Justia Contracts Opinion Summaries

Lincoln Park’s dire financial condition led Michigan officials to place the city under the purview of an Emergency Manager pursuant to the Local Financial Stability and Choice Act, Mich. Comp. Laws 141.1541. Emergency Manager Coulter, with the approval of Michigan’s Treasurer, issued 10 orders that temporarily replaced Lincoln Park retiree health-care benefits with monthly stipends that retirees could use to purchase individual health-care coverage. Retirees filed sui under 42 U.S.C. 1983, asserting violations of the Contracts Clause, the Due Process Clause, and the Takings Clause. The district court rejected the Treasurer’s motion to dismiss, arguing qualified immunity and Eleventh Amendment immunity. The Sixth Circuit reversed. The court held, as a matter of first impression, that an alleged Contracts Clause violation cannot give rise to a cause of action under section 1983. With respect to other constitutional claims, the claimed property right derives from contract; a state contract action would be sufficient to safeguard the retirees’ contractual property rights. Because the state contract action is available as a remedy for any uncompensated taking the challenges to the constitutionality of Coulter’s orders are not ripe for resolution. As the claims fail on the merits, there is no need to evaluate the alleged immunity defenses. View "Kaminski v. Coulter" on Justia Law

Gary Jet began operating as a Fixed Base Operator (FBO) at the Authority's Gary/Chicago International Airport in 1991. The 2006 “Minimum Standards,” regulations governing FBOs, contained a 1.5% charge on gross revenue for commercial FBO services beginning in 2001, “pending the expiration of existing leases which do not incorporate these terms.” Gary Jet’s lease did not contain this provision. During negotiations for a new lease, the parties agreed that Gary Jet would instead pay “supplemental rent” of 10% of certain fees. A January 2007 “First Amended Lease” with a 39-year term, required Gary Jet to pay base rent plus supplemental rent and stated Gary Jet “shall abide by” the Minimum Standards, except when they conflict with the 2007 Lease. The lease stated that the Minimum Standards “shall be … made applicable to” subsequent lease agreements. In 2013, Gary Jet sued for breach of contract. The parties entered settled in 2014. Gary Jet agreed that New Minimum Standards controlled any conflict with its lease. A 2014 revised lease stated that the Minimum Standards controlled any conflicts. The initial draft of new Minimum Standards did not require Gary Jet to pay a percentage of gross revenue. In 2015, the Authority stated that it intended require that each FBO pay a percentage of gross revenues. Gary Jet objected, but the Authority approved the New Minimum Standards with the provision. The Seventh Circuit affirmed dismissal of Gary Jet’s suit under the Contracts Clause. Gary Jet cannot plausibly demonstrate that it is without a remedy for any violation of its contractual rights, which is essential to a Contracts-Clause claim. View "Gary Jet Center, Inc. v. AFCO AvPORTS Management, LLC" on Justia Law

Jewels by Park Lane, Inc. ("JBPL"), and Kathy Cassidy, the national director for JBPL, sought a writ of mandamus compelling the Circuit Court to vacate its order denying their motion to dismiss an action against them on the ground of improper venue arising out of a forum-selection clause, and to enter an order dismissing the case. JBPL was a multilevel marketing company that sold jewelry through independent contractors who host parties offering JBPL's jewelry line for sale. Jennifer Miller became a “director” for LBPL. Miller sued JBPL and Cassidy, alleging JBPL promised to employ her for a 12-month period and to pay her $4,000 a month for that period. Miller set out claims alleging account stated, open account, breach of contract, and fraud. Miller sought compensatory damages, punitive damages, and attorney fees. The employment agreement contained a “forum selection clause” in which any disputes between the parties would be settled in accordance with the laws of Illinois. Miller admitted that the director agreement contained a forum selection clause but argued that she would not have entered into the agreement but for the fraud perpetuated by JBPL and Cassidy. The Alabama Supreme Court concluded JBPL and Cassidy have shown a clear legal right to have the action against them dismissed on the basis that venue in the Tallapoosa Circuit Court was, by application of the outbound forum-selection clause, improper. The trial court exceeded its discretion in denying their motion to dismiss Miller's action. View "Ex parte Jewels by Park Lane, Inc." on Justia Law

This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

The circuit court determined that appropriations made by ordinances or resolutions of the cities of Little Rock and North Little Rock (Appellants) to the cities’ chambers of commerce and related economic development entities were in violation of article 12, section 5 of the Arkansas Constitution. The court concluded that Appellants had appropriated city funds to private corporations using “service contracts” that violated article 12, section 5 and were invalid due to lack of consideration and absence of benefits to the taxpayers. The court permanently enjoined Appellants from passing such ordinances or resolutions. The Supreme Court remanded the case to the circuit court with instructions to lift the injunction and dismiss Appellees’ complaint, holding that an amendment to article 12, section 5 rendered the basis for the circuit court’s injunction moot. View "Stodola v. Lynch" on Justia Law

Plaintiff, an African-American, filed suit against defendants after her application to lease a space for her hair salon was denied. Plaintiff alleged that the denial infringed her right to freedom from racial discrimination in the making of a contract. The district court granted summary judgment for defendants. The court affirmed the district court's alternative conclusion that plaintiff failed to rebut the legitimate, nondiscriminatory reasons defendants proffered for denying her lease application. Defendants' reasons included: odors emanating from the salon would disturb the residential tenants on the upper floors; plaintiff's business would not survive given the number of other salons in the area; a salon would not generate cross-shopping with other commercial tenants; plaintiff's credit score was too low; and defendants would not break even given the high cost of building out the unit. View "Flournoy v. CML-GA WB, LLC" on Justia Law

Plaintiffs brought a lawsuit against their insurance carrier (Defendant), claiming that Defendant had incorrectly denied coverage. The case proceeded to a jury trial. The jury’s unanimous verdict was for Defendant. Thereafter, Plaintiffs filed a motion for a new trial after learning that the jury foreperson had a prior felony conviction, arguing that the juror was not qualified to serve on the jury under 28 U.S.C. 1865(b)(5). The district court denied the motion for a new trial, concluding that Plaintiffs had not shown that the juror’s service deprived them of a fundamentally fair trial. The First Circuit affirmed, holding that the juror’s inclusion was not fatal to the jury’s verdict, and therefore, the district court properly denied Plaintiffs’ new-trial motion. View "Faria v. Harleysville Worcester Insurance Co." on Justia Law

In 1997, Aaron sustained a catastrophic brain injury at birth due to the negligence of employees at Lee Memorial. The family retained the law firm, under a contingency fee agreement providing for payment of 40 percent of any recovery if a lawsuit was filed, plus costs, and stating that if "one of the parties to pay my claim for damages is a governmental agency, I understand that Federal and Florida Law may limit the amount of attorney fees ... in that event, I understand that the fees owed ... shall be the amount provided by law.” A jury awarded the child $28.3 million, the mother $1.34 million, and the father $1 million. Because the hospital was an independent special district of the state, the court enforced the sovereign immunity damage limitations and entered a judgment for $200,000, which was affirmed. The firm pursued a two-year lobbying effort to secure a claims bill from the Legislature. In 2012 the Legislature passed a claims bill, directing Lee Memorial to pay $10 million, with an additional $5 million to be paid in annual installments to a special needs trust for Aaron, stating that payment of fees and costs from those funds shall not exceed $100,000. No funds were awarded for the parents. The firm petitioned the guardianship court to approve a $2.5 million for attorneys’ fees and costs. The court denied the request. On appeal, the district court affirmed. The Supreme Court of Florida reversed, holding that the fee limitation in the claims bill is unconstitutional and may not stand when such a limitation impairs a preexisting contract. View "Searcy, Denney, Scarola, Barnhart & Shipley. v. Florida" on Justia Law

Before 2013, the surviving spouse of a member of Chattanooga’s Fire and Police Pension Fund could receive benefits after the member died without incurring a proportional reduction in the member’s lifetime benefits. In 2012, the city removed this “default death benefit” for members who were not eligible to retire as of January 1, 2013. Dodd was not eligible to retire on that date and opted for a five-percent reduction in current, lifetime benefits so that his wife could receive an additional benefit upon his death. Dodd sued, asserting claims under the federal Contract Clause, Due Process Clause, and Takings Clause, and Tennessee’s Law of the Land Clause. Dodd also argued that the 2012 amendment was not validly enacted under local law. The district court granted the city summary judgment on all claims. The Sixth Circuit affirmed. Because Dodd does not have a contract or property right to the default death benefit, his constitutional claims fail. Although Dodd’s interest in some future benefits vested after 10 years of service, but Dodd did not become entitled to the default death benefit when he hit 10 years. Dodd’s challenge to the validity of the amendment’s enactment is also without merit. View "Dodd v. City of Chattanooga" on Justia Law

Pure Wafer, a facility that cleans silicon wafers, filed suit against the City, challenging Ordinance No. 4856-1313. The Ordinance imposes limits on the pollutants that industrial users, like Pure Wafer, are permitted to discharge into the City’s sewer system. Pure Wafer claims that by enacting the Ordinance, the City impaired the obligation of its contract with Pure Wafer and committed at least two different breaches of contract. The district court entered judgment for Pure Wafer and awarded Pure Wafer a permanent injunction. The court concluded that the City has not impaired the obligation of its contract with Pure Wafer in violation of the Contracts Clause of the Constitution, because the Ordinance has not altered the ordinary state-law remedies to which Pure Wafer would otherwise be entitled if it successfully proves a breach of contract. The court explained that the City might very well have breached its contract but that does not necessarily mean it has violated the Contracts Clause. Therefore, the court reversed as to the Contracts Clause claim. The court agreed, however, with Pure Wafer's alternative claim that the City has breached the contractual obligations it undertook in the Development Agreement. In this case, the City agreed to accept such effluent as the parties knew Pure Wafer would need to discharge in order to maintain a viable business, and the City agreed to bear the financial risk that State-initiated regulatory changes would make complying with such promise more costly than it was when the parties entered into the Agreement. Therefore, the court concluded that the City may not force Pure Wafer to absorb the costs needed to bring the City into line with the terms of its Aquifer Protection Permit. The court explained that enforcing the Ordinance against Pure Wafer would eviscerate the benefit of Pure Wafer’s bargain; the City cannot do so without putting itself in breach of the Agreement. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Pure Wafer Inc. v. City of Prescott" on Justia Law