Justia Contracts Opinion Summaries

As part of an asset-purchase agreement, ISI promised to pay Indigo $2 million with interest on a defined schedule. Guido guaranteed the debt. Under a subordination agreement signed by the parties, a bank is entitled to be paid ahead of Indigo unless ISI meets certain financial conditions designed for the bank’s security.The Seventh Circuit affirmed the dismissal of Indigo’s suit to collect on the guaranty. Indigo is entitled to enforce Guido’s obligation without first trying to collect from ISI but must show that ISI has failed to keep its promise to pay. Indigo’s complaint did not allege that ISI has retired the bank’s loan or met the financial conditions. ISI is, therefore, forbidden to pay Indigo, and is not in default under the note. The guaranty kicks in on ISI’s failure “to timely make payment as required under the Note” and, under Illinois law, “instruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction are regarded as one contract and will be construed together.” View "Indigo Old Corp., Inc. v. Guido" on Justia Law

The Eleventh Circuit granted Drummond's motion to amend this court's judgment and vacated its prior opinion, substituting it for this opinion. The court denied as moot Southern Coal's petition for rehearing en banc.In this appeal, the court affirmed the district court's judgment against Southern Coal in the amount of $6,860,000 plus $1,473,699.87 in prejudgment interest for a total of $8,333,699.87. The court concluded that the district court correctly found that Southern Coal was not excused from performing under the contract. Furthermore, the court concluded that the district court correctly found the price escalation clause unenforceable. However, the court reversed as to the issue of attorneys' fees, remanding to the district court to award a reasonable sum to the prevailing party, Drummond. View "Southern Coal Corp. v. Drummond Coal Sales, Inc." on Justia Law

The Court of Appeals affirmed the judgment of the court of special appeals reversing the judgment of the circuit court granting summary judgment to Pabst Brewing Company (Pabst) and dismissing this breach of contract lawsuit brought by Frederick P. Winner, Ltd. (Winner), holding that the circuit court erred in its interpretation of the Successor Manufacturers Law (SML), Md. Code Ann., Alco. Bev. (AB) 5-201.Under a contract agreed upon in 1994, Winner and its predecessor entity distributed Pabst beer brands in Maryland. In 2014, Blue Ribbon, LLC purchased 100 percent of the stock of Pabst's parent entity. In 2015, Pabst terminated its contract with Winner, claiming that the termination was allowed under the SML. Winner disagreed and brought this lawsuit. The circuit court concluded that Blue Ribbon was permitted to cause Pabst to terminate its contract with Winner. The court of special appeals reversed. The Court of Appeals affirmed, holding (1) the SML applies only where the beer manufacturer that holds a Maryland license to distribute a brand of beer is replaced by another entity as the license hold with respect to that brand; and (2) Blue Ribbon did not qualify as a successor beer manufacturer, and Pabst did not have the right to terminate its contract with Winner without cause. View "Pabst Brewing Co. v. Frederick P. Winner, Ltd." on Justia Law

K.F.C., age 11, signed up for a Snapchat account. Snapchat's terms specify that a person must be at least 13 to have an account. K.F.C. lied about her age. Before she turned 18, K.F.C. sued, alleging that Snapchat’s features amount to facial recognition, which violates the Illinois Biometric Privacy Act, K.F.C. acknowledges that she accepted Snapchat’s terms but denies that its arbitration clause binds her although she continued using Snapchat after turning 13.The Seventh Circuit affirmed the dismissal of the case. An arbitrator, not a court, must decide whether K.F.C.’s youth is a defense to the contract’s enforcement. While even the most sweeping delegation cannot send the contract-formation issue to the arbitrator, state law does not provide that agreements between adults and children are void but treats such agreements as voidable (capable of ratification), so the age of the contracting parties is a potential defense to enforcement. The Federal Arbitration Act provides that arbitration is enforceable to the extent any promise is enforceable as a matter of state law, 9 U.S.C. 2. A challenge to the validity (as opposed to the existence) of a contract goes to the arbitrator; K.F.C.’s arguments about her youth and public policy concern the contract’s validity, not its existence. View "K.F.C. v. Snap Inc." on Justia Law

In this construction contract action, the Supreme Court affirmed the judgment of the district court dismissing Helix Electric of Nevada, LLC's claims for retention against APCO Construction, Inc. and the award of attorney fees for APCO pursuant to Nev. R. Civ. P. 68 for less than APCO's requested amount.Gemstone Development West, Inc. sought to construct condominiums and hired APCO as its general contractor. APCO subcontracted with Helix at Gemstone's direction. Helix was paid less than it billed, and the difference, $505,021, was withheld in retention. Under the subcontract, the retention would be released only upon the occurrence of several conditions. Later, the relationship between the parties soured, and the project was terminated. APCO, Helix, and other subcontractors recorded mechanics' liens against the property. After a trial, the district court dismissed Helix's claims for retention against APCO and granted attorney fees. The Supreme Court affirmed, holding (1) the district court correctly concluded that a subcontract provision conditioning the payment of funds on APCO first being paid was unenforceable, but the unenforceablity of the pay-if-paid condition did not also invalidate the remaining conditions precedent for obtaining the retention payment; and (2) none of the remaining arguments on appeal warranted reversal. View "Helix Electric of Nev., LLC v. APCO Construction, Inc." on Justia Law

The Supreme Court quashed the decision of the Third District Court of Appeal concluding that the circuit court had personal jurisdiction over Tribeca Asset Management, Inc., holding that the parties' agreement did not provide for arbitration in Florida.Tribeca and Ancla International, S.A. entered into a confidentiality agreement. Ancla later filed a petition to compel arbitration. The circuit court dismissed the petition for lack of personal jurisdiction, concluding that a provision in the parties' agreement did not contain a forum selection clause and merely contained a choice of law provision. The Third District reversed, concluding that the provision contained a forum selection clause. The Supreme Court reversed, holding that the agreement did not provide for arbitration in Florida. View "Tribeca Asset Management, Inc. v. Ancla International, S.A." on Justia Law

The Supreme Court held that an action seeking a determination that an oil and gas lease has expired by its own terms is a controversy "involving the title to or the possession of real estate" so that the action is exempt from arbitration under Ohio Rev. Code 2711.01(B)(1).Appellants brought an action for declaratory judgment alleging that oil and gas leases between the parties had terminated because Appellee failed to produce oil or gas or to commence drilling operations within the terms of the lease. Appellee moved to stay pending arbitration. The trial court denied the request, concluding that Appellants' claims involved the title to or the possession of real property, and therefore, were exempt from arbitration under Ohio Rev. Code 2711.01(B)(1). The court of appeals reversed. The Supreme Court reversed, holding the trial court correctly declined to stay the action in this case pending arbitration. View "French v. Ascent Resources-Utica, LLC" on Justia Law

Keles was admitted into Rutgers’s Civil and Environmental Engineering (CEE) Department’s graduate program and received his M.S. degree in 2014. While pursuing this degree, Keles expressed his interest in continuing his studies as a Ph.D. student. To continue their studies as Ph.D. students, M.S. students in the CEE Department must submit a “Change-in-Status” form, identifying advisors and describing their research plans. At the end of the M.S. program, Keles submitted an incomplete Change-in-Status form. Keles disputed that he needed to submit a completed Change-in-Status form due to his claimed enrollment as an M.S.-Ph.D. student. Members of the CEE Department and the University’s administration informed him that he needed to satisfy the admission prerequisites. Keles neither found an advisor nor submitted a completed form but sought to register for classes in 2015. Rutgers’s Administration informed Keles that his lack of academic standing prevented him from registering.Keles sued, alleging contract, tort, statutory, and due process claims. The Third Circuit affirmed the dismissal of his suit, finding that Rutgers adhered to its own policies and did not act in bad faith. All M.S. students were subject to the same departmental requirements. Rutgers afforded Keles sufficient process and did not venture “beyond the pale of reasoned academic decisionmaking.” View "Keles v. Bender" on Justia Law

After Phillips invoked the force majeure clause to terminate its agreement to sell a Rudolf Stingel painting on behalf of JN based on COVID-19 nonessential business restrictions, JN filed suit for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, and equitable estoppel.The Second Circuit affirmed the district court's grant of Phillips's motion to dismiss the complaint for failure to state a claim, agreeing with the district court that the pandemic constituted "a circumstance beyond the parties' reasonable control" as contemplated by their agreement, rejecting JN's arguments to the contrary. The court also rejected JN's contention that the district court erred in dismissing its claim for breach of another agreement, the Basquiat Agreement. Rather, the court concluded that the Basquiat Agreement was not integrated with the Stingel Agreement and was fully performed where JN signed the Stingel Agreement, and Phillips auctioned off the Basquiat Painting and paid the seller a guaranteed sum. Furthermore, assuming the Basquiat Agreement required Phillips to fully perform the Stingel Agreement, Phillips's proper invocation of the force majeure clause excused its performance. Finally, JN's remaining contentions regarding its implied covenant claim, bad faith claims, and breach of fiduciary duty claim are unavailing. View "JN Contemporary Art LLC v. Phillips Auctioneers LLC" on Justia Law

The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court ruling that an umbrella insurance policy between Motorists Mutual Insurance Company (Motorists)and Owens-Brockway Glass container, Inc. (Owens) did not apply to claims made against Ironics, Inc. by Owens, holding that the court of appeals did not err.Owens asserted claims against Ironics for, among other claims, breach of contract. Ironics asked its insurer, Motorists, to defend and indemnify it against Owens's claims under a commercial general-liability policy and a commercial umbrella policy with Motorists. The trial court concluded that neither policy covered Owens's claims and granted summary judgment for Motorists. The court of appeals reversed in part, holding that Ironics was entitled to coverage under the umbrella policy. The Supreme Court affirmed, holding that Owens's claims arose out of an accident that resulted in "property damage" under Ironic's umbrella policy with Motorists and that none of the policy's exclusions applied. View "Motorists Mutual Insurance Co. v. Ironics, Inc." on Justia Law