Justia Contracts Opinion Summaries

An individual owing a debt sued a debt collection agency. The suit alleged the agency's debt-collection letter violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, by contradicting and overshadowing the statutory notices in the letter. The standard for evaluating any potential deception in the letter was whether an unsophisticated or least sophisticated consumer would be confused by the letter. The district court concluded that the letter did not violate the statute. The Fifth Circuit Court of Appeals affirmed, holding (1) the debt collection agency's letter was not inconsistent with and did not overshadow the letter's Section 1692g(a)'s notice; and (2) therefore, a least-sophisticated or unsophisticated consumer would not be confused by the letter.

Defendant Helen Cupido appealed a trial court's summary judgment entered in favor of Recovery Resources, LLC. Helen and David Cupido married in January 1993. In March 2010, David Cupido incurred medical expenses at St. Alexius Medical Center. The parties divorced in April 2011. Under the divorce judgment, the trial court ordered David Cupido responsible for payment of the debt owed to St. Alexius Medical Center. The divorce judgment also required Helen and David to indemnify one another from any and all collection activities, which may arise regarding debts awarded to a party. Recovery Resources, LLC, a collection company, sued Helen and David for $9,494.61 owed to St. Alexius Medical Center for medical care provided to David while he and Helen were married and living together. David did not answer Recovery Resources' claim and a default judgment was entered against him. Helen answered denying liability and cross-claimed for indemnity against David. Helen then moved for summary judgment arguing she was entitled to judgment, as a matter of law, because the divorce judgment allocated the debt to David. Recovery Resources resisted and moved for summary judgment arguing it was entitled to judgment, as a matter of law, because Helen was liable for the debt. The trial court granted summary judgment in favor of Recovery Resources. On appeal, Helen contended the trial court erred: (1) by concluding she is jointly and severally liable for the debt David incurred, and (2) by failing to dismiss her from the lawsuit based on the indemnification language in the divorce judgment. Upon review, the Supreme Court concluded that the indemnification language in the divorce judgment between Helen and David Cupido did not affect Recovery Resources' statutory right to recover the debt. Accordingly the trial court did not err in failing to dismiss Helen from the collection action.

R.J. Reynolds Tobacco Company (RJR) operated a customer rewards program, called Camel Cash, from 1991 to 1007. Customers could purchase Camel cigarettes, save Camel Cash certificates, enroll in the program, and ultimately redeem their certificates for merchandise featured in RJR catalogs. Plaintiffs alleged that, in reliance on RJR's actions, they purchased Camel cigarettes, enrolled in the program, and saved their certificates for future redemption. They alleged that in 2006 RJR abruptly ceased accepting certificates for redemption, making Plaintiffs' unredeemed certificates worthless. Plaintiffs brought this action for breach of contract, promissory estoppel, and violation of two California consumer protection laws. The district court dismissed the action for failure to state a claim. The Ninth Circuit Court of Appeals (1) affirmed dismissal of Plaintiffs' claims under the Unfair Competition Law and the Consumer Legal Remedies Act; and (2) reversed the dismissal of Plaintiffs' claims for promissory estoppel and breach of contract, holding that Plaintiffs adequately alleged these claims.

At issue before the Ninth Circuit Court of Appeals in this case was whether an adverse claim to a stake may be so lacking in substance that a neutral stakeholder cannot interplead in good faith. Interpleader is proper when a stakeholder has at least a good faith belief that there are conflicting colorable claims. Appellee in this case was an insurance company that sought to interplead disputed insurance proceeds. Seeking to interplead the insurance funds, Appellee filed a counterclaim against Appellant and a third party complaint against Appellant's former husband. The district court found that interpleader was appropriate. The Ninth Circuit affirmed, holding that Appellee interpleaded in good faith, and consequently, the district court's judgment in interpleader was proper.

Plaintiffs purchased furniture from the Fortunoff store and purchased a furniture protection plan. Defendant sold the plans to Fortunoff, which in turn sold them to plaintiffs. After the Fortunoff store closed and the company went into bankruptcy, defendant rejected plaintiffs’ claims under the plan. Plaintiffs filed a putative class action alleging breach of contract, that the store closing termination clause in the plan violated New York General Business Law 395-a, and deceptive business practices in violation of General Business Law 36 349. The district court dismissed, holding that there was no implied cause of action under 395-a. The Second Circuit certified to the New York Court of Appeals: May parties seek to have contractual provisions that run contrary to General Business Law 395-a declared void as against public policy? May plaintiffs bring suit pursuant to 349 on the theory that defendants deceived them by including a contractual provision that violates 395-a and later enforcing this agreement?

While vacationing in Arizona, plaintiffs contracted to purchase a condominium in a planned development in Mexico. The project was managed by defendant, an Arizona resident. After making the first of three installment payments, plaintiffs became concerned and sought reassurance. Defendant sent several communications to plaintiffs (in Wisconsin) assuring them the project was properly financed and would be completed on time. They made additional payments. The unit was not completed on time and investigation revealed that the project did not have financing; advance sales were funding the development. Plaintiffs sued in Wisconsin state court, alleging intentional misrepresentation and seeking rescission and damages. Following removal to federal district court, the case was dismissed for lack of personal jurisdiction. The Seventh Circuit reversed. The complaint alleges that repeated communications to plaintiffs’ Wisconsin home were part of a deliberate attempt to create a false sense of security and to induce plaintiffs to make payments. The communications are critical to the claim of intentional misrepresentation. Defendant was aware that the harm would be felt in Wisconsin. The allegations are sufficient to establish minimum contacts necessary to satisfy due-process requirements for jurisdiction in Wisconsin. The communications satisfy the “local act or omission” provision of the Wisconsin long-arm statute.

Respondents brought this action on behalf of themselves and others similarly situated against Philip Morris, alleging that Philip Morris's marketing of its cigarettes violated Minnesota's consumer protection statutes. Respondents asserted claims under Minn. Stat. 8.31(3a) and for common law fraud and unjust enrichment. The district court granted Respondents' motion to certify the class. Subsequently, the court granted summary judgment to Philip Morris on the consumer protection claims asserted under section 8.31(3a) and then dismissed the case. The court of appeals affirmed the class certification but reversed the grant of summary judgment and reinstated Respondents' section 8.31(3a) consumer protection claims. The Supreme Court reversed, holding (1) Respondents' consumer protection claims asserted under section 8.31(3a) were previously released; and (2) because all of Respondents' claims had been dismissed, the issue of whether the plaintiff class was properly certified was moot.

Appellants Warren and Wynne Kirschbaum appealed a trial court's ruling in favor of Appellee First Quality Carpets, Inc. arising from a dispute they had over carpet installed in 2007. The Kirschbaums argued that the civil division erred in awarding First Quality attorney's fees under 9 V.S.A. 4007(c) of the Prompt Pay Act because that section of the statute authorizing attorney's fees recovery effectively expired in 1996 pursuant to a sunset provision included in the Act. Alternatively, the Kirschbaums argued that because they withheld payment to First Quality in good faith, they were entitled to a directed verdict and that First Quality should not have been awarded attorney's fees under 4007(c). Finally, the Kirschbaums argued that the court erred in denying their counterclaim under the Consumer Fraud Act. Upon review, the Supreme Court affirmed the trial court in all respects.

In this appeal the Supreme Court considered whether the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), an act that governs the disposition of failed financial institutions' assets, divests a court of jurisdiction to consider any defense or affirmative defense not first adjudicated through FIRREA's claims process. The Supreme Court concluded that while FIRREA's jurisdictional bar divests a district court of jurisdiction to consider claims and counterclaims asserted against a successor in interest to the Federal Deposit Insurance Corporation (FDIC) not first adjudicated through FIRREA's claims process, it does not apply to defenses or affirmative defenses raised by a debtor in response to the successor in interest's complaint for collection. In this case, the Court reversed the district court's grant of summary judgment to Successor in Interest on its breach of contract and breach of personal guaranty claims against Debtor, as Debtor's affirmative defenses were not barred by FIRREA. Remanded.

Plaintiffs sought to establish a nationwide class of thousands of borrowers who allegedly paid inflated appraisal fees in connection with real estate transactions financed by Wells Fargo. Plaintiffs subsequently appealed the district court's dismissal of their claims contending that the appraisal practice of Wells Fargo and Rels unjustly enriched Rels and violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq.; the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. 2601 et seq.; California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 et seq.; and Arizona's anti-racketeering statute (AZRAC), Ariz. Rev. Stat. 13-2314.04. Because plaintiffs did not plausibly allege a concrete financial loss caused by a RICO violation, the district court did not err in concluding that they lacked standing under RICO and AZRAC. In regards to the UCL claims, the court agreed with the district court that the complaint did not allege "lost money or property" where plaintiffs admitted that Wells Fargo charged them market rates for appraisal services as disclosed on the settlement. The court also rejected plaintiffs' claims under RESPA Section 8(a) and (b), as well as plaintiffs' assertion that the district court erred in dismissing their claims with prejudice rather than sua sponte allowing them leave to amend the complaint for the third time.