Justia Contracts Opinion Summaries

Walworth, a former stockholder, sued Mu Sigma, a privately held data analytics company, and Rajaram, the company’s founder, CEO, and board chairman, alleging that after reaping the benefits of Walworth’s $1.5 million investment and reputational capital, the defendants embarked on a fraudulent scheme to oust Walworth of its substantial ownership interest in the company.The Cook County circuit court dismissed the complaint, citing the stock repurchase agreement (SRA), which included anti-reliance and general release provisions. The appellate court reversed, holding that the anti-reliance language was ambiguous. The Illinois Supreme Court reinstated the dismissal, stating that “the broad and comprehensive release agreed to by [Walworth], a sophisticated party represented by experienced counsel, unambiguously encompasses” the unjust enrichment and breach of contract claims. The bargained-for anti-reliance provisions reflected the understanding that there may be undisclosed information but that Walworth was satisfied by the information provided. Walworth had direct access to Rajaram to negotiate the arm’s-length transaction at issue and Rajaram was not acting as a fiduciary for Walworth. A corporation owes no fiduciary duty to its shareholder and Delaware law does not impose “an affirmative fiduciary duty of disclosure for individual transactions.” View "Walworth Investments-LG, LLC v. Mu Sigma, Inc." on Justia Law

A Delaware superior court held that Plaintiffs-Appellees-Cross-Appellants, two doctors who started a laboratory testing enterprise known as Bako Diagnostics (“Bako”), breached certain restrictive covenants when they left Bako to form a new, competing laboratory enterprise. Despite fee-shifting provisions in certain of the contracts, the trial court declined to award attorneys’ fees. The Delaware Supreme Court agreed with the superior court’s determinations that the two doctors breached certain of the restrictive covenants. But because it appeared that the superior court may have misapplied the formula that both sides employed for calculating damages, the Court remanded the case for the trial court to clarify how it derived its damages award and for any needed revisions. Further, the Supreme Court disagreed that no attorneys’ fees were warranted under certain of the contracts. View "Bako Pathology LP v. Bakotic" on Justia Law

The Supreme Court reversed the judgment of the district court granting Defendant's motion to dismiss this lawsuit brought by Plaintiff under the Utah Sales Representative Commission Payment Act for allegedly failing to pay commissions it owed to her, holding that the Act's writing requirement is not a precondition for recovery.In her complaint, Plaintiff claimed that Defendant violated the Act by failing to pay commissions for sales that she made while working as a commissioned sales agent for the company. Defendant filed a motion to dismiss, arguing that because there was no signed writing there could be no recovery under the Act. The district court granted the motion. The Supreme Court reversed, holding (1) under the plain text of the Act, the writing requirement is not a prerequisite for a sales representative to sue a principal under the Act; and (2) therefore, the district court erred in granting Defendant's motion to dismiss. View "Williamson v. MGS By Design, Inc." on Justia Law

The 1985 “Manning Lease” granted the lessee rights to oil and gas on an approximately 100-acre tract of land in Bowling Green that is adjacent to a quarry. There is a long-expired one-year term, followed by a second term that conditions the maintenance of the leasehold interest on the production of oil or gas by the lessee. Bluegrass now owns the property. Believing that lessees were producing an insufficient quantity of oil to justify maintaining the lease, Bluegrass purported to terminate the lease and sought a declaration that the lease had terminated by its own terms while asserting several other related claims.The district court found that Bluegrass’s termination of the lease was improper and granted the lessees summary judgment. The Sixth Circuit reversed and remanded. There is a factual dispute regarding whether the lease terminated by its own terms. The trier of fact must determine if the lessee has produced oil in paying quantities after considering all the evidence. There is a material factual dispute about whether the lessee ceased producing oil for a period of time, and, if so, whether that period of time was unreasonable. View "Bluegrass Materials Co., LLC v. Freeman" on Justia Law

The First Circuit affirmed in part and reversed in part the judgment of the district court granting Evenflo Company Inc.'s motion to dismiss this amended class action complaint brought by forty-three plaintiffs from twenty-eight states alleging that certain representations made by Evenflo were false or misleading, holding that Plaintiffs' pleadings plausibly demonstrated their standing to seek monetary relief.Plaintiffs alleged that Evenflo made several misrepresentations about the safety and testing of its children's Big Kid car booster seat and that Plaintiffs purchased the seat relying on the misrepresentations and that, but for the misrepresentations, Plaintiffs would not have purchased the seat or would have paid less for it. Plaintiffs sought both monetary relief and declaratory and injunctive relief. The district court concluded that Plaintiffs lacked standing to bring their complaint and granted Evenflo's motion to dismiss. The Supreme Court remanded the case for further proceedings, holding (1) Plaintiffs had standing to pursue monetary relief; and (2) Plaintiffs lacked standing to seek declaratory and injunctive relief. View "In re Evenflo Company, Inc. v. Xavier" on Justia Law

The First Circuit affirmed the conclusion of the district court conclusion that the insurance policy issued by Motorists Commercial Mutual Insurance Company to the dealership that owned a motor vehicle that killed and injured several people did cover the accident at issue in this case, holding that the district court did not err.This dispute arose from an auction at which a motor vehicle being displayed for bidding suddenly accelerated into a group of auction attendees, killing five people and injuring several more. Motorists brought this action seeking a declaration that its policies did not provide coverage for the victims' claims against the auctioneer or its employee who was behind the wheel of the vehicle when it struck the victims. The district court granted summary judgment for Motorists. The First Circuit affirmed, holding that the policies at issue did not provide coverage for the accident. View "Motorists Commercial Mutual Insurance Co. v. Hartwell" on Justia Law

The Supreme Court affirmed the judgment of the district court confirming an arbitration award involving a breach of a lease agreement after ruling that the arbitrator's determinations were not manifest error and were within his authority, holding that the district court did not err in confirming the arbitration award.Mountain Business Center, LLC (MBC) won an arbitration award against Fork Road, LLC. On appeal, MBC made three arguments in support of his request that the Court reverse and vacate the arbitration award. The Supreme Court affirmed, holding (1) the arbitrator did not exceed his authority by determining all issues presented by the parties in their stipulated list; (2) the arbitrator's determination that MBC was not the prevailing party and therefore not entitled to attorney fees was not a manifest error of law; and (3) the arbitrator's determination the MBC was not entitled to the first-to-breach rule was not a manifest error of law. View "Mountain Business Center, LLC v. Ford Road, LLC" on Justia Law

In this action concerning a disputed agreement between between Kenneth and Rebecca Goens and Lynn VanSloten for the sale of an empty lot, the Supreme Court dismissed the appeal for lack of appellate jurisdiction under S.D. Codified Laws 15-26A-3, holding that the underlying interlocutory judgment was not a final judgment under S.D. Codified Laws 15-6-54(b) and was therefore not appealable.Kenneth delivered the purchase agreement at issue and VanSloten's earnest money check to FDT, LLC with the intention that FDT act as the closing agent for the property sale. When a dispute arose regarding the earnest money check and purchase agreement the Goenses filed a complaint against FDT and VanSloten. VanSloten asserted a counterclaim against the Goenses. The circuit court granted FDT's motion for summary judgment against the Goenses, but the order did not resolve the remaining claims or contain any certification under S.D. Codified Laws 15-6-54(b). The Goenses appealed. The Supreme Court dismissed the appeal, holding that because active claims remained in this action at the time of appeal and no Rule 54(b) certification was made, this Court lacked appellate jurisdiction under S.D. Codified Laws 15-26A-3. View "Goens v. FDT, LLC" on Justia Law

The Supreme Court held that in order to compel arbitration against a union employee, the claim must have been clearly and unmistakably waived in arbitration provisions in the collective-bargaining agreement (CBA) governing the parties, and to be clear and unmistakeable the claim must be included either by statute or specific cause of action in the arbitration provisions of the CBA.Plaintiff brought this intentional employer tort action under Ohio Rev. Code 2745.01. The trial court denied Defendant's ensuing motion to stay the proceedings and to compel arbitration. The court of appeals affirmed, holding that because the parties' CBA made no mention of Ohio Rev. Code 2745.01 or intentional torts, Plaintiff had not waived his right to pursue such a claim in a judicial forum. The Supreme Court affirmed, holding that because Plaintiff's claim for an intentional tort was not mentioned in the CBA, Defendants did not clearly and unmistakably agree to prohibit resolution of the claim in court. View "Sinley v. Safety Controls Technology, Inc." on Justia Law

The First Circuit reversed the ruling of the district court granting summary judgment in favor of a general liability insurer (Insurer) and dismissing Insured's complaint seeking full coverage of its defense when the company faced a trade secrets lawsuit brought by a competitor, holding that Insured was entitled to summary judgment on the duty to defend.Insured brought this action after Insurer only paid for some of Insured's defense. Insurer counterclaimed seeking a declaratory judgment of absolution from policy coverage. During discovery, both parties moved to compel responses. A magistrate judge denied Insurer's request for information exchanged between Insured and its lawyers and then stayed discovery until it ruled on cross-motions for summary judgment. The district court then granted summary judgment for Insurer. The First Circuit held (1) the district court erred in granting summary judgment for Insurer, and Insured was entitled to summary judgment on the duty to defend; (2) on the reasonableness of the defense, the case is remanded for further proceedings; and (3) the district court correctly granted Insurer's motion to compel. View "Lionbridge Technologies, LLC v. Valley Forge Insurance Co." on Justia Law