Justia Contracts Opinion Summaries

The First Circuit affirmed the district court's dismissal of Appellant's claims in three putative class action lawsuits against Defendants - Nestle USA, Inc., Mars, Inc., and The Hersey Company - holding that Appellant did not plausibly state a claim for relief under Mass. Gen. Laws ch. 93A and that Appellant's unjust enrichment claim was foreclosed by the availability of a remedy at law.Appellant alleged that Defendant's failure to disclose on the packaging of their chocolate products that upstream labor abuses existing in their cocoa supply chains violated Chapter 93A and that Defendants had been unjustly enriched by this packaging omission. The district court dismissed the claims. The First Circuit affirmed, holding (1) Appellant did not plausibly state a Chapter 93A unfairness claim; and (2) Appellant's unjust enrichment claims must be dismissed because an adequate remedy at law was available to her through Chapter 93A. View "Tomasella v. Nestle USA, Inc." on Justia Law

Plaintiff Henry Sanchez filed a class action seeking relief based on the Retail Installment Sales Act, N.J.S.A. 17:16C-1 to -61 (RISA). He contended the “initiation fee” charged in defendant Fitness Factory’s gym membership contract, among other provisions, violated RISA. The trial court dismissed Sanchez’s complaint, finding that RISA did not apply to the contract because it was a contract for services. The Appellate Division affirmed. While acknowledging that RISA applied to some services contracts, the Appellate Division found that RISA applied only to contracts that contained a financing arrangement. The New Jersey Supreme Court determined that by its own terms, RISA applied to services contracts. Further, in the statute as written, there was no requirement that a contract include a financing arrangement to be covered by RISA. Judgment was reversed and the matter remanded for further proceedings. View "Sanchez v. Fitness Factory Edgewater, LLC" on Justia Law

The Oklahoma Supreme Court granted certiorari to address first impression questions of: (1) whether a home warranty plan met the definition of an insurance contract; (2) and if it was insurance, whether a forced arbitration clause in such a contract was unenforceable under the Oklahoma Uniform Arbitration Act; (3) whether 12 O.S. 2011 section 1855 of the Oklahoma Uniform Arbitration Act was a state law enacted for the purpose of regulating insurance under the McCarran-Ferguson Act; and (4) whether pursuant to the McCarran-Ferguson Act, did section 1855 preempted the application of the Federal Arbitration Act. The Supreme Court answered all questions in the affirmative. View "Sparks v. Old Republic Home Protection Co., Inc." on Justia Law

In this case where a judgment creditor sought to garnish the judgment debtor's bank account, which, at one time, contained funds both exempt and nonexempt from garnishment, the Supreme Court affirmed the judgment of the county court finding that the bank account consisted solely of exempt funds, holding that funds exempt from garnishment remain exempt, even when commingled with nonexempt funds, so long as the source of exempt funds is reasonably traceable.Plaintiff obtained a judgment against Defendant and sought to garnish Defendant's bank account. The court ordered that the non-exempt funds in the account be transferred to the court. Defendant requested a hearing, asserting that the funds were exempt from garnishment because the only funds in the account were Social Security payments. Plaintiff stated that at one point the account held non-exempt funds commingled with the Social Security funds but that the non-exempt funds had been spent. The county court ruled that the funds were exempt. The district court affirmed. The Supreme Court affirmed, holding that Defendant met his burden to prove that the remaining funds in his account constituted exempt Social Security funds. View "Schaefer Shapiro, LLP v. Ball" on Justia Law

The Supreme Court affirmed the order of the circuit court denying Petitioners' motion to compel arbitration of Respondents' claims against them, holding that a merger clause in the retail sales installment contract (RISC) between the parties served to supplant the arbitration agreement contained in the previously-executed credit application.Respondents purchased a new truck from Petitioners. Respondents first executed a credit application that contained an arbitration provision. Thereafter, the parties executed the RSIC, which did not contain an arbitration clause. After Respondents defaulted on their loan Petitioners began collection efforts. Respondents filed this complaint asserting that Petitioners harassed them by phone even after being advised they were represented by counsel. Petitioners moved to compel arbitration based on the arbitration provision contained in the credit application. The circuit court denied the motion. The Supreme Court affirmed, holding that the arbitration provisions in the credit application did not survive the merger clause of the RISC, thereby nullifying Respondents' obligation to arbitrate their claims against Petitioners. View "TD Auto Finance LLC v. Reynolds" on Justia Law

In January 2017, plaintiffs Lori Dougherty and Julie Lee's 89-year-old father passed away while living in Somerford Place, an elder residential care facility owned and operated by defendants Roseville Heritage Partners, Somerford Place, LLC, Five Star Quality Care, Inc., and Five Star Quality Care-Somerford, LLC. In July 2017, plaintiffs sued defendants, alleging elder abuse and wrongful death based upon the reckless and negligent care their father received while residing in defendants’ facility. Defendants appealed the trial court’s denial of their motion to compel arbitration and stay the action, contending the arbitration agreement did not contain any unconscionable or unlawful provisions. Alternatively, defendants argued the court abused its discretion by invalidating the agreement as a whole, rather than severing the offending provisions. The Court of Appeal found the arbitration agreement at issue here was "buried within the packet at pages 43 through 45," and "[b]ased on the adhesiveness of the agreement, and the oppression and surprise present," the Court concluded the trial court properly found the Agreement was imposed on a “take it or leave it” basis and evinced a high degree of procedural unconscionability. Under the sliding scale approach, only a low level of substantive unconscionability was required to render the arbitration agreement unenforceable. Likewise, the Court concurred that the arbitration agreement was substantively unconscionable, "particularly given the accompanying evidence of procedural unconscionability." The Court found no abuse of discretion in the trial court's declination to sever the offending provisions of the agreement, rather than invalidate the entire agreement. View "Dougherty v. Roseville Heritage Partners" on Justia Law

In August 2004, the Askinses purchased a used car by entering into a retail installment contract with East Sprague Motors & R.V.'s, Inc. for $13,713.44 at an interest rate of 18.95% per year. The contract was contemporaneously assigned to Fireside Bank (formerly known as Fireside Thrift Co.). The Askinses made two years of regular payments, then returned the car to Fireside in an attempt to satisfy the loan. However, the loan was never satisfied. Fireside sold the car for less than the remaining balance owed, leaving the Askinses with an ongoing obligation. Fireside then sued the Askinses for the remaining balance of the loan. The Askinses did not appear, and the court entered a default judgment against them, which included prejudgment interest, costs and attorney fees. Fireside assigned the debt to Cavalry Investments, LLC, in 2012. For the next 8 years, the Askinses were subjected to 14 writs of garnishment and several unsuccessful attempts at garnishment by Fireside and Cavalry. Approximately $10,849.16 was collected over the course of the garnishment proceedings. Fireside and Cavalry did not file any satisfactions of the garnishment judgments or partial satisfactions of the underlying judgment. Cavalry’s final writ of garnishment, obtained on August 3, 2015, stated that the Askinses still owed $11,158.94. This case presented an opportunity for the Washington Supreme Court to discuss the limits of CR60, in cases where a creditor uses the garnishment process to enforce a default judgment against a debtor. The Court held CR 60 may not be used to prosecute an independent cause of action separate and apart from the underlying cause of action in which the original order or judgment was filed. The Court held the trial court properly considered argument and evidence relevant to the questions of what was still owed on the underlying existing judgment and whether that judgment had been satisfied. The trial court correctly ruled that the judgment had been satisfied and ordered that the Askinses were entitled to prospective relief. View "Fireside Bank v. Askins" on Justia Law

The First Circuit affirmed the judgment of the district court granting Defendants' motion to dismiss Plaintiffs' complaint alleging that Defendants knew that Mount Ida College was on the brink of insolvency but concealed this information, holding that Plaintiffs' claims were properly dismissed.Mount Ida, a higher education institution in Massachusetts, permanently closed after providing its students six weeks' notice that it was closing. Plaintiffs, current and prospective students, brought a putative class action against Mount Ida, its board of trustees, and five Mount Ida administrators (collectively, Defendants), alleging seven Massachusetts state law claims. The district court dismissed the complaint. The First Circuit affirmed, holding (1) Plaintiffs' breach of fiduciary duty claim failed; (2) the district court did not err in dismissing Plaintiffs' violation of privacy claim; (3) no claims were stated for fraud, negligent misrepresentation, or fraud in the inducement; (4) Plaintiffs' allegations did not plausibly allege a breach of implied contract; and (5) the district court properly dismissed Plaintiffs' Mass. Gen. Laws ch. 93A claim. View "Squeri v. Mount Ida College" on Justia Law

The Supreme Judicial Court vacated the trial judge's order setting aside the jury verdict and reinstated the original judgment in favor of Plaintiff, holding that the contract at issue in this appeal did not require an obligation that Plaintiff register as a securities broker-dealer under Massachusetts and Federal securities laws.Plaintiff sued Defendant alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and violations of Mass. Gen. Laws ch. 93A. A jury found Defendant liable on all claims and awarded treble damages. Thereafter, the judge set aside the jury's verdict in its entirety, concluding that Plaintiff had been required to register as a securities broker-dealer and that its failure to do so rendered its contract with Defendant invalid and unenforceable. The contract required Plaintiff to "source capital and structure financing transactions from agreed-upon investors and/or lenders" for Defendant. The Supreme Judicial Court reversed, holding (1) the contract, on its face, did not require Plaintiff to "effect" transactions in "securities"; and (2) because Plaintiff's purported obligation to register as a broker-dealer was the sole basis for the judge's decision that Plaintiff could not maintain its breach of contract and Mass. Gen. Laws ch. 93A claims, the judge's decision to set aside the jury verdict was erroneous. View "NTV Management, Inc. v. Lightship Global Ventures, LLC" on Justia Law

Mac Haik appeals the circuit court’s denial of its motion to compel arbitration. In 2016, plaintiff Brenda Hester purchased a used 2014 Dodge Ram from Jackson Mac Haik CDJR, Ltd. (Mac Haik). Hester executed a retail-installment sale contract with Mac Haik for the purchase of the vehicle. The contract contained an arbitration provision. In 2017, Hester sued Mac Haik, American Financial Warranty Corporation (American Warranty), Randy Miggins d/b/a M&S Towing, and Randy Miggins, alleging that the vehicle she bought from Mac Haik “was defective in materials and workmanship from and after the date of purchase” and “that said defects have existed since the Plaintiff started using said vehicle.” She alleged further that American Warranty issued her a warranty but failed to repair her truck. Hester never served American Warranty with a summons and copy of her complaint. Hester alleged that Mac Haik took possession of her vehicle to make warranted repairs and later allowed it to be towed. Mac Haik, finding that all of Hester’s claims, which sounded in tort or contract and related to her purchase or condition of the vehicle at issue, argued that the claims were subject to arbitration. Mac Haik appealed the circuit court’s denial of its motion to compel arbitration. Because the Mississippi Supreme Court found that the claims fell within the scope of the valid arbitration provision, and that no defenses existed to bar arbitration, it reversed reverse the circuit court’s order denying Mac Haik’s motion to compel arbitration and ordered the claims to arbitration. View "Jackson Mac Haik CDJR, Ltd. v. Hester" on Justia Law