Justia Contracts Opinion Summaries

CP and Cimarex entered into the Master Service Agreement (MSA). Cimarex hired CP to work at Cimarex’s Oklahoma oil well. CP assigned Trent, an employee of one of its subcontractors, to work at the well. A flash fire occurred at the well. Trent was severely burned Trent sued Cimarex and CP. Cimarex and its insurers settled with Trent for $4.5 million. The Texas Oilfield Anti-Indemnity Act (TOAIA) voids indemnity agreements that pertain to wells for oil, gas, or water or to mineral mines unless the indemnity agreement is supported by liability insurance. The MSA's mutual indemnity provision required Cimarex and CP to indemnify each other; CP was obligated to obtain a minimum of $1 million in commercial general liability insurance and $2 million in excess liability insurance, Cimarex was required to obtain $1 million in general liability insurance and $25 million in excess liability insurance. CP obtained more coverage than the minimum required by the MSA, but its policy limited indemnity coverage. Cimarex sought indemnity from CP, which paid Cimarex $3 million, but refused to indemnify Cimarex for the remaining $1.5 million.The Fifth Circuit affirmed summary judgment for CP. TOAIA contemplates that mutual indemnity obligations will be enforceable only up to the limits of insurance each party has agreed to provide in equal amounts to the other party as indemnitee. CP did not breach the MSA because CP was only required to indemnify Cimarex up to $3 million. View "Cimarex Energy Co. v. CP Well Testing L.L.C." on Justia Law

Secure intending to open an Illinois coal gasification plant, contracted with Siemens. Secure would buy gasification equipment on a payment plan; Siemens would provide updates and repairs to the equipment. The price of natural gas fell in 2009. Secure had to change its business plan and could not keep up with its payments to Siemens. In 2010, other clients discovered problems with Siemens’s gasification equipment. Siemens began implementing substantial modifications to its gasifiers. Because Secure's plant was not operational, Siemens left Secure out of the loop. In 2015, Siemens decided to exit the gasification market but promised to continue supporting its existing projects, including Secure’s, which had never been opened or used.In 2016, Secure sued Siemens, alleging fraud- and contract-based claims. Siemens, which was still owed 13 million dollars under the contract, filed a breach of contract counterclaim. Years into the litigation, the court denied Secure leave to amend its complaint, then excluded Secure’s expert witness for relying on an unreliable methodology, and granted Siemens summary judgment on Secure’s claims. Before trial on Siemens’s counterclaim, the court excluded Secure's evidence in support of its breach-of-contract affirmative defense. The jury returned a full verdict in Siemens’s favor. The Eleventh Circuit affirmed. The district court did not abuse its discretion in excluding Secure’s expert witness and its trial evidence and did not err in granting Siemens summary judgment. View "MidAmerica C2L Inc. v. Siemens Energy, Inc." on Justia Law

The Housing Authority of New Orleans (HANO) agreed to pay Parkcrest $11 million to build affordable housing. Liberty was Parkcrest’s surety. HANO terminated Parkcrest before the project was done. Parkcrest sued, alleging breach of contract. Liberty and HANO executed a “Takeover Agreement,” incorporating the original contract; Liberty stepped into Parkcrest’s shoes to finish the project. Liberty hired Parkcrest as its completion contractor. HANO claimed that Liberty had forfeited any right to continue working on the project and requested that it relinquish control of the site. Liberty claimed the termination was wrongful. Rather than following the contract’s dispute resolution procedures, Liberty filed a complaint-in-intervention in the HANO-Parkcrest litigation.The district court concluded that HANO had breached the Takeover Agreement and the underlying HANO Contract by terminating Liberty for convenience after Liberty had substantially completed the project, awarded Liberty and Parkcrest damages, and held HANO liable to Liberty for attorney’s fees, but left those fees unquantified. The Fifth Circut affirmed but concluded it lacked jurisdiction to consider the fee award because a fee award is not a final judgment under 28 U.S.C. 1291 until reduced to a sum certain. The district court then awarded Liberty $526,192.25 in fees. The Fifth Circuit reversed. Liberty’s claim for fees arises from the contract, which authorizes fee-shifting “upon the receipt by [HANO] of a properly presented claim.” Liberty breached the contract’s dispute-resolution procedures, this breach was unexcused, so Liberty is entitled to nothing. View "Liberty Mutual Insurance Co. v. Housing Authority of New Orleans" on Justia Law

Employees of a Navy services contractor, SA-TECH, sued the contractor in California state court for violations of the state’s labor laws. Before and during that suit, SA-TECH sought guidance from the Navy as to whether California’s labor laws applied to it and its subcontractors, given the federal nature of its service contract. Those requests went unanswered. SA-TECH’s claim with its contracting officer under the Contract Disputes Act was denied. SA-TECH then sought declaratory relief on the questions: whether the modified understanding of California labor laws would control SA-TECH’s operations on Navy and Navy-chartered ships; whether SA-TECH would be permitted or required by the Navy, under its contracts, to pay any sleep-time over-time; and whether costs incurred by SA-TECH in settling the state-court litigation would be allowable costs under its current contract.The district court dismissed the complaint, citing lack of subject matter jurisdiction pursuant to the Contract Disputes Act’s exhaustion requirements, 41 U.S.C. 7103(a)(1)–(3). The Fourth Circuit affirmed. SA-TECH did not specifically assert any legal or contractual grounds entitling it to the Navy’s opinion on its agency status. Its other issues are monetary claims for which SA-TECH did not present a requested sum certain, as required to exhaust its remedies. View "Systems Application & Technologies, Inc. v. United States" on Justia Law

Gardineer was involved in an automobile accident. She sued the other driver, Lynette Hill, and the vehicle owner, Dennis Hill (Lynette’s father-in-law). Dennis had both a primary insurance policy and an umbrella policy with ANPAC. After Dennis’s death, the parties reached a settlement wherein ANPAC paid Gardineer the policy limit of Dennis’s automobile insurance policy. Gardineer reserved the right to assert that ANPAC had a duty to indemnify Hill under Dennis’s umbrellas policy for Hill’s liability. ANPAC sought a declaration that it had no duty to indemnify Hill under the umbrella policy.The Ninth Circuit affirmed summary judgment in favor of ANPAC. The umbrella policy, by its plain and unambiguous terms, did not provide coverage for Lynettel’s liability arising from her use of Dennis’s vehicle. The term “insured” meant Dennis, his wife, and any “relative” – defined as a related person living in the household. Lynette did not reside in Dennis’s household; she was not a “relative” and not an “insured” under the policy. View "American National Property & Casualty Co. v. Gardineer" on Justia Law

In response to questions certified to it by the United States Court of Appeals for the Second Circuit, the Court of Appeals held that inferences of vesting of retiree health insurance rights when construing a collective bargaining agreement (CBA) are inconsistent with New York's established contract interpretation principles.In Kolbe v. Tibbetts, the Court of Appeals left open the question of whether a New York court should infer vesting of retiree health insurance rights when construing a collective bargaining agreement (CBA). The Supreme Court rejected such inferences as incompatible with ordinary contract principles under federal law, thus repudiating International Union, United Automobile, Aerospace, & Agriculture Implement Workers of America v. Yard-Man, Inc., 716 F2d 1476 (6th Cir 1983). In answering the questions certified to it in this case, the Court of Appeals (1) held that it maintains its traditional contract interpretation principles, including those set forth in Kolbe; but (2) clarified that New York's contract law does not recognize Yard-Man-type inferences. View "Donohue v. Cuomo" on Justia Law

MDK, a Bolivian entity, filed suit against Proplant, a Texas-based corporation under both breach of contract and tort theories. The Fifth Circuit affirmed the district court's grant of summary judgment in favor of Proplant, concluding that MDK did not meet the Federal Rule of Civil Procedure 56(d) standard for deferring summary judgment, and thus the district court did not err by ruling on Proplant's summary judgment motion before the parties had completed discovery. In this case, MDK's opening brief failed to adequately present its arguments that Proplant's summary judgment motion and the district court's summary judgment order were "legally deficient." Therefore, MDK has waived these issues.Finally, the court rejected MDK's contention that the district court erred in granting summary judgment on MDK's two breach of contract claims. In regard to the first claim, the court concluded that MDK has not pointed to any evidence suggesting that it did in fact execute the October Document. In regard to the second claim, the court concluded that MDK failed to meet its burden of demonstrating by competent evidence that there is a dispute of material fact as to whether YPFB awarded Proplant the O&M contract. View "MDK Sociedad de Responsabilidad Limitada v. Proplant Inc." on Justia Law

The Supreme Court affirmed the judgment of the appellate court affirming the judgment in favor of Defendant Theresa Virgulak in this action brought by Plaintiff, Manufacturers and Traders Trust Company, holding that there was no error.The trial court found in favor of Defendant on Plaintiff's foreclosure, reformation, and unjust enrichment claims. The appellate court affirmed. The Supreme Court affirmed, holding (1) the trial court properly declined Plaintiff’s request to reform the mortgage deed to reference that the mortgage deed executed by Defendant was given to secure a note executed by her husband; and (2) the trial court correctly determined that Plaintiff was not entitled to foreclose the mortgage executed by Defendant because Defendant was not a borrower on the note. View "JPMorgan Chase Bank, National Ass'n v. Virgulak" on Justia Law

Shinyaku and Sarepta executed an Agreement concerning “a potential business relationship relating to therapies for the treatment of Duchenne Muscular Dystrophy.” During the Agreement’s term the parties would “not directly or indirectly assert or file any legal or equitable .. claim or otherwise initiate any … form of legal or administrative proceeding against the other Party . . . in any jurisdiction … concerning intellectual property in the field of Duchenne Muscular Dystrophy,” including “patent infringement litigations, declaratory judgment actions, patent validity challenges” before the U.S. Patent and Trademark Office (PTO) or Japanese Patent Office, and reexamination proceedings before the PTO. A forum selection, governing intellectual property disputes between the parties after the term’s expiration named the District of Delaware. The term ended in June 2021; the two-year forum selection clause took effect. That same day, Sarepta filed seven Patent Trial and Appeal Board petitions for inter partes review (IPR). Shinyaku filed suit in the District of Delaware asserting breach of contract (alleging that the IPR petitions violated the forum selection clause), declaratory judgment of noninfringement and invalidity concerning Sarepta’s patents, and infringement of Shinyaku’s patents.The Federal Circuit directed that the district court enter an injunction, requiring Sarepta to withdraw the petitions. The plain language of the forum selection clause resolved the dispute. View "Nippon Shinyaku Co., Ltd. v. Sarepta Therapeutics, Inc." on Justia Law

The Fifth Circuit affirmed the district court's judgment in favor of Schlumberger in an action brought by Hess for breach of contract. Hess had contracted with Schlumberger to provide safety valves for several of Hess's deep-sea oil wells in the Gulf of Mexico. After Hess experienced problems with the valves, Schlumberger recalled them. Hess filed suit claiming that it was entitled to revoke its acceptance of the valves that Schlumberger had provided.The court upheld the district court's interpretation of two sections of API 14A standards that were incorporated into the sales contract. In this case, the district court did not err in interpreting API 14A Section 6.3.2.2 to require only that the drawings remain substantially the same and that the valves be manufactured using those drawings. Furthermore, the district court did not err in interpreting API 14A Section 7.6.2 regarding the seal spring (aka rosette spring) and that the contract contemplated dimensional inspection of the seal assemblies rather than inspection of the rosette springs within that assembly. The court also concluded that the district court did not clearly err in making its factual findings relative to Schlumberger's compliance with 6.3.2.2. Assuming without deciding that Hess is correct that the proper standard is "producing cause," the court concluded that the district court's order is consistent with the application of such a rule. Finally, the district court did not clearly err in finding that any alleged non-conformity did not cause the valves' failure which in turn would have impaired their value. View "Hess Corp. v. Schlumberger Technology Corp." on Justia Law