Justia Contracts Opinion Summaries

Argonaut Insurance Company (“Argonaut”) appealed from an order of the district court remanding this breach-of-bond action, brought by LeChase Construction Services, LLC (“LeChase”), to New York state court after Argonaut removed it on the basis of diversity jurisdiction. The district court purported to issue its remand order pursuant to 28 U.S.C. Section 1447(e), which authorizes remand if, after removal, a plaintiff joins defendants whose inclusion would destroy diversity jurisdiction. The district court expressly acknowledged that section 1447(e) is facially inapplicable here, as LeChase was not seeking to join a non-diverse defendant or otherwise contesting the existence of diversity jurisdiction. Nevertheless, the district court reasoned that, since remand would facilitate this case’s consolidation with two related actions then pending in New York state court, thus conserving judicial resources and avoiding the risk of inconsistent outcomes, it was appropriate under the “rubric” of section 1447(e). At issue was: (1) whether the Second Circuit has appellate jurisdiction over the district court’s remand order notwithstanding Section 1447(d; and (2) if the court does, whether the district court issued such order in excess of its statutory authority under section 1447(e).   The Second Circuit vacated the district court’s order and remanded. The court concluded, as a matter of first impression, that “[section] 1447(d) permits appellate review of a district-court remand order that dresses in [section 1447(e)’s] jurisdictional clothing a patently non-jurisdictional ground,” such as the prudential considerations invoked by the district court here. The court concluded – for essentially the reasons acknowledged by the district court itself – that its remand order here was unauthorized under section 1447(e). View "LeChase Constr. Servs. LLC v. Argonaut Ins. Co." on Justia Law

Plaintiff appealed the district court’s decision dismissing her claims against New York University (NYU) and declining to allow her to amend her complaint to add another plaintiff. Plaintiff s a parent of an adult student who attended New York University (NYU) (Defendant-Appellee) during the Spring 2020 semester—a semester during which NYU suspended its in-person operations and transitioned to remote instruction. Alleging breach of contract, unjust enrichment, and other claims, Plaintiff brought a putative class action suit against NYU to partially recover the tuition and fees she paid for her daughter’s Spring 2020 semester. The district court granted NYU’s motion to dismiss on the basis that Plaintiff lacked standing and denied Plaintiff’s motion to amend her complaint to add a current NYU student as an additional plaintiff because it concluded that amendment would be futile.   The Second Circuit affirmed the judgment of the district court in part, vacated in part, and remanded for further proceedings. The court concluded that the district court correctly determined that Plaintiff lacks standing to bring her breach of contract and unjust enrichment claims because she has not alleged an injury-in-fact to herself, rather than to her daughter. The court held that Plaintiff fails to plausibly allege a claim for conversion. The court wrote that for these reasons, the district court properly dismissed her claims. However, the court concluded that amending the complaint to add a current student as plaintiff would not be futile. The student plaintiff plausibly alleged claims for breach of contract, unjust enrichment, and money had and received that would survive a motion to dismiss. View "Christina Rynasko v. New York University" on Justia Law

In this case concerning the regulation of gambling licenses in the Commonwealth the First Circuit reversed in part the summary judgment for Defendants and certified questions of law to the Massachusetts Supreme Judicial Court (SJC).An option contract for the purchase of land gave Encore Boston Harbor the option to purchase land from FBT Realty, LLC for $75 million should the Massachusetts Gaming Commission grant Encore a gaming license. The Commission ultimately conditioned the grant of the license on a $35 million purchase price for the sale of the land and signed certification by each member of FBT, except for Plaintiff, that they were sole members of the company. Defendants presented Plaintiff with an offer that would "make him whole" if he signed the certification in a contract. Plaintiff executed the required certification and then brought this action alleging, among other claims, breach of contract. The district court granted summary judgment for Defendants, finding no valid or enforceable contract. The First Circuit reversed in part, holding that genuine issues of material fact existed as to certain claims and that the question of whether the contract was unenforceable as contrary to state law and/or as a violation of public policy must be resolved by the SJC. View "Gattineri v. Wynn MA, LLC" on Justia Law

Honey Bum, a rival fast-fashion retailer, alleged that Fashion Nova organized a per se unlawful group boycott by threatening to stop purchasing from certain clothing vendors unless they, in turn, stopped selling to Honey Bum. The district court granted summary judgment on Honey Bum’s Sherman Act § 1 group boycott claim, concluding that Honey Bum failed to create a material dispute as to the existence of a horizontal agreement between the vendors themselves, to boycott Honey Bum. The district court also granted summary judgment on Honey Bum’s California business tort claims.   The Ninth Circuit affirmed the district court’s summary judgment in favor of Fashion Nova, Inc., et al. in an antitrust action brought by Honey Bum, LLC. The panel held that Sherman Act Section 1 prohibits contracts, combinations, and conspiracies that unreasonably restrain trade. In determining the reasonableness of a restraint, two different kinds of liability standards are considered. Some restraints are unreasonable per se because they always or almost always tend to restrict competition and decrease output. Most restraints, however, are subject to the so-called Rule of Reason, a multi-step, burden-shifting framework. The panel held that a group boycott is an agreement among multiple firms not to deal with another firm (the target). Some group boycotts are per se unlawful, while others are not. The panel affirmed the district court’s grant of summary judgment on Honey Bum’s claim for tortious interference with prospective economic relations because that claim required a showing of independent unlawfulness. View "HONEY BUM, LLC V. FASHION NOVA, INC., ET AL" on Justia Law

Ron and Lorrie Meier investigated the purchase of a life insurance policy for Ron through Monarch Solutions. While they considered a policy offered by Lincoln, a nurse assessed Ron’s health and prepared a “Medical Supplement” and “Examiner’s Report.” Ron ultimately applied for a policy with Pacific. In June 2018, Pacific received a copy of the medical forms previously submitted to Lincoln. On July 26, Ron completed his Pacific application, referencing the Lincoln “medical examination.” Ron agreed to several terms, including a provision requiring him to update Pacific “in writing of any changes” to his health. Pacific accepted Ron’s application on July 30 and began the underwriting process. On August 6, Ron learned he had stage IV lung cancer and immediately began treatment. Ron and Lorrie orally disclosed Ron’s cancer diagnosis to their Monarch representative but did not inform Pacific. On September 6, Pacific delivered Ron's policy. A year later Ron died from lung cancer.After learning that Ron had failed to disclose his terminal cancer before the policy’s issuance date, Pacific rejected Lorrie’s claim. Pursuant to the Illinois Insurance Code, Pacific rescinded the policy and returned the premiums. The district court and Seventh Circuit ruled in favor of Pacific. Ron’s failure to inform Pacific of the diagnosis constituted a material misrepresentation allowing for the policy's rescission. View "Meier v. Pacific Life Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the trial court granting a motion to compel arbitration brought by Defendant Star Financial Group, Inc. in this class-action complaint alleging that Defendant collected improper overdraft fees, holding that Plaintiffs' account agreement did not allow Defendant to add an addendum to the terms and conditions of the account agreement.When Plaintiffs opened their checking account they assented to an account agreement detailing the terms and conditions of their relationship with Defendant. Before Plaintiffs brought this suit Defendant added an arbitration and no-class-action addendum to the terms and conditions of Plaintiffs' account agreement. When Plaintiffs filed this lawsuit Defendants cited the addendum and filed a motion to compel arbitration. The trial court granted the motion. The Supreme Court reversed, holding that Plaintiffs were not bound by the arbitration addendum to their account agreement because the account agreement's change-of-terms provision did not allow Plaintiff to add the addendum. View "Decker v. Star Financial Group Inc." on Justia Law

SM, AA and RM are the co-owners of Cannaco Research Corporation (CRC), a licensed manufacturer and distributor of cannabis products. All three individuals served as officers of CRC until February 2021, when AA and RM voted to remove SM from her position. SM sued AA, RM and others, including JA, AA’s husband, in a multicount complaint alleging causes of action for breach of contract, breach of fiduciary duty, fraud and other torts.   AA moved to disqualify SM counsel, Spencer Hosie and Hosie Rice LLP, on the ground SM had impermissibly downloaded from AA’s CRC email account private communications between AA and JA, protected by the spousal communication privilege and provided them to her attorneys, who then used them in an attempt to obtain a receivership for CRC in a parallel proceeding. The trial court granted the motion, finding that SM had not carried her burden of establishing AA had no reasonable expectation her communications with her husband would be private, and ordered the disqualification of Hosie and Hosie Rice.   The Second Appellate District affirmed. The court held that the evidence before the trial court supported its finding that AA reasonably expected her communications were, and would remain, confidential. And while the court acknowledged disqualification may not be an appropriate remedy when a client simply discusses with his or her lawyer improperly acquired privileged information, counsel’s knowing use of the opposing side’s privileged documents, however obtained, is a ground for disqualification. View "Militello v. VFARM 1509" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing in part the circuit court's decision granting summary judgment in favor of the Milwaukee Police Supervisors Organization (MPSO) and Milwaukee Professional Firefighters' Association Local 215 (Local 215) in this challenge to a shift in policy by the Milwaukee Employees' Retirement System (MERS), holding that the circuit court properly granted Local 215's motion for summary judgment.Under the Milwaukee City Charter, MERS must pay an eligible beneficiary for duty disability retirement (DDR) a percentage of the "current annual salary for such position which he held at the time of such injury." At issue in this case was the meaning of "current annual salary." In reversing the circuit court's grant of summary judgment to Local 215, the court of appeals concluded that DDR recipients cannot receive a pension offset payment. The Supreme Court reversed in part, holding that the charter, read alongside the relevant collective bargaining agreement, requires MERS to include a 5.8 percent pension offset payment in the "current annual salary" used to calculate DDR benefits for beneficiaries hired before October 3, 2011. View "Milwaukee Police Supervisors Organization v. City of Milwaukee" on Justia Law

In this tort and breach-of-contract lawsuit, the Supreme Court affirmed in part and reversed in part the trial court's take-nothing summary judgment entered on the claim brought by several affiliated retailers (the Retailers), holding that the trial court erred in part.The Retailers in this case sought to recoup millions of dollars in disallowed reimbursements for purchases their customers made under the federally-funded Supplemental Nutrition Assistance Program (SNAP) after a lengthy outage in a third-party contractor's Electronic Benefit Transfer (EBT) system. The Retailers had permitted their SNAP customers to make purchases during the system outage, as authorized by a federal regulation, but held the EBT transactions in abeyance until they could be submitted and the Retailers reimbursed. The EBT contractor, however, later declined reimbursement for nearly 90,000 transactions. The trial court rendered a final take-nothing judgment against the Retailers, and the court of appeals affirmed. The Supreme Court affirmed the judgment on the Retailers' breach of contract claim but reversed the judgment as to losses from certain transactions and the Retailers' tort claims, holding that the court relied on an erroneous construction of 7 C.F.R. 274.8(e)(1). View "Wal-Mart Stores, Inc. v. Xerox State & Local Solutions, Inc." on Justia Law

In this case concerning the term "physical abuse" as used in an "abuse and molestation" policy exclusion the Supreme Judicial Court reversed the order of the superior court granting summary judgment in favor of Insurer on its action for declaratory relief, holding that the abuse and molestation exclusion did not exempt coverage under the circumstances of this case.The homeowners' insurance policy at issue precluded coverage under a policy exclusion exempting coverage for "[b]odily injury...arising out of sexual molestation, corporal punishment or physical or mental abuse." Insured initiated an unprovoked attack on Leonard Miville by punching and kicking him repeatedly. When Insurer denied coverage Miville commenced an action against Insured. Insurer brought this action seeking a judgment declaring that it had no duty to defend or indemnify Insured for the personal injury claims. The judge granted summary judgment for Insurer. The Supreme Judicial Court reversed, holding that a reasonable insured would not expect the abuse and molestation exclusion to preclude coverage for the incident. View "Dorchester Mutual Insurance Co. v. Miville" on Justia Law