Justia Contracts Opinion Summaries

Hembree Insurance Trust ("Hembree") leased a 135,847-square-foot industrial building in Scottsboro to Maples Industries, Inc. ("Maples") for five years starting January 1, 2020. The lease required Maples to maintain the property and share roof repair costs with Hembree. Hembree initiated a lawsuit against Maples in March 2024, alleging that Maples failed to repair or replace the roof as required by the lease.The Jackson Circuit Court treated Maples's motion to dismiss as a motion for summary judgment and ruled in favor of Maples. The court found the lease "null and void" because Hembree did not own the property, which had been transferred to Woods Cove Industrial Property, LLC ("Woods Cove") in 2014. Hembree argued that it was the sole member of Woods Cove and had the authority to lease the property, but the trial court disagreed.The Supreme Court of Alabama reviewed the case de novo. It found that Hembree, as the sole and controlling member of Woods Cove, had the authority to lease the property. The court noted that a tenant in possession generally cannot dispute the landlord's title and that Maples had accepted and benefited from the lease. The court concluded that Maples was estopped from challenging the lease based on Hembree being the named lessor. The Supreme Court of Alabama reversed the trial court's judgment and remanded the case for further proceedings. View "Hembree Insurance Trust v. Maples Industries, Inc." on Justia Law

Kenneth Tilley sought financing from Malvern National Bank (MNB) for a real estate development project in 2009 and 2010, totaling $350,000. Tilley claimed MNB engaged in unfair dealings and sued for breach of contract, promissory estoppel, violations of the Arkansas Deceptive Trade Practices Act (ADTPA), tortious interference, negligence, and fraud. The case has been appealed multiple times, with the Arkansas Supreme Court previously reversing decisions related to Tilley's right to a jury trial.Initially, the Garland County Circuit Court struck Tilley's jury demand, which was reversed by the Arkansas Supreme Court. After remand, the circuit court reinstated a bench trial verdict, citing Act 13 of 2018, which was again reversed by the Supreme Court. On the third remand, MNB moved for summary judgment on all claims. The circuit court granted summary judgment, citing Tilley's reduction of collateral as a material alteration of the agreement, a rationale not argued by MNB. Tilley appealed this decision.The Arkansas Supreme Court reviewed the case and held that the circuit court did not violate the mandate by considering summary judgment. However, it was reversible error for the circuit court to grant summary judgment based on an unargued rationale. The Supreme Court affirmed summary judgment on Tilley's ADTPA, tortious interference, and negligence claims, finding no genuine issues of material fact. However, it reversed and remanded the summary judgment on Tilley's breach of contract, promissory estoppel, and fraud claims, determining that there were disputed material facts that required a jury trial. The case was remanded for further proceedings consistent with this opinion. View "Tilley v. Malvern National Bank" on Justia Law

Hamilton Reserve Bank, the beneficial owner of $250,490,000 in Sri Lankan government bonds, sued the Democratic Socialist Republic of Sri Lanka in the United States District Court for the Southern District of New York after Sri Lanka defaulted on the bonds. Over a year later, Jesse Guzman, Ultimate Concrete LLC, and Intercoastal Finance Ltd. sought to intervene, claiming Hamilton defrauded them by using their deposited funds to purchase the bonds and then refusing to allow them to withdraw their money.The district court denied the motion to intervene, holding that it lacked jurisdiction over the intervenors' claims. The court found that the claims did not derive from a "common nucleus of operative fact" with Hamilton's breach of contract claim against Sri Lanka, as required for supplemental jurisdiction under 28 U.S.C. § 1367(a).The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the district court applied the correct "common nucleus of operative fact" standard for evaluating supplemental jurisdiction under Section 1367(a). The court concluded that the intervenors' claims, which involved a banking dispute with Hamilton, did not share substantial factual overlap with Hamilton's breach of contract claim against Sri Lanka. Therefore, the district court correctly determined it lacked jurisdiction over the intervenors' claims and denied their motion to intervene. View "Hamilton Reserve Bank v. Sri Lanka" on Justia Law

Salvador Rivas purchased a condominium unit with a mortgage loan from Flagstar Bank, secured by a deed of trust. Rivas fell behind on his condo association dues, leading the New Hampshire House Condominium Unit Owners Association (NHH) to foreclose on the unit in 2014. The foreclosure sale terms indicated the unit was sold subject to Flagstar’s first deed of trust of approximately $256,632. Advanced Financial Investments, LLC (AFI) bought the unit for $26,000, despite its tax-assessed value of $237,930. Flagstar later filed for judicial foreclosure, claiming its lien was extinguished by NHH’s foreclosure sale.The Superior Court of the District of Columbia dismissed Flagstar’s judicial foreclosure claim, reasoning that the lien was extinguished by the prior foreclosure sale. The court also dismissed Flagstar’s claims for declaratory relief, breach of fiduciary duty, and unjust enrichment as time-barred, as they were raised for the first time in an amended complaint filed almost four years after the foreclosure sale.The District of Columbia Court of Appeals reviewed the case. The court agreed with Flagstar that its judicial foreclosure claim was improperly dismissed, as rebuttals to affirmative defenses are not subject to any statute of limitations. However, the court affirmed the trial court’s ruling on the alternative ground that appellees were entitled to summary judgment on the judicial foreclosure claim. The court held that the 2014 foreclosure sale was not unconscionable as a matter of law, given the legal uncertainty at the time regarding whether Flagstar’s lien would survive the sale.The court also rejected Flagstar’s remaining arguments, except for the unjust enrichment claim against AFI. The court found that this claim should not have been dismissed as time-barred and could not be resolved on summary judgment. The case was remanded for trial on the unjust enrichment claim against AFI, while the trial court’s judgment was otherwise affirmed. View "Flagstar Bank, FSB v. Advanced Financial Investments, LLC" on Justia Law

Badlia Brothers, LLC, a check-cashing business, cashed 15 checks issued by the State of Maryland. These checks had already been paid by the State before Badlia presented them for payment. Some checks were deposited using a mobile app, creating "substitute checks," and were then fraudulently or negligently presented to Badlia. Others were reported lost or stolen, leading the State to issue stop payment orders and replacement checks, which were also cashed by Badlia. Badlia accepted the checks without knowledge of prior payments and sought payment from the State, which refused.Badlia filed complaints in the District Court of Maryland, claiming the right to enforce the checks as a holder in due course. The court consolidated the cases, ruled that the State enjoyed qualified immunity, and dismissed the cases. The Circuit Court for Baltimore City reversed, holding that a check is a contract, and thus, the State had waived sovereign immunity. On remand, the District Court found that Badlia was a holder in due course entitled to enforce the checks. The Circuit Court affirmed, and the State petitioned for certiorari.The Supreme Court of Maryland reviewed the case and held that a check is a contract for purposes of the State’s waiver of sovereign immunity under § 12-201(a) of the State Government Article. The court affirmed the Circuit Court's decision, concluding that the State has waived sovereign immunity for claims by a holder in due course seeking payment on an authorized State-issued check. View "Comptroller v. Badlia Brothers, LLC" on Justia Law

Billy Ford worked as a full-time security guard for Parkwest Casino Lotus from September 2018 to December 2021. Upon hiring, Ford signed an arbitration agreement that excluded claims for workers' compensation, unemployment compensation, certain administrative complaints, ERISA claims, and "representative claims under [PAGA]." In February 2022, Ford filed a complaint against Parkwest under PAGA, alleging Labor Code violations, including mandatory off-the-clock health screenings and inaccurate wage statements. Parkwest moved to compel arbitration of Ford's individual PAGA claims and to dismiss the representative PAGA claims, citing Viking River Cruises, Inc. v. Moriana.The Superior Court of Sacramento County denied Parkwest's motion to compel arbitration, finding that the arbitration agreement specifically excluded all PAGA claims. Parkwest appealed, arguing that the agreement was ambiguous regarding the exclusion of individual PAGA claims and that such ambiguity should be resolved in favor of arbitration.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court concluded that the arbitration agreement unambiguously excluded all PAGA claims, including individual claims. The court reasoned that the language of the agreement and the circumstances under which it was executed indicated that the parties intended to exclude all PAGA claims from arbitration. The court affirmed the trial court's order denying Parkwest's motion to compel arbitration. View "Ford v. The Silver F" on Justia Law

US Framing International LLC entered into a subcontract with Continental Building Company for framing services on two student-housing projects. Disputes arose, leading US Framing to leave the Knoxville project. Continental then filed an insurance claim alleging US Framing's breach of the subcontract. US Framing sued Continental and its officers, claiming insurance fraud under Tennessee law. The district court dismissed the case, stating US Framing failed to plead any injury directly caused by the alleged fraudulent insurance claim.The United States District Court for the Eastern District of Tennessee initially reviewed the case. The court granted Continental's motion to dismiss, concluding that US Framing did not demonstrate any direct injury resulting from Continental's insurance claim. US Framing then appealed the decision.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court's dismissal, holding that US Framing did not plausibly allege any economic damages directly resulting from Continental's alleged insurance fraud. The court also determined that US Framing could not recover attorney's fees or statutory penalties, as it did not establish itself as a prevailing party entitled to such relief. The court's decision was based on the interpretation of Tennessee law, which requires a direct causal link between the alleged fraud and the claimed damages. View "US Framing International LLC v. Continental Building Co." on Justia Law

Pemco and Boeing entered into a contractual "teaming arrangement" to bid for a 2008 Air Force contract, which included a master agreement, a work share agreement, and a non-disclosure agreement. The relationship soured, leading Pemco to sue Boeing for breach of contract and trade secret misappropriation under the Missouri Trade Secrets Act. The district court initially dismissed the trade secrets claim as time-barred but allowed the breach of contract claims to proceed, resulting in a jury awarding Pemco $2,132,038 in direct damages.On appeal, the Eleventh Circuit reversed the dismissal of the trade secrets claim, holding that the Missouri statute of limitations applied, not Alabama's. After remand, Pemco filed a new complaint asserting only the trade secrets claim. The district court dismissed this claim, concluding that the contractual limitation of liability provision barred all additional damages since Pemco had already recovered the maximum amount allowed for breach of contract.The Eleventh Circuit reviewed the case de novo and held that the limitation of liability provision in the master agreement applies to Pemco’s trade secrets claim, barring most categories of damages, including incidental, punitive, and consequential damages. However, the court found that the provision does not bar recovery for unjust enrichment, which Pemco had alleged. The court noted that unjust enrichment damages are distinct from the direct, out-of-pocket damages Pemco had already recovered and are not categorically barred by the limitation provision.The court reversed the district court’s dismissal of Pemco’s trade secrets claim and remanded the case for further proceedings, allowing Pemco to pursue recovery based on Boeing’s alleged unjust enrichment. The court denied Pemco’s request to reassign the case to a different district judge. View "Alabama Aircraft Industries Inc. v. Boeing Company, The" on Justia Law

In 2008, the plaintiff, ams-OSRAM USA Inc. (formerly Texas Advanced Optoelectronic Solutions, Inc. or TAOS), sued Renesas Electronics America, Inc. (formerly Intersil Corporation) in the Eastern District of Texas. TAOS alleged patent infringement and state-law claims of trade secret misappropriation and breach of a confidentiality agreement related to ambient-light sensors. The patent claim is no longer at issue. TAOS claimed that Intersil used confidential information disclosed during merger discussions to develop competing products.The district court entered a judgment in 2015 based on a jury verdict, awarding TAOS damages for trade secret misappropriation but not for breach of contract, deeming the latter duplicative. In 2018, the Federal Circuit affirmed Intersil’s liability for trade secret misappropriation on a narrower basis, vacated the monetary award, and remanded for further proceedings. The court also vacated the judgment denying contract damages as duplicative.On remand, the district court held additional proceedings, including a new jury trial. The court awarded TAOS $8,546,000 in disgorged profits for trade secret misappropriation, $17,092,000 in exemplary damages, and reasonable royalties for breach of contract totaling $6,637,693. The court also awarded prejudgment interest and attorneys’ fees. Both parties appealed.The United States Court of Appeals for the Federal Circuit affirmed the district court’s findings on the trade secret and contract claims, including the disgorgement and exemplary damages awards. However, the court reversed the finding that the trade secret became properly accessible in January 2006, determining the correct date to be February 28, 2005. The court affirmed the 26-month head-start period and the inclusion of profits from sales to Apple for the iPod Touch in the disgorgement award. The court vacated the prejudgment interest awards and remanded for further consideration of the appropriate accrual dates for interest on sales occurring after the complaint was filed. View "AMS-OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. " on Justia Law

Plaintiffs, E&I Global Energy Services, Inc. and E&C Global, LLC, sued Liberty Mutual Insurance Company for breach of contract and tort claims related to a construction project. The United States, through the Western Area Power Administration (WAPA), contracted with Isolux to build a substation, and Liberty issued performance and payment bonds for Isolux. After Isolux was terminated, Liberty hired E&C as the completion contractor, but E&I performed the work. Plaintiffs claimed Liberty failed to pay for the work completed.The United States District Court for the District of South Dakota granted summary judgment for Liberty on the unjust enrichment claim and ruled in Liberty's favor on all other claims after a bench trial. The court denied Plaintiffs' untimely request for a jury trial, excluded an expert witness report filed after the deadline, found no evidence of an assignment of rights between E&C and E&I, and ruled against Plaintiffs on their fraud, deceit, and negligent misrepresentation claims.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the district court did not abuse its discretion in denying the jury trial request, as Plaintiffs failed to timely file the motion and did not justify the delay. The exclusion of the expert report was also upheld, as the district court properly applied the relevant factors and found the late report was neither substantially justified nor harmless. The court affirmed the district court's finding that there was no valid assignment of rights from E&C to E&I, meaning Liberty's promise to pay was to E&C, not E&I. The court also upheld the findings that Liberty did not have the intent to deceive or induce reliance, and that Bruce did not reasonably rely on Mattingly's statements. Finally, the court declined to address the unjust enrichment claim as Plaintiffs did not raise the argument below. The Eighth Circuit affirmed the district court's rulings in their entirety. View "E&I Global Energy Services v. Liberty Mutual Insurance Co." on Justia Law