Justia Contracts Opinion Summaries

Emmis bought a directors-and-officers liability policy covering October 1, 2009 to October 1, 2010, from Chubb Insurance. Emmis later bought, from Illinois National, a policy covering liability from October 1, 2011, to October 1, 2012, with an exclusion for any losses in connection with “Event(s),” which included “[a]ll notices of claim of circumstances as reported” under the Chubb policy. In 2012, Emmis tried to gain control of enough of its shares to go private. Shareholders filed suit to stop Emmis’s effort. Emmis reported the suit to Chubb and also sought coverage under the Illinois National policy. Illinois National refused coverage. Emmis sued, seeking damages for breach of contract and breach of the duty of good faith and fair dealing. The district court granted Emmis summary judgment for breach of contract, rejecting Illinois National’s interpretation of the “as reported” language. The Seventh Circuit reversed. Illinois National’s proposed interpretation is correct. The phrase “as reported” has no discernable temporal limitations. Once Emmis reported a claim to Chubb, at any time, then that claim was “reported” and excluded. View "Emmis Communications Corp. v. Illinois National Insurance Co" on Justia Law

The Supreme Court vacated the judgment of the superior court that granted a preliminary injunction in favor of Plaintiffs restraining the City of Woonsocket from changing the terms of Plaintiffs' retiree health insurance, holding that the City had the statutory authority to make changes to Plaintiffs' health care benefits.Plaintiffs, several retried Woonsocket police officers, brought this action against the City and the Woonsocket Budget Commission (the WBC). The superior court granted a preliminary injunction for Plaintiffs and reinstated Plaintiffs' previous postretirement health care benefits. The Supreme Court vacated the judgment, holding that the trial justice (1) did not err when he found that Plaintiffs had a vested contractual right to free lifetime health care benefits; (2) erred when he found that the WBC lacked statutory authority when it adopted the Retiree Resolutions that required Plaintiffs to contribute to their health care expenses; and (3) erred in finding that the WBC violated the Contract Clause of the Rhode Island Constitution when it required Plaintiffs to pay for their health insurance under a new uniform health care plan applicable to all retirees and employees. The Court remanded the case to the trial justice for additional findings. View "Hebert v. City of Woonsocket" on Justia Law

The Supreme Court affirmed the order of the circuit court granting Plaintiffs' motion for class certification in this action alleging that Defendant, which leased with Plaintiffs to drill and sell hydrocarbons from the leased property, improperly suspended royalty payments, holding that the requirements of numerosity and superiority were met.The complaint alleged that the royalty payments were suspended in an effort by Defendant to recoup improper deductions. Plaintiffs moved for class certification, which the trial court granted. Defendant appealed, arguing that Plaintiffs failed to satisfy the numerosity and superiority requirements. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in determining that the numerosity and superiority requirements were satisfied in this case. View "Stephens Production Co. v. Mainer" on Justia Law

laintiff was a car repair business in Rutland, Vermont. Defendant insured the vehicles of dozens of plaintiff’s customers (“the insureds”) who hired plaintiff to repair damage to their vehicles between 2009 and 2014. Over seventy insurance claims, which all arose under identical insurance policies, were combined in this breach-of- contract case. In each instance, defendant paid less than what plaintiff had billed to complete the repair, a "short pay." Plaintiff submitted to defendant a final invoice and a “supplemental report” itemizing each of the repairs performed. For each claim involved in this case, although defendant did not pay a portion of what the repair shop believed was owed under the policy, defendant did pay significant sums. Defendant initially paid what its claims adjuster believed to be covered by the insurance policy after having conducted a visual inspection of the damage. Defendant generally would make at least one additional payment based on information provided by plaintiff after plaintiff disassembled the damaged vehicle in preparation to repair it, a "supplemental payment." After an adjuster’s initial estimate was paid to plaintiff and any supplemental payments were made, there was still an outstanding balance for the repair bill on each claim involved in this case. Plaintiff believed these were covered by the insurance policy yet had been unpaid by the insurer. However, defendant maintained that these unpaid portions of the repair bill between plaintiff and each insured were not covered under the policy. A jury ultimately awarded plaintiff $41,737.89 in damages. After the trial, the court concluded that plaintiff could not show that his assignors were damaged by a breach of contract by defendant and granted defendant's motion for judgment as a matter of law. The Vermont Supreme Court reversed this determination, vacated the judgment that was entered in favor of defendant, and remanded with direction to the superior court to reinstate the jury’s verdict and its award of damages. View "Parker's Classic Auto Works, Ltd. v. Nationwide Mutual Insurance Company" on Justia Law

Corbett’s businesses were governed by separate, substantively identical, Auto Driveaway franchise agreements. Each included non‐compete and non‐disclosure clauses and a 2016 expiration date. Those expiration dates passed. Both parties continued dealing as though the agreements were still in place until November 2017, when Auto Driveaway mailed an offer to renew the contracts for another five years. Corbett never responded but continued operating his franchises as before. Auto Driveaway subsequently learned that Corbett was building an app to compete against the app it had hired Corbett to build. Auto Driveaway suspected that Corbett was using its proprietary work product as a starting point. Corbett was set to launch his app through a new company, InnovAuto, in direct competition with Auto Driveaway. Auto Driveaway filed suit. Months later, Auto Driveaway discovered that Corbett had another competitive auto transport business, Tactical. Auto Driveaway obtained a preliminary injunction, stating that Corbett may not engage in any conduct that might violate the non‐compete clause of the franchise agreement. The court required Auto Driveaway to post a $10,000 bond as security for the injunction. The Seventh Circuit concluded that the district court must revisit the form of the injunction and the amount of security. Nothing covered by the order went beyond the controversy before the court or could have surprised Corbett but it is not a stand-alone separate document that spells out within its four corners exactly what the parties must or must not do. View "Auto Driveaway Franchise Systems, LLC v. Corbett" on Justia Law

The case arose from a landlord’s repeated refusal to consent to the proposed assignment of a ground lease for the anchor space in a shopping center. The plaintiffs were the entities that wished to assign the leasehold interest and the entities that agreed to take the assignment; the defendants were the landlord and its parent company. In their original and first amended complaints, plaintiffs alleged the landlord unreasonably withheld consent to the plaintiffs’ lease assignment request. While the litigation was pending, plaintiffs made an amended lease assignment request, which the landlord similarly rejected. In their second amended complaint, plaintiffs asserted the same five causes of action as before, but added allegations about the landlord’s refusal to consent to their amended assignment request. The landlord filed an anti-SLAPP motion to strike the second amended complaint, contending plaintiffs’ amended assignment request and the landlord’s response to that request were settlement communications and statements made in litigation, and therefore constituted protected activity. The trial court denied the motion, finding the landlord’s rejection of the amended assignment request was not a settlement communication or litigation-related conduct, but rather an ordinary business decision. The Court of Appeal agreed and affirmed the order denying the anti-SLAPP motion. View "ValueRock TN Prop. v. PK II Larwin Square" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals in this insurance dispute, holding that an insurer's payment of an appraisal award bars an insured's breach of contract claim and bad faith claims but that an insured may proceed on his claim under the Texas Prompt Payment of Claims Act, Tex. Ins. Code chapter 542.Insured sued Insurer for breach of contract, violations of the Prompt Payment Act, and statutory and common law bad faith insurance practices. Insurer filed a motion to compel appraisal, which the trial court granted. Insurer then filed a motion for summary judgment, arguing that its payment of the appraisal award resolved all claims in the lawsuit. The trial court granted the motion. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the payment barred Insured's breach of contract claim premised on failure to pay the amount of the covered loss; (2) the payment barred Insured's bad faith insurance practices claims to the extent the only actual damages sought were lost policy benefits; and (3) in accordance with today's decision in Barbara Technologies Corp. v. State Farm Lloyds, __ S.W.3d __ (Tex. 2019), Insured may proceed on his claim under the Prompt Payment Act. View "Ortiz v. State Farm Lloyds" on Justia Law

In this case arising from an offer to purchase an assignment of a farmout that fell through the Supreme Court affirmed the judgment of the court of appeals concluding that Plaintiff could not prevail on its breach of contract claim or fraud claim as a matter of law, holding that, as a matter of law, both claims failed.The trial court granted judgment in favor of Plaintiff on its claims. The court of appeals reversed, holding (1) Plaintiff's breach of contract claim failed as a matter of law because the contract's consent-to-assignment provision unambiguously gave Defendant an unqualified right to refuse to consent, and (2) Plaintiff's fraud claim failed as a matter of law because Plaintiff could not justifiably rely on an oral promise to do something that was addressed in the written contract. The Supreme Court affirmed, holding (1) Defendant could not have breached the contract as a matter of law because the plain language of the contract unambiguously entitled Defendant to withhold its consent to a proposed assignment; and (2) where the written terms of the contract controlled Plaintiff could not justifiably rely on an oral statement. View "Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc." on Justia Law

The Supreme Court affirmed the decision of the district court denying Northern Natural Gas Company's request for a declaratory judgment upholding its decision to withhold the maximum amount of liquidated damages allowable under its contract with U.S. Pipeline, Inc. for a delay in the completion of a relocation project, holding that Northern manifested a clear intent to waive the contractual liquidated damages provision.The parties in this case entered into a construction contract providing that the relocation project would be substantially completed by a certain date. The project was not substantially completed by that date, and based on the liquidated damages provision in the contract, Northern withheld $351,000 in liquidated damages and refused to pay certain costs requested by U.S. Pipeline related to extra work orders. The district court denied Northern's request for a declaratory judgment upholding its decision to withhold liquidated damages from U.S. Pipeline, holding that Northern waived its rights to these liquidated damages under the contract. The Supreme Court affirmed, holding that the district court's determination that Northern's conduct amounted to a waiver was supported by the evidence and was not clearly wrong. View "United States Pipeline v. Northern Natural Gas Co." on Justia Law

The agreement gave Division the exclusive right to purchase aged and customer-returned merchandise from Finish and provided for an 18-month term “commencing on March 1, 2001” that could be extended by written agreement of the parties “prior to the expiration of the term or any extension thereof.” The agreement was twice amended. Despite the 2008 agreement’s express ending date of December 31, 2013, Finish continued to ship products to Division in 2014. Finish eventually stopped dealing with Division and began dealing with other parties. In 2015, Division wrote to Finish asserting its exclusive right under the agreement to purchase Finish’s surplus products. Finish asserted that the agreement was no longer in effect. The district court dismissed Division’s suit, concluding that the agreement did not provide for perpetual self-renewal and the 2008 Amendment did not provide for an automatic extension. Since the plain language was not ambiguous, the court refused to consider extrinsic evidence of the parties’ intent—the 2014 shipments. The Sixth Circuit affirmed. The agreement is clear and unambiguous, Division’s extrinsic evidence cannot be considered. There was no automatic extension following the 2008 amendment extension; the agreement was no longer in force after December 2013 and Finish did not commit a breach when it began dealing with third parties in 2014. View "Division Six Sports, Inc. v. Finish Line, Inc." on Justia Law