Justia Contracts Opinion Summaries

Appellant in his capacity as Litigation Trustee for the Erickson Litigation Trust, appeals the dismissal of his avoidance and recovery claims under the bankruptcy laws. In broad terms, these claims seek avoidance of settlement releases approved in Delaware state court, as well as two payments related to Erickson Air-Crane, Inc.’s acquisition of Evergreen Helicopters, Inc. (EHI) (the “Evergreen Transaction”).   The Fifth Circuit affirmed the dismissal of the claims relating to the settlement releases and reversed in part the dismissal of the payments relating to the Evergreen Transaction itself. The court concluded that consistent with Besing and Erlewine, there was reasonable equivalence as a matter of law. The Delaware settlement “should not be unwound by the federal courts merely because of its unequal division of [settlement proceeds].” Further, the court wrote that Appellant’s attempt to attack the Delaware releases as actually fraudulent transfers also fails. The court wrote it saw no error in the lower court's conclusion that Appellant failed to adequately plead actual fraud, and his arguments on appeal do not convince the court otherwise. Moreover, the court found that acting in his specific capacity, Appellant is not enjoined by the Delaware settlement from asserting creditor claims that arose only under the Bankruptcy Code. View "Ogle v. Morgan, et al" on Justia Law

The Fifth Circuit affirmed the district court’s order denying Klairmont Korners, L.L.C. (“Klairmont”) claim that a debtor’s decision to reject a commercial lease pursuant to 11 U.S.C. Section 365 should not receive deference under the business judgment rul Klairmont Korners, L.L.C. (“Klairmont”) appeals a district court order denying its claim that a debtor’s decision to reject a commercial lease pursuant to 11 U.S.C. Section 365 should not receive deference under the business judgment rule because of “bad faith, whim, or caprice” inherent in a third party’s negotiations with Klairmont.   The Fifth Circuit affirmed. The court explained that Klairmont’s contentions fail under this court’s own standard for overcoming the business judgment rule, as well as the “bad faith” test Klairmont encourages us to adopt. The court explained that Klairmont’s position is untenable, even under the test it proposes the court adopt from another circuit, under which courts should not defer to a debtor’s decision under Section 365 that is “the product of bad faith, or whim, or caprice.” Klairmont misunderstands this standard, urging the court to hold that any bad faith involved in the bankruptcy proceedings should prompt a bankruptcy court to decline a debtor’s decision regarding an executory contract. That is not the test these other courts have adopted. Klairmont will not find relief in asserting that the debtor’s decision deserves no deference under the business judgment rule.     . View "Klairmont Korners, L.L.C." on Justia Law

Appellant Today’s IV filed a civil complaint against respondents Los Angeles County Metropolitan Transportation Authority and Regional Connector Constructors for their “unreasonable” construction of an underground subway line in downtown Los Angeles, which affected the Westin Bonaventure Hotel and Suites (the Bonaventure), owned by Today’s IV.   Today’s IV alleged claims for nuisance and inverse condemnation due to 1) respondents’ use of the cut-and-cover construction method instead of the tunnel boring machine method; 2) construction work during nights and weekends, which was particularly harmful to the Bonaventure’s operation as a hotel; 3) violation of certain noise limits; and 4) interference with access to the Bonaventure. Today’s IV alleged lost contracts, including a $3.3 million airline contract, and loss of business. It requested compensatory and punitive damages from Respondents.   The trial court found no liability and entered judgment in favor of Respondents. The Second Appellate District affirmed. The court explained that the first two circumstances that justify an inverse condemnation claim are not applicable here, as Appellant does not contend that its property has been physically invaded or physically damaged. Thus, Appellant necessarily relies upon the intangible intrusion theory. To recover under this theory, Appellant must be able to establish its property suffered from an intangible intrusion burdening the property in a way that is direct, substantial, and peculiar to the property itself. View "Today's IV, Inc. v. L.A. County Metropolitan Transportation Auth." on Justia Law

The Supreme Court affirmed the judgment, decree of foreclosure, and order of sale by the district court, and the orders and actions contained within these documents, holding that there was no error or abuse of discretion.Thermal Design, Inc. filed a complaint to foreclose its construction lien against Mark and Pam Duffy and Central Copters, Inc. The complaint also asserted claims against TNT Building Systems. A jury found that TNT, acting as an agent of Central Copters, entered into a contract with Thermal Design for the insulation system, and both TNT and Central Copters were jointly and severally liable for breaching the contract with Thermal Design. As to a crossclaim between TNT and Central Copters, the jury found that both parties breached their agreement but that only TNT incurred damages. The district court entered a final order restating that, as a matter of law, Thermal Design had a valid construction lien attaching to both the Duffys’ real property and Central Copters’ building that should be foreclosed. The Supreme Court affirmed, holding that the district court did not err or abuse its discretion in the proceedings below. View "Thermal Design, Inc. v. Thorson" on Justia Law

Appellant Advanced Indicator and Manufacturing, Inc. claims its building was damaged by Hurricane Harvey’s winds. Advanced’s insurer, Acadia Insurance Company, determined that the damage to the building was caused by poor maintenance and routine wear and tear. When Acadia denied Advanced’s claim, Advanced sued. Advanced filed a motion to remand the case to state court   The district court granted Acadia’s motion and granted summary judgment on Advanced’s extra-contractual claims. The Fifth Circuit affirmed the district court’s denial of the motion to remand, reversed the grant of summary judgment on Advanced’s claims, and remanded the matter to the district court.   The court explained that Advanced’s argument is unavailing because it fails to consider Flagg’s command that “the district court must examine the plaintiff’s possibility of recovery against that defendant at the time of removal.” At the time of removal, then, it would have been proper for the district court to find that “there is no possibility of recovery by [Advanced] against an in-state defendant.” Accordingly, the differences between Sections 542A.006(b) and 542.006(c) are not material as long as the insurer elects to accept liability for the agent before removal. The court held that summary judgment was not warranted on Advanced’s breach of contract claim given the evidence Advanced has put forth. This conclusion requires the reversal of the district court’s dismissal of Advanced’s other claims. View "Adv Indicator v. Acadia Ins" on Justia Law

Plaintiff began receiving prescription medication administered through a pain pump and filled by AIS Healthcare (“AIS”). In 2021, she discovered that AIS was billing her insurer at a rate of $120 per day for allegedly unauthorized services. Plaintiff filed suit in state court, seeking damages for contract, tort, and unjust enrichment claims. AIS removed to federal court and moved to dismiss the case on grounds that Plaintiff lacked standing to sue because she had suffered no injury. Noting that “a breach of contract alone is an insufficient injury in fact,” the district court concluded that Plaintiff could not satisfy standing’s redressability element for the claims asserted and dismissed them with prejudice under Rule 12(b)(1).   The Fifth Circuit affirmed the district court’s judgment dismissing Plaintiff’s claims for lack of standing, however, the court modified the district court’s judgment dismissing Plaintiff’s claims for lack of standing. First, the court explained that the district court erred in holding that Plaintiff failed to show an injury in fact through her associated breach of contract and tort claims. However, because the court agreed with the district court that Plaintiff’s claims are not redressable by the damages she seeks, the court affirmed its dismissal of her claims for lack of standing. Further, the district court’s dismissal with prejudice appears to be a “scrivener’s” error. The court thus modified the district court’s judgment dismissing Plaintiff’s claims with prejudice to make it without prejudice and affirm the judgment as modified. View "Denning v. Bond Pharmacy" on Justia Law

Broadband Voice, LLC, d/b/a Fuse.Cloud, LLC (Fuse), appealed a circuit court's dismissal of its complaint with prejudice. Fuse argued that it was entitled to $116,984.02 in early-termination fees from the four contracts it had with Jefferson County (the County). Fuse also argued that the trial court erred, inter alia, by denying its motion for judgment on the pleadings. Because the early-termination provision in Fuse’s contract with the County was unenforceable, the Mississippi Supreme Court found trial court did not err by denying Fuse’s motion for judgment on the pleadings or by dismissing Fuse’s complaint with prejudice. View "Broadband Voice, LLC v. Jefferson County, Mississippi" on Justia Law

The Supreme Court held that the district court erred in denying Appellant's motion to compel arbitration and refusing to submit the arbitrability determination under the circumstances of this case to an arbitrator.Plaintiffs sued Airbnb, Inc. for wrongful death and personal injury alleging that Airbnb's services had been used by a party's host to rent the house where a shooting occurred, resulting in a fatality. Airbnb moved to compel arbitration, arguing that Plaintiffs had agreed to Airbnb's Terms of Service during the registration process for their accounts. The district court denied the motion to compel. The Supreme Court reversed, holding that because the Federal Arbitrability Administration governed the enforcement of arbitration agreement at issue, and because the agreement delegated the arbitrability question to an arbitrator, the district court erred in deciding the arbitrability question. View "Airbnb, Inc. v. Rice" on Justia Law

The Supreme Court reversed the order of the district court denying Appellant's motion to compel arbitration, holding that where an arbitration agreement delegates the threshold question of arbitrability to the arbitrator, the district court must refer to the case to arbitration, even if the court concludes that the dispute is not subject to the arbitration agreement.Respondents filed a personal injury lawsuit against Uber after their Uber driver rear-ended another Uber driver. Uber moved to compel arbitration on the grounds that Respondents had agreed to arbitrate their claims. The district court denied the motion, concluding that the arbitration agreement did not plainly provide that the parties agreed to submit this particular dispute to arbitration. The Supreme Court reversed, holding that where the arbitration agreement's delegation clause expressly requires the arbitrator to determine threshold issues of arbitrability, the district court erred by denying Uber's motion to compel on the ground that the claims were not subject to the arbitration agreement. View "Uber Technologies, Inc. v. Royz" on Justia Law

In a dispute over the applicability of a forum selection clause contained in a franchise agreement, the Fifth Circuit held that non-signatories to a franchise agreement may be bound to the contract’s choice of forum provision under the equitable doctrine that binds non-signatories who are “closely related” to the contract. View "Franlink v. BACE Services" on Justia Law