Justia Contracts Opinion Summaries

PSI helps customers bring products to market. P.B. contacted PSI for assistance with the design, manufacture, and distribution of a custom cosmetics bag (Orgo Bag). PSI submitted a purchase order to its Chinese manufacturers indicating that P.B. would purchase 100,000 Orgo Bags in the first year and purchase another 1.5 million bags annually thereafter. During the first 18 months, P.B. purchased only 38,296 Orgo Bags. PSI directed the Chinese manufacturer to mitigate its losses and liquidate any materials it had purchased for the Orgo. The failure of the Orgo cost PSI $506,129.44. In 2019, PSI sued P.B., Aldez, Copek, and Byrne, alleging breach of contract, promissory estoppel, fraud, silent fraud, negligent misrepresentation, innocent misrepresentation, and non-acceptance of conforming goods under the U.C.C. The court dismissed Copek, Byrne, and Aldez but permitted some claims against P.B. to continue.In 2021, PSI sued Aldez for breach of contract, promissory estoppel, and nonacceptance of conforming goods, arguing that in the 2019 suit, its claims were pleaded directly against Aldez, whereas in the 2021 suit, it sought to pierce P.B.’s corporate veil and hold Aldez vicariously liable. The district court dismissed, citing res judicata. The Sixth Circuit affirmed. The complaint does not allege any wrongdoing by Aldez and corporate veil piercing is not a cause of action under Michigan law; the 2021 suit’s complaint fails to state a claim. View "Product Solutions International, Inc. v. Aldez Containers, LLC" on Justia Law

Andrew Ashmore, agent for appellant Breckenridge Property Fund 2016, LLC, (“Breckenridge”) arrived at a foreclosure sale with endorsed checks to support Breckenridge’s bid. Jesse Thomas, agent for Cornerstone Properties, LLC, (“Cornerstone”) was also present. Before the auction, the auctioneer provided Ashmore and Thomas a packet of paperwork. The last page contained a requirement that endorsed checks would not be accepted as payment for a bid. Because Ashmore only had endorsed checks, the auctioneer gave Ashmore one hour to cure the payment defect, but the auction eventually proceeded with Ashmore unable to secure a different form of payment. The property ultimately sold to Cornerstone. Breckenridge filed a complaint against the two respondents and a third defendant, alleging: (1) violations of Idaho Code section 45-1506; (2) estoppel; and (3) negligence/negligence per se, seeking mainly to void the sale to Cornerstone. Breckenridge also recorded a lis pendens against the property. The district court ultimately entered summary judgment for all defendants and quashed the lis pendens. The Idaho Supreme Court found the district court abused its discretion in awarding attorney fees to Cornerstone and the auctioneer under Idaho Code section 12-120(3). The judgment was affirmed in all other respects. View "Breckenridge Property Fund 2016, LLC v. Wally Enterprises, Inc., et al." on Justia Law

The Supreme Court held that the Town of Weddington was protected from Providence Volunteer Fire Department, Inc.'s fraud-related claims based upon the doctrine of governmental immunity and that Mayor Deter was protected from those claims based upon the doctrine of legislative immunity, and therefore, the trial court erred by failing to dismiss Providence's fraud-related claims.The Town entered into three contracts with Providence in order to procure fire protection services for its residents, renovate its fire station, and purchase and lease the fire station back to Providence. Substantial improvements were subsequently made to Providence's fire station, and the Town then obtained a quitclaim deed to the property. Thereafter, the Town voted to terminate the lease with Providence. Providence filed a complaint asserting various forms of relief. The trial court denied the Town's motion to dismiss. The court of appeals reversed, ruling that Providence's fraud-related claims were barred by governmental and legislative immunity. The Supreme Court affirmed, holding that the court of appeals did not err in deciding that (1) the Town was shielded from Providence's fraud-related claims on the basis of governmental immunity; and (2) Mayor Deter was shielded from Providence's fraud-related claims on the basis of legislative immunity. View "Providence Volunteer Fire Department, Inc. v. Town of Weddington" on Justia Law

The Supreme Court affirmed the judgment of the district court finding that PNS Stores, Inc. d/b/a Big Lots breached a lease with Capital City Properties, LLC and breached the implied covenant of good faith and fair dealing, holding that the district court did not err by finding that Big Lots breached the implied covenant of good faith and fair dealing.Capital City and Big Lots entered into a lease that required Capital City to deliver commercial property to Big Lots by a certain date. Capital City later filed a complaint against Big Lots alleging breach of contract and the implied covenant of good faith and fair dealing. Big Lots counterclaimed for breach of the lease. The district court found in favor of Capital City on both of its claims and awarded damages. The Supreme Court affirmed, holding that there was no error in the proceedings below. View "PNS Stores, Inc. v. Capital City Properties, LLC" on Justia Law

Plaintiff designated his nephew as his health care agent and attorney-in-fact using an advance health care directive and power of attorney for health care decisions form developed by the California Medical Association (the Advance Directive). After the execution of the Advance Directive, Plaintiff was admitted to a skilled nursing facility. Nineteen days later, his nephew executed an admission agreement and a separate arbitration agreement purportedly on Plaintiff’s behalf as his “Legal Representative/Agent”. The sole issue on appeal is whether the nephew was authorized to sign the arbitration agreement on Plaintiff’s behalf.   In answering the relevant question on appeal, the Second Appellate District held that an agent’s authority to make “health care decisions” on a principal’s behalf does not include the authority to execute optional arbitration agreements. Accordingly, the court affirmed the trial court’s order denying the motion to compel arbitration. The court explained that its conclusion that the execution of an arbitration agreement is not a “health care decision” finds support in the regulatory history of the recently enacted federal regulatory scheme prohibiting nursing facilities participating in Medicare or Medicaid programs from requiring a resident (or his representative) to sign an arbitration agreement as a condition of admission. Specifically, in the Centers for Medicare & Medicaid Services’ (i.e., the agency’s) responses to public comments published in the Federal Register. These comments and responses demonstrate that practically speaking, arbitration agreements are not executed as part of the health care decision-making process, but rather are entered into only after the agent chooses a nursing facility based on the limited options available and other factors unrelated to arbitration. View "Logan v. Country Oaks Partners" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court denying the cross-motions for summary judgment filed by the parties in this case, holding that summary judgment should have been granted to Rema Kolda as a matter of law on counts one, two, and four.DT-Trak Consulting, Inc., a medical consulting firm and independent contractor, sued Kolda, its former employee, for alleged violations of multiple provisions of a non-complete agreement. Kolda counterclaimed for barratry. Thereafter, the parties filed cross-motions for summary judgment, which the circuit court denied. The Supreme Court reversed in part, holding (1) Kolda was not in violation of the non-compete provision of the agreement, and summary judgment should have been granted on this count; and (2) Kolda was entitled to summary judgment on count four, which alleged the existence of a trade secret, and count one, which alleged the existence of a trade secret in addition to proprietary information and "confidential information." View "Dt-Trak Consulting, Inc. v. Kolda" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court dismissing Constance Mouanda's complaint against Jani-King International (Jani-King) and Cardinal Franchising, Inc. (Cardinal) alleging fraud, breach of contract, and unconscionability, holding that the trial court erred in granting Cardinal's and Jani-King's motion to dismiss.Mouanda formed The Matsoumou's LLC, for which Cardinal provided the necessary legal documents. The LLC entered into a franchise agreement with Cardinal and began operating as a unit franchisee. Mouanda later brought suit alleging fraud, breach of contract, and unconscionability and seeking damages for Cardinal and Jani-King's failure to comply with Kentucky's wage and hour laws. Cardinal and Jani-King moved to dismiss based on Mouanda's failure to bring the lawsuit on behalf of the LLC. The court of appeals affirmed. The Supreme Court reversed, holding that the franchise agreement contained nothing that would preclude a wage and hour claim by Mouanda individually and that the fraud claim was not dependent on the LLC being a party to the action. The Court remanded the case to allow the parties to develop the record so the trial court can determine whether Mouanda has a valid wage and hour claim and/or fraud claim. View "Mouanda v. Jani-King International" on Justia Law

Corwell’s insurance broker told him that Coventry would essentially provide free life insurance for a couple of years before an assignment of the policy to those who had funded it from the beginning, at no expense or risk to the insured. In 2006, Corwell, age 78, applied to Sun Life for a $5 million life insurance policy, indicating that his family L.P. would be the primary beneficiary and Corwell would be the owner. The annual premium, $300,000 per year, exceeded Corwell’s income almost every year. Corwell falsely stated that the premiums would not involve premium financing. Sun would not have issued the policy if it had known that Corwell would be using a non-recourse loan to pay the premiums. At the end of the loan’s 30-month term, Coventry notified Corwell that the balance was $569,572; Corwell could either repay it or relinquish the policy. As expected, Corwell relinquished the policy, which the lender sold to Coventry. Sun Life rejected a 2017 death claim and sought a declaratory judgment that the policy was void as an illegal wagering contract, procured for the benefit of strangers who lacked an insurable interest, in violation of Illinois law. The district court granted Sun summary judgment and allowed it to keep almost all of the premiums.The Seventh Circuit affirmed with the exception of part of the premiums. Illinois law looks beyond the form of the transactions and considers the substance to determine whether a purchase was supported by an insurable interest. This funding arrangement was an unlawful wager by strangers on Corwell’s life. View "Sun Life Assurance Company of v. Wells Fargo Bank, N.A." on Justia Law

The First Circuit affirmed the judgment of the district court granting summary judgment in favor of Family Medicine Associates (FMA) and one of its members (together, Defendants) and dismissing this lawsuit alleging breach of contract, breach of the implied covenant of good faith and nonpayment of wages, holding that Plaintiff's claims on appeal were unavailing.Plaintiff, a licensed physician, brought this lawsuit against his former employer nearly three years after his employment relationship was terminated. In his complaint, Plaintiff alleged that Defendants' breached their oral promise of a partnership that was never committed to writing. The district court granted summary judgment in favor of Defendants on all counts. The First Circuit affirmed, holding that Plaintiff failed to put forth sufficient evidence to survive summary judgment. View "Guldseth v. Family Medicine Associates LLC" on Justia Law

This appeal involved a breach of contract claim arising out of an indemnitee’s refusal to repay money advanced pursuant to an LLC Agreement. Under the Agreement, a Person was entitled to indemnification if the Person acted in good faith and in a manner believed to be in or not opposed to the best interests of the Company. The indemnification payments were further conditioned on the Person’s written undertaking to repay all amounts advanced under the LLC Agreement if it was later determined that the Person did not satisfy the standard of conduct, and thus, was not entitled to indemnification. New Wood Resources operated a plywood and veneer manufacturing facility in Mississippi known as Winston Plywood & Veneer LLC (“WPV”). Dr. Richard Baldwin (“Baldwin”) served as a manager of New Wood starting in September of 2013, and served as a member of New Wood’s Board of Managers. Baldwin was asked to invest in New Wood, and to oversee the revitalization of a newly acquired plywood mill in Louisville, Mississippi. The WPV manufacturing facility in Louisville had been dormant for years and was in need of repair. New Wood began to make repairs so that it could operate a mill. However, prior to the WPV facility’s completion, the facility was destroyed by an EF-4 tornado. WPV received funding from FEMA, and Baldwin took the lead role on behalf of New Wood to restore the WPV facility and transform it into a functioning and profitable plywood manufacturing facility. In 2016, just before the WPV mill was set to begin operations, Baldwin was terminated from his position as the President and General Manager of WPV. The Delaware Court addressed the narrow issue of whether the LLC Agreement pertinent here contained an implied covenant of good faith that would require the determination of a Person’s entitlement to indemnification to be made in good faith. After review of the Agreement, the Court held that it did. It therefore reversed and remanded this case for further proceedings. View "Baldwin v. New Wood Resources LLC" on Justia Law