Justia Contracts Opinion Summaries

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

Following the September 11 attacks, Kellogg Brown & Root International (KBR) contracted with the U.S. Army to provide logistics support in Iraq and Kuwait. KBR subcontracted with First Kuwaiti General Trading & Contracting W.L.L. (First Kuwaiti) to provide trailers for troops. First Kuwaiti incurred significant unanticipated costs and sought additional payment from KBR. Disputes arose, leading to arbitration before the International Center for Dispute Resolution (ICDR). The ICDR Panel issued a final award denying First Kuwaiti’s claim for payment and resolving all disputes. First Kuwaiti’s request for changes to the award was rejected by the ICDR Panel.First Kuwaiti filed a motion in the U.S. District Court for the Eastern District of Virginia to vacate the arbitration award, which KBR opposed as untimely. KBR also filed a cross-motion to confirm the award. The district court denied First Kuwaiti’s motion to vacate as untimely and granted KBR’s motion to confirm the award. Additionally, the district court denied First Kuwaiti’s request for prejudgment interest on two other claims unrelated to the trailer damages.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s decision, holding that First Kuwaiti’s motion to vacate was untimely as it was filed more than three months after the final arbitration award was delivered. The court also held that the district court had the authority to confirm the arbitration award under Chapter Two of the Federal Arbitration Act, which applies to arbitrations involving foreign parties and does not require consent for judicial confirmation. Lastly, the court found no abuse of discretion in the district court’s denial of prejudgment interest, as the stipulations did not explicitly provide for such interest and the circumstances did not warrant it. The Fourth Circuit affirmed the district court’s orders. View "First Kuwaiti General Trading & Contracting W.L.L. v. Kellogg Brown & Root International, Incorporated" on Justia Law

Ryan West, a former employee of Village Practice Management Company, LLC ("Village"), sought a declaratory judgment from the Court of Chancery of Delaware. West argued that Village could not declare a forfeiture of his vested Class B Units after he joined a competitor post-employment, as the Agreement did not limit post-employment competitive activities. Village contended that West forfeited his vested Class B Units by joining a competitor, invoking the Management Incentive Plan's ("Plan") forfeiture provisions.The Court of Chancery denied Village's motion to stay proceedings and compel West to submit his claims to Village's Compensation Committee. The court then granted West's motion for judgment on the pleadings, holding that the Agreement only restricted "detrimental activity" during employment. Consequently, Village could not enforce a forfeiture of West's vested Class B Units for activities occurring after his resignation. The court also awarded West his attorneys' fees.On appeal, the Supreme Court of Delaware reversed the Court of Chancery's decision. The Supreme Court found that the term "Participant" in the Agreement could reasonably be interpreted to include former employees, making the Agreement ambiguous. Therefore, the grant of judgment on the pleadings in favor of West was improper. The Supreme Court also reversed the award of attorneys' fees to West, as he was no longer the prevailing party. However, the Supreme Court upheld the Court of Chancery's denial of Village's request for a stay, distinguishing the case from others that required disputes to be resolved by a committee first. The case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Village Practice Management Company, LLC v. West" on Justia Law

Susan Miele was hired by Foundation Medicine, Inc. (FMI) in 2017 and signed a restrictive covenant agreement that included a nonsolicitation provision. In 2020, Miele and FMI executed a transition agreement upon her separation, which incorporated the restrictive covenant agreement and included a forfeiture clause. FMI paid Miele approximately $1.2 million in transition benefits. After joining Ginkgo Bioworks in 2021, Miele allegedly solicited FMI employees to join Ginkgo, leading FMI to cease further payments and demand repayment of benefits.Miele sued FMI in late 2021 for breach of the transition agreement, and FMI counterclaimed for breach of contract. Miele moved for judgment on the pleadings, arguing that the provisions FMI relied on were unenforceable under the Massachusetts Noncompetition Agreement Act. A Superior Court judge granted Miele's motion in part, ruling that FMI could not enforce the forfeiture provision but allowed FMI to assert Miele's breach as a defense and seek damages. The judge concluded that the transition agreement qualified as a "forfeiture for competition agreement" under the act.The Supreme Judicial Court of Massachusetts reviewed the case. The court held that the Massachusetts Noncompetition Agreement Act does not apply to a nonsolicitation agreement, even if it includes a forfeiture provision. The court reasoned that the act explicitly excludes nonsolicitation agreements from its scope, and a forfeiture clause does not change this exclusion. The court reversed the Superior Court's order partially granting Miele's motion for judgment on the pleadings and remanded the matter for further proceedings consistent with its opinion. View "Miele v. Foundation Medicine, Inc." on Justia Law

In 1997, William Brokaw Price’s parents entered into a contract with Carri Scharf Trucking, Inc. (CST) for surface-level mining on their property. The contract allowed CST to extract sand, gravel, and topsoil in exchange for royalty payments. As the contract neared its end in 2010, Bill Price, Brokaw’s father, communicated with CST about future plans for the property but passed away shortly after. Years later, Brokaw discovered that the property had not been reclaimed as required by the contract, leading to a dispute over CST’s reclamation obligations and alleged trespassing.The Prices sued CST for breach of contract, and CST counterclaimed for breach based on the Prices’ trespass accusations. The first trial ended in a mistrial, and the second trial resulted in a verdict for CST. The district court denied the Prices’ motion for judgment as a matter of law and rejected CST’s request for attorney’s fees under the contract’s fee-shifting provision.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court’s decision, holding that the contract did not set a firm deadline for reclamation and allowed for a jury to resolve factual disputes about the instructions given by Bill Price. The jury had a sufficient basis for its verdict in favor of CST. Additionally, the court held that CST was not entitled to attorney’s fees because the contract’s fee-shifting provision only applied to parties enforcing the contract’s terms, and CST’s successful defense did not trigger that provision. The court affirmed the judgment of the district court in all respects. View "Price v Carri Scharf Trucking, Inc." on Justia Law

A contractor hired a subcontractor to work on a remote bridge construction project. The scope of the work changed, and neither party kept detailed records of the changes and associated costs. Years after the project was completed, the subcontractor sued for damages, claiming unpaid work. The superior court found that the subcontract did not govern the extra work, awarded some damages to the subcontractor, and precluded some claims due to discovery violations. The court also found the contractor to be the prevailing party and awarded attorney’s fees. Both parties appealed.The superior court denied summary judgment motions from both parties, finding factual disputes. It precluded the subcontractor from pursuing certain damages claims due to insufficient documentation but allowed evidence for contingent findings. After a bench trial, the court awarded the subcontractor $191,443.42, later reduced to $146,693.42 upon reconsideration. The court found the contractor to be the prevailing party under Rule 68 and awarded attorney’s fees.The Supreme Court of Alaska reviewed the case. It concluded that the superior court abused its discretion by precluding the subcontractor’s claims for snowmachine use and labor without considering less severe sanctions. The court affirmed the superior court’s findings on other damages but reversed the awards for Morris Johnson’s labor and boat use, remanding for recalculation. The prevailing party determination and attorney’s fee award were vacated and remanded for reconsideration. The court otherwise affirmed the superior court’s judgment. View "Johnson v. Albin Carlson & Co." on Justia Law

White Knight Development, LLC entered into a contract in 2015 to purchase land from Dick and Julie Simmons for $400,000. The contract included a "buy-back" provision allowing White Knight to require the Simmonses to repurchase the property if certain restrictions were extended. When the restrictions were extended in October 2016, White Knight invoked the buy-back provision, but the Simmonses refused to repurchase the property. White Knight sued for breach of contract and sought specific performance and damages related to the delay in performance.The trial court found that the Simmonses breached the contract and awarded White Knight specific performance, ordering the Simmonses to repurchase the property for $400,000. Additionally, the court awarded White Knight $308,136.14 in damages for various costs incurred due to the delay in performance. These costs included property taxes, loan interest, and other expenses related to the property and White Knight's business operations.The Court of Appeals for the Tenth District of Texas modified the judgment by deleting the $308,136.14 monetary award but otherwise affirmed the trial court's decision. The court acknowledged that monetary compensation could be awarded alongside specific performance in narrow circumstances but found no express statement by the trial court that the monetary award was equitable in nature.The Supreme Court of Texas held that while specific performance usually precludes a monetary award, there are narrow circumstances where both can be awarded. The court concluded that the trial court's findings supported an equitable monetary award to account for the delay in performance. The Supreme Court reversed the Court of Appeals' judgment in part and remanded the case for further review of the monetary award consistent with the principles announced. View "WHITE KNIGHT DEVELOPMENT, LLC v. SIMMONS" on Justia Law

Two air ambulance providers, Guardian Flight, LLC, and Med-Trans Corporation, sued Health Care Service Corporation (HCSC) for failing to timely pay dispute resolution awards under the No Surprises Act (NSA). The providers also claimed that HCSC improperly denied benefits under the Employee Retirement Income Security Act (ERISA) and was unjustly enriched under Texas law.The United States District Court for the Northern District of Texas dismissed the providers' complaint. The court found that the NSA does not provide a private right of action for enforcing dispute resolution awards. It also dismissed the ERISA claim for lack of standing, as the providers did not show that the beneficiaries suffered any injury since the NSA shields them from liability. Lastly, the court dismissed the quantum meruit claim, stating that the providers did not perform their services for HCSC's benefit. The court also denied the providers' request for leave to amend their complaint, deeming it futile.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The appellate court agreed that the NSA does not contain a private right of action and that the statute's text and structure support this conclusion. The court also upheld the dismissal of the ERISA claim, reiterating that the beneficiaries did not suffer any concrete injury. Finally, the court affirmed the dismissal of the quantum meruit claim, as the providers did not render services for HCSC's benefit. The appellate court also found no abuse of discretion in the district court's denial of leave to amend the complaint. View "Guardian Flight v. Health Care Service" on Justia Law

West Virginia filed a complaint in state court against CaremarkPCS Health, LLC, a pharmacy benefit manager (PBM), alleging that Caremark unlawfully drove up the cost of insulin, causing financial harm to the state. The complaint included state law claims of civil conspiracy, unjust enrichment, fraud, and breach of contract. Caremark removed the case to federal court under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), arguing that its conduct in negotiating rebates, which is central to the complaint, was performed under the direction of the federal government as part of its work for federal health plans.The United States District Court for the Northern District of West Virginia found that removal was unwarranted and remanded the case to state court. The district court concluded that Caremark failed to meet the requirements for federal officer removal and noted that West Virginia had disclaimed any federal claims in its complaint.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 Caremark was entitled to remove the case to federal court under § 1442(a)(1). The court found that Caremark acted under a federal officer because it administered health benefits for federal employees under contracts with FEHBA carriers, which are supervised by the Office of Personnel Management (OPM). The court also determined that Caremark had a colorable federal defense, specifically that federal law preempted West Virginia's claims. Finally, the court concluded that the charged conduct was related to Caremark's federal work, as the rebate negotiations for federal and non-federal clients were indivisible. Thus, the Fourth Circuit reversed the district court's remand decision and returned the case to the district court for further proceedings. View "West Virginia ex rel. Hunt v. CaremarkPCS Health, L.L.C." on Justia Law