Justia Contracts Opinion Summaries

The Supreme Court affirmed the order of the circuit court granted summary judgment in favor of Shelter Mutual Insurance Company on Plaintiffs' claim arising from medical expenses they incurred following an automobile accident, holding that the trial court did not err in granting summary judgment.On appeal, Plaintiffs argued that the language in the relevant insurance policy was ambiguous or, in the alternative, the policy language was against public policy and should be declared void. The Supreme Court affirmed, holding (1) the applicable policy language was not ambiguous, and the policy was not against the public policy of the State of Arkansas; and (2) Plaintiffs' argument that the trial court erred in denying their motion in limine was moot. View "Crockett v. Shelter Mutual Insurance Co." on Justia Law

Three out of every five hospitals use Ciox, a medical records provider, which processed 4.3 million pages per day in 2018. Ciox is subject to the 1996 Health Insurance Portability and Accountability Act (HIPAA), 110 Stat. 1936. Department of Health and Human Service fee-limit provisions prohibit Ciox from charging patients more than “reasonable, cost-based fee[s]” for their records. Tennessee’s Medical Records Act (TMRA), prevents hospitals from charging patients more than the “reasonable costs for copying and the actual costs of mailing [their] records.” The named Plaintiffs worked with law firms to request their medical records from Tennessee hospitals. Ciox serviced those requests. Plaintiffs filed a class action, accusing Ciox of charging them more than what HIPAA regulations and TMRA allow. HIPAA does not authorize a private cause of action, so the Plaintiffs cited common-law causes of action: negligence, negligence per se, unjust enrichment, and breach of implied-in-law contract. The district court dismissed the TMRA claim but granted class certification and later granted Ciox summary judgment The Sixth Circuit affirmed. Tennessee's common law is no substitute for the private right of action that Congress refused to create in HIPAA. TMRA’s fee limits unambiguously do not apply to medical-records providers. Plaintiffs cannot prove the existence of any common-law duty or legal contract. Because the court did not send notice to absentee class members, the decision binds only the named Plaintiffs. View "Faber v. Ciox Health, LLC" on Justia Law

Renovate America, Inc. (Renovate) appealed an order denying its petition to compel arbitration of Rosa Fabian's claims related to the financing and installation of a solar energy system in her home. Fabian filed a complaint against Renovate alleging that solar panels she purchased for her home were improperly installed. Fabian alleged that, in early 2017, Renovate made an unsolicited telephone call to her home about financing the solar panels and "signed" her name on a financial agreement. All communications between Fabian and Renovate's representative occurred telephonically and she was never presented with any documents to sign. Fabian claims she did not sign a financial agreement with Renovate; nevertheless, Renovate incorporated the solar panel payments set forth in the financial agreement into her mortgage loan payments. Fabian thus alleged that Renovate violated: (1) the Consumers Legal Remedies Act; (2) the Unfair Competition Law; and (3) the California Contract Translation Act. Renovate petitioned to compel arbitration of Fabian's claims and stay judicial proceedings pending arbitration, supported by an Assessment Contract (Contract) that Renovate claimed Fabian had signed electronically. Renovate contended the trial court erred in ruling that the company failed to prove by a preponderance of the evidence that Fabian electronically signed the subject contract. The Court of Appeal found that by not providing any specific details about the circumstances surrounding the Contract's execution, Renovate offered little more than a bare statement that Fabian "entered into" the Contract without offering any facts to support that assertion. "This left a critical gap in the evidence supporting Renovate's petition." The Court therefore affirmed denial of the petition to compel arbitration. View "Fabian v. Renovate America, Inc." on Justia Law

The Supreme Court vacated the section of the trial court's preliminary injunction purporting to enforce an unreasonable restrictive covenant in a noncompetition agreement, holding that parties to noncompetition agreements cannot use a reformation clause to contract around the principle that reviewing courts may delete, but not add, language to revise unreasonable restrictive covenants under Indiana's "blue pencil doctrine."Under the blue pencil doctrine, courts can make overbroad covenants reasonable by deleting language, but they may not add terms. The noncompetition agreement in this case contained an overbroad nonsolicitation covenant that contained a reformation clause authorizing the court to modify unenforceable provisions. The trial court granted a preliminary injunction enforcing the covenant. The court of appeals concluded that the nonsolicitation covenant was overbroad but revised the covenant to make it reasonable under the reformation clause. The Supreme Court granted transfer and held that since the nonsolicitation covenant could not be blue penciled, but rather required additional language to limit the scope of its restrictive covenants, it could not be enforced despite its reformation clause. View "Heraeus Medical, LLC v. Zimmer, Inc." on Justia Law

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