Justia Contracts Opinion Summaries

Petitioner Timothy Gognat appealed an appellate court's decision that awarded summary judgment to Respondent Chet Ellsworth, Steven Smith and MSD Energy, Inc. In his suit, Mr. Gognat alleged that Respondents misappropriated certain trade secrets he disclosed to them. In the late 1990s, Mr. Gognat developed information relating to "probable" oil and natural gas reserves in the Western Kentucky Area. This information included technical, geographical, geological and business maps, charts, plans, interpretations, calculations, summaries, and other documents. Mr. Gognat shared this information with Mr. Ellsworth, and the two created a joint venture, MSD Energy, to eventually develop the reserves. Mr. Gognat maintained that Respondents misappropriated the trade secrets in the documents by acquiring leases in Western Kentucky without adequately compensating him pursuant to the joint venture. The district court found that the statute of limitations barred Mr. Gognat's claim, and the appellate court affirmed that decision. On appeal to the Supreme Court, Mr. Gognat argued that his claim against Respondents was premised solely on activities dating from 2005. Upon careful consideration of the arguments and the applicable legal authority, the Supreme Court affirmed the appellate court's decision. The Court found that the undisputed facts demonstrated that all of the proprietary information alleged to have been misappropriated constituted a single trade secret and this was known to Mr. Gognat more than three years prior to filing his complaint. Therefore, Mr. Gognat's claim was barred by the applicable statute of limitations.

Petitioner Lucht's Concrete Pumping sought to enforce a non-compete agreement signed by Respondent Tracy Horner, a former at-will employee. Because Mr. Horner was an at-will employee at the time he signed the agreement, Lucht's argued that its forbearance from terminating Mr. Horner constituted adequate consideration for the non-compete agreement. The appellate court held that continued employment did not constitute adequate consideration once an employee started working for an employer because the employee is in the same position as he was before he signed the agreement. Upon careful consideration of the arguments and the applicable legal authority, the Supreme Court reversed the appellate court's decision. The Court found that an employer that forbears from terminating an existing at-will employee forbears from exercising a legal right, and that constitutes adequate consideration. The Court remanded the case for further proceedings.

Respondent Lincoln General Insurance Companyâs insured drove a rental car under the influence of methamphetamines, and led police on a high-sped car chase that ended when he struck a vehicle containing Petitioner Julie Bailey and her son. Her son was killed. The insured pled guilty to five felonies, including second-degree murder. The insured assigned his rights to Petitioner to collect on a $1 million excess-insurance policy issued by Lincoln General. Lincoln General denied coverage for damages caused by the insured, relying on an exclusion in the rental agreement that voided coverage if the car was used to commit a crime that could be charged as a felony. The trial court and the court of appeals held that the criminal-acts exclusion of the policy was enforceable. The Supreme Court affirmed the lower courtsâ decisions to uphold the criminal-acts exclusion of the insurance policy, finding that Lincoln Generalâs use of the exclusion was a proper exercise of its freedom to contract and provide coverage or damages caused by fortuitous events instead of for damages caused by intentionally criminal acts.

The Supreme Court reviewed the appellate courtâs decision against Plaintiffs Jack and Danette Steele. In their claim, Plaintiffs alleged that attorney Katherine Allen gave them incorrect information about a statute of limitations, which led to missing a filing deadline in a negligence suit. The trial court dismissed both their claims of negligent misrepresentation and professional negligence. Plaintiffs only appealed the dismissal of their negligent misrepresentation claim. The appellate court held that Plaintiffs had a claim against the attorney. However, the Supreme Court disagreed, finding that Plaintiffsâ evidence was not sufficient to support their claim. The Court reversed the decision of the appellate court and remanded the case for further proceedings.