Justia Contracts Opinion Summaries

Plaintiff brought suit against the Dealership and Porsche when the pre-owned car that she purchased from the Dealership developed serious mechanical problems during the warranty period and the Dealership refused to honor her warranty claims. Plaintiff alleged breach of implied and express warranties under the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301 et seq., and breach of contract and unconscionability under California law. The district court granted the Dealership's petition to compel arbitration pursuant to the mandatory arbitration provision in the sales contract that plaintiff signed when she bought the car and stayed the action against Porsche. Plaintiff's principal argument on appeal was that the MMWA barred the provision mandating pre-dispute binding arbitration of her warranty claims against the Dealership. Although the text of the MMWA did not specifically address the validity of pre-dispute mandatory binding arbitration, Congress expressly delegated rulemaking authority under the statue to the Federal Trade Commission (FTC). The FTC construed the MMWA as barring pre-dispute mandatory binding arbitration provisions covering written warranty agreements and issued a rule prohibiting judicial enforcement of such provisions with respect to consumer claims brought under the MMWA. Because it was required to defer to the reasonable construction of a statute by the agency that Congress had authorized to interpret it, the court held that the MMWA precluded enforcement of pre-dispute agreements such as Porsche's that required mandatory binding arbitration of consumer warranty claims. The court declined to address plaintiff's remaining claims. Accordingly, the court reversed and remanded for further proceedings.

Plaintiff brought suit against Toyota when the new car that she leased developed mechanical problems during the warranty period and Toyota failed to repair them to her satisfaction. In addition to several California state law claims, she alleged breach of warranty under the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301 et seq. The district court granted Toyota's motion to dismiss for lack of subject matter jurisdiction on the ground that plaintiff did not, before filing suit in civil court, pursue her claims through the California Dispute Settlement Program (CDSP) that Toyota maintained and specified in its warranty. Plaintiff appealed, arguing that her failure to initially resort to the CDSP provided Toyota an affirmative defense to her warranty claims under the MMWA, but did not defeat subject matter jurisdiction. The court held that the prerequisite in section 2310(a) of the MMWA that a "consumer may not commence a civil action... unless he initially resorts to [an informal dispute settlement procedure]" was merely a codification of the MMWA's exhaustion requirement and did not operate as a jurisdictional bar. Accordingly, the court reversed and remanded so that the district court could consider how to proceed with the instant action, including the failure-to-exhaust issues.

Several purchasers of condominium units sued developer Harborage Cottages-Stuart, LLLP (Harborage), alleging that Harborage violated the Interstate Land Sales Full Disclosure Act (ILSFDA), 15 U.S.C. 1701 et seq., and several Florida statutes. Central to this appeal was whether Harborage violated section 1703(a)(1)(B) by failing to provide the purchasers with a property report prior to their signing the purchase agreements. The court held that Harborage failed to prove that it was entitled to an exemption from the ILFSDA and its admitted failure to provide the report violated the ILFSDA. Therefore, the court affirmed the district court's grant of summary judgment in favor of plaintiffs on their claim under section 1703(a)(1)(B) and (C). The court also affirmed the district court's award of damages and attorney's fees under section 1709; affirmed the grant of summary judgment in favor of Gentry-Hunt on the claim that Harborage violated Fla. Stat. 718.506 and vacated the judgment in favor of the Stones on the section 718.506 claim; and vacated the grant of summary judgment in favor of plaintiffs on the claim that Harborage violated the anti-fraud provision of the ILSFDA and the claim asserted under Fla. Stat. 501.204(1).

Plaintiffs brought an action against defendant, seeking a refund of two cruise tickets they purchased and cancelled, and damages under G.L.c. 93A for unfair and deceptive trade practices. The court concluded that the evidence at trial plainly established that defendant violated the Attorney General's travel service regulations in two respects: fist, it failed to disclose the refund policy; and second, having violated the disclosure statement, it failed to refund the payments made by a cancelling customer within thirty days. These violations qualified as unfair or deceptive acts, and they caused plaintiffs a loss: the lack of a prompt refund of the ticket price. The court also concluded that plaintiffs' demand letter satisfied the requirements of G.L.c. 93A, section 9(3). The purposes of the demand letter were sufficiently fulfilled where it constituted fair notice of the claim and enabled defendant to make a reasonable tender of settlement. Accordingly, the judgment for defendant on plaintiffs' claims was reversed and the case remanded for the entry of judgment for plaintiffs and for determination of their damages, reasonable attorneys' fees, and costs.

This case originated with a misunderstanding regarding a $645 charge on the credit card bill of appellant. Chase Bank misidentified the basis for the charge but failed to respond to appellant's requests for information about it. After unsuccessfully attempting to get response from Chase Bank, appellant and his wife filed this action, alleging, inter alia, claims under the Fair Credit Billing Act (FCBA), 15 U.S.C. 1666-1666j and Oregon's Unlawful Debt Collection Practices Act (UDCPA), Or. Rev. Stat. 646.639-643. The court held that the trial court erred in holding that appellant failed to state a claim under the UDCPA. The court declined to certify appellant's proposed question to the Oregon Supreme Court regarding this claim because existing state precedent guided the court's decision. As to the FCBA claims, the trial court erred in requiring evidence of detrimental reliance to support actual damages and in limiting statutory damages for Chase Bank's multiple violations of the FCBA to a single recovery. Finally, the court held that the trial court abused its discretion in denying any award of attorneys' fees related to appellant's successful claim under the FCBA. Accordingly, the court reversed and remanded for further proceedings.

Plaintiff Blanca Gonzalez, and Monserate Diaz purchased a home as tenants in common. Diaz borrowed the downpayment from Cityscape Mortgage Corporation (Cityscape) and executed a note. Plaintiff did not sign the note. Plaintiff and Diaz secured that loan by mortgaging their home to Cityscape. Over time, Plaintiff fell behind on the payments and U.S. Bank obtained a foreclosure judgment. The trial court ordered that the home be sold to satisfy the judgment. Before the sheriffâs sale, Plaintiff entered into a written agreement with Defendant Wilshire Credit Corporation (Wilshire), U.S. Bankâs servicing agent. Plaintiff was represented by a Legal Services attorney who helped negotiate the agreement. Plaintiff missed four payments to Wilshire. A scheduled sheriffâs sale was cancelled when the parties entered into a second agreement. Plaintiff was contacted and dealt with directly; neither Wilshire nor U.S. Bank notified the Legal Services attorney. Although Plaintiff had not missed a single payment required by the second agreement, instead of dismissing the foreclosure action as promised, Wilshire sent a letter to Plaintiff noting that the second agreement was about to expire and that a new agreement needed to be negotiated to avoid foreclosure. Plaintiff contacted the Legal Services attorney. When the attorney questioned Wilshire, it could not explain how it had come to the arrears amount set in the second agreement, or why Plaintiff was not deemed current on the loan. Plaintiff filed a complaint alleging that Wilshire and U.S. Bank engaged in deceptive and unconscionable practices in violation of the CFA. The trial court granted summary judgment in favor of Wilshire and U.S. Bank, finding that the CFA did not apply to post-judgment settlement agreements entered into to stave off a foreclosure sale. The Appellate Division reversed and reinstated plaintiffâs CFA claim. Upon review, the Supreme Court held that the post-foreclosure-judgment agreements in this case constituted stand-alone extensions of credit. In fashioning and collecting on such a loan, a lender or its servicing agent cannot use unconscionable practices in violation of the CFA.

Thirteen-year-old Efrain Ramos-Domingo was killed by a Union Pacific Railroad Company train. Two days later, Efrain's mother, Manuela Gonzalez signed a document releasing Union Pacific from liability for Efrain's death in exchange for $15,000. Manuela later filed a complaint in district court for wrongful death and breach of fiduciary duty. Union Pacific filed a motion to dismiss Manuela's complaint, arguing that the release barred Manuela's claims. The district court sustained the motion to dismiss with respect to the wrongful death claim but overruled the motion with respect to the fiduciary duty claim. The district court then granted Union Pacific's motion for summary judgment on the remaining claim, finding that there was no fiduciary duty owed by Union Pacific to Manuela. The Supreme Court affirmed in part and reversed in part, holding (1) the district court erred in dismissing Manuela's wrongful death claim because Manuela alleged facts that, if proved, could demonstrate that the release was void on the basis of its failure to represent a binding mutual understanding of the parties or was voidable as the product of fraud, overreaching or duress; and (2) the district court correctly concluded that Union Pacific owed no fiduciary duty to Manuela. Remanded.

Plaintiff, on behalf of himself and similarly situated individuals, brought an action against Chase, alleging that it increased his interest rates retroactively to the beginning of this payment cycle after his account was closed to new transactions as a result of a late payment to Chase or another creditor. The court had previously issued an opinion reversing the district court's dismissal of most of plaintiff's federal and state claims. However, Chase sought Supreme Court review of the court's decision and the Supreme Court reversed with respect to the federal claim and remanded for further proceedings. Consequently, the court withdrew its prior opinion and, consistent with the Supreme Court's ruling, affirmed the district court's dismissal of plaintiff's first cause of action under the Truth in Lending Act (TILA), 15 U.S.C. 1601-1615, for failure to notify of rate increase, as well as plaintiff's sixth cause of action for breach of contract for failure to notify him "of any change if required by applicable law." Although the Supreme Court's decision did not specifically address the court's ruling on plaintiff's state law claims, the court held: as Delaware law permitted the actions taken by Chase, the district court correctly concluded that plaintiff's second, third, and fourth state law causes of action were foreclosed; plaintiff's fifth cause of action failed to state a claim for consumer fraud under 6 Del. C. 2513(a); and plaintiff's seventh cause of action failed to state a claim for breach of an implied duty of good faith. Therefore, the court affirmed the judgment of the district court.

Liberty Mutual sued Pella in the district court for declaratory judgment where the suit was sought to determine the scope of Liberty Mutual's obligation, under general commercial liability (GCL) policies issued to Pella, to reimburse Pella's defense costs in two underlying lawsuits. Both parties appealed the judgment of the district court. The court held that the district court did not err in concluding that Liberty Mutual's duty to reimburse Pella's defense costs should be determined by looking at the allegations in the complaint to determine if they stated a covered claim where Liberty Mutual would still have no duty to defend even if it had to reimburse defense costs in a suit where an "occurrence" was alleged but not yet an established fact. The court also held that because the underlying suits did not allege an "occurrence," Liberty Mutual did not owe Pella a duty to reimburse its costs in defending either action. Therefore, the court need not address Liberty Mutual's alternative argument. The court further held that the district court did not commit reversible error in granting summary judgment to Liberty Mutual. The court finally held that, in light of its conclusion that Liberty Mutual had no duty to reimburse Pella's defense costs in the underlying suits, the court need not address the issue of defense costs. Accordingly, the court affirmed the district court's grant of summary judgment to Liberty Mutual on Pella's bad-faith counterclaim. The court reversed the district court's order granting summary judgment to Pella on Liberty Mutual's claim for declaratory judgment and remanded with instructions to enter declaratory judgment in favor of Liberty Mutual.

Judith Berry brought negligence and consumer protection claims against defendants National Medical Services and Compass Vision after her urinalysis tests conducted as part of Berry's participation in the Kansas Nurses Assistance Program (KNAP) showed positive results, which meant Berry tested positive for substance abuse in violation of Berry's KNAP agreement. Berry claimed Defendants were negligent in designing, implementing, promoting, and managing their testing protocol and that Defendants knew that because she was a participant in KNAP, her nursing license would be in jeopardy if she tested positive. The district court dismissed Berry's petition with prejudice for failure to state a claim upon which relief may be granted. The court of appeals reversed on the negligence claim, finding that Berry was a foreseeable plaintiff, that the probability of harm was foreseeable, and that there was no public policy against imposing a duty on Defendants. The Supreme Court affirmed, holding (1) Berry was a foreseeable plaintiff and the probability of harm was foreseeable; and (2) there was no public policy to extend protection to Defendants simply because they contracted with a government agency. Remanded.