Justia Contracts Opinion Summaries

The Supreme Court affirmed in part and reversed in part the orders of the district court holding Plaintiff liable for additional taxes Defendants owed as a result of Plaintiff's prepayment on the contract, holding that Plaintiff was obligated to pay additional taxes that were incurred by Defendants over the term of the contract.Plaintiff entered into an agreement with Defendants for the purchase of real property. Plaintiff later sued, alleging that its obligations under the agreement were satisfied and seeking an order requiring Defendants to reconvey the property to Plaintiff. Defendants counterclaimed for breach of contract. After a trial, the district court held that Plaintiff had not fulfilled all obligations under the contract. The court awarded Defendants damages and denied Defendants' request for prejudgment interest on the damage award. The Supreme Court reversed in part, holding that the district court (1) correctly found that Plaintiff did not extinguish its obligations under the contract; (2) correctly denied Defendants' motion for prejudgment interest; but (3) erred when it interpreted the relevant documents to obligate Plaintiff to pay the additional taxes that were incurred by Defendants in the year the prepayment was made instead of the total additional taxes Defendants incurred over the term of the contract. View "First National Properties, LLC v. Hilstead Trust" on Justia Law

Since 1986, the GSW NBA basketball team has played their home games at the Authority's Oakland arena. A 1996 License Agreement gave GSW certain obligations to pay the debt incurred in renovating the arena if GSW “terminates” the agreement. In 2012, GSW announced its intention to construct a new arena in San Francisco. GSW did not exercise the renewal option in the Agreement, and, on June 30, 2017, its initial term expired. GSW initiated arbitration proceedings, seeking a declaration that it was no longer obliged to make debt payments if it allowed the License Agreement to expire rather than terminating it.The arbitrator ruled in favor of the Authority and against GSW, awarding the Authority attorney fees. The court of appeal affirmed. Based on extrinsic evidence, the arbitrator found the parties intended to adhere to the terms of a pre-agreement Memorandum of Understanding, which required the team to continue making debt payments after the initial term. The 1996 License Agreement is reasonably susceptible to the parties’ competing interpretations, so parol evidence was admissible to prove what the parties intended. Even assuming that the arbitrator addressed a question of law when she interpreted the Agreement, the parties intended to include a termination of the agreement upon GSW’s failure to exercise the first two options to renew. View "Oakland-Alameda County Coliseum Authority v. Golden State Warriors, LLC" on Justia Law

In consolidated appeals, the issue presented for the Pennsylvania Supreme Court's review centered on whether, under the terms of the “replacement cost coverage” policies at issue, the insurer was permitted to withhold from any actual cash value (“ACV”) payment general contractor’s overhead and profit (“GCOP”) expenses, unless and until the insureds undertook repairs of the damaged property, even though the services of a general contractor were reasonably likely to be needed to complete the repairs. Appellants Konrad Kurach and Mark Wintersteen (“Policyholders”) each purchased identical “Farmers Next Generation” insurance policies from Appellee Truck Insurance Company (“Insurer”), to cover their Pennsylvania residential dwellings. Subsequent to the purchase of these policies, both Policyholders sustained water damage to their houses in excess of $2,500, and both filed claims with Insurer under the policies. Thus, where, as here, the cost of repairing or replacing a policyholder’s damaged property exceeds $2,500, Insurer was first required to pay the ACV of the property at the time of the loss to the policyholder (“step one”). Once the repair or replacement of the damaged property is commenced, Insurer was then obligated (in “step two”) to pay the depreciated value of the damaged property and also the expense of hiring a general contractor, “unless the law of [Pennsylvania] requires” payment of GCOP as part of ACV. After careful review, the Pennsylvania Supreme Court affirmed the order of the Superior Court, which found the insurer was entitled to withhold such costs. View "Wintersteen v. Truck Ins. Exchange" on Justia Law

In 2014, Brembo, an Italian joint-stock corporation, headquartered in Italy, and TAW, a California LLC with its principal office in North Carolina, entered into an “Exclusive Distribution Agreement” covering brake systems manufactured by Brembo. The parties consented “to the exclusive jurisdiction of the state and federal courts of the State of New York.” In 2016, Brembo sent a termination notice to TAW in North Carolina. TAW filed suit in New York federal court but voluntarily dismissed its lawsuit. Brembo filed a New York state lawsuit seeking damages for TAW’s alleged failure to pay for products shipped to TAW in North Carolina. TAW filed a counterclaim seeking damages based on Brembo’s alleged failure to enforce the agreement’s exclusivity provisions and its termination of the agreement without explanation.While Brembo’s New York lawsuit was pending, TAW filed this California lawsuit, alleging wrongful termination of the agreement. The court of appeal affirmed the trial court in granting Brembo’s motion to quash service of the summons for lack of personal jurisdiction. Brembo’s contacts with the U.S. were already directed away from California before the parties entered into the agreement. The agreement’s choice of law and forum selection clauses reinforce that Brembo did not have fair warning and could not have reasonably anticipated being brought into a California court to defend against TAW’s lawsuit. View "T.A.W. Performance, LLC v. Brembo, S.P.A." on Justia Law

DWM agreed to purchase 30 gasoline station-convenience stores from Smart for $67 million. It was understood that it was a "flip" because Smart did not yet own the properties. Both parties were represented by counsel. The Agreement requires DWM to deposit $300,000 into an escrow account. At the close of the due diligence period, DWM is to pay a second deposit of $450,000. DWM never paid the initial earnest money deposit but the parties continued their due diligence investigations and negotiations. The Agreement requires DWM to provide Smart with written notice to terminate the Agreement if, after its investigations, DWM disapproved of the purchase. If DWM did not provide that written notice, the Agreement states that Smart is entitled to keep the earnest money if the deal falls through. DWM failed to provide notice of disapproval and did not pay the second deposit. In the meantime, Smart executed contracts to acquire the properties. When the DWM-Smart deal fell through, Smart sued DWM for breach of contract, arguing it was entitled to $750,000 in earnest money as liquidated damages. DWM counterclaimed for breach of contract and fraudulent inducement, for failure to provide adequate due diligence materials.The Seventh Circuit affirmed holdings that DWM breached the contract, that DWM’s obligation to pay the earnest money remained, and that Smart was entitled to the earnest money as liquidated damages under Illinois law. View "Smart Oil, LLC v. DW Mazel, LLC" on Justia Law

Jarboe was hired by DKD. Shortly after he began working, Jarboe was transferred to Leehan. Following his termination at Leehan, Jarboe brought this wage and hour action individually and on behalf of a putative class against the Hanlees Auto Group, its 12 affiliated dealerships (each us a separate corporate entity), including DKD and Leehan, and three individuals. The defendants moved to compel arbitration based on an employment agreement between Jarboe and DKD. The trial court granted the motion as to 11 of the 12 causes of action against DKD but denied the motion as to the other defendants. The trial court allowed Jarboe’s claim under the Private Attorneys General Act of 2004 (PAGA), Labor Code section 2698, to proceed in court against all defendants. The trial court refused to stay the litigation pending arbitration of Jarboe’s claims against DKD. The court of appeal affirmed, rejecting an argument that the other defendants are entitled to enforce the arbitration agreement between Jarboe and DKD as third party beneficiaries of Jarboe’s employment agreement or under the doctrine of equitable estoppel. View "Jarboe v. Hanlees Auto Group" on Justia Law

After encountering problems with their used 2011 Dodge Grand Caravan, plaintiffs Dina C. and Pastor O. Felisilda brought an action against Elk Grove Auto Group, Inc., doing business as Elk Grove Dodge Chrysler Jeep (Elk Grove Dodge) and the manufacturer, FCA US LLC (FCA) for violation of the Song-Beverly Consumer Warranty Act. Relying on the retail installment sales contract signed by the Felisildas, Elk Grove Dodge moved to compel arbitration. FCA filed a notice of nonopposition to the motion to compel. The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator’s decision. The Felisildas appealed, contending: (1) the trial court lacked jurisdiction to compel them to arbitrate their claim against FCA for lack of notice that the motion to compel included FCA; and (2) the trial court lacked discretion to order the Felisildas to arbitrate their claim against FCA because FCA was a nonsignatory to the sales contract. After review, the Court of Appeal concluded the Felisildas forfeited their claim regarding lack of notice by arguing against FCA’s participation in arbitration. Furthermore, the Court concluded the trial court correctly determined the Felisildas’ claim against FCA was encompassed by the arbitration provision in the sales contract. View "Felisilda v. FCA US LLC" on Justia Law

The parties to this appeal were a Bolivian company, Compania de Inversiones Mercantiles S.A. (“CIMSA”), and Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively “GCC”). Plaintiff-appellant CIMSA brought a district court action pursuant to the Federal Arbitration Act to confirm a foreign arbitral award issued in Bolivia against Defendant-appellee GCC. The underlying dispute stemmed from an agreement under which CIMSA and GCC arranged to give each other a right of first refusal if either party decided to sell its shares in a Bolivian cement company known as Sociedad Boliviana de Cemento, S.A. (“SOBOCE”). GCC sold its SOBOCE shares to a third party after taking the position that CIMSA failed to properly exercise its right of first refusal. In 2011, CIMSA initiated an arbitration proceeding in Bolivia. The arbitration tribunal determined that GCC violated the contract and the parties’ expectations. GCC then initiated Bolivian and Mexican court actions to challenge the arbitration tribunal’s decisions. A Bolivian trial judge rejected GCC’s challenge to the arbitration tribunal’s decision on the merits. A Bolivian appellate court reversed and remanded. During the pendency of the remand proceedings, Bolivia’s highest court reversed the appellate court and affirmed the original trial judge. But as a result of the simultaneous remand proceedings, the high court also issued arguably contradictory orders suggesting the second trial judge’s ruling on the merits remained in effect. GCC filed a separate Bolivian court action challenging the arbitration tribunal’s damages award. That case made its way to Bolivia’s highest court too, which reversed an intermediate appellate court’s nullification of the award and remanded for further proceedings. Invoking the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, CIMSA filed a confirmation action in the United States District Court for the District of Colorado. After encountering difficulties with conventional service of process in Mexico under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, CIMSA sought and received permission from the district court to serve GCC through its American counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). The district court then rejected GCC’s challenges to personal jurisdiction, holding (among other things) that: (1) it was appropriate to aggregate GCC’s contacts with the United States; (2) CIMSA’s injury arose out of GCC’s contacts; (3) exercising jurisdiction was consistent with fair play and substantial justice; and (4) alternative service was proper. The district court rejected GCC's defenses to CIMSA's claim under the New York Convention. Before the Tenth Circuit Court of Appeals, the Court affirmed the district court: the district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts. "The district court correctly decided that exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary." The Court also affirmed the district court's confirmation of the arbitration tribunal's decisions. View "Compania De Inversiones v. Grupo Cementos de Chihuahua" on Justia Law

The Court of Chancery dismissed Plaintiff's complaint for declaratory relief and injunctive relief against the City Library of Wilmington for failure to state a claim, holding that the complaint failed to state a claim for breach of contract.After Plaintiff was banned from various sections of the Library, he filed this complaint seeking to enjoin the Library from banning him and from suspending his privileges. Plaintiff further sought to induce the Library to enforce Library regulations and asked that the Court "rewrite the organizational chart of the Library." The Library filed a motion to dismiss the complaint. The Court of Chancery granted the motion, holding that Plaintiff's count for breach of contract did not state a claim on which relief could be granted. View "Brown v. City Library of Wilmington" on Justia Law

Travelex filed suit against defendant to enforce an alleged agreement restricting her ability to compete with Travelex by soliciting business from certain customers. The district court granted partial summary judgment in favor of defendant, determining that the purported agreement was unenforceable.The Eighth Circuit reversed and remanded, holding that summary judgment was not warranted. In this case, the district court concluded that the agreement was unenforceable because the 2008 agreement became a nullity when Travelex was acquired by Cover-More and defendant refused to sign a new agreement as a condition of continued employment and was terminated. The court held that defendant's refusal to sign the new agreement nullified the prior agreement. The court also held that defendant's alternative argument, that under New York law restrictive covenants may not be enforced when an employee is dismissed without cause, does not apply because the non-solicitation agreement is not unreasonable as a matter of law. View "Travelex Insurance Services, Inc. v. Barty" on Justia Law