Justia Contracts Opinion Summaries

TIG Insurance Company (“TIG”) appeals from a judgment and order of the district court. TIG asserts that Judge Ramos erred in ordering it to arbitrate a coverage dispute with ExxonMobil Oil Corporation (“Exxon”). Even if it was required to arbitrate, TIG contends that Judge Ramos erred in awarding Exxon prejudgment interest when confirming the arbitral award. After entering judgment, and after TIG had appealed, the district court clerk notified the parties that it was brought to Judge Ramos’s attention that he owned stock in Exxon when he presided over the case. Nothing in the record suggests that Judge Ramos was aware of his conflict at the time he rendered his decisions, and the parties do not suggest otherwise. TIG moved in the district court to vacate the judgment. The case was reassigned to a different judge, who denied the motion to vacate. TIG appealed from that denial as well.The Second Circuit affirmed the district court’s denial of Appellant’s motion to vacate and the district court’s order compelling arbitration, reversed in part its decision granting Exxon’s request for prejudgment interest, and remanded to the district court for further proceedings. The court explained that vacatur was not required because this case presents only questions of law, and a non-conflicted district judge reviewed the case de novo. As to the merits, the court held that the district court did not err in compelling arbitration because the parties were subject to a binding arbitration agreement, but that the district court erred in ordering TIG to pay pre-arbitral-award interest. View "ExxonMobil Oil Corporation v. TIG Insurance Company" on Justia Law

Harrison Co., L.L.C. executed a credit agreement with A-Z Wholesalers, Inc. to supply A-Z with tobacco products and other goods. Barkat Ali personally guaranteed A-Z’s payment. A-Z fell behind $2.6 million on payments for the goods it received, so Harrison sued for breach of contract and breach of guaranty actions against A-Z and Ali. The district court granted summary judgment for Harrison.A-Z and Ali argue there is a genuine dispute of material fact as to whether the sales that Harrison is seeking payment for were, in reality, sales from Imperial following the merger of the two companies. The Fifth Circuit affirmed. The court wrote that Imperial and Harrison are—and always have been—separate entities with their own employees, customers, and warehouses. As the district court explained, A-Z and Ali do not allege, let alone present evidence, “that A-Z experienced any changes in ordering procedures, pricing, delivery schedules, type or brand of goods, inventory availability, or any other indicia that . . . [shows] it was no longer doing business with Harrison.” Therefore, the district court did not err in granting summary judgment. View "Harrison Company v. A-Z Whsle" on Justia Law

The United States Federal District Court for the Western District of Washington certified a question of law to the Washington Supreme Court. Cox Construction was the general contractor of a remodeling project. Cox hired Baker & Son Construction, Inc. as a subcontractor. A Baker employee allegedly caused a two-by-four to fall from a railing and strike Ronnie Cox, owner of Cox Construction, who later died from his injury. Baker allegedly called an insurance agent to alert them of the incident. The agent told Baker that no action needed to be taken because at that time, no claim existed. A few months later, Baker received a wrongful death claim from an attorney representing Cox’s widow. Baker notified its insurer, Preferred Contractors Insurance Company (PCIC) of the claim. PCIC denied coverage, but agreed to defend Baker under a reservation of rights. The certified question to the Washington Supreme Court related to the “claims-made” nature of the policy and the timing of Baker’s tender of Ms. Cox’s claim. The Supreme Court replied to the certified question that in light of RCW 18.27, a contractor’s commercial general liability insurance policy that requires the loss to occur and be reported within the same policy year, and provides neither neither prospective nor retroactive coverage violates Washington’s public policy. View "Preferred Contractors Ins. Co. v. Baker & Son Constr., Inc." on Justia Law

AFC Franchising is an Alabama LLC with its principal place of business in Shelby County, Alabama. Defendant is a resident of New York. Defendant signed a “Master Developer Agreement” with another company, Doctors Express Franchising, to develop urgent-care centers in New York and Connecticut.   After a series of acquisitions, AFC was assigned Doctors Express’s end of the bargain in 2013, and Defendant was notified of the assignment When the parties’ relationship soured, Purugganan threatened to sue AFC in either Connecticut or New York. AFC believed that the floating forum-selection clause required Defendant to sue in Alabama, where AFC had its principal place of business. It thus sought a declaratory judgment in Alabama state court (1) that the parties had to litigate their dispute in Alabama and (2) that AFC hadn’t breached the Master Developer Agreement.   The district court sided with Defendant on the personal jurisdiction issue. The Eleventh Circuit reversed the district court’s decision and held that, in the circumstances presented, the clause is applicable and enforceable. The court explained that the court erred in dismissing for lack of personal jurisdiction. By voluntarily agreeing to an applicable and enforceable floating forum-selection clause, Defendant waived his right to contest personal jurisdiction in this dispute. Further, Defendant offers no reason why he might have consented to personal jurisdiction but not venue. View "AFC Franchising, LLC v. Danilo Purugganan" on Justia Law

Taizhou, a Chinese manufacturer, entered into a Cooperation Agreement with Z Outdoor, a Wisconsin company owned by Casual Products: Taizhou would manufacture outdoor furniture and other related items for Z Outdoor to sell to customers. Z Outdoor eventually stopped paying Taizhou. The Cornings, on behalf of Z Outdoor, made false statements about future business, forthcoming payments, and causes for the delays. Taizhou continued to fill customer orders without receiving compensation. In 2018, AFG (a Wisconsin LLC also owned by Casual) started submitting purchase orders to Taizhou. AFG never signed the Cooperation Agreement. Taizhou filled the orders and sent AFG invoices. AFG eventually stopped paying Taizhou and made false statements regarding payment delays. The total due from Z Outdoor and AFG accrued to $14 million for purchase orders sent, 2017-2019.The district court entered a default judgment against the corporate defendants on Taizhou's contract claims but ruled against Taizhou on unjust enrichment, fraud, and conversion claims, finding the fraud and conversion claims barred by Wisconsin’s economic loss doctrine and q “mere repackaging of Taizhou’s ‘straightforward breach of contract claim.’” The Seventh Circuit affirmed. Any fraud was interwoven with the Cooperation Agreement, so the economic loss doctrine applies. To the extent the damages amounted to lost profits or lost business, those are also economic losses under Wisconsin law. View "Taizhou Yuanda Investment Group Co., Ltd. v. Z Outdoor Living, LLC" on Justia Law

The First Circuit affirmed the order of the district court granting summary judgment in favor of Defendants and dismissing Plaintiffs' hybrid breach of contract and fair representation claim, their Takings Clause claim, and their claim for declaratory relief, holding that there was no error or abuse of discretion.Plaintiffs, five sergeants in the City of Cranston Police Department, brought this lawsuit against the City of Cranston, the International Brotherhood of Police Officers, Local 301 (the Union), and Matthew Josefson. Plaintiffs were promoted to the rank of sergeant during the time period between Josefson's demotion and reinstatement and then, after Josefson's reinstatement, moved down one position in sergeant rank seniority. Plaintiffs brought suit, alleging several claims. The district court granted summary judgment for Defendants on all claims. The First Circuit affirmed, holding that Plaintiffs' claims failed. View "Barth v. City of Cranston" on Justia Law

In 2001, Levy, a 37-year-old single mother of two, purchased a 20-year term life insurance policy from West Coast, with a $3 million benefit payable upon her death to her sons. In January 2019, Benita—in deteriorating physical and mental health—missed a payment. Approximately five months later, she died, having never paid the missed premium. West Coast declared the policy forfeited.Levy's sons filed suit, alleging breach of contract and that a late-2018 missed-payment notice failed to comply with the Illinois Insurance Code, which forbids an insurer from canceling a policy within six months of a policyholder’s failure to pay a premium by its due date (calculated to include a 31-day grace period) unless the insurer provided notice stating “that unless such premium or other sums due shall be paid to the company or its agents the policy and all payments thereon will become forfeited and void, except as to the right to a surrender value or paid-up policy as provided for by the policy.” West Coast’s 2018 notice incorporated much of the statutory language. The Seventh Circuit affirmed the dismissal of the complaint. The Notice adequately alerted policyholders to the consequences of nonpayment; there was no need for the Notice to mention the company’s agents as alternate payees. View "Levy v. West Coast Life Insurance Co." on Justia Law

Plaintiff sued to obtain two insurance benefits that she believes Hartford Insurance Company owes her: (1) long-term disability payments and (2) a waiver of life insurance premiums. Although it concedes that Plaintiff was covered by its policy, Hartford contends that she was ineligible for those benefits.The Eleventh Circuit affirmed the district court’s order granting Hartford summary judgment, concluding that Hartford’s determinations were permissible. The court explained that Plaintiff was not entitled to disability payments because Hartford’s interpretation of the disability exclusion was reasonable, and its conflict of interest didn’t lead it to make an arbitrary or capricious decision. Likewise, Plaintiff was not entitled to a waiver of life insurance premiums because she wasn’t disabled within the meaning of Hartford’s life insurance policy. View "Carol H. Stewart v. Hartford Life and Accident Insurance Company" on Justia Law

The issue this appeal presented for the New Jersey Supreme Court’s review centered on an exclusionary clause in a commercial general liability insurance policy issued by Admiral Insurance Company (Admiral) to Richfield Window Coverings, LLC (Richfield). Richfield sold window coverage products, including blinds, to national retailers like Home Depot and provided retailers with machines to cut the blinds to meet the specifications of the retailers’ customers. Colleen Lorito, an employee of a Home Depot located in Nassau County, was injured while operating the blind cutting machine. She and her husband filed a civil action against Richfield, asserting claims for product liability, breach of warranty, and loss of spousal services. Admiral denied any obligation to defend or indemnify, asserting the claims were not covered under the policy based on the Designated New York Counties Exclusion of the insurance policy. Richfield filed a declaratory judgment action seeking to compel Admiral to defend it in the Lorito case and, if necessary, indemnify it against any monetary damages awarded to the plaintiffs. The Law Division granted summary judgment in favor of Admiral. The Appellate Division reversed, finding that “Richfield’s limited activities and operations have no causal relationship to the causes of action or allegations.” The Supreme Court found that the policy’s broad and unambiguous language made clear that a causal relationship was not required in order for the exclusionary clause to apply; rather, any claim “in any way connected with” the insured’s operations or activities in a county identified in the exclusionary clause was not covered under the policy. Richfield’s operations in an excluded county were alleged to be connected with the injuries for which recovery was sought, so the exclusion applied. Admiral had no duty to defend a claim that it is not contractually obligated to indemnify. View "Norman International, Inc. v. Admiral Insurance Company " on Justia Law

CAE Integrated L.L.C. and Capital Asset Exchange and Trading, L.L.C. (collectively CAE) sued its former employee and his current employer, Moov, for misappropriation of trade secrets and then moved for a preliminary injunction. The district court denied the preliminary injunction and CAE appealed.   The Fifth Circuit affirmed the denial finding that CAE failed to establish a likelihood of success on the merits of its claims. The court considered that trade secret information derives independent economic value from being not generally known or readily ascertainable through proper means. What CAE refers to as the “transactional documents” are files from Google Drive with purchase orders, invoices, customer equipment needs, and pricing history. The former employee has not had access to his MacBook since 2016 and he testified that Google Drive contained none of the transactional documents when he started at Moov. The district court found the employee’s testimony credible and the forensic analysis confirmed that before the employee began at Moov, he deleted any remaining transactional documents from his Google Drive. Therefore, the district court did not clearly err in finding that neither the employee nor Moov misappropriated trade secrets. Further, even if CAE had established that the employee or Moov misappropriated trade secrets, it failed to show the use or potential use of trade secrets. View "CAE Integrated v. Moov Technologies" on Justia Law