Justia Contracts Opinion Summaries

Sköld coined the name “Restoraderm” for a proprietary drug-delivery formulation that he developed for potential use in skin-care products. He entered into a 2001 letter of intent with CollaGenex, a skin-care company, stating that “[a]ll trademarks associated with the drug delivery system … shall be applied for and registered in the name of CollaGenex and be the exclusive property of CollaGenex.” Their 2002 contract reiterated those provisions and stated that termination of the agreement would not affect any vested rights. With Sköld’s cooperation, CollaGenex applied to register the Restoraderm mark. Under a 2004 Agreement, Sköld transferred Restoraderm patent rights and goodwill to CollaGenex, without mentioning trademark rights. After Galderma bought CollaGenex it used Restoraderm as a brand name on products employing other technologies. In 2009, Galderma terminated the 2004 Agreement, asserting that it owned the trade name and that Sköld should not use the name. Sköld markets products based on the original Restoraderm technology that do not bear the Restoraderm mark. Galderma’s Restoraderm product line has enjoyed international success. Sköld sued, alleging trademark infringement, false advertising, unfair competition, breach of contract, and unjust enrichment. Only Sköld’s unjust enrichment claim was successful. The Third Circuit reversed in part, absolving Galderma of liability. The 2004 agreement, rather than voiding CollaGenex’s ownership of the mark by implication, confirmed that CollaGenex owned the Restoraderm mark. Galderma succeeded to those vested rights. View "Skold v. Galderma Laboratories L.P." on Justia Law

Debtor brought an adversary proceeding against Kestrel for breach of contract, alleging that Kestrel failed to pay for services owed that debtor provided Kestrel to help it collateralize a corporate debt offering with life settlements. The Fifth Circuit affirmed the district court's judgment upholding the bankruptcy court's holding that the contract was voidable because debtor failed to register as an investment adviser in violation of the Investment Advisers Act of 1940. The court held that debtor contracted with Kestrel to advise it about life settlements, and the life settlements contemplated in the origination agreement were investment contracts within the meaning of the Act. View "Living Benefits Asset Management v. Kestrel Aircraft Co." on Justia Law

The First Circuit affirmed the district court’s grant of summary judgment in favor of a Church on its lawsuit seeking a declaratory judgment that its claim filed pursuant to its property insurance policy with an Insurance Company was improperly denied, holding that ambiguities in the policy resulted in coverage for the collapse of a ceiling in one section of the church.The Insurance Company denied the Church’s claim, citing the “faulty construction” exclusion in the policy. In its complaint, the church argued that the collapse was caused by hidden decay such that the “additional coverage - collapse” provision applied. The First Circuit affirmed, holding that the meaning of “decay” was ambiguous and that ambiguity must be resolved in the Church’s favor. View "Easthampton Congregational Church v. Church Mutual Insurance Co." on Justia Law

The First Circuit affirmed the district court’s grant of summary judgment in favor of Liberty Mutual Insurance Corporation on Brendan Kelly’s claim that Liberty was bound to provide uninsured motorist coverage for his benefit, holding that no uninsured motorist coverage was provided under the policy.The insurance contract was an umbrella policy issued to Kelly’s employer and the named insured and was issued in New Hampshire. The named insured rejected uninsured motorist coverage in writing, but the writing was not incorporated into the policy. Kelly argued that that the lack of an explicit reference to the named insured’s written rejection rendered that rejection inoperative against an additional insured like himself, and that provision of uninsured motorist coverage was therefore required under state law. The First Circuit disagreed, holding that Kelly’s position was not implicit in the statute. View "Kelly v. Liberty Insurance Corp." on Justia Law

UFAA filed suit seeking declaratory relief against the Companies and FGI (collectively, Farmers), alleging that Farmers engaged in numerous practices that violated the terms of Agent Appointment Agreements signed prior to 2009. The trial court found that UFAA lacked standing to pursue its claims and failed to demonstrate it was entitled to declaratory relief.The Court of Appeal held that UFAA had associational standing to pursue its claims related to performance and office standards, but did not have standing to pursue its other claims. However, on the merits, UFAA was not entitled to declaratory relief on its claims related to office locations and performance standards. In this case, although the Agreements did not expressly prohibit specific office locations or require agents meet performance standards, Farmers could terminate agencies for such reasons pursuant to the no-cause termination provision. The court also held that UFAA's single enterprise arguments were moot and UFAA's arguments related to the motion for new trial were meritless. Accordingly, the court affirmed the judgment. View "United Farmers Agents Assoc. v. Farmers Group, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming an award of actual and punitive damages in favor of Carduco, Inc., a Mercedes-Benz franchisee, on its fraud claim against Mercedes-Benz USA, LLC, holding that the court of appeals erred in affirming the trial court’s judgment, as modified.In its complaint Caduco alleged that Mercedes fraudulently induced it to purchase the assets of the previous Mercedes-Benz dealer in Harlingen, Texas. Specifically, Carduco argued that Mercedes had promised Carduco that, if it agreed to take on the franchise in Harlington, Carduco would eventually be able to relocate to the McAllen area as the exclusive Mercedes-Benz dealership there. A jury found for Carduco and awarded both actual and punitive damages. The court of appeals affirmed as modified by a suggestion of remittitur of the punitive damages award. The Supreme Court reversed, holding that the parties’ written agreement directly contradicted Carduco’s purported belief that Mercedes had promised to McAllen area to it, thereby negating Carduco’s justifiable reliance as a matter of law. The Court then rendered judgment that Carduco take nothing. View "Mercedes-Benz USA, LLC v. Carduco, Inc." on Justia Law

The Supreme Court reversed the judgment of the district court dismissing Plaintiff’s two-count petition, holding that the district court erred in holding that a seller of auction services of certain machinery is entitled to summary judgment on a claim brought by a buyer of those services under the Door-to-Door Sales Act (DDSA), Iowa Code chapter 555A.Plaintiff brought this action claiming a violation of the DDSA and seeking a declaratory judgment challenging the underlying sales contract because of an invalid execution by a third party and because of fraud in the inducement. The district court granted summary judgment in favor of Defendant, concluding, among other things, that the DDSA does not apply to a contract for auction services, such as the contract in this case. The Supreme Court reversed, holding (1) Defendant was not entitled to summary judgment on the DDSA claim where Defendant presented no evidence that Plaintiff’s purpose in purchasing the auction services was not “primarily for personal, family, or household purposes”; and (2) because the declaratory judgment count had allegations beyond the DDSA the district court erred in dismissing this count of the petition. View "Morris v. Steffes Group, Inc." on Justia Law

In this case arising from a bond transaction involving a municipal golf course in the City of Buena Vista, Virginia (the City), the Fourth Circuit affirmed the district court’s motion to dismiss a ten-count complaint filed by ACA Financial Guaranty Corporation (ACA) and SunTrust Bank (Bank) against the City and the Public Recreational Facilities Authority (Authority), holding that the complaint failed to allege claims for which relief could be granted.In an effort to refinance a loan that the Authority took out to finance the construction of the golf course, the Authority issued over $9 million in bonds. The Authority and the Bank entered into a trust agreement regarding the bonds. To repay the bonds, the Authority leased the golf course to the City. The City and the Authority then issued deeds of trust to the Bank pledging certain property as security. The City later failed to pay the rent due on the golf course lease, and the Authority could not repay the bonds. ACA, which provided insurance on the bonds, and the Bank sued. The district court dismissed the complaint. The Fourth Circuit affirmed, holding that the City’s obligation to make rent payments was not legally enforceable when the obligation was expressly subject to the city’s annual decision to appropriate funds. View "ACA Financial Guaranty v. City of Buena Vista, Virginia" on Justia Law

In 2006, T3 Enterprises entered into the Distributor Agreement with Safeguard Business Systems (SBS). In 2014, T3 filed suit alleging SBS had breached the Distributor Agreement by failing to prevent other SBS distributors from selling to T3’s customers and for paying commissions to the interfering distributors rather than to T3. The Distributor Agreement between SBS and T3 contained an arbitration clause indicating disputes must be resolved in a Dallas, Texas based arbitration procedure. The Distributor Agreement also contained a forum selection clause indicating that the Federal Arbitration Act (FAA) and Texas law would apply to any disputes between the parties. Pursuant to this agreement, SBS moved the district court to compel arbitration in Dallas. The district court determined the parties had to submit to arbitration, but that the Dallas forum selection clause was unenforceable, and arbitration was to take place in Idaho. The Arbitration Panel (the Panel) found for T3 and the district court confirmed the award in the amount of $4,362,041.95. The district court denied SBS’s motion to vacate or modify the award. SBS appealed, but finding no reversible error, the Idaho Supreme Court affirmed the district court. View "T3 Enterprises v. Safeguard Business Sys" on Justia Law

The Supreme Court reversed the decision of the circuit court denying Defendant’s motion to compel arbitration, holding that the circuit court erred in denying the motion for arbitration because the parties’ disagreements were controversies arising out of or relating to their contract, and therefore, pursuant to the contract, an arbitrator must resolve them.Plaintiffs sued Defendant, alleging that the home Defendant constructed for Plaintiffs suffered from defects that caused damage to the home. Defendant filed a motion to compel arbitration under the arbitration clause of the parties’ contract. The circuit court denied the motion, concluding that the arbitration clause was unenforceable. The supreme Court reversed, holding that the parties’ disagreement over the interpretation of the arbitration clause, as well as the application of the doctrine of impossibility to the arbitration clause, were “controvers[ies] arising out of or relating to the contract,” and therefore, the circuit court erred in refusing to compel arbitration. View "Brush Arbor Home Construction, LLC v. Alexander" on Justia Law