Justia Contracts Opinion Summaries

In the 1990s, Defendants (Employers) created a sick-leave policy allowing employees to bank their sick leave in a continued illness bank (CIB). In 2002, Employers modified the terms of the CIB to create the CIB pay-out benefit, which allowed a capped amount of unused CIB hours to be paid to departing employees who completed twenty-five years or more of service. In 2008, Employers terminated the CIB pay-out benefit, and only employees who had reached twenty-five years of employment with Employers were entitled to their earned but unused CIB hours upon termination. Plaintiffs in this case represented employees who had not reached twenty-five years of service before the benefit ended. Plaintiffs brought a class action complaint against Employers. The district court granted summary judgment for Employers. The Supreme Court affirmed, holding that the district court did not err in determining that (1) Employers’ policies did not constitute a standardized group employment contract; (2) the CIB pay-out benefit was not deferred compensation or wages under the Montana Wage and Wage Protection Act; and (3) the covenant of good faith and fair dealing did not apply to Plaintiffs’ claims. View "Chipman v. Northwest Healthcare Corp." on Justia Law

Steve Sangwin, a State employee, was a qualified subscriber and beneficiary of the State of Montana Employee Benefits Plan (Plan), which was administered by Blue Cross and Blue Shield of Montana (BCBS). Steve's daughter, McKinley, was also a beneficiary under the Plan. This case arose after BCBS denied a preauthorization request for a medical procedure for McKinley on the grounds that the procedure was "experimental for research." Steve and his wife (collectively, the Sangwins) initiated this action by filing an amended complaint setting forth five counts, including a request for certification of a class action. The Sangwins defined class members as other beneficiaries of the Plan who had their employee benefits denied by the State based on the experimental exclusion for research in the past eight years. The district court granted the Sangwins' motion for class certification. The State appealed. The Supreme Court (1) affirmed the district court's order defining the class; but (2) reversed and remanded with respect to the question certified for class treatment, holding that the district court abused its discretion in specifying for class treatment the question of whether the State breached its contract of insurance with the plaintiffs. View "Sangwin v. State" on Justia Law

In 1994, Norem purchased a “Flexible Premium Variable Life Insurance Policy” from Lincoln Benefit. With variable life insurance, part of the premium is allocated to the insurer’s investment funds, called subaccounts. Policyholders may move their investments within the subaccounts and the death benefit, which is guaranteed not to fall below a certain amount. With variable universal life, the policyholder may easily invest and alter insurance coverage. The policy is comprised of the policy value, which represents the investment component, and its net amount at risk, which represents the insurance component. Norem purchased his policy because he wanted both life insurance and an investment vehicle for the proceeds from the sale of his ownership of a medical business. The policy has a “cost of insurance” (COI) charge deducted monthly from the policy. The policy explains how the COI rate is calculated. Norem filed a putative class action on behalf of himself and other similarly situated policyholders, claiming that Lincoln Benefit breached the terms of its policies in its method of calculating the COI rate.Before deciding on class certification, the district court granted summary judgment to Lincoln Benefit, concluding that its calculation of COI rates did not breach the contract. The Seventh Circuit affirmed. View "Norem v. Lincoln Benefit Life Co." on Justia Law

Crockett’s former law firm subscribed to a LexisNexis legal research plan that allowed unlimited access to certain databases for a flat fee. Subscribers could access other databases for an additional fee. According to Crockett, LexisNexis indicated that a warning sign would display before a subscriber used a database outside the plan. Years after subscribing, Crockett complained that his firm was being charged additional fees without any warning that it was using a database outside the Plan. LexisNexis insisted on payment of the additional fees. The firm dissolved. Crockett’s new firm entered into a LexisNexis subscription agreement, materially identical to the earlier plan; it contains an arbitration clause. Crockett filed an arbitration demand against LexisNexis on behalf of two putative classes. One class comprised law firms that were charged additional fees. The other comprised clients onto whom such fees were passed. The demand sought damages of more than $500 million. LexisNexis sought a federal court declaration that the agreement did not authorize class arbitration. The district court granted LexisNexis summary judgment. The Sixth Circuit affirmed. “The idea that the arbitration agreement … reflects the intent of anyone but LexisNexis is the purest legal fiction,” but the one-sided adhesive nature of the clause and the absence of a class-action right do not render it unenforceable. The court observed that Westlaw’s contract lacks any arbitration clause.View "Reed Elsevier, Inc. v. Crockett" on Justia Law

This case stemmed from the Deepwater Horizon drilling platform oil spill. On appeal, BP challenged the district court's decision upholding the Claims Administrator's interpretation of the settlement agreement between it and the class of parties injured in the oil spill and the district court's dismissal of its action for breach of contract against the Administrator and denial of its motion for a preliminary injunction. The court concluded that the balance of equities favored a tailored stay where those who experienced actual injury traceable to loss from the Deepwater Horizon accident continued to receive recovery but those who did not receive their payments until this case was fully heard and decided through the judicial process weighed in favor of BP. Accordingly, the court reversed the denial of the preliminary injunction and instructed the district court to expeditiously craft a narrowly-tailored injunction that allowed the time necessary for deliberate reconsideration of significant issues on remand. The court affirmed the district court's dismissal of BP's suit against the Claim Administrator. View "In Re: Deepwater Horizon" on Justia Law

Plaintiff sued the servicer of his loan (Bank) in a putative class action, asserting that the Bank's requirement that he maintain flood insurance coverage in an amount sufficient to cover the replacement value of his home breached the terms of his mortgage contract. The mortgage was insured by the Federal Housing Administration (FHA). Specifically, Defendant contended that the Bank, under a covenant of the mortgage contract, could not require more than the federally mandated minimum flood insurance. The covenant was a standard uniform covenant prescribed by the FHA pursuant to federal law. The district court dismissed the complaint for failure to state a claim. The judgment of dismissal was affirmed by an equally divided en banc First Circuit Court of Appeals, holding that Plaintiff failed to state a claim for breach of contract, as (1) the Bank's reading of the contract was correct and Plaintiff's was incorrect; (2) Plaintiff could not avoid dismissal on the grounds that his specific understanding or the actions of the parties created an ambiguity; and (3) the United States' position articulated in its amicus brief, which stated that Plaintiff's interpretation of the contract was incorrect, reinforced the Court's conclusion. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law

This case concerned the 2011 NFL lockout. Active NFL players filed a class action suit (Brady suit) against the NFL, alleging violations of the federal antitrust laws and other claims. Retired NFL players also filed suit against the NFL and its teams, alleging antitrust violations (Eller I suit). After both actions were consolidated, the Brady suit was settled, the players re-designated the NFLPA as their collective bargaining agent, the NFL and NFLPA signed a new collective bargaining agreement (CBA) incorporating the settlement terms, the Brady plaintiffs dismissed their action, the lockout ended, and the 2011 NFL season commenced. Carl Eller and other retired NFL players (plaintiffs) then filed this class action (Eller II) against the NFLPA and others. The district court granted defendants' motion to dismiss and plaintiffs appealed, alleging claims for intentional interference with prospective economic advantage under Minnesota law. The court concluded that no reasonable jury could find that plaintiffs had a reasonable expectation of a prospective separate contractual relation with the NFL that would provide more than the increased benefits provided in the 2011 CBA. Even if plaintiffs alleged a reasonable expectation of prospective contractual relations or economic advantage with the NFL, plaintiffs failed to allege facts proving that defendants improperly or wrongfully interfered with these advantageous prospects. Accordingly, the court affirmed the judgment of the district court. View "Eller, et al. v. NFL Players Assoc., et al." on Justia Law

This interlocutory appeal arose from the district court's order certifying a class in Plaintiff's class action against Defendant, Allstate Insurance Company. Plaintiff's class action claim arose out of the Supreme Court's remand of his initial non-class third-party claim against Allstate in Jacobsen I. In Jacobsen I, Plaintiff filed a complaint against Allstate for, among other causes of action, violations of the Montana Unfair Trade Practices Act. Plaintiff sought both compensatory and punitive damages. The Supreme Court ultimately remanded the case for a new trial. On remand, Plaintiff filed a motion for class certification, proposing a class definition encompassing all unrepresented individuals who had either third- or first-party claims against Allstate and whose claims were adjusted by Allstate using its Claim Core Process Redesign program. The district court certified the class. The Supreme Court affirmed the class certification but modified the certified class on remand, holding that the district court did not abuse its discretion by certifying the Mont. R. Civ. P. 23(a)(2) class action but that the certification of class-wide punitive damages was inappropriate in the context of a Rule 23(b)(2) class. Remanded. View "Jacobsen v. Allstate Ins. Co." on Justia Law

Representing a class of truck owner-operators, Walker sued Trailer Transit, a broker of trucking services, for breach of contract in Indiana state court. Trailer Transit removed the suit to federal court under the Class Action Fairness Act (CAFA), section 1332(d)(2). Walker argued that notice of removal was untimely because it was filed more than 30 days after Trailer Transit “first ascertained” that the class’s theory of damages could result in recovery of more than $5 million. The district court denied a motion to remand. The Seventh Circuit affirmed. The earliest possible trigger for removal was Walker’s response to Trailer Transit’s requests for admission seeking clarification of the theory of damages. Even that response did not affirmatively specify a damages figure under the class’s new theory, so the removal clock never actually started to run View "Walker v. Trailer Transit, Inc." on Justia Law

Plaintiffs filed a putative class action lawsuit against Black Hills Federal Credit Union and CUNA Mutual Insurance Society for changing their credit disability insurance policy. The complaint alleged that Defendants wrongfully switched the credit disability insurance policies of 4,461 borrowers. Plaintiffs filed a motion for class certification, but the trial court denied the motion, finding that Plaintiffs did not meet the adequacy requirement or the predominance and superiority requirements of the class certification statutes. The Supreme Court reversed, holding that the trial court erred in its application of the class certification statutes to the facts in this case. Remanded for certification of the class. View "Thurman v. CUNA Mut. Ins. Soc'y" on Justia Law