Justia Contracts Opinion Summaries

In this case, the plaintiff purchased a new 2014 Kia Optima and soon experienced issues with the vehicle's transmission. Despite multiple visits to the dealership, the problem persisted. The plaintiff requested a buyback from Kia Motors America, Inc. (Kia), but Kia initially declined, citing an inability to replicate the issue. Eventually, Kia offered to repurchase the vehicle, but the plaintiff found the terms unacceptable and continued to use the car while pursuing legal action.The Los Angeles County Superior Court found in favor of the plaintiff, awarding restitution and a civil penalty for Kia's willful violation of the Song-Beverly Consumer Warranty Act. The jury awarded $42,568.90 in restitution and $85,317.80 in civil penalties, totaling $127,976.70. Kia filed post-trial motions to reduce the restitution amount and to strike the civil penalty, arguing that certain costs should not be included and that there was insufficient evidence of willfulness. The trial court partially granted Kia's motions, striking the civil penalty but upholding the restitution amount.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the restitution award should exclude the cost of the manufacturer’s rebate, the optional theft deterrent device, the optional service contract, and certain insurance premiums. The court found that these costs were not recoverable under the Act. However, the court found substantial evidence to support the jury's finding that Kia knowingly violated the Act or did not act with a good faith and reasonable belief that it was complying. The court affirmed the trial court's order for a new trial on the issue of the civil penalty, directing that the new trial be consistent with its opinion and limited to the 21-month period between Kia's violation and the plaintiff's lawsuit. View "Valdovinos v. Kia Motors America, Inc." on Justia Law

In 2007, Dennis Collins, Suzanne Collins, David Butler, and Lucia Bott purchased long-term care insurance policies from Metropolitan Life Insurance Company (MetLife). They also bought an Inflation Protection Rider, which promised automatic annual benefit increases without corresponding premium hikes, though MetLife reserved the right to adjust premiums on a class basis. In 2015, 2018, and 2019, MetLife informed the plaintiffs of significant premium increases. The plaintiffs filed a class action in 2022, alleging fraud, fraudulent concealment, violations of state consumer protection statutes, and breach of the implied covenant of good faith and fair dealing under Illinois and Missouri law.The United States District Court for the Eastern District of Missouri dismissed the case, ruling that the filed rate doctrine under Missouri and Illinois law barred the plaintiffs' claims. Additionally, the court found that the plaintiffs bringing claims under Missouri law failed to exhaust administrative remedies. The plaintiffs appealed, arguing that the filed rate doctrine did not apply, they were not required to exhaust administrative remedies, and their complaint adequately alleged a breach of the implied covenant.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court's dismissal. The appellate court held that the plaintiffs' complaint failed to state a claim upon which relief could be granted. The court found that MetLife's statements about premium expectations were not materially false and that the plaintiffs did not sufficiently allege intentional fraud or fraudulent concealment. The court also concluded that the statutory claims under the Missouri Merchandising Practices Act and the Illinois Consumer Fraud and Deceptive Business Practices Act were barred by regulatory exemptions. Lastly, the court determined that the implied covenant of good faith and fair dealing was not breached, as MetLife's actions were expressly permitted by the policy terms. View "Collins v. Metropolitan Life Insurance Co." on Justia Law

In this case, the plaintiff purchased a new 2014 Kia Optima and soon experienced issues with the vehicle's reverse gear. Despite multiple visits to the dealership, the problem persisted. The plaintiff requested a buyback from Kia Motors America, Inc. (Kia), but Kia's investigations, including installing a flight recorder, did not confirm the defect. Kia eventually offered to repurchase the vehicle, but the plaintiff rejected the offer and continued to use the car until filing a lawsuit under California’s Song-Beverly Consumer Warranty Act (the Act).The Superior Court of Los Angeles County found in favor of the plaintiff, awarding restitution and a civil penalty for Kia's willful violation of the Act. Kia filed posttrial motions challenging the restitution amount and the civil penalty. The court partially granted Kia's motions, striking the civil penalty for insufficient evidence but denying the motion to reduce the restitution amount.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the restitution award should not include the cost of the optional service contract, certain insurance premiums, and other specific amounts. The court affirmed the trial court's decision to grant a new trial on the civil penalty, finding substantial evidence that Kia may have had a good faith and reasonable belief that the vehicle was not defective.The appellate court directed the trial court to amend the judgment to exclude the non-recoverable amounts from the restitution award and to conduct a new trial on the civil penalty, limited to the period before the lawsuit was filed. The court clarified that a violation of the Act is willful only if it is deliberate, knowing, or not based on a good faith and reasonable belief of compliance. View "Valdovinos v. Kia Motors America, Inc." on Justia Law

Circle of Seven, LLC, left a Dodge Ram truck on a foreclosed property. The new property owner hired Bottoms Towing & Recovery to remove the truck. Bottoms Towing later sought to sell the truck to cover unpaid towing and storage fees. Circle of Seven contested the sale and the lien amount, arguing that the towing company had used the truck without authorization, which should reduce the lien.The Superior Court of Nash County held a hearing where Circle of Seven presented testimony from its managing member and an employee. The court found that Bottoms Towing had driven the truck and made unnecessary alterations, reducing the lien by $1,427.14 for maintenance and $62.50 for unauthorized use. Circle of Seven appealed, claiming the reduction was insufficient.The North Carolina Court of Appeals affirmed the trial court's decision, with a divided opinion. The majority found that the trial court's findings were supported by competent evidence. The dissent argued that Bottoms Towing unlawfully converted the truck for personal use and that the lien should be reduced based on the truck's loss in market value due to this conversion.The North Carolina Supreme Court reviewed the case based on the dissent. The Court held that it could not address the dissent's theory because Circle of Seven had not raised the conversion argument or presented evidence on the truck's value in the lower courts. The Court emphasized that appellate courts should not address issues not raised by the parties. Consequently, the Supreme Court affirmed the decision of the Court of Appeals. View "Bottoms Towing & Recovery, LLC v. Circle of Seven, LLC" on Justia Law

Radiance Capital Receivables Twelve, LLC ("Radiance") appealed a judgment from the Henry Circuit Court in favor of Bondy's Ford, Inc. ("Bondy's"). Radiance had garnished the wages of David Sherrill, who worked for Bondy's. Bondy's stopped paying on the garnishment, claiming Sherrill had left its employment, but continued to pay for Sherrill's services through a company created by Sherrill's wife. Radiance argued that Bondy's should still comply with the garnishment by withdrawing funds owed for Sherrill's services.The Henry Circuit Court had initially entered a garnishment judgment in favor of SE Property Holdings, LLC, which was later substituted by Radiance. Bondy's reported Sherrill's employment termination in September 2019, two months after the required notice period. Radiance filed a motion for judgment against Bondy's, arguing that Sherrill continued to provide services to Bondy's through his wife's company, KDS Aero Services, LLC. Bondy's responded with a motion to dismiss, claiming Sherrill was an independent contractor. The trial court granted Bondy's motion to dismiss and denied Radiance's motion.The Supreme Court of Alabama reviewed the case de novo. The court found that genuine issues of material fact existed regarding whether Bondy's payments to KDS Aero Services were actually owed to Sherrill. The lack of a contract or invoices between Bondy's and KDS Aero Services, coupled with inconsistencies in Sherrill's representations about his employment and residence, suggested potential fraud or misuse of corporate form to hide funds. The court reversed the trial court's judgment and remanded the case for further proceedings, emphasizing that neither party had met the burden for summary judgment. View "Radiance Capital Receivables Twelve, LLC v. Bondy's Ford, Inc." on Justia Law

Jonathan Michel, a sophomore at Yale University during the Spring 2020 semester, filed a putative class action against Yale after the university transitioned to online-only classes due to the COVID-19 pandemic. Michel sought tuition refunds, claiming promissory estoppel and unjust enrichment under Connecticut law, arguing that Yale's refusal to refund tuition was inequitable since the online education provided was of lower value than the in-person education promised.The United States District Court for the District of Connecticut granted Yale's motion for summary judgment, concluding that Michel did not present evidence of financial detriment caused by the transition to online classes, a necessary element for both promissory estoppel and unjust enrichment claims. The court dismissed Michel's suit on January 31, 2023.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that Michel's quasi-contract claims were barred by a "Temporary Suspension Provision" in Yale's Undergraduate Regulations. This provision, which acted as a force majeure clause, allowed Yale to transition to online-only classes during the pandemic without issuing tuition refunds. The court concluded that Michel and Yale had a contractual relationship governed by this provision, which precluded Michel's quasi-contract claims. Therefore, Yale was entitled to summary judgment. View "Michel v. Yale University" on Justia Law

Windward Bora LLC purchased a junior promissory note signed by Constance and Royston Browne, secured by a junior mortgage on real property. Windward's predecessor had already obtained a final judgment of foreclosure on the junior mortgage. Without seeking leave from the court that issued the foreclosure, Windward filed a diversity action to recover on the promissory note. Both parties moved for summary judgment.The United States District Court for the Southern District of New York granted the Brownes' motion for summary judgment and denied Windward's. The court found diversity jurisdiction by comparing the national citizenship of the Brownes with that of Windward’s sole member, a U.S. lawful permanent resident, and concluded that state domiciles were irrelevant. It also held that the suit was precluded by New York’s election-of-remedies statute because Windward did not seek leave before suing on the note after its predecessor had already sued on the mortgage. The court found no special circumstances to excuse Windward’s failure.The United States Court of Appeals for the Second Circuit reviewed the case. It agreed with the district court that diversity jurisdiction was present but clarified that the state domiciles of the parties were relevant. The court resolved a divide among district courts, stating that there is no diversity jurisdiction in a suit between U.S. citizens and unincorporated associations with lawful permanent resident members if such jurisdiction would not exist in a suit between the same U.S. citizens and those permanent resident members as individuals. The court also affirmed the district court’s decision to grant summary judgment for the Brownes under New York’s election-of-remedies statute, finding no special circumstances to excuse Windward’s failure to seek leave. The judgment of the district court was affirmed. View "Bora v. Browne" on Justia Law

Farzam Salami received emergency services at Los Robles Regional Medical Center on three occasions in 2020. He signed a conditions of admission contract agreeing to pay for services rendered, as listed in the hospital's chargemaster. Los Robles billed him for these services, including a significant emergency services fee (EMS fee). Salami paid part of the discounted bill but disputed the EMS fee, claiming it covered general operating costs rather than services actually rendered. He argued that had he known about the EMS fee, he would have sought treatment elsewhere.Salami sued Los Robles in December 2021 for breach of contract and declaratory relief. The trial court sustained Los Robles's demurrer to the first amended complaint (FAC), finding that Salami did not allege he performed his duties under the contract or that Los Robles failed to perform its duties. The court also found that the breach of contract claim could not be cured by amendment. Salami was granted leave to amend to assert claims under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). In his third amended complaint (TAC), Salami alleged that Los Robles failed to disclose the EMS fee adequately.The Court of Appeal of the State of California, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that Los Robles had no duty to disclose the EMS fee beyond including it in the chargemaster. The court referenced recent cases, including Moran v. Prime Healthcare Management, Inc., which held that hospitals are not required to provide additional signage or warnings about EMS fees. The court concluded that Los Robles complied with its statutory and regulatory obligations, and Salami's claims under the UCL and CLRA failed as a result. The judgment in favor of Los Robles was affirmed. View "Salami v. Los Robles Regional Medical Center" on Justia Law

Michigan First Credit Union reimbursed its customers for unauthorized electronic fund transfers resulting from a SIM Swap scam involving T-Mobile USA, Inc. Michigan First sought to recover these funds from T-Mobile, claiming indemnification or contribution under the Electronic Fund Transfer Act (EFTA) and state law. The district court dismissed the complaint, ruling that Michigan First failed to state a claim for indemnification or contribution under both the EFTA and state law.The United States District Court for the Eastern District of Michigan dismissed Michigan First’s claims, finding no basis for indemnification or contribution under the EFTA or state law. Michigan First appealed, arguing that the EFTA implies a right to indemnification or contribution, that the Michigan Electronic Funds Transfer Act (MEFTA) is not preempted by the EFTA, and that its state common-law indemnification claim should stand.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that the EFTA does not imply a right to indemnification or contribution for financial institutions, as the statute is designed to protect consumers, not financial institutions. The court also found that the EFTA preempts the MEFTA and any state common-law claims for indemnification or contribution, as allowing such claims would conflict with the EFTA’s comprehensive regulatory scheme. Consequently, the Sixth Circuit affirmed the district court’s dismissal of Michigan First’s complaint. View "Michigan First Credit Union v. T-Mobile USA, Inc." on Justia Law

Samuel Boytor, an engineer and businessman, and his wife Carol, defaulted on loans they had personally guaranteed. They entered into a settlement agreement with EFS Bank’s successor, restructuring their debt into three new promissory notes secured by mortgages on their properties. PNC Bank, which eventually held these notes, filed a complaint in 2018 against the Boytors for defaulting on two of the notes. PNC sought foreclosure on the Boytors’ residential property and a money judgment for the nonpayment of a separate note.The United States District Court for the Northern District of Illinois held a bench trial and found in favor of PNC on both counts. The court ordered foreclosure on the Boytors’ residential property and issued a deficiency judgment after the property was sold. The Boytors appealed the decision.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The appellate court held that PNC had established a prima facie case for foreclosure by presenting the mortgage and underlying note. The Boytors’ affirmative defenses, including lack of consideration and payment of the notes, were rejected. The court found that the $203,000 note was supported by consideration and that the Boytors had not paid the note. Additionally, the court determined that the $200,000 note was not paid, and the release of the mortgage did not extinguish the underlying debt. The court also rejected the Boytors’ argument of accord and satisfaction, finding no evidence of a new arrangement to pay less than the outstanding debt. View "PNC Bank, National Association v. Boytor" on Justia Law