Justia Contracts Opinion Summaries

An insured fell from a roof and became paralyzed from the waist down, never to walk again. Within months, his medical bills climbed past $400,000, and future costs were projected into the millions. Three insurance companies potentially provided coverage for the insured. This appeal is a battle between the two of them. The primary insurer was Southern Owners Insurance Company. At the time of the accident, the insured was performing subcontracting work for Beck Construction, which had a policy with American Builders Insurance Company and an excess policy with Evanston Insurance Company. American Builders investigated the accident, assessed Beck Construction’s liability, and evaluated the claim. Southern-Owners did little to nothing for months. American Builders then sued Southern-Owners for common law bad faith under Florida’s doctrine of equitable subrogation. Southern-Owners moved for summary judgment, but the district court denied the motion. A federal trial jury heard the case and found in favor of American Builders. After the entry of final judgment, Southern-Owners sought judgment matter of law or, in the alternative, a new trial. On appeal, Southern-Owners challenges the denials of its summary judgment and post-trial motions.   The Eleventh Circuit affirmed. The court held that taking the evidence in the light most favorable to American Builders, a reasonable jury could have found (as it did) both that Southern-Owners acted in bad faith and that its bad faith caused American Builders to pay its policy. Moreover, American Builders did not breach Southern-Owners’ contract and relieve Southern-Owners of its good-faith duties. The district court did not err in denying Southern-Owners’ Rule 50(b) motion. View "American Builders Insurance Company v. Southern-Owners Insurance Company" on Justia Law

This appeal arises out of an insurance dispute involving a yacht, the Serendipity, that was destroyed by Hurricane Dorian, a Category 5 storm, that slammed into Great Abaco Island in the Bahamas. Serendipity at Sea, LLC (“Serendipity, LLC”), a holding company created by M.S. and J.E. (“the Managers”) to manage the Serendipity, sued Underwriters at Lloyd’s of London Subscribing to Policy Number 187581 (“Lloyd’s”) for breach of contract after Lloyd’s denied the the Managers insurance claim for the damage Hurricane Dorian caused to the Serendipity. In denying that it had breached the contract, Lloyd’s argued that it was not liable because Serendipity, LLC did not employ a full-time licensed captain in violation of the policy’s Captain Warranty, and that the breach increased the hazard to the yacht because a licensed captain would have operated the vessel back to Florida when Hurricane Dorian formed and was forecast to hit the Bahamas.   The district court granted summary judgment in favor of Lloyd’s. It found that the Captain Warranty was unambiguous; that Serendipity, LLC breached the agreement by failing to hire a full-time licensed captain; and that the breach increased the hazard posed to the Serendipity based on the purportedly undisputed testimony of an expert hired by Lloyd’s. The Eleventh Circuit reversed the district court’s grant of summary judgment in favor of Lloyd’s and remanded. The court explained that while it agreed with the district court’s conclusion that Serendipity, LLC breached the Captain Warranty, a disputed question of material fact remains about whether the breach increased the hazard posed to the vessel. View "Serendipity at Sea, LLC v. Underwriters at Lloyd's of London Subscribing to Policy Number 187581" on Justia Law

Barry Clarke brought this action for specific performance of a right of first refusal. Clarke owned a strip club at 2015 Pittsburgh Avenue in Charleston, South Carolina. Group Investment Company, Inc., whose shareholders were John Robinson and Robin Robinson, owned a strip club across the street at 2028 Pittsburgh Avenue (the Subject Property). The Subject Property included buildings, a parking lot, and other land. In 1999, Clarke and Group Investment entered into a recorded lease that allowed Clarke to use half of the parking spaces located on the Subject Property. In 2007, Group Investment conveyed the Subject Property to RRJR, LLC for the stated consideration of $5.00. John Robinson and Robin Robinson were members of RRJR. Clarke testified he "probably" knew Group Investment transferred the Subject Property to RRJR, but Clarke claimed he did not seek to exercise the Right at that time because Group Investment and RRJR were "the same people." In 2013, RRJR conveyed the Subject Property to Fine Housing for $150,000.00. Fine Housing's closing attorney did not take note of the Lease or the Right prior to the closing, but Fine Housing conceded it had record notice of both the Lease and the Right. Neither Fine Housing nor RRJR notified Clarke of the sale of the Subject Property. Clarke learned of the sale in March 2014, and in May 2015, Clarke initiated this action for specific performance against Fine Housing and RRJR. RRJR did not answer and was in default. After a bench trial, the trial court ruled the Right was enforceable as to the entire Subject Property and ordered Fine Housing to convey title to the Subject Property to Clarke upon his payment of $350,000.00. The court of appeals reversed, holding the Right was an unreasonable restraint on alienation and was therefore unenforceable. The South Carolina Supreme Court found the Right did not identify the property it encumbered, contain price provisions, or contain procedures governing the exercise of the Right. Therefore, the Court concluded the Right was an unreasonable restraint on alienation, and affirmed the court of appeals' holding that the Right was unenforceable. View "Clarke v. Fine Housing, Inc." on Justia Law

The Supreme Judicial Court affirmed the decision of the district court granting summary judgment in favor of Seller in this case stemming from the economic disruption caused by the COVID-19 pandemic, holding that there was no error in the proceedings below.Specifically at issue was, in light of the disruptions caused by COVID-19 pandemic, whether the doctrines of impracticability of performance or frustration of purpose temporarily excused the purchaser of a cleaning services franchise and the purchaser's co-owners from their obligation to pay the outstanding portion of the purchase price of the franchise. The district court granted summary judgment in favor of the property seller. The First Circuit affirmed, holding (1) the record did not support a rational finding that the pandemic cause date continued payment of the franchise purchase price to be impracticable or frustrated the principal purpose of the contract; and (2) the parties intended that the obligation to pay would not be conditioned on the franchise's financial performance beyond the first six months following the sale. View "Le Fort Enterprises, Inc. v. Lantern 18, LLC" on Justia Law

The First Circuit affirmed the judgment of the federal district court dismissing Plaintiff's complaint alleging contract claims against Defendant, holding that Plaintiff insufficiently pled that her claims met the amount in controversy required by 28 U.S.C. 1332(a).Plaintiff filed a complaint against Defendant in the United States District Court for the District of Rhode Island asserting diversity jurisdiction. Plaintiff asserted claims for breach of contract, breach of implied warranty, and breach of the duty of good faith and fair dealing, alleging that her claims exceeded the statutory amount-in-controversy requirement. The district court granted Defendant's motion to dismiss for lack of jurisdiction. The First Circuit affirmed, holding that Plaintiff did not meet her burden of establishing the amount in controversy required for diversity jurisdiction. View "Andersen v. Vagaro, Inc." on Justia Law

Petitioners Geoff Cole and Admiral’s Experience, Inc. sought a writ of mandate to compel the trial court to calendar their timely motion for summary judgment for a hearing before the start of trial. The Court of Appeal notified the parties it was considering issuing a peremptory writ in the first instance (Palma v. U.S. Industrial Fasteners, Inc., 36 Cal.3d 171(1984)), and read and considered the informal response and request for judicial notice from real party in interest Matt Zeiner (Zeiner). Petitioners also field a reply brief, which Zeiner requested to strike. In 2018, a dispute arose between petitioners and Zeiner after a trailer petitioners rented from Zeiner was destroyed. In January 2019, Zeiner initiated the underlying lawsuit against petitioners seeking to recover for the loss of the trailer. The Court of Appeal granted the request for judicial notice, denied Zeiner’s request to strike the reply brief, and concluded that petitioners were entitled to peremptory writ relief. The Court published its decision to provide guidance on the deadline for filing a summary judgment motion that is served electronically. View "Cole v. Super. Ct." on Justia Law

The First Circuit affirmed the judgments of the district court dismissing part of Plaintiff's putative class action for failure to state a claim and entering summary judgment disposing of the remainder of his claims, holding that there was no error in the proceedings below.In his complaint, Plaintiff argued that an increased coverage limit on his house and premium violated the terms of his contract with Amica Mutual Insurance Company and that he and other Amica insureds paid too much to insure their homes. The district court dismissed the breach of contract and implied covenant of good faith and fair dealing claims and then granted summary judgment for Amica on the unjust enrichment, money had and received, and Mass. Gen. Laws ch. 93A claims. The First Circuit affirmed, holding that there was no reversible error in the proceedings below. View "Gottlieb v. Amica Mutual Insurance Co." on Justia Law

Evanston Insurance Company appealed the judgment following a bench trial on an insurance-coverage dispute. After determining that Evanston failed to timely rescind the policy and that a policy exclusion did not apply, the district court required Evanston to continue defending Desert State Life Management against a class action arising from its former CEO’s embezzlement scheme. Though the Tenth Circuit agreed with the district court that rescission was untimely, it disagreed about the likely application of New Mexico law on applying policy exclusions. Judgment was thus affirmed in part and reversed in part. View "Evanston Insurance Company v. Desert State Life Management, et al." on Justia Law

Doe alleges that she was sexually assaulted by a massage therapist during a massage at a San Rafael Massage Envy retail location. She filed suit against the Arizona-based franchisor that licenses the “Massage Envy” brand name (MEF), and the independently owned San Rafael franchise where the assault allegedly occurred. MEF moved to compel arbitration on the basis of a “Terms of Use Agreement” presented to Doe when she checked in for a massage she had booked at the franchise location. The trial court concluded that there was no agreement to arbitrate between Doe and MEF.The court of appeal affirmed, rejecting MEF’s argument that the “Terms of Use Agreement,” which was available to Doe via a hyperlink on the electronic tablet she was given at the franchise, was a valid and enforceable “clickwrap” agreement of the sort that courts routinely enforce. Doe did not have reasonable notice that she was entering into any agreement with MEF, much less notice of the terms of the agreement. The transaction was nothing like the typical transactions in which clickwrap agreements are used; Doe went to a physical location, where she was already a member, and was handed a tablet to check in for a massage. View "Doe v. Massage Envy Franchising, LLC" on Justia Law

Plaintiff brought a lawsuit against Allianz Life Insurance Company of North America (“Allianz”) in Plaintiff’s capacity as a trustee of the Zupnick Family Trust 2008A (“Trust”). Plaintiff sought a declaratory judgment that an Allianz life insurance policy (“Zupnick Policy”), which Plaintiff contends is owned by the Trust, remains in effect. The district court concluded that the Trust was not the actual owner of the Zupnick Policy under New York law because any assignment of the policy to the Trust failed to comply with the Zupnick Policy’s provision that assignment would be effective upon Allianz’s receipt of written notice of the assignment. The district court held that the Trust lacked contractual standing to sue on the Zupnick Policy, and granted Allianz’s motion to dismiss. On appeal, Plaintiff argued that failure to comply with the provisions of a life insurance policy requiring written notice of assignment cannot, under New York law, render an assignment ineffective.   The Second Circuit certified the question to the Court of Appeals because the argument turns on a question of state law for which no controlling decision of the New York Court of Appeals exists. The court certified the following question: Where a life insurance policy provides that “assignment will be effective upon Notice” in writing to the insurer, does the failure to provide such written notice void the assignment so that the purported assignee does not have contractual standing to bring a claim under the Policy? View "Brettler v. Allianz Life Insurance Company of North America" on Justia Law