Justia Contracts Opinion Summaries

The First Circuit affirmed the judgment of the district court granting Defendant's motion to dismiss this suit brought by the insurer (Insurer) of a chicken products manufacturer seeking damages from the manufacturer's chicken supplier (Supplier) for claims under Maine law of breach of warranty and strict product liability, holding that the district court did not err in dismissing the claims.Insurer sought to recoup the money it paid to the manufacturer for the losses the manufacturer incurred when its products were recalled following a salmonella outbreak. Insurer's complaint against Supplier alleged that the manufacturer received raw chicken from Supplier that was contaminated with salmonella and was therefore defective under Maine law. The district court dismissed all claims, concluding that the allegations in the complaint did not plausibly allege that the raw chicken sent by Supplier to the manufacturer was defective and that the strict liability claim was independently barred by the economic loss doctrine. The First Circuit affirmed, holding (1) as to the breach of warranty claims, Insurer failed to plausibly allege that the raw chicken at issue was contaminated with a type of salmonella that would persist despite proper cooking; and (2) Insurer's strict liability claim was properly dismissed because the complaint failed to allege facts that could suffice to show that the chicken was defective. View "Starr Surplus Lines Insurance Co. v. Mountaire Farms Inc." on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiffs' amended complaint under Federal Rule of Civil Procedure 12(b)(6). This appeal arose from a multitude of lawsuits filed by Connecticut homeowners whose basements walls were likely constructed with defective concrete manufactured by the now‐defunct J.J. Mottes Company.The court held that the "collapse" provision in the Allstate homeowner's insurance policy in this case did not afford coverage for basement walls that exhibit signs of deterioration but that have not collapsed suddenly, accidentally, and entirely, as required by the policy. Therefore, the horizontal and vertical cracking in plaintiffs' basement walls did not constitute a covered "collapse" under the policy and Allstate did not breach its contract by denying coverage for plaintiffs' claim. View "Valls v. Allstate Insurance Co." on Justia Law

In this employment case arising out of the sale of a cattle feedlot the Supreme Court affirmed the decision of the court of appeals reversing summary judgment on Plaintiff's implied-in-fact employment contract claim and Plaintiff's claim for promissory estoppel, holding that a genuine issue of material fact existed preventing summary judgment.Plaintiff moved his employment from the old owner of the feedlot to the new owner, Defendant. Because of operational changes, Defendant later terminated Plaintiff's employment. Plaintiff then sued Defendant alleging breach of an employment contract, or in the alternative, detrimental reliance and estoppel. The district court concluded that Plaintiff was Defendant's employee at will, and therefore, Defendant could terminate Plaintiff's employment at any time without cause. The court of appeals reversed, holding that whether Plaintiff's employment was at will - or protected by an implied-in-fact contract - was a disputed question of fact. The Supreme Court affirmed, holding (1) whether a meeting of minds existed between the parties on an implied-in-fact employment contract presented a genuine issue of material fact precluding summary judgment; and (2) therefore, summary judgment should not have been granted for Defendant on Plaintiff's promissory estoppel claim. View "Peters v. Deseret Cattle Feeders, LLC" on Justia Law

In December 2007, Kia Motors America, Inc. (Kia) and TS & A Motors, LLC d/b/a Kia of Somersworth (Somersworth) entered into a Dealer Sales and Service Agreement (Dealer Agreement), which governed the franchise relationship between the parties. Under this agreement, Somersworth was required to employ certain parts and service personnel. In 2011 and Kia sent a series of letters notifying Somersworth of perceived staffing and training deficiencies. These letters referenced Somersworth’s failure to meet technician training requirements in 2009 and 2010, to adequately staff and train personnel in its parts and service department, and to meet the minimum number of technicians required to participate in Kia’s “Optima Hybrid Program.” During Somersworth’s tenure as a dealer, Kia employees overseeing Somersworth made note of its high employee turnover rates. The Board determined that over the course of its operations as a dealer, Somersworth violated the provision of the Dealer Agreement that required certain parts and service personnel “on an almost constant basis.” Kia management worked with Somersworth to remedy its staffing deficiencies. It sent numerous written notifications to Somersworth referencing the inadequacy of its parts and service staffing, met with Somersworth to discuss its concerns over staffing, and gave Somersworth the “benefit of the doubt” when the dealer promised to hire the appropriate number of staff members. Somerset appealed a superior court decision to affirm a New Hampshire Motor Vehicle Industry Board ruling that Kia properly terminated its franchise agreement with Somersworth. Finding no reversible error, the New Hampshire Supreme Court affirmed the Board's decision. View "TS & A Motors, LLC v. Kia Motors America, Inc." on Justia Law

This case stemmed from a contract dispute between two oil-drilling businesses, Eni and Transocean. The district court granted judgment in favor of Transocean and rejected Eni's claims surrounding Transocean's maintenance of its equipment, found that Eni had wrongfully repudiated the contract, and awarded damages to Transocean.The Fifth Circuit vacated the damages award and held that the district court erred by simply applying the Standby Rate because Eni never issued any instructions after repudiation. In this case, the district court should have attempted to determine, in the hypothetical nonbreach world, how many days the Deepwater Pathfinder would have spent at each applicable rate. Accordingly, the court remanded with instructions to recalculate the damages using the correct methodology. The court found Eni's remaining arguments lacking in merit and affirmed as to those claims. View "ENI US Operating Company, Inc. v. Transocean Offshore Deepwater Drilling, Inc." on Justia Law

Yuri Vanetik and his father, Anatoly (Tony), were involved with a number of interrelated companies in the business of oil exploration in Russia. Yuri approached his friend, Elliot Broidy, about investing in one of those companies, Terra Resources (Terra). Broidy agreed to invest $750,000, with the written agreement his investment would go only to efforts to start production on the oil wells. Farmers & Merchants Trust Company (F&M Trust) was the trustee and administrator of the simplified employee pension plan (SEP) for Broidy’s individual retirement account (IRA). F&M Trust acquired stock in Terra. Broidy later learned that his investment had not been used in connection with the oil wells - it had been used to pay off Yuri’s and Tony’s preexisting debts. Broidy and Tony orally agreed that Tony would pay back the $750,000, but Tony failed to do so. F&M Trust then sued Yuri and Tony for breach of written and oral contracts, and for fraud. F&M Trust also sued Richard Weed (the attorney for Yuri, Tony, and the oil exploration companies) for fraud. The jury found in favor of F&M Trust on all causes of action, and awarded compensatory and punitive damages against Yuri, Tony, and the Weed defendants. Judgment was entered against Yuri and Tony; the trial court granted judgment notwithstanding the verdict (JNOV) in favor of the Weed defendants. On appeal, the Court of Appeal concluded substantial evidence supported the jury’s verdict against Yuri and Tony on the claims for breach of written contract, breach of oral contract, and fraud. The jury’s special verdict findings on the contract and fraud claims neither resulted in inconsistent verdicts, nor required F&M Trust to make an election of remedies. However, F&M Trust failed to offer substantial evidence supporting the punitive damages awards against Tony and Yuri, so the Court reversed those punitive damage awards. The trial court properly granted JNOV in favor of the Weed defendants on the fraud causes of action. View "Farmers & Merchants Trust Co. v. Vanetik" on Justia Law

The Supreme Court affirmed the decision of the circuit court denying Petitioner's motion to set aside a default judgment entered against him, holding that the circuit court did not abuse its discretion in denying Petitioner's motion to set aside the default judgment.Respondent filed a breach of contract claim against Petitioner for allegedly failing to pay insurance premiums. Petitioner did not respond to Respondent's properly served complaint, and Respondent obtained a default judgment against him. Nearly sixteen months later, Petitioner filed a motion to set aside the default judgment on the grounds that he was not a proper party to the action. The circuit court denied the motion as untimely because the grounds on which Petitioner sought to have the judgment set aside were subject to a one-year limitation period under W. Va. Rule 60(b). The Supreme Court affirmed, holding (1) Petitioner's grounds to set aside the judgment were untimely under Rule 60(b); and (2) while void judgments are not subject to the strict time frame set forth in Rule 60(b), the circuit court did not lack personal jurisdiction over Petitioner so as to render the judgment void. View "Amoruso v. Commerce & Industry Insurance Co." on Justia Law

The Supreme Court reversed the order of the district court awarding attorney's fees to TCH Builders and Remodeling, holding that the district court abused its discretion by assessing all of TCH's attorney fees against the construction lien bond posted by Homes For Our Troops (HFOT).TCH filed a construction lien against HFOT's property and initiated this action claiming, among other things, breach of contract and foreclosure of the construction lien bond. The district court dismissed all claims against HFOT except for TCH's lien claim against HFOT's bond. A jury found in favor of TCH. The district court entered an order ruling that all attorney fees incurred by TCH throughout the course of the proceeding were payable from the bond posted by HFOT. The Supreme Court reversed and remanded for redetermination of the amount of fees to be assessed against HFOT's bond, holding that the assessment of the entirety of TCH's attorney fees against HFOT's bond was inequitable, arbitrary, and not reasonable. View "TCH Builders v. Elements of Construction, Inc." on Justia Law

George Zakk filed suit against Vin Diesel, One Race Films, Inc., and Revolution Studios for breach of an oral contract, breach of an implied-in-fact contract, intentional interference with contractual relations, quantum meruit, promissory estoppel, and declaratory relief. Plaintiff alleged that he was entitled to be paid and receive an executive producer credit for a film that was a sequel to a film he had worked on and developed. The trial court sustained defendants' demurrers and dismissed the third amended complaint.With regard to oral contracts that fall within the statute of frauds category of contracts not to be performed within a year, the Court of Appeal held that the promisee's full performance of all of his or her obligations under the contract takes the contract out of the statute of frauds, and no further showing of estoppel is required. The court distinguished cases involving other categories of contracts within the statute of frauds, such as contracts to make a will or contracts not to be performed within the promisor's lifetime, because those categories of contracts historically have been treated differently than contracts not to be performed within a year. The court held that, to the extent those cases hold that avoidance of the statute of frauds requires the promisee to satisfy the elements of estoppel--showing extraordinary services by the promisee or unjust enrichment by the promisor--they do not apply to the category of contracts not to be performed within a year.In this case, the court affirmed in part and reversed in part, holding that Zakk's allegation that he fully performed his obligations under the alleged oral contract at issue is enough to avoid the statute of frauds. The trial court erred in finding that Zakk's breach of contract and related claims were barred by the statute of frauds absent alleged facts showing defendants were estopped to assert the statute. Furthermore, the trial court erred by finding that the third amended complaint was a sham pleading and that the quantum meruit claim was time-barred. However, the trial court did not abuse its discretion in dismissing the promissory estoppel claim. View "Zakk v. Diesel" on Justia Law

The Eighth Circuit affirmed an adverse order by the FAA's Office of Dispute Resolution for Acquisition (ODRA) regarding property Southern leased to the Administration. Southern subsequently sold the property and surrounding land to Prairie Land, assigning its lease with the FAA to Prairie Land. After the FAA refused to vacate the premises, Prairie Land initiated a contract dispute with the ODRA.The court held that the FAA's continued occupancy of the property was permitted, and the ODRA did not err by concluding that the holdover provisions permitted the FAA to holdover on the property until either a new lease was agreed upon or it acquired the property in fee. Therefore, the FAA was fully within its rights to continue possessing the property. View "Prairie Land Holdings, LLC v. FAA" on Justia Law