Justia Contracts Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the district court in favor of AWIN Real Estate, LLC (AWIN) on its claim that Whitehead Homes, Inc. (WHI) breached an investment agreement between the parties and in favor of WHI on an unpled claim that AWIN breached the parties' operating agreement, holding that the court lacked record evidence to award WHI damages for AWIN's breach of the operating agreement.Specifically, the Supreme Court held (1) the district court's interpretation of the ambiguous language in the investment agreement to hold WHI in breach was reasonable in light of the circumstances of the case; and (2) the district court lacked sufficient evidence to support its award of $55,000 in damages to WHI for AWIN's alleged breach of the operating agreement. The Supreme Court remanded for further proceedings on attorney's fees consistent with this opinion. View "AWIN Real Estate, LLC v. Whitehead Homes, Inc." on Justia Law

Innovative Images, LLC sued its former attorney James Summerville, Summerville Moore, P.C., and The Summerville Firm, LLC (collectively, the “Summerville Defendants”) for legal malpractice. In response, the Summerville Defendants moved to dismiss the suit and to compel arbitration in accordance with the parties’ engagement agreement, which included a clause mandating arbitration for any dispute arising under the agreement. The trial court denied the motion, ruling that the arbitration clause was “unconscionable” and thus unenforceable because it had been entered into in violation of Rule 1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for attorneys found in Georgia Bar Rule 4-102 (d). The Court of Appeals reversed, holding that the arbitration clause was not void as against public policy or unconscionable. The Georgia Supreme Court concluded after review that regardless of whether the Summerville Defendants violated GRPC Rule 1.4 (b) by entering into the mandatory arbitration clause in the engagement agreement without first apprising Innovative of the advantages and disadvantages of arbitration, the clause was not void as against public policy because Innovative did not argue, and no court has held, that such an arbitration clause could never lawfully be included in an attorney-client contract. For similar reasons, the Supreme Court held the arbitration clause was not substantively unconscionable, and on the limited record before it, Innovative did not show the clause was procedurally unconscionable. Accordingly, the Court affirmed the appellate court's judgment. View "Innovative Images, LLC v. Summerville et al." on Justia Law

The Pharmacies filed suit against ESI, the nation's largest Pharmacy Benefit Manager (PBM), alleging breach of contract, attempted monopolization, and other claims. The district court dismissed the entire complaint with prejudice, holding that the Pharmacies did not state a claim for breach of contract because their claim was based on the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. The parties had incorporated HIPAA and the HITECH Act into section 5.3 of their pharmacy provider agreements (PPA).The court affirmed and held that, textually, HIPAA does not authorize the Pharmacies to direct or control the use of their customers’ information and does not grant the Pharmacies power to enforce their customers' rights. Furthermore, the Pharmacies failed to allege a breach of contract based upon an alleged past or ongoing HIPAA violation. In this case, the Pharmacies failed to allege that ESI's use of their customers’ HIPAA-protected information to provide lower cost mail order refills lacked the express authorization of the plan sponsors and, thus, the implied authorization of the customers seeking to have their prescription costs covered by their plans.The court also held that the district court did not err in dismissing the Pharmacies' claim for breach of the implied covenant of good faith and fair dealing where the parties' agreements give ESI access to the Pharmacies' customer information and do not prevent its use for mail-order service dispensing. Finally, the court rejected the Pharmacies' claims of unfair competition, misappropriation of trade secrets, tortious interference with business expectancy and attempted monopolization. View "Trone Health Services, Inc. v. Express Scripts Holding Co." on Justia Law

The issue this case presented for the Mississippi Supreme Court was whether Jackson Ramelli Waste LLC was entitled to additional compensation “over and above [the] amounts agreed upon by the parties, invoiced by [Jackson Ramelli], and accepted as payment by [Jackson Ramelli], in the absence of a contract, but under a quantum meruit theory[.]” From October 2009 to September 2015, Waste Management contracted with the City of Jackson to collect solid waste from all residential units and light commercial entities in the city. The contract required Waste Management to subcontract 35.802 percent of the work to minority-owned or women-owned businesses and to adhere to the requirements of the City’s equal business opportunity (EBO) plan. Waste Management entered a subcontract with Jackson Ramelli and Metro Waste Disposal to perform certain portions of the waste-collection services and to fulfill this obligation. Jackson Ramelli’s payment rate would be adjusted annually in accordance with any increase or decrease in the Consumer Price Index (CPI). Both parties were prohibited from the assignment of the subcontract without the other party’s consent. Unbeknownst to Waste Management, after entering into the subcontract with Waste Management, Jackson Ramelli subcontracted all of its work to RKC LLC, a Louisiana company that was neither a minority- nor women-owned company. It is undisputed that RKC performed all of the residential waste-collection services that Waste Management hired Jackson Ramelli to perform. The subcontract between Waste Management and Jackson Ramelli expired at the end of September 2010; the parties continued services on a month-to-month basis. In January 2012, Jackson Ramelli purchased the right to assume Metro Waste’s routes related to the contract. As a result, Jackson Ramelli increased the amount it invoiced Waste Management to reflect the additional houses it acquired through its acquisition of Metro Waste’s routes. While Jackson Ramelli submitted monthly invoices to Waste Management for services rendered, it did not invoice Waste Management for any CPI adjustments or for any further houses serviced. But during this time, Jackson Ramelli raised the possibility of additional compensation to reflect (1) the changes in the CPI and (2) the increase in the number of houses Jackson Ramelli claimed to be servicing. Jackson Ramelli filed a complaint against Waste Management in July 2015 claiming Waste Management’s: (1) nonpayment of CPI increases between 2012 and 2015; (2) nonpayment of waste-collection services for additional houses between 2012 and 2015; and (3) nonpayment of work performed in March 2015. Because the record established that the additional work claimed by Jackson Ramelli was contemplated by its contract and because Jackson Ramelli did not have a reasonable expectation of additional compensation, the Supreme Court reversed its quantum meruit claim, and final judgment was entered in favor of Waste Management. View "Waste Management of Mississippi Inc. v. Jackson Ramelli Waste LLC" on Justia Law

Taylor's leases for the Outer Continental Shelf (OCS), set to expire in 2007, incorporated Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1301, regulations. They required Taylor to leave the leased area “in a manner satisfactory to the [Regional] Director.” Taylor drilled 28 wells, each connected to an oil platform. In 2004, Hurricane Ivan toppled Taylor’s platform, rendering the wells inoperable. Taylor discovered leaking oil but took no action. In 2007, Taylor was ordered to decommission the wells within one year. Taylor sought extensions. The government required Taylor to set aside funds for its decommissioning obligations. For Taylor to receive reimbursement, the government must confirm the work was conducted “in material compliance with all applicable federal laws and . . . regulations" and with the Leases. The resulting Trust Agreement states that it “shall be governed by and construed in accordance with the laws of" Louisiana. Taylor attempted to fulfill its obligations. The government approved a departure from certain standards but ultimately refused to relieve Taylor of its responsibilities.Taylor filed claims involving Louisiana state law: breach of the Trust Agreement; request for dissolution of the trust account based on impossibility of performance; request for reformation for mutual error; and breach of the duty of good faith and fair dealing. The Federal Circuit affirmed the dismissal of the complaint. OCSLA makes federal law exclusive in its regulation of the OCS. To the extent federal law applies to a particular issue, state law is inapplicable. OCSLA regulations address the arguments underlying Taylor’s contract claims, so Louisiana state law cannot be adopted as surrogate law. View "Taylor Energy Co. LLC v. United States" on Justia Law

In 2019, Perficient filed suit against its former employee and his new employer, Spaulding, alleging claims including breach of contract and violations of the Defend Trade Secrets Act, and the Missouri Uniform Trade Secrets Act. The district court ruled in favor of Perficient, concluding that the employee violated the covenant-not-to-compete provision in his employment contract. The district court then granted permanent injunctive relief of short duration. The employee and Spaulding timely filed this interlocutory appeal but did not seek a stay of the district court’s order pending appeal. The injunction expired in May 2020 on its own, with the appeal pending and further proceedings stayed in the district court. The Eighth Circuit held that the district court's injunction has become moot and remanded to the district court for further proceedings. Furthermore, none of the traditional exceptions to mootness apply. Accordingly, the court dismissed the appeal. View "Perficient, Inc. v. Munley" on Justia Law

D2 filed suit for breach of contract, quantum meruit, violations of the Texas prompt pay statute, and to foreclose on a statutory and constitutional lien. Thompson, in turn, alleged that D2 breached the excavation contract between the parties. The district court held in D2's favor on all claims and ordered Thompson to pay for unpaid work and for "excess" excavating work, as well as interest and attorneys' fees.The Fifth Circuit held that the district court did not clearly err by finding that management of the site was so deficient that D2 had to regrade the same areas as many as six times and was unable to complete its work in other parts of the site, justifying D2's cessation of work. Therefore, the court affirmed the district court's judgment for the $81,068 in unpaid work and the related prompt payment statute and lien remedies for that breach of contract. However, the court held that neither breach of contract nor quantum meruit allows D2 to recover for "excavation of unanticipated excess soil." Thus, the court reversed the district court's judgment of $257,588.53 for the "excavation of unanticipated excess soil" and rendered judgment for Thompson on those breach of contract and quantum meruit claims. The court remanded for modification of the judgment. View "D2 Excavating, Inc. v. Thompson Thrift Construction, Inc." on Justia Law

The lawsuit underlying this appeal involves a "spin-off" of the Fast & Furious franchise, a project ultimately released as Fast & Furious Presents: Hobbs & Shaw (the film), on which Moritz allegedly worked as a producer pursuant to an oral agreement with Universal. After Moritz filed suit for breach of a binding oral agreement regarding Moritz's work on the film, appellants moved to compel arbitration based on arbitration agreements in the written producer contracts regarding Moritz's work for Universal on the Fast & Furious franchise.The Court of Appeal affirmed the trial court's denial of appellants' motion to arbitrate, holding that the arbitration agreements from the Fast & Furious movies did not apply to the Hobbs & Shaw spin-off dispute. The court stated that not only is it not clear and unmistakable here that the parties agreed to delegate arbitrability questions concerning Hobbs & Shaw to an arbitrator, no reasonable person in their position would have understood the arbitration provisions in the Fast & Furious contracts to require arbitration of any future claim of whatever nature or type, no matter how unrelated to the agreements nor how distant in the future the claim arose. The court explained that the Federal Arbitration Act (FAA) requires no enforcement of an arbitration provision with respect to disputes unrelated to the contract in which the provision appears. In this case, appellants' argument that an arbitration provision creates a perpetual obligation to arbitrate any conceivable claim that Moritz might ever have against them is plainly inconsistent with the FAA's explicit relatedness requirement. View "Moritz v. Universal City Studios LLC" on Justia Law

Caliber Paving Company, Inc. (Caliber) sued Rexford Industrial Realty and Management, Inc. (Rexford) for intentional interference with a contract between Caliber and Steve Fodor Construction (SFC). The trial court granted Rexford’s motion for summary judgment on the ground that Rexford, although not a party to the contract, had an economic interest in it and therefore could not be liable in tort for intentional interference with contract. Caliber appealed. In a case of first impression, the Court of Appeal held that under Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503 (1994), a defendant who is not a party to the contract or an agent of a party to the contract is a noncontracting party or stranger to the contract and, regardless whether the defendant claims a social or economic interest in the contractual relationship, may be liable in tort for intentional interference with contract. Applied Equipment did not confer immunity for intentional interference with contract on noncontracting parties having a social or economic interest in the contractual relationship from liability. The Court also concluded Caliber submitted admissible evidence sufficient to meet its burden of raising a triable issue of fact as to whether Rexford interfered with the contract between SFC and Caliber. Judgment was reversed and the matter remanded for further proceedings. View "Caliber Paving Co. v. Rexford Industrial Realty and Management" on Justia Law

A jury awarded plaintiff $1 million on his claims against Sparrows Point for nonpayment of a commission on the sale of a large parcel of industrial property located on the Sparrows Point peninsula. Defendants contend that the evidence is insufficient to support the jury's verdict as to all claims. In the alternative, they seek a new trial, contending that the district court erred in admitting evidence of an alleged effort to compromise plaintiff's claim to a commission and in granting plaintiff a jury trial.The Fourth Circuit held that the evidence of defendants' effort to compromise plaintiff's claim was not admissible for any purpose under Federal Rule of Evidence 408 and the error was not harmless. The court explained that, even assuming that the evidence is sufficient as a matter of law to support the jury's verdict, the court cannot be confident that the jury was not substantially swayed by the evidentiary error. Therefore, the court held that defendants are entitled to a new trial. Finally, the court found that the district court enjoyed ample discretion to grant plaintiff's untimely request for a jury trial under Federal Rule of Civil Procedure 39(b), and thus the new trial may remain before a jury. View "Macsherry v. Sparrows Point, LLC" on Justia Law