Justia Contracts Opinion Summaries

Articles Posted in Contracts
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The case involves Ángel Cruz-Agosto, who was convicted as a felon in possession of a firearm following a guilty plea. Cruz-Agosto was arrested after police officers observed him pull a pistol from his waistband and drop it on the floor of his vehicle. At the time of his arrest, Cruz-Agosto was serving a term of federal supervised release. He entered into a plea agreement with the government, which calculated a Total Offense Level of nineteen and agreed to jointly recommend a sentence of thirty-seven months' imprisonment.The district court, however, found that the recommended sentence did not reflect the seriousness of the offense and sentenced Cruz-Agosto to seventy-one months' imprisonment, followed by a three-year term of supervised release. The court also held a sentencing hearing for the revocation of Cruz-Agosto's supervised release, sentencing him to an additional eighteen months' imprisonment to be served consecutively.Cruz-Agosto appealed his sentences, focusing on an alleged breach of the plea agreement by the prosecutor at sentencing. He argued that the government failed to argue for a concurrent sentence or a maximum of a four-month consecutive sentence on the revocation, and failed to correct a perceived error made by the district court.The United States Court of Appeals for the First Circuit affirmed the sentences given by the district court. The court found that the government did not breach the plea agreement, as it had fulfilled its obligation to jointly recommend a sentence of thirty-seven months' imprisonment. The court also found that Cruz-Agosto failed to show that any alleged error by the government affected his substantial rights or the outcome of the proceedings. View "United States v. Cruz-Agosto" on Justia Law

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The case revolves around an accident where the plaintiff, Daniel Bennett, was injured when his vehicle abruptly stopped after driving over a downed telecommunications line owned by Cox Communications of Louisiana (“Cox”). Bennett filed a lawsuit against several defendants, including Cox and Cable Man, Inc., a company contracted by Cox to maintain the line. Bennett alleged that both Cox and Cable Man were negligent in their handling of the line and their failure to properly train their employees.Cox, in response, invoked an indemnification agreement under their contract with Cable Man, requiring Cable Man to indemnify and defend Cox against any claims related to Cable Man's work. Cable Man refused the tender and filed an Exception of Prematurity, arguing that without a finding of liability or a judgment, the claim for indemnity was premature. The trial court denied the exception, but the Court of Appeal, First Circuit, reversed the trial court's ruling, finding Cox’s claim for indemnity to be premature.The Supreme Court of Louisiana, however, reversed the Court of Appeal's decision. The court held that a claim for indemnity raised during the pendency of the litigation and before a finding of liability is not premature. The court reasoned that this finding aligns with principles of judicial economy and efficiency, and the relevant Code of Civil Procedure articles pertaining to third party practice. The court clarified that while the right to collect on an indemnity agreement is determined upon judgment or finding of liability or loss, there is no prohibition on asserting a claim for indemnity in the same proceeding. The case was remanded for further proceedings. View "Bennett v. Demco Energy Services, LLC" on Justia Law

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The case revolves around a dispute between Diamond Transportation Logistics (Diamond) and The Kroger Company (Kroger). In 2010, the two companies entered into a transportation agreement, which was renewed in 2016, for Diamond to transport Kroger's goods. The agreement included an indemnity provision, which allowed Kroger to withhold payments from Diamond for claims against Diamond under certain conditions. In December 2015, a subcontractor of Diamond was involved in a fatal accident while transporting Kroger's goods. The family of the deceased sued both Diamond and Kroger for wrongful death, alleging negligence in Kroger's selection, hiring, and retention of Diamond as a shipper. Kroger demanded Diamond to cover its legal expenses based on the indemnity provision in their agreement. However, Diamond failed to reimburse Kroger, leading Kroger to withhold nearly $1.8 million in shipping payments from Diamond.The case was first heard in the United States District Court for the Southern District of Ohio, where Kroger filed a counterclaim for breach of the transportation agreement's indemnity provision. The district court ruled in favor of Kroger, awarding it $612,429.45 plus interest. Diamond appealed this decision to the United States Court of Appeals for the Sixth Circuit.The Sixth Circuit Court of Appeals affirmed the district court's decision. The main issue was whether the indemnity provision's exception for "liability...caused by the sole negligence or willful misconduct of Kroger" relieved Diamond of its obligation. The court held that the exception did not apply in this case because Kroger's liability for the family's negligent selection, hiring, and retention claim was not caused by its "sole negligence." The court reasoned that Diamond's negligence also played a part in Kroger's liability, and therefore, Diamond was required to cover Kroger's costs in settling the family's claim. View "Diamond Transp. Logistics, Inc. v. Kroger Co." on Justia Law

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The case revolves around a dispute between a real estate salesperson, James Kennedy II, and a real estate broker, Weichert Co. Kennedy worked for Weichert from 2012 to 2018 under two written agreements that identified him as an independent contractor. After his affiliation with Weichert ended, Kennedy filed a class action lawsuit alleging that Weichert violated the Wage Payment Law (WPL) by misclassifying him and other real estate salespersons as independent contractors and unlawfully deducting fees and expenses from their commissions.The trial court denied Weichert's motion to dismiss Kennedy's complaint, ruling that the question of Kennedy's status was not determined by the parties' agreement, but by the legal standard that generally governs employee classification issues under the WPL, known as the "ABC" test. The Appellate Division affirmed this decision, but noted that the 2018 amendments to the New Jersey Real Estate License Act, or the Brokers Act, authorized real estate brokers and salespersons to enter into independent contractor relationships. However, it held that these amendments applied prospectively and thus governed only a brief portion of Kennedy's claim.The Supreme Court of New Jersey reversed the lower courts' decisions. It held that the parties' agreement to enter into an independent contractor business affiliation is enforceable under N.J.S.A. 45:15-3.2, and Kennedy, as an independent contractor, was not subject to the WPL pursuant to N.J.S.A. 34:11-4.1(b). Therefore, the trial court erred when it denied Weichert’s motion to dismiss the complaint. The case was remanded for the dismissal of Kennedy’s complaint. View "Kennedy v. Weichert Co." on Justia Law

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The case involves Alejandro Cortés-López, who was serving a 24-month prison term after pleading guilty to conspiracy to commit mail and wire fraud. Cortés-López had entered into a plea agreement with the government, admitting to a fraudulent financial scheme that solicited residents in Puerto Rico to invest in short-term, high-interest loans in the Dominican Republic. The plea agreement stipulated a total offense level (TOL) of 18, which, combined with a criminal history category of I, suggested a guidelines sentencing range (GSR) of 27-33 months' imprisonment. However, both parties agreed to jointly request a variant sentence of 24 months of probation.The Presentence Investigation Report (PSR) calculated a higher TOL due to the financial fraud scheme resulting in more than $5.4 million in losses to the investors. Cortés-López objected to these enhancements, but the probation office maintained that the higher loss amount and additional enhancement were correct. At the sentencing hearing, the government acknowledged the PSR's calculation but stated it was standing by its plea agreement recommendation of 24 months of probation. The district court, however, imposed a sentence of 24 months' imprisonment, followed by 3 years of supervised release and $5.4 million in restitution.Cortés-López appealed, arguing that the government breached the plea agreement by supporting the higher TOL calculated in the PSR and failing to advocate meaningfully for the agreed-upon 24-month probation sentence. The United States Court of Appeals for the First Circuit agreed, finding that the government's conduct at the sentencing hearing was a breach of the plea agreement. The court vacated Cortés-López's sentence and remanded the case for further proceedings. View "United States v. Cortes-Lopez" on Justia Law

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The case revolves around a dispute between Harley Channelview Properties, LLC (Channelview) and Harley Marine Gulf, LLC (Harley Marine) over a property lease agreement. The original lease, signed in 2011, included a provision granting Harley Marine an option to purchase the property. In 2012, Channelview bought the property, subject to the Harley Marine lease. Over time, Channelview concluded that Harley Marine's purchase option had expired, and it invested $15 million in property improvements. However, Harley Marine believed the purchase option was still valid and attempted to buy the property in 2020. When Channelview refused to transfer the property, Harley Marine sued for breach of contract and sought specific performance.The trial court granted Harley Marine's motion for partial summary judgment on its contract claim and ordered Channelview to transfer the property title to Harley Marine within 30 days, even though the court acknowledged that its ruling was "interlocutory" and other issues remained unresolved. Channelview appealed, arguing that the trial court's order was equivalent to a temporary injunction.The court of appeals dismissed Channelview's appeal, ruling that the trial court had granted "permanent" relief, and thus the order was not a "temporary" injunction from which an appeal could be taken. Channelview then petitioned the Supreme Court of Texas for review.The Supreme Court of Texas reversed the court of appeals' decision. The court held that the trial court's order had the character and function of a temporary injunction because it required immediate action based on an interim ruling that a claim had merit and was effective during the pendency of the suit. The court noted that the order was "interlocutory," not final, and the trial court could modify it at any time until final judgment. The court remanded the case to the court of appeals for consideration of the merits of the appeal. View "HARLEY CHANNELVIEW PROPERTIES, LLC v. HARLEY MARINE GULF, LLC" on Justia Law

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The case involves a dispute over a postnuptial modification of a premarital agreement. The parties, David and Elizabeth Roberts, entered into a premarital agreement before their marriage in 1993. The agreement stipulated that each spouse waived their statutory elective share, but agreed that each would take one-third of the other’s net real property interests at the time of death. Twenty-four years later, the parties executed a new agreement, a "partial revocation" of the premarital agreement, which maintained the waiver of elective share but relinquished their one-third share in each other’s real property investments at the time of death. Elizabeth received approximately $15,000 cash and $50,000 in debt repayment or forgiveness from David, plus a monthly living allowance for as long as the couple remained married. After David's death, Elizabeth contested the validity of this partial revocation.The district court rejected Elizabeth's challenge and enforced the partial revocation. Elizabeth appealed the decision to the Supreme Court of Iowa.The Supreme Court of Iowa reversed the district court's decision. The court concluded that under Iowa law, specifically Iowa Code sections 596.7 and 597.2, a postmarital amendment to a premarital agreement relating to inchoate dower interests in property is not enforceable. The court found that the partial revocation was essentially an amendment, not a revocation, and that Iowa law does not permit married persons who previously entered into a premarital agreement to enter into a new agreement during their marriage relating to inchoate dower interests in each other’s property. The court remanded the case for further proceedings regarding counterclaims made by David's son, Eric, who asked that if the partial revocation agreement is invalidated, Elizabeth should be required to relinquish the benefits she received as a result thereof to avoid unjust enrichment. View "Roberts v. Roberts" on Justia Law

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The case involves Montalla, LLC ("Montalla") and the Commonwealth of Virginia, Department of Transportation ("VDOT"), and the Comptroller of Virginia (collectively the "Commonwealth"). Montalla filed a five-count complaint against the Commonwealth related to several contracts VDOT had entered into for construction inspection services. The circuit court dismissed the entire complaint, ruling that sovereign immunity barred all five counts. The Court of Appeals affirmed the judgment of the circuit court, concluding that Counts I-III of the complaint were barred by sovereign immunity and that Counts IV-V were barred by the entry of a settlement agreement entered into by the pertinent parties.The Court of Appeals of Virginia affirmed the lower court's decision, concluding that the first three counts of the complaint were barred by sovereign immunity and that the last two counts were barred by the entry of a settlement agreement. The Court of Appeals reasoned that the settlement agreement was enforceable and that Montalla had not sufficiently alleged duress or repudiation to set it aside.The Supreme Court of Virginia reversed the judgment of the Court of Appeals. The Supreme Court held that the doctrine of sovereign immunity did not bar Montalla's claims based on valid contracts. The Court also held that the Court of Appeals erred in concluding that the settlement agreement, including the release of claims contained therein, was enforceable at this stage of the proceedings. The case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Montalla, LLC v. Commonwealth" on Justia Law

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The case involves a group of grocery store owner-operators and their related company, Anchor Mobile Food Markets, Inc. (AMFM), who sued Onex Partners IV, Onex Corporation, Anthony Munk, and Matthew Ross (collectively, Onex) for violations of Missouri common law and the Racketeer Influenced and Corrupt Organizations Act (RICO). The owner-operators had invested in the discount grocery chain Save-A-Lot and its independent licensee program, which turned out to be a disastrous investment. They alleged that Onex, which had acquired Save-A-Lot, had fraudulently induced them into the investment.The United States District Court for the Eastern District of Missouri had granted summary judgment to Onex. The court found that the owner-operators had signed multiple contractual releases and anti-reliance disclaimers before opening their stores, which barred their claims. The owner-operators and AMFM argued that these releases and disclaimers were fraudulently induced.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that the owner-operators failed to raise a genuine dispute of material fact that they were fraudulently induced to enter the releases. The court also found that the releases were valid and barred the owner-operators' claims. The court further found that AMFM's claims against Onex failed, as neither Save-A-Lot nor Onex had contracted with AMFM. Finally, the court affirmed the district court's denial of the owner-operators and AMFM's request for leave to amend their complaint. View "SBFO Operator No. 3, LLC v. Onex Corporation" on Justia Law

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The case involves a dispute between Missoula County and the Montana Department of Corrections (DOC) over the reimbursement rate for housing DOC inmates in county detention centers. The County and the DOC had entered into a contract in 2015, setting a reimbursement rate of $88.73 per day for each inmate. However, in 2015, the Montana Legislature capped the reimbursement rate at $69 per day. The County filed a lawsuit in 2020, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.The District Court granted summary judgment to the DOC, concluding that the County's contract claims were time-barred by a one-year statute of limitations. It also found that the County's tort claim for breach of the covenant of good faith was not supported by a special relationship and that the County could not recover under a theory of unjust enrichment.The Supreme Court of Montana affirmed the District Court's decision. It held that the one-year statute of limitations applied to the County's contract claims, rejecting the County's argument that an eight-year limitation period should apply. The court also agreed with the lower court that the County's tort claim for breach of the covenant of good faith was not supported by a special relationship. Finally, the court concluded that the County could not recover under a theory of unjust enrichment, as the County had not demonstrated that the DOC had reaped an inequitable gain. View "Missoula County v. Department of Corrections" on Justia Law