Justia Contracts Opinion Summaries

In this case, the plaintiff purchased a new 2014 Kia Optima and soon experienced issues with the vehicle's reverse gear. Despite multiple visits to the dealership, the problem persisted. The plaintiff requested a buyback from Kia Motors America, Inc. (Kia), but Kia's investigations, including installing a flight recorder, did not confirm the defect. Kia eventually offered to repurchase the vehicle, but the plaintiff rejected the offer and continued to use the car until filing a lawsuit under California’s Song-Beverly Consumer Warranty Act (the Act).The Superior Court of Los Angeles County found in favor of the plaintiff, awarding restitution and a civil penalty for Kia's willful violation of the Act. Kia filed posttrial motions challenging the restitution amount and the civil penalty. The court partially granted Kia's motions, striking the civil penalty for insufficient evidence but denying the motion to reduce the restitution amount.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the restitution award should not include the cost of the optional service contract, certain insurance premiums, and other specific amounts. The court affirmed the trial court's decision to grant a new trial on the civil penalty, finding substantial evidence that Kia may have had a good faith and reasonable belief that the vehicle was not defective.The appellate court directed the trial court to amend the judgment to exclude the non-recoverable amounts from the restitution award and to conduct a new trial on the civil penalty, limited to the period before the lawsuit was filed. The court clarified that a violation of the Act is willful only if it is deliberate, knowing, or not based on a good faith and reasonable belief of compliance. View "Valdovinos v. Kia Motors America, Inc." on Justia Law

A physician in Puerto Rico, Dr. Jaime Salas Rushford, had his board certification suspended by the American Board of Internal Medicine (ABIM) after ABIM concluded that he had improperly shared board exam questions with his test prep instructor. ABIM sued Salas Rushford for copyright infringement in New Jersey. Salas Rushford counterclaimed against ABIM and several ABIM-affiliated individuals, alleging that the process leading to his suspension was a "sham."The counterclaims were transferred to the District of Puerto Rico, where the district court granted ABIM's motion for judgment on the pleadings and denied Salas Rushford leave to amend his pleading. The court found that Salas Rushford failed to state a claim for breach of contract, breach of the implied covenant of good faith and fair dealing, and tort claims against the ABIM Individuals. The court also dismissed his Lanham Act claim for commercial disparagement.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's dismissal of Salas Rushford's claims. It held that ABIM had broad discretion under its policies to revoke certification if a diplomate failed to maintain satisfactory ethical and professional behavior. The court found that Salas Rushford did not plausibly allege that ABIM acted with bad motive or ill intention, which is necessary to state a claim for breach of the implied covenant of good faith and fair dealing under New Jersey law.The court also affirmed the dismissal of the Lanham Act claim, noting that Salas Rushford failed to allege actual consumer deception or intentional deception, which is required to state a claim for false advertising. Finally, the court upheld the district court's denial of leave to amend the complaint, citing undue delay and lack of a concrete argument for why justice required an amendment. View "American Board of Internal Medicine v. Salas-Rushford" on Justia Law

Cave Quarries, Inc. hired Warex LLC to conduct a controlled explosion to blast a rock wall at its quarry. The explosion went wrong, destroying Cave Quarries' asphalt plant. Cave Quarries sued Warex, claiming strict liability and negligence. The oral contract between the parties did not cover this scenario, so Cave Quarries turned to tort law.The Orange Circuit Court denied both parties' motions for summary judgment. The court held that strict liability did not apply because Cave Quarries was not an innocent bystander but a participant in the blasting. The court ruled that the negligence standard should apply and found material issues of fact precluding summary judgment. The Indiana Court of Appeals affirmed the trial court's decision, agreeing that the negligence standard should apply.The Indiana Supreme Court reviewed the case and affirmed the lower court's decision. The court held that strict liability for blasting does not extend to customers who hire the blaster, as they are participants in the activity and benefit from it. The court maintained that strict liability applies to damage caused to neighbors and bystanders but not to customers. The court remanded the case for further proceedings on the negligence claim, directing the trial court to enter judgment for Warex on the strict liability claim and proceed with the negligence claim. View "Cave Quarries Inc. v. Warex, LLC" on Justia Law

JES Farms Partnership sold crops through Indigo Ag's digital platform. In 2021, JES initiated arbitration against Indigo, alleging breach of a marketplace seller agreement and trade rule violations. Indigo counterclaimed, alleging JES breached the agreement and its addenda. JES then sought a federal court's declaratory judgment that Indigo’s counterclaims were not arbitrable and that some addenda were invalid. Indigo moved to compel arbitration based on the agreement's arbitration clause.The United States District Court for the District of South Dakota partially denied Indigo's motion. The court agreed that Indigo’s counterclaims were arbitrable but ruled that the enforceability of the addenda was not arbitrable under the marketplace seller agreement. The court found the arbitration clause "narrow" and concluded that disputes about the addenda's enforceability did not relate to crop transactions. Indigo appealed this decision.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court determined that the arbitration clause in the marketplace seller agreement was broad, covering "any dispute" related to the agreement or transactions under it. The court found that the enforceability of the addenda was indeed a dispute "relating to crop transactions" and thus fell within the scope of the arbitration clause. Consequently, the Eighth Circuit reversed the district court's decision and directed it to grant Indigo’s motion to compel arbitration and address the case's status pending arbitration. View "JES Farms Partnership v. Indigo Ag Inc." on Justia Law

In 2018, John Burns and Rajeev Arora, representing Moca Financial Inc., engaged in discussions with Manoj Baheti, represented by Yash Venture Holdings, LLC, about a potential investment. The alleged agreement was that Yash would provide $600,000 worth of software development in exchange for a 15% non-dilutable ownership interest in Moca. However, subsequent documents and communications indicated ongoing negotiations and changes in terms, including a reduction of Yash's proposed stake and a shift from software development to a cash investment. Yash eventually refused to sign the final documents, leading to the current litigation.The United States District Court for the Central District of Illinois dismissed most of Yash's claims, including breach of contract, fraud, and securities fraud, but allowed the equitable estoppel and copyright infringement claims to proceed. Yash later voluntarily dismissed the remaining claims, and the district court entered final judgment, prompting Yash to appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court found that Yash did not adequately allege the existence of an enforceable contract, as there was no meeting of the minds on the material term of whether the ownership interest was non-dilutable. Consequently, the breach of contract claim failed. Similarly, the promissory estoppel claim failed due to the lack of an unambiguous promise. The fraud and securities fraud claims were also dismissed because they relied on the existence of a non-dilutable ownership interest, which was not sufficiently alleged. Lastly, the breach of fiduciary duty claims failed as there was no enforceable stock subscription agreement to establish a fiduciary duty. The Seventh Circuit affirmed the district court's judgment. View "Yash Venture Holdings, LLC v. Moca Financial, Inc." on Justia Law

The case involves a dispute over the sale of real property owned by the estate of Mark Engelhardt. Yvonne Engelhart, the personal representative of the estate, sent a notice letter to interested parties, including the Ebels and Tom Gross, outlining the bidding process for the property. The Ebels submitted bids that complied with the notice letter's requirements, while Gross submitted bids that did not meet the specified conditions. Despite this, the estate's attorney initially declared the Ebels the winning bidders but later accepted Gross's bids after he questioned the process.The District Court of McIntosh County initially dismissed the Ebels' claims, concluding the contracts were invalid due to the statute of frauds. The North Dakota Supreme Court reversed this decision, stating the statute of frauds was not properly raised. On remand, the district court declared the contracts between the Ebels and the estate valid and ordered specific performance. The court dismissed the Ebels' tortious interference claims against Gross, finding his actions justified.The North Dakota Supreme Court reviewed the case and affirmed the district court's decision. The court held that valid contracts were formed between the Ebels and the estate when the estate's attorney declared them the winning bidders. The court found that Gross's bids did not comply with the notice letter's requirements and that he had actual notice of the Ebels' winning bids, disqualifying him as a good-faith purchaser. The court also upheld the dismissal of the Ebels' tortious interference claims, concluding Gross's actions were reasonable and justified under the circumstances. View "Ebel v. Engelhart" on Justia Law

In August 2020, Kimberly Strable, who was under 18, inquired about a managerial position at Arby’s in Great Falls but was told she could not apply due to her age. Strable filed an age discrimination claim with the Montana Human Rights Bureau (HRB), which issued a reasonable cause determination. The parties entered into a conciliation process, and Strable’s attorney and Arby’s attorney reached an agreement in principle for a $25,000 settlement, subject to a mutually agreeable settlement agreement. However, the parties did not finalize or sign the draft conciliation agreement, which included affirmative relief provisions required by the HRB.The First Judicial District Court, Lewis and Clark County, granted summary judgment in favor of Arby’s, finding that no enforceable contract existed between the parties. The court noted that the negotiations were part of an ongoing HRB case and that Arby’s had not consented to the affirmative relief provisions, which were essential terms of the conciliation agreement.The Supreme Court of the State of Montana reviewed the case and affirmed the District Court’s decision. The court held that the essential element of consent was lacking because the parties had not agreed on all essential terms, including the HRB’s affirmative relief provisions. The court emphasized that a binding contract requires mutual consent on all essential terms, and in this case, Arby’s could not consent to terms it was unaware of. Therefore, the court concluded that no enforceable contract existed, and summary judgment in favor of Arby’s was appropriate. View "Strable v. Carisch" on Justia Law

A hospital and a physician entered into a settlement agreement to resolve a dispute over the suspension of the physician's clinical privileges. The agreement required the hospital to submit a report to a regulatory authority using specific language agreed upon by both parties. The hospital, however, selected codes for the report that generated additional text, which the physician claimed contradicted and was inconsistent with the agreed language. The physician sued for breach of the settlement agreement.The Circuit Court for Montgomery County granted summary judgment in favor of the hospital, ruling that the settlement agreement did not restrict the hospital's selection of codes for the report. The Appellate Court of Maryland disagreed, holding that a reasonable person would understand the hospital's obligation to report using specific language to preclude it from including contradictory and materially inconsistent language. The Appellate Court vacated the summary judgment, finding that whether the hospital breached its obligation was a question for the jury.The Supreme Court of Maryland reviewed the case and affirmed the Appellate Court's decision. The court held that the hospital's obligation to report using specific, agreed-upon language precluded it from including additional language that contradicted and was materially inconsistent with the agreed language. The court also affirmed that the physician's claim regarding the hospital's failure to provide a timely hearing was released in the settlement agreement. The case was remanded for further proceedings to determine if the hospital's actions constituted a breach of the settlement agreement. View "Adventist Healthcare v. Behram" on Justia Law

In 2019, Ancor Holdings, L.P. (Ancor) and Landon Capital Partners, L.L.C. (Landon) entered into letters of intent to invest in and acquire a majority interest in ICON EV, L.L.C. (ICON). The deal fell through, and Landon and ICON entered into their own agreement. Ancor sued Landon and ICON for breach of contract and tortious interference, respectively. The trial court dismissed Ancor’s tortious interference claim against ICON as a matter of law and denied Ancor’s declaratory judgment claim. The jury found for Ancor on the breach of contract claim against Landon, awarding $2,112,542 in damages.The United States District Court for the Northern District of Texas initially handled the case. The trial court dismissed Ancor’s tortious interference claim against ICON and denied Ancor’s declaratory judgment claim. The jury found Landon breached the contract and awarded Ancor damages. Ancor appealed the dismissal of its claims, and Landon cross-appealed the jury’s verdict.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court reversed the trial court’s dismissal of Ancor’s declaratory judgment and tortious interference claims, remanding them for a jury trial. The appellate court affirmed the jury’s finding that Landon breached the contract but reversed the trial court’s judgment on the reimbursement amount, instructing it to determine 80% of all third-party costs incurred. The court held that Ancor was entitled to a jury trial on its declaratory judgment claim and that sufficient evidence supported the tortious interference claim against ICON. The court also found that the trial court did not err in submitting the breach of contract claim to the jury, nor did the jury err in its findings. View "Ancor Holdings, L.P. v. Landon Capital Partners, L.L.C." on Justia Law

C.R. Bard, Inc. (Bard), a medical device company, held patents on a vascular graft and entered into a licensing agreement with Atrium Medical Corporation (Atrium) to settle a patent infringement lawsuit. The agreement required Atrium to pay Bard a 15% per-unit royalty on U.S. sales until the U.S. patent expired in 2019 and on Canadian sales until the Canadian patent expired in 2024. Additionally, Atrium was to pay a minimum royalty of $3.75 million per quarter until the FDA approved the iCast stent for vascular use or rescinded its approval for all uses. Atrium ceased minimum royalty payments after the U.S. patent expired, leading Bard to sue for breach of contract.The United States District Court for the District of Arizona held a bench trial and found that the minimum royalty provision was primarily intended to compensate Bard for U.S. sales, thus constituting patent misuse under Brulotte v. Thys Co. The court concluded that the provision violated Brulotte because it effectively extended royalties beyond the patent's expiration based on the parties' motivations during negotiations.The United States Court of Appeals for the Ninth Circuit reversed the district court's judgment. The appellate court clarified that the Brulotte rule requires examining whether a contract explicitly provides for royalties on the use of a patented invention after the patent's expiration. The court held that the licensing agreement did not violate Brulotte because it provided for U.S. royalties only until the U.S. patent expired and Canadian royalties until the Canadian patent expired. The minimum royalty payments were not tied to post-expiration use of the U.S. patent but were instead based on Canadian sales, which continued to be valid under the Canadian patent. The Ninth Circuit concluded that the district court erred by considering the parties' subjective motivations and reversed the judgment for Atrium on Bard’s breach of contract claim. View "C.R. BARD, INC. V. ATRIUM MEDICAL CORPORATION" on Justia Law