Justia Contracts Opinion Summaries

Jacqueline Davis filed a lawsuit against BetMGM, LLC, in the Wayne Circuit Court, claiming fraud, conversion, and breach of contract after winning over $3 million on BetMGM's online gambling platform. BetMGM approved her withdrawal of $100,000 but later suspended her account, citing a game malfunction that erroneously credited her winnings. BetMGM refused to remit the remaining winnings, leading Davis to file a complaint with the Michigan Gaming Control Board (MGCB) and subsequently in court.The Wayne Circuit Court granted BetMGM's motion for summary disposition, ruling that the Lawful Internet Gaming Act (LIGA) preempted Davis's claims and that the MGCB had exclusive jurisdiction over online gambling disputes. The court relied on caselaw interpreting the Michigan Gaming Control and Revenue Act (MGCRA) and administrative rules under the LIGA, concluding that the LIGA precluded inconsistent common-law claims. Davis's motion for reconsideration was denied.The Michigan Court of Appeals affirmed the circuit court's decision in a split decision. The majority agreed with the lower court's reasoning, while the dissent argued that the MGCB did not have the authority to resolve individual patron disputes and that Davis's claims were not inconsistent with the LIGA. The dissent also noted that the MGCB's role was limited to investigating violations of the LIGA and did not extend to adjudicating disputes between patrons and licensees.The Michigan Supreme Court reversed the Court of Appeals' decision, holding that the LIGA did not abrogate common-law claims of fraud, conversion, and breach of contract. The court clarified that the correct principle to apply was abrogation, not preemption, and found no clear legislative intent to abrogate these common-law claims. The court also determined that Davis's claims were not inconsistent with the LIGA, as the MGCB did not have the authority to resolve such disputes. The case was remanded to the circuit court for further proceedings. View "Davis v. BetMGM, LLC" on Justia Law

CPI Security Systems, Inc. filed a lawsuit against Vivint Smart Home, Inc., alleging that Vivint engaged in deceptive practices to lure away CPI’s customers. Vivint sales representatives falsely claimed that Vivint had acquired CPI, that CPI was going out of business, or that Vivint needed to upgrade CPI’s equipment. These tactics led many CPI customers to switch to Vivint, causing significant losses for CPI. A jury found Vivint liable for violating the Lanham Act, the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), and for committing the common-law torts of unfair competition and tortious interference with contracts. The jury awarded CPI $49.7 million in compensatory damages and $140 million in punitive damages.The United States District Court for the Western District of North Carolina upheld the jury’s verdict. Vivint appealed, raising several issues, including the requirement of CPI’s reliance on false statements for the UDTPA claim, the sufficiency of evidence supporting the damages award, the application of North Carolina’s cap on punitive damages, and the admission of prejudicial evidence.The United States Court of Appeals for the Fourth Circuit reviewed the case and found no reversible error. The court held that CPI was not required to prove its own reliance on Vivint’s false statements to establish a UDTPA claim, as the claim was based on unfair competition rather than fraud. The court also found that the evidence presented by CPI was sufficient to support the jury’s damages award. Additionally, the court ruled that the district court correctly applied North Carolina’s cap on punitive damages by considering the total compensatory damages awarded. The court further held that the district court did not abuse its discretion in denying Vivint’s motion to bifurcate the trial or in its evidentiary rulings. The reassignment of the trial judge post-trial did not warrant a new trial. Consequently, the Fourth Circuit affirmed the district court’s judgment. View "CPI Security Systems, Inc. v. Vivint Smart Home, Inc." on Justia Law

23rd Psalm Trucking, L.L.C. entered into a four-year contract with the Madison Parish Police Jury on July 14, 2014, to collect and dispose of residential waste. The contract was extended for an additional three years, set to expire on July 14, 2021. However, due to fiscal concerns, the Police Jury rebid the contract in June 2020 and awarded it to another contractor, effective January 1, 2021. Psalm Trucking sued for breach of contract and unfair trade practices, claiming an estimated loss of $385,235.50.The trial court granted summary judgment in favor of the Police Jury, finding the contract null and void under La. R.S. 39:1410.60 (A) because it was not approved by the State Bond Commission. The court also rejected Psalm Trucking’s detrimental reliance claim, noting the company did not seek legal advice before contracting. The Court of Appeal affirmed, agreeing that the Bond Commission’s approval was required for multi-year contracts without a non-appropriation clause.The Supreme Court of Louisiana reviewed the case and affirmed the lower courts' decisions. The court held that La. R.S. 33:4169.1 and La. R.S. 39:1410.60 must be read together, requiring Bond Commission approval for contracts that constitute debt. The court found the four-year contract constituted debt and was null and void without the Bond Commission’s approval. The court also agreed that Psalm Trucking failed to prove detrimental reliance against a governmental agency. The judgment of the Court of Appeal was affirmed. View "23rd Psalm Trucking, L.L.C. v. Madison Parish Police Jury" on Justia Law

Tody's Service, Inc. (Tody's), a towing company, billed Liberty Mutual Insurance Company (Liberty) a six-figure storage fee after towing and storing a vehicle involved in a fatal crash at the direction of the police. The vehicle, insured by Liberty, was held as evidence for nearly three years. After obtaining the vehicle's title, Liberty refused to pay the accrued storage charges, leading Tody's to sue Liberty to recover those fees.In the Superior Court, a judge granted summary judgment in favor of Liberty on all of Tody's claims, which included unjust enrichment, promissory estoppel, and failure to pay storage fees under G. L. c. 159B, § 6B. The judge found no evidence of unjust enrichment, ruled that § 6B does not provide a private right of action, and concluded that Tody's failed to demonstrate any actionable promise or reasonable reliance to support promissory estoppel.The Supreme Judicial Court reviewed the case and held that Liberty was not unjustly enriched as a matter of law, as there was no measurable benefit conferred on Liberty by Tody's storage of the vehicle. The court also found no evidence of reliance sufficient to support promissory estoppel, as Tody's stored the vehicle in response to a police directive, not in reliance on any promise by Liberty. Additionally, the court held that § 6B does not create a private right of action against a vehicle owner. Consequently, the Supreme Judicial Court affirmed the judgment in Liberty's favor. View "Tody's Service, Inc. v. Liberty Mutual Insurance Company" on Justia Law

Michael Reilly approached William G. Harris III, a developmentally disabled individual, to purchase his home for $30,000, significantly below its appraised value. Harris, unable to understand the value of money, signed the contract. Reilly attempted to finalize the sale but was informed by the Sheltered Workshop, where Harris was a client, of Harris's disability and was denied further contact with him. Harris passed away in December 2021, and Reilly sued Harris's Estate for specific performance of the contract. The Estate counterclaimed, alleging negligence, violations of the Montana Consumer Protection Act (CPA), and sought punitive damages.The Second Judicial District Court, Butte-Silver Bow County, dismissed Reilly's complaint without imposing sanctions and denied the Estate's request for treble damages and attorney fees. The jury awarded the Estate $28,900 in compensatory damages and $45,000 in punitive damages. Reilly moved to dismiss his complaint just before the trial, which the District Court granted, but the Estate objected, seeking sanctions for the late dismissal. The District Court did not rule on the objection. The jury found Reilly exploited Harris and violated the CPA, awarding damages accordingly. The District Court later denied the Estate's request for treble damages and attorney fees, citing the substantial jury award as sufficient.The Supreme Court of the State of Montana reviewed the case. It held that the District Court abused its discretion by dismissing Reilly's complaint without imposing sanctions, given the late timing and the Estate's incurred costs. However, it affirmed the District Court's denial of treble damages and attorney fees under the CPA, agreeing that the jury's award was substantial. The Supreme Court affirmed the compensatory and punitive damages awarded to the Estate and remanded the case to the District Court to award the Estate its full costs and attorney fees incurred before Reilly's motion to dismiss. View "Harris Estate v. Reilly" on Justia Law

Former students of the University of Montana filed a class action lawsuit against the university, alleging mishandling of student loan reimbursement payments. They claimed that the university's contract with Higher One Holdings, Inc. subjected them to excessive bank fees and unlawfully disclosed their personal information without consent. The university had contracted with Higher One from 2010 to 2015 to process student loan reimbursements, which involved issuing debit cards and charging various fees.The District Court of the Fourth Judicial District in Missoula County certified three classes of plaintiffs but was later partially reversed by the Montana Supreme Court, which upheld the certification of two classes and reversed the third. The case proceeded to a jury trial, where the jury found in favor of the university, concluding that it did not breach its fiduciary duty, violate privacy rights, or unjustly enrich itself.The Supreme Court of the State of Montana reviewed the case on appeal. The students raised several issues, including the admissibility of evidence regarding their banking practices, the testimony of the university's expert witness, the university's closing arguments, the admission of a fee comparison chart, and the refusal of a burden-shifting jury instruction. The court found that the District Court did not abuse its discretion in its evidentiary rulings, including allowing the university to present evidence about students' banking practices and admitting the fee comparison chart. The court also held that the expert witness's testimony was permissible and that the university's closing arguments did not prejudice the students' right to a fair trial.Ultimately, the Supreme Court of Montana affirmed the District Court's judgment in favor of the University of Montana, upholding the jury's verdict. View "Knudsen v. U. of M." on Justia Law

In 2018, Marriott announced a data breach affecting the guest reservation database of Starwood Hotels & Resorts Worldwide, which Marriott had acquired in 2016. The breach exposed personal information of approximately 133.7 million guests, including some payment card information. Plaintiffs filed class action lawsuits against Marriott and Accenture, a third-party IT service provider for Starwood and Marriott during the breach. The cases were consolidated for pretrial proceedings in the District of Maryland.The district court initially certified multiple state-specific damages classes against Marriott and issue classes against both Marriott and Accenture. However, the court did not address the effect of a class-action waiver in the Starwood Preferred Guest Program (SPG) contract, which Marriott argued precluded class certification. The Fourth Circuit vacated the class certification, instructing the district court to consider the class-action waiver's impact.On remand, the district court again certified the classes, holding that Marriott had waived its right to enforce the class-action waiver by participating in multidistrict litigation (MDL) and by agreeing to pretrial proceedings in Maryland, contrary to the SPG contract's venue and choice-of-law provisions. The court also suggested that the class-action waiver might be unenforceable under Rule 23 of the Federal Rules of Civil Procedure.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court's decision. The Fourth Circuit held that Marriott did not waive its right to enforce the class-action waiver and that the waiver was valid and enforceable. The court found that the waiver applied to the plaintiffs' claims, including consumer protection and negligence claims, as they were related to the SPG Program. Consequently, the court reversed the certification of all classes against Marriott and the issue classes against Accenture, as the latter were justified only in combination with the Marriott damages classes. View "Maldini v. Marriott International, Incorporated" on Justia Law

M.G. received health care coverage through Medi-Cal and was treated by Dameron Hospital Association (Dameron) after an automobile accident. Dameron required M.G. or her representative to sign a conditions of admissions (COA) form, which included an assignment of benefits (AOB) clause. This clause assigned to Dameron the right to direct payment of uninsured and underinsured motorist (UM) benefits from M.G.'s automobile insurance policy with Progressive Casualty Insurance Company (Progressive). Dameron sought payment from Progressive for M.G.'s treatment at rates higher than Medi-Cal would pay. Progressive settled a UM claim with M.G. but did not pay Dameron, leading Dameron to sue Progressive for damages, an injunction, and declaratory relief.The Superior Court of San Joaquin County sustained a demurrer to Dameron's complaint without leave to amend, citing collateral estoppel based on a prior decision in Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Dameron v. AAA). The court found the COA forms to be contracts of adhesion and the AOBs unenforceable, as it was not within the reasonable expectations of patients that a hospital would collect payments for emergency care directly from their UM benefits.The California Court of Appeal, Third Appellate District, affirmed the trial court's decision. The appellate court held that the COAs were contracts of adhesion and that it was not within the reasonable expectations of Medi-Cal patients that their UM benefits would be assigned to the hospital for payment of medical bills at rates higher than Medi-Cal would pay. The court concluded that the AOBs were unenforceable and did not need to address arguments regarding collateral estoppel or the Knox-Keene Health Care Service Plan Act. The court also denied Progressive's motion to strike exhibits from Dameron's reply brief. View "Dameron Hospital Assn. v. Progressive Casualty Insurance Co." on Justia Law

The plaintiff, Joshua Naranjo, filed a class action lawsuit against Doctors Medical Center of Modesto, Inc., alleging violations of the unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) due to the hospital's practice of charging an undisclosed "Evaluation and Management Services Fee" (EMS Fee) to emergency room patients. Naranjo claimed that the fee was charged without prior notification or agreement, making it an unfair, deceptive, and unlawful practice.The Superior Court of Stanislaus County sustained the hospital's demurrer to each cause of action in Naranjo's first amended complaint (FAC) without leave to amend and entered a judgment of dismissal. Naranjo appealed, and the Court of Appeal initially reversed the judgment, finding that Naranjo had stated valid causes of action under the UCL and CLRA and for declaratory relief. The court also directed the trial court to consider any future motion by Naranjo to amend his FAC to state a breach of contract cause of action.The California Supreme Court granted review and subsequently transferred the case back to the Court of Appeal, directing it to reconsider the matter in light of its ruling in Capito v. San Jose Healthcare System, LP. In Capito, the Supreme Court held that hospitals do not have a duty under the UCL or CLRA to disclose EMS fees to emergency room patients prior to treatment beyond what is required by the statutory and regulatory scheme.Upon reconsideration, the Court of Appeal concluded that Naranjo's claims are barred to the extent they are based on an alleged duty to disclose EMS fees prior to treatment. However, the court found that Naranjo had stated a valid contract-based cause of action for declaratory relief and should be allowed to amend his FAC to state causes of action for breach of contract and violations of the UCL and CLRA, subject to specific parameters. The judgment of dismissal was reversed, and the case was remanded for further proceedings. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law

Portfolio Recovery Associates, LLC, a debt purchaser, filed suits against three consumers, Jeannie Duvall, Allease Riddle, and Lorrena Terry, to collect past-due credit card debts. The consumers counterclaimed, alleging that Portfolio's debt-collection practices violated Alaska's Unfair Trade Practices and Consumer Protection Act (UTPA). The superior courts ruled in favor of the consumers on Portfolio's debt-collection claims, finding insufficient admissible evidence to prove Portfolio's ownership of the debts or the amounts owed. The courts also ruled in favor of the consumers on some of their UTPA counterclaims, awarding statutory damages and attorney's fees.In Duvall's case, the superior court granted summary judgment on her UTPA counterclaim that Portfolio sought unauthorized fees and charges, finding Portfolio failed to produce the original credit card agreement. The court excluded a late-disclosed witness and certain documents as inadmissible hearsay. Portfolio's contract claim failed due to lack of evidence. The court awarded Duvall partial attorney's fees under the UTPA and Rule 82.In Riddle's case, the superior court granted summary judgment on her UTPA counterclaim, finding Portfolio lacked standing to sue without proving ownership of the debt. The court awarded Riddle statutory damages and partial attorney's fees, reducing the award due to excessive litigation by both parties.In Terry's case, the superior court ruled in her favor on Portfolio's contract claim and her UTPA counterclaims after a bench trial. The court found Portfolio's conduct unfair and deceptive, awarding Terry statutory damages and full attorney's fees.The Alaska Supreme Court affirmed the superior courts' rulings on the merits and statutory damages. It found no abuse of discretion in the evidentiary rulings or the exclusion of the late-disclosed witness. The court affirmed the attorney's fees award in Duvall, remanded the fees award in Riddle for reconsideration, and remanded the fees award in Terry for a minor correction. View "Portfolio Recovery Associates, LLC v. Duvall" on Justia Law