Justia Contracts Opinion Summaries

In 2014, Brian Shotts was injured in a car accident caused by Dana Pollard. Shotts was insured under a policy issued by GEICO General Insurance Company (“GEICO”), which included underinsured motorist (“UM”) coverage. Pollard had automobile insurance through Farmers Insurance (“Farmers”). Shotts filed a claim with Farmers, which offered Pollard’s policy limits as settlement. Before accepting the offer, Shotts notified GEICO of the accident. GEICO opened a claim, assigned an adjuster, and began an investigation. GEICO also waived its subrogation rights, allowing Shotts to accept the offer from Farmers. GEICO’s investigation determined that Shotts’s injuries exceeded Pollard’s policy limits by $3,210.87. GEICO offered Shotts a settlement of that amount, but Shotts declined the offer as “unreasonably low.” Shotts demanded GEICO promptly “pay the first dollar of his claim, up to the value of [the] claim or the total available UM limits” of $25,000. He also asked GEICO to reevaluate the offer. In response, GEICO requested additional information about Shotts’s injuries. It then proposed a peer review to determine whether his injuries exceeded the $3,210.87 offer. Shotts sued for bad faith breach of contract, alleging that GEICO acted in bad faith by: (1) conducting “a biased and unfair investigation and evaluation of [his] claim”; and (2) failing to pay the full value of his claim. He also requested punitive damages. The district court granted summary judgment for GEICO on both bad faith claims and denied punitive damages. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Shotts v. GEICO" on Justia Law

The First Circuit affirmed the judgment of the district court granting summary judgment in favor of Defendant and dismissing Plaintiff's claims that Defendant terminated his employment to deprive him of a significant equity incentive, holding that no reasonable factfinder could conclude that when Defendant fired Plaintiff it deprived Plaintiff of compensation that he had already earned by virtue of his past services.In his complaint, Plaintiff alleged that Defendant breached the implied covenant of good faith and fair dealing. The district court granted summary judgment for Defendant, concluding that Plaintiff had not presented sufficient evidence to show that, at the time of his discharge, Plaintiff was deprived of compensation that he had fairly earned and legitimately expected by virtue of his past work. The First Circuit affirmed, holding that the district court did not err in entering summary judgment in favor of Defendant. View "Suzuki v. Abiomed, Inc." on Justia Law

After Mount Diablo School District hired Taber to modernize eight school campuses, the plaintiffs challenged the District’s use of a lease-leaseback agreement for the construction project. The court of appeal affirmed the dismissal of most of plaintiff’s claims, except a claim against Taber of conflict of interest. Plaintiff alleged Taber provided preconstruction services regarding the project, so a conflict of interest arose when the District subsequently awarded Taber the contract. The court of appeal affirmed summary judgment in Taber’s favor, finding no violation of Government Code section 1090(a). Section 1090 only prohibits a contract made by a financially-interested party when that party makes the contract in an “official capacity.” Where the financially-interested party is an independent contractor, section 1090 applies only if the independent contractor can be said to have been entrusted with “transact[ing] on behalf of the Government.” In this case, it cannot reasonably be said that Taber was hired to engage in or advise on public contracting on behalf of the District. The District contracted with Taber for Taber to provide preconstruction services in anticipation of Taber completing the project. Taber provided those services (planning and setting specifications) in its capacity as the intended provider of services, not as a de facto official of the District. View "California Taxpayers Action Network v. Taber Construction, Inc." on Justia Law

Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA. View "Peoples v. United Servs. Auto. Ass'n" on Justia Law

In 1980, Langkamp, then a toddler, suffered severe burn injuries on U.S. Army property. In a suit under the Federal Tort Claims Act, the parties entered into a Settlement Agreement. The government agreed to pay $239,425.45 upfront to cover attorney fees and costs, plus a structured settlement: $350.00 per month, 1985-1996; $3,100.00 per month, guaranteed for 15 years, beginning in 1996, and Lump Sum Payments of $15,000.00 in 1996, $50,000.00 in 2000, $100,000.00 in 2008, 250,000.00 in 2018, and $1,000,000.00 in 2028. The government issued a check for $239,425.45 to the parents and a check for $160,574.55 payable to JMW Settlements, an annuity broker. JMW purchased two single-premium annuity policies from ELNY to fund the monthly and periodic lump-sum payments. Until 2013, ELNY sent Langkamp the specified monthly and periodic lump-sum payments. Following ELNY’s insolvency and court-approved restructuring, Langkamp’s structured settlement payments were reduced to 40 percent of the original amount. The Claims Court rejected Langkamp’s argument that the government had continuing liability for the Settlement Agreement payments. The Federal Circuit reversed. The Settlement Agreement contains no reference to the purchase of an annuity from a third party but unambiguously obligates the government to ensure that all future monthly and periodic lump-sum payments are properly disbursed. The court noted that in 1984 it cost the government approximately $160,000 to obtain a promise from an insurance company to fund the future payments specified in the Settlement Agreement. View "Langkamp v. United States" on Justia Law

In this breach of contract action the Supreme Court affirmed the judgment of the superior court in favor of Defendant, holding that the trial justice did not err in finding that no oral contract existed between the parties.Plaintiff filed a complaint alleging breach of contract, breach of implied contract, and that Defendant was liable under the theories of quasi-contract and promissory estoppel. The trial justice entered judgment in favor of Defendant, finding that no oral or implied-in-fact contract existed between the parties and that Defendant was not liable under the theories of quasi-contract or promissory estoppel. The Supreme Court affirmed, holding that the trial justice did not misconceive or overlook material evidence, did not make factual findings that were clearly wrong, or misapply the law when finding that no oral contract existed between the parties. View "E.W. Burman, Inc. v. Bradford Dyeing Ass'n, Inc." on Justia Law

In its motion for summary judgment, Farmers Insurance Company of Idaho argued that Erica Klein was barred from pursuing a supplemental UIM claim because the five-year statute of limitations in Idaho Code section 5-216 had run. Farmers asserted the statute of limitations began to run on either the date of the accident or the date Klein settled with the third party tortfeasor, both of which occurred more than five years prior to Klein filing her complaint to compel arbitration of her UIM claim. The district court denied Farmers’s motion and subsequent motion for reconsideration, holding that the “breach of contract” rule was the proper method of calculating the accrual date for Klein’s cause of action. Farmers appealed the district court’s denial of both motions. The Idaho Supreme Court determined the issue raised by this case was one of first impression, inasmuch as it was asked to determine when the statute of limitations began to run on a cause of action for UIM benefits under an automobile insurance policy. After considering the different approaches taken by other states, the Court adopted the majority’s “breach of contract” rule and affirmed the district court’s decisions. View "Klein v. Farmers Insurance Co." on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of the Jackson Hole Airport Board and dismissing Appellants' petition for declaratory judgment challenging the validity of an asset purchase agreement between the Board and Jackson Hole Aviation, holding that airport boards have the statutory authority to issue revenue bonds to fund the purchase of intangible property, including goodwill.Appellants were two entities interested in providing services at Jackson Hole Airport and individuals dissatisfied with the Airport's current services. Appellants brought this action claiming that the purchase agreement between the Board and Jackson Hole Aviation, the current service provider at the Airport, exceeded the Board's statutory authority because the Board could not acquire intangible assets using revenue bond funding. The district court concluded that the term "other property" in Wyo. Stat. Ann. 10-5-101(a) authorized the use of revenue bonds for purchases of both tangible and intangible property. The Supreme Court affirmed, holding that section 10-5-101(a) authorized purchases of both tangible and intangible property and that the district court correctly determined that goodwill is intangible property included in the term "other property" found in section 10-5-101(a). View "Herrick v. Jackson Hole Airport Board" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the trial court's judgment dismissing Plaintiffs' claims for quiet title and declaratory judgment based on their contention that an oil and gas lease had terminated by its terms due to lack of production, holding that the twenty-one-year limitations period in Ohio Rev. Code. 2305.04 applied.In their complaint Plaintiffs alleged that the well at issue did not produce any oil or gas from its inception until 1999 and that the well had been inoperative for enough time to terminate the lease. Defendants asserted a statute of limitations defense to Plaintiffs' claims. The trial court held that Plaintiffs had not presented any evidence to satisfy their burden of proving that the well was no longer profitable and that Plaintiffs' claims were subject to a fifteen-year statute of limitations. Plaintiffs appealed, arguing that the correct limitations period was the twenty-one-year period under Ohio Rev. Code 2305.04. The court of appeals rejected the argument and affirmed the trial court's summary judgment for Defendants. The Supreme Court reversed, holding that the twenty-one-year statute of limitations period applied and that evidence of lack of production prior to 1999 was not irrelevant. View "Browne v. Artex Oil Co." on Justia Law

Plaintiffs filed suit against the storage company, demanding to be paid for their losses after water damaged their property. In this case, the contract the customers signed specified that the company was not responsible for water damage, and that customers storing property with it did so at their own risk. The contract offered insurance options to the customers, but the customers declined insurance.The Court of Appeal affirmed the trial court's judgment in favor of the company on the customers' breach of contract claim, holding that one may not contract to accept risk, decide to be self-insured, and then retroactively demand to be paid by the other side after there is a loss. Finally, the court held that the customers forfeited their claim under the Consumer Legal Remedies Act. View "Kanovsky v. At Your Door Self Storage" on Justia Law