Justia Contracts Opinion Summaries

A group of public servants who had contacted Navient for help repaying their loans (collectively, “Plaintiffs”) filed a putative class action lawsuit, alleging that Navient had not “lived up to its obligation to help vulnerable borrowers get on the best possible repayment plan and qualify for PSLF.”   Navient moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, which the district court granted in part, dismissing all claims except “the claim brought under New York’s General Business Law Section 349”. The district court certified a class for settlement purposes under Federal Rule of Civil Procedure 23(b)(2) and approved the settlement as “fair, reasonable, adequate,” and “in the best interest of the Settlement Class as a whole.”   Two objectors now appeal that judgment, arguing that the district court erred in certifying the class, approving the settlement, and approving service awards of $15,000 to the named Plaintiffs. The Second Circuit affirmed concluding that the district court did not abuse its discretion in making any of these determinations. The court explained that here, the amended complaint plausibly alleged that the named Plaintiffs were likely to suffer future harm because they continued to rely on Navient for information about repaying their student loans. At least six of the named Plaintiffs continue to have a relationship with Navient. That is enough to confer standing on the entire class. Further, the court explained individual class members [in fact] retain their right to bring individual lawsuits,” and the settlement does not prevent absent class members from pursuing monetary claims. View "Hyland v. Navient Corporation" on Justia Law

Plaintiff suffered serious injuries when his motorcycle collided with a car driven by a negligent motorist. After exhausting its liability limits, he next looked to the underinsured-motorist benefits of a policy covering just his motorcycle. When those benefits fell short too, he turned to a policy underwritten by Standard Fire Insurance Company that covered vehicles other than his motorcycle.   Relying on what the parties call the owned-but-not-insured exclusion, it denied coverage because the accident occurred with a vehicle that Plaintiff had decided to insure elsewhere. On cross-motions for summary judgment, the district court agreed with Standard Fire that it owed nothing. The Eighth Circuit affirmed. The court rejected Plaintiff’s argument that the exclusion is ambiguous. Even if “this coverage” might lend itself to some ambiguity in isolation, the remainder of the policy points to only one reasonable interpretation: the owned-but-not-insured exclusion applies in precisely this situation. View "John Eberlein v. Standard Fire Ins Co" on Justia Law

After being hit by an under-insured motorist, Plaintiff experienced worsening symptoms from his Parkinson’s disease. His condition eventually deteriorated to the point that he could no longer work as a doctor. Plaintiff sued Encompass Insurance for $500,000, the maximum available under his automobile policy. The state trial court granted summary judgment to Plaintiff, concluding that Encompass failed to refute that Plaintiff lost at least $500,000 in earning capacity because of the accident. On removal, a federal district court held that it was unable to vacate that judgment.   The Eighth Circuit reversed and remanded. The court interpreted Encompass’s notice of appeal as challenging the Arkansas court’s ruling, as merged into the final judgment of the district court, and held that it constituted an appeal of a “final decision of a district court of the United States” under 28 U.S.C. Section 1291.   The court also rejected the district court’s conclusion that a federal court lacks jurisdiction to vacate the state court’s summary judgment order. The court explained that the Rooker-Feldman doctrine has no application to a properly removed case where, as here, there is no attack on a separate and final state-court judgment. Finally, the court held that the Arkansas court erred by granting summary judgment. The conflict between expert witnesses created a genuine dispute of material fact, so summary judgment was improper. View "Paul Wills v. Encompass Insurance Company" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the summary judgment entered by the Cuyahoga County Court of Common Pleas in favor of Warrensville Heights in this real property dispute, holding that the agreement between the parties in this case was valid and enforceable.The Beachwood City School District Board of Education sought approval from the state board of education for a transfer of territory it annexed in 1990 to the Beachwood City School District. The Warrensville Heights City School District Board of Education, whose district the annexed territory was a part of, objected. In 1997, Beachwood and Warrensville Heights agreed that the territory would not transfer to the Beachwood City School District but that the districts would share the tax revenue generated from real property located within the territory. The court of common pleas granted summary judgment for Warrensville Heights, concluding that the parties' agreement was not valid. The court of appeal reversed. The Supreme Court affirmed, holding that the 1997 agreement required neither approval nor a fiscal certificate and therefore was valid and enforceable. View "Beachwood City School District Bd. of Education v. Warrensville Heights City School District Bd. of Education" on Justia Law

Apple Annie operated restaurants in Marin, San Francisco, and Santa Barbara counties and had comprehensive commercial liability and property insurance through Oregon Mutual for “for direct physical loss of or damage to Covered Property at the [insured] premises,” and to “pay for the actual loss of Business Income you sustain due to the necessary suspension of your ‘operations’ during the ‘period of restoration. The suspension must be caused by direct physical loss of or damage to property at the described premises. The loss or damage must be caused by or result from a Covered Cause of Loss.” The policy did not define “direct physical loss of or damage.”Apple Annie filed claims for losses resulting from the COVID pandemic and ensuing lockdown. The court of appeal affirmed summary judgment in favor of Oregon Mutual. The policy language,“direct physical loss or damage to,” despite its disjunctive phrasing, is unambiguous. A loss of use simply is not the same as a physical loss. Although the COVID virus has a physical presence, and thus Apple Annie may have suffered economic loss from the physical presence of the COVID virus, it has not suffered “direct physical loss of or damage to [its] property.” View "Apple Annie, LLC v. Oregon Mutual Insurance Co." on Justia Law

The First Circuit affirmed the judgment of the district court dismissing Amyndas Pharmaceuticals, S.A.'s claims against Zealand Pharma A/S and vacated the dismissal of Amyndas's claims against Zealand Pharma U.S., Inc., holding that the district court erred in dismissing Amyndas's claims against Zealand Pharma U.S.When Amyndas was considering separate joint ventures with Zealand Pharma and Alexion Pharmaceuticals, Inc. it shared trade secrets before understanding that neither of the joint ventures would materialize. Zealand Pharma and Zealand US, its newly established affiliate, subsequently announced a partnership with Alexion Pharmaceuticals, Inc. Amyndas sued for misappropriation of trade secrets and other confidential information. The district court (1) dismissed Amyndas's claims against Zealand Pharma on the ground that Amyndas was required to litigate those claims in Denmark; and (2) dismissed Amyndas's claims against Zealand US for failure to state a claim. The First Circuit vacated in part and remanded the case for further proceedings, holding that the district court (1) correctly dismissed Amyndas's claims against Zealand Pharma; and (2) erred in concluding that Amyndas's claims against Zealand US were futile. View "Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S" on Justia Law

Jones established a trust, naming his daughter (Spencer) as successor trustee. The property was the trust’s principal asset. Jones later married Grays-Jones, but did not amend the trust. Jones contracted to sell the property to CDI for $13.6 million. Jones died shortly thereafter. Months later, Grays-Jones petitioned for an interest in Jones’s estate as an omitted spouse. While the property was still in escrow, Grays-Jones and Spencer, as trustee, agreed the trust “shall pay to [Grays-Jones] a total of $3,000,000 . . . as her full and final settlement of [Grays-Jones’s] interest in the Estate. Payment of said amount shall be paid ... out of the escrow from the sale of the [property].” Grays-Jones would move out of Jones’s residence in exchange for $150,000, which would constitute “an advance against the total settlement.” A stipulated judgment incorporated the settlement. Spencer, as trustee, paid Grays-Jones $150,000; Grays-Jones moved out of Jones’s residence. The sale of the property fell through. Spencer did not pay Grays-Jones the outstanding $2.85 million.Grays-Jones sought to enforce the stipulated judgment, alleging Spencer frustrated the sale of the property. She requested the appointment of a temporary trustee to sell the residence and property. The trial court denied the petition, finding the settlement agreement unenforceable because the sale was a condition precedent. The court of appeal reversed. The settlement agreement contained a condition precedent as to the method of payment, but Spencer’s independent promise to pay $3 million is enforceable and remains payable upon the property’s sale. View "Estate of Jones" on Justia Law

OneMain, a non-bank finance company, loaned Zirpoli $6,200.08, to be repaid at a rate of 26.91% (total $11,364.35). The loan was issued under the Consumer Discount Company Act (CDCA), a consumer protection statute, which creates an exception to Pennsylvania’s usury law. The loan is governed by a disclosure statement, a security agreement, and an arbitration agreement. Later, OneMain sold delinquent accounts to Midland, including Zirpoli’s loan. Midland sued Zirpoli but later dismissed the suit and undertook collection efforts.Zirpoli filed a class action, alleging that Midland’s collection activities constituted an unlawful attempt to collect the loan because Midland does not have a CDCA license and never obtained nor requested approval from the Department of Banking. Midland was, therefore, not lawfully permitted to purchase the loan. Midland moved to compel arbitration. The court denied the motion, focusing on the validity of the assignment from OneMain and Midland. The Third Circuit vacated. The ultimate illegality of a contract does not automatically negate the parties’ agreement that an arbitrator should resolve disputes arising from the contract. The parties to the loan clearly agreed to arbitrate the issue of arbitrability. The arbitration agreement provides that an arbitrator shall resolve the arbitrability of defenses to enforcement, including alleged violations of state usury laws. View "Zirpoli v. Midland Funding LLC" on Justia Law

This insurance coverage dispute involves claims for coverage by Doe Run Resources Corporation against its insurer, St. Paul Fire & Marine Insurance Company, stemming from multiple lawsuits against Doe Run’s Peruvian subsidiary, Doe Run Peru, which allege various claims stemming from Doe Run Peru’s alleged release of toxic chemicals from a metallurgical plant. After an earlier coverage dispute in state court, where the court determined that a pollution exclusion in St. Paul’s policy precluded coverage, Doe Run filed this action alleging that additional, newly discovered facts implicated an exception to the exclusion that was not raised in the previous state court action. St. Paul filed a motion to dismiss based on issue and claim preclusion. The district court granted the motion based on issue preclusion, and Doe Run appeals.   The Eighth Circuit affirmed, concluding that the district court did not err in granting St. Paul’s motion to dismiss based on issue preclusion, and because the district court did not err, the court wrote, it need not consider the parties arguments regarding claim preclusion. The court explained that in the absence of subsequent events or circumstances representing an actual change between the prior state court action and this action, issue preclusion applies. Here, St. Paul did reconsider Doe Run’s claim for coverage when Doe Run resubmitted the claim following the nine newly filed lawsuits alleging pollution from the La Oroya plant, which alleged a new theory of liability. View "Doe Run Resources Corporation v. St. Paul Fire & Marine Ins Co" on Justia Law

The State of North Dakota, ex rel. the North Dakota Board of University and School Lands, and the Office of the Commissioner of University and School Lands, a/k/a the North Dakota Department of Trust Lands appealed a judgment dismissing its claim against Newfield Exploration Company relating to the underpayment of gas royalties. The North Dakota Supreme Court found that the district court concluded the State did not establish a legal obligation owed by Newfield. However, the State pled N.D.C.C. § 47-16-39.1 in its counterclaim, which the court recognized at trial. Because the State satisfied both the pleading and the proof requirements of N.D.C.C. § 47-16-39.1, the Supreme Court held the district court erred in concluding the State did not prove Newfield owed it a legal obligation to pay additional royalties. Rather, as the well operator, Newfield owed the State an obligation under N.D.C.C. § 47-16-39.1 to pay royalties according to the State’s leases. The court failed to recognize Newfield’s legal obligations as a well operator under N.D.C.C. § 47-16-39.1. The Supreme Court concluded the district court erred in dismissing the State's counterclaim; therefore, judgment was reversed and the matter remanded for findings related to the State's damages and Newfield's affirmative defenses. View "Newfield Exploration Company, et al. v. North Dakota, et al." on Justia Law