leases were unconscionable contracts of adhesion.The trial court denied defendants' motion to dismiss, finding the complaint sufficiently pled fraud. The Appellate Division affirmed, holding that class action waivers in contracts without mandatory arbitration provisions are unenforceable as a matter of public policy. The court distinguished this case from AT&T Mobility LLC v. Concepcion, which upheld class action waivers in arbitration agreements under the Federal Arbitration Act (FAA). The Appellate Division emphasized New Jersey's public policy favoring class actions for consumer protection.The Supreme Court of New Jersey reviewed the case and reversed the Appellate Division's decision. The Court held that class action waivers in consumer contracts are not inherently contrary to public policy and can be enforceable unless found to be unconscionable or invalid under general contract principles. The Court found that the class action waiver in the lease agreements was clear and unambiguous, and the leases were not unconscionable. Therefore, the class action waiver was enforceable, and plaintiffs must pursue their claims individually. The case was remanded for further proceedings consistent with this opinion. View "Pace v. Hamilton Cove" on Justia Law

The case involves a putative class action of approximately 2,000 payees who received structured settlement annuities to resolve personal injury claims. The plaintiffs, Renaldo White and Randolph Nadeau, alleged that defendants Symetra Life Insurance Company and Symetra Assigned Benefits Service Company wrongfully induced them to cash out their annuities in individualized “factoring” arrangements, whereby they gave up their rights to periodic payments in return for discounted lump sums.The district court certified two nationwide classes under Federal Rule of Civil Procedure 23. The first class consisted of all persons who were annuitants of a structured settlement annuity (SSA) issued by Symetra and who subsequently sold to a Symetra affiliate the right to receive payments from that SSA in a factoring transaction. The second class was a subclass of the first, consisting of all members of the class whose contract defining the annuity at issue included language explicitly stating that the annuitants lack the power to transfer their future SSA payments.The United States Court of Appeals for the Ninth Circuit reversed the district court’s certification of the two nationwide classes. The court held that individual issues of causation will predominate over common ones when evaluating whether defendants’ acts and omissions caused the plaintiffs to enter factoring transactions and incur their alleged injuries. The court also held that the district court erred in certifying the nationwide subclass of plaintiffs whose original settlement agreements with their personal injury tortfeasors contained structured settlement annuity (SSA) anti-assignment provisions. The record indicates that the annuitants hail from a wide array of different states, and some of the settlement agreements have choice of law provisions denoting the law of a state other than the location where the contract was executed. The apparent variations in state law on the enforceability of anti-assignment provisions in SSAs and the need to apply multiple state laws to the subclass raised a substantial question of whether individual issues predominate and how the matter can be fairly managed as a class action. View "WHITE V. SYMETRA ASSIGNED BENEFITS SERVICE COMPANY" on Justia Law

The case involves a dispute between Coinbase, Inc., a cryptocurrency exchange platform, and its users. The users had agreed to two contracts with Coinbase. The first contract, the User Agreement, contained an arbitration provision stating that an arbitrator must decide all disputes, including whether a disagreement is arbitrable. The second contract, the Official Rules for a promotional sweepstakes, contained a forum selection clause stating that California courts have sole jurisdiction over any controversies regarding the promotion. The users filed a class action in the U.S. District Court for the Northern District of California, alleging that the sweepstakes violated various California laws. Coinbase moved to compel arbitration based on the User Agreement’s arbitration provision. The District Court denied the motion, ruling that the Official Rules’ forum selection clause controlled the dispute. The Ninth Circuit affirmed this decision.The Supreme Court of the United States affirmed the Ninth Circuit's decision. The Court held that when parties have agreed to two contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs. The Court rejected Coinbase's arguments that the Ninth Circuit should have applied the severability principle and that the Ninth Circuit erroneously held that the Official Rules’ forum selection clause superseded the User Agreement’s arbitration provision. The Court also dismissed Coinbase's concern that its ruling would invite chaos by facilitating challenges to delegation clauses. The Court concluded that a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by their second. View "Coinbase v. Suski" on Justia Law

The case originated as a class action dispute about the underpayment of oil and gas royalties due on wells in Oklahoma. The plaintiff, Chieftain Royalty Company, sued SM Energy Company, the operator of the wells, under various tort theories, including fraud, breach of contract, and breach of fiduciary duty. In 2015, the claims were settled for approximately $52 million. Following the settlement, Chieftain's counsel moved for attorneys’ fees, and Chieftain sought an incentive award for its CEO, Robert Abernathy. Two class members objected to the awards and appealed. The court affirmed the settlement but reversed the attorneys’ fees and incentive awards, remanding to the district court for further proceedings.On remand, the district court re-awarded the fees and incentive award. The class did not receive notice of the 2018 attorneys’ fees motion as required under Federal Rule of Civil Procedure 23(h)(1), so the court vacated the district court order awarding attorneys’ fees and remanded with instructions to direct class-wide notice of the 2018 attorneys’ fees motion and to re-open the period for objections. The court did not reach the merits of the appellate challenge to the re-awarded attorneys’ fees. The court affirmed the district court’s incentive award to Mr. Abernathy. View "Chieftain Royalty Company v. SM Energy Company" on Justia Law

A group of individuals, including a minor, filed a class action lawsuit against Warner Bros. Entertainment, Inc. for alleged misrepresentations related to the mobile application Game of Thrones: Conquest (GOTC). The plaintiffs claimed that Warner Bros. engaged in false and misleading advertising within the game. In response, Warner Bros. moved to compel arbitration of all claims based on the GOTC Terms of Service, which users agree to by tapping a “Play” button located on the app’s sign-in screen. The district court denied Warner Bros.' motion, finding that the notice of the Terms of Service was insufficiently conspicuous to bind users to them.The case was appealed to the United States Court of Appeals for the Ninth Circuit. The lower court had found that Warner Bros. failed to provide reasonably conspicuous notice of its Terms of Service, thus denying the motion to compel arbitration. The district court focused on whether the context of the transaction put the plaintiffs on notice that they were agreeing to the Terms of Service, concluding that the app did not involve a continuing relationship that would require some terms and conditions.The Ninth Circuit Court of Appeals reversed the district court's decision. The appellate court held that the district court erred in finding that Warner Bros. failed to provide reasonably conspicuous notice. The court found that the context of the transaction and the placement of the notice were both sufficient to provide reasonably conspicuous notice. The court also rejected the plaintiffs' argument that the arbitration agreement was unconscionable due to its ban on public injunctive relief. The court concluded that the unenforceability of the waiver of one’s right to seek public injunctive relief did not make either this provision or the arbitration agreement unconscionable or otherwise unenforceable. The case was remanded for further proceedings. View "KEEBAUGH V. WARNER BROS. ENTERTAINMENT INC." on Justia Law

Yasmin Varela filed a class action lawsuit against State Farm Mutual Automobile Insurance Company (State Farm) after a car accident. Varela's insurance policy with State Farm entitled her to the "actual cash value" of her totaled car. However, she alleged that State Farm improperly adjusted the value of her car based on a "typical negotiation" deduction, which was not defined or mentioned in the policy. Varela claimed this deduction was arbitrary, did not reflect market realities, and was not authorized by Minnesota law. She sued State Farm for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of the Minnesota Consumer Fraud Act (MCFA).State Farm moved to dismiss the complaint, arguing that Varela's claims were subject to mandatory, binding arbitration under the Minnesota No-Fault Automobile Insurance Act (No-Fault Act). The district court granted State Farm's motion in part, agreeing that Varela's claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment fell within the No-Fault Act's mandatory arbitration provision. However, the court found that Varela's MCFA claim did not seek the type of relief addressed by the No-Fault Act and was neither time-barred nor improperly pleaded, and thus denied State Farm's motion to dismiss this claim.State Farm appealed, arguing that Varela's MCFA claim was subject to mandatory arbitration and should have been dismissed. However, the United States Court of Appeals for the Eighth Circuit dismissed the appeal for lack of jurisdiction. The court found that State Farm did not invoke the Federal Arbitration Act (FAA) in its motion to dismiss and did not file a motion to compel arbitration. The court concluded that the district court's order turned entirely on a question of state law, and the policy contained no arbitration provision for the district court to "compel." Therefore, State Farm failed to establish the court's jurisdiction over the interlocutory appeal. View "Varela v. State Farm Mutual Automobile Insurance Co." on Justia Law

The Eleventh Circuit Court of Appeals ruled on a class action lawsuit that involved a life insurance policy dispute between plaintiff Worth Johnson and defendant Protective Life Insurance Company. Johnson alleged that Protective breached its contract by not reassessing and adjusting its cost of insurance (COI) rates based exclusively on expectations of future mortality experience. The district court granted Protective’s motion for judgment on the pleadings, concluding that Protective did not breach its insurance contract.On appeal, the Eleventh Circuit affirmed the district court's decision in part, agreeing that the policy did not require Protective to reassess and redetermine its COI rates based exclusively on its expectations as to future mortality experience. However, the court reversed the district court's dismissal of Johnson's alternative claim that Protective did reassess and redetermine its COI rates, but ignored its expectations as to future mortality experience when doing so. The court remanded the case for further proceedings consistent with its ruling. View "Johnson v. Protective Life Insurance Company" on Justia Law

The Indiana Supreme Court heard a case involving a dispute between Tonia Land and the IU Credit Union (IUCU). When Land became a customer at the credit union, she was given an account agreement that could be modified at any time. Later, when she registered for online banking, she accepted another agreement that allowed the IUCU to modify the terms and conditions of the services. In 2019, the IUCU proposed changes to these agreements, which would require disputes to be resolved through arbitration and prevent Land from initiating or participating in a class-action lawsuit. Land did not opt out of these changes within thirty days as required, which, according to the IUCU, made the terms binding. However, Land later filed a class-action lawsuit against the credit union, which attempted to compel arbitration based on the addendum.The court held that while the IUCU did provide Land with reasonable notice of its offer to amend the original agreements, Land's subsequent silence and inaction did not result in her assent to that offer, according to Section 69 of the Restatement (Second) of Contracts. The credit union petitioned for rehearing, claiming that the court failed to address certain legal authorities and arguments raised on appeal and in the transfer proceedings.Upon rehearing, the court affirmed its original decision, rejecting the credit union's arguments. However, the court also expressed a willingness to consider a different standard governing the offer and acceptance of unilateral contracts between businesses and consumers in future cases. The court found no merit in the credit union's arguments on rehearing and affirmed its original opinion in full. View "Land v. IU Credit Union" on Justia Law

The Supreme Court of Missouri issued an opinion involving a dispute between Tyler Technologies, Inc., and several individual and corporate property owners. The property owners had filed a class-action petition alleging that Tyler Technologies negligently carried out its contractual obligations to assist Jackson County with the 2023 real property assessment. The property owners claimed that Tyler Technologies' failures resulted in some class members not receiving timely notice of increased assessments and others having their property assessments increase by more than 15 percent without a physical inspection.Tyler Technologies filed a motion to dismiss the allegations, arguing that the property owners failed to allege facts showing that Tyler Technologies owed them a duty of care. The circuit court overruled the motion to dismiss, prompting Tyler Technologies to file a petition for a writ of prohibition, which the Supreme Court of Missouri issued as a preliminary writ.After a review, the Supreme Court of Missouri determined that the property owners did not provide sufficient evidence to show that Tyler Technologies owed them a duty of care. The court noted that the duties the property owners described were statutory obligations of the county assessor, not private, third-party contractors like Tyler Technologies. The court also invoked the rule of privity, which generally states that a party to a contract does not owe a duty to a plaintiff who was not a party to the contract. In the court's view, disregarding this rule would expose Tyler Technologies to excessive and unlimited liability and potentially discourage contractors from entering into service contracts due to the fear of obligations and liabilities they would not voluntarily assume.Therefore, the Supreme Court of Missouri held that Tyler Technologies was entitled to dismissal of the disputed counts of the property owners' petition. The court made its preliminary writ of prohibition permanent, barring further action from the circuit court other than dismissing the contested counts with prejudice. View "State ex rel. Tyler Technologies, Inc. v. Chamberlain" on Justia Law

The Supreme Court dismissed this interlocutory appeal of a vacated class certification order and directed the circuit court to remand the case to address motions to compel arbitration, holding that this appeal was moot.Plaintiffs, who represented the estates of former residents of fourteen different nursing homes, alleged breach of contract and unjust enrichment claims against the nursing homes, in violation of the Arkansas Civil Rights act and the Arkansas Deceptive Trade Practices Act. The nursing homes moved to compel arbitration for all but two of the named plaintiffs, after which the plaintiffs moved for class certification. The circuit court granted Plaintiffs' motion for class certification without ruling on the motions to compel arbitration. The nursing homes brought an interlocutory appeal of the class-certification order and petitioned for writ of prohibition, mandamus, and certiorari. The Supreme Court granted the writ petition, vacating the order granting class certification, and ordered the circuit court to rule on the motions to compel before ruling on class certification, holding that the interlocutory appeal of the vacated class-certification order was moot. View "Reliance Health Care, Inc. v. Mitchell" on Justia Law