Justia Contracts Opinion Summaries

The Supreme Court reversed the judgment of the court of appeals holding that Emergency Medical Training Services (EMTS) did not provide clear and specific evidence under the Texas Citizens Participation Act (TCPA), Tex. Civ. Prac. & Rem. Code 27.003, of a prima facie case that a former employee (Defendant) breached nondisclosure agreements she signed in connection with her employment, holding that EMTS established a prima facie case of each essential element of a breach of contract cause of action.EMTS sued Defendant for breach of contract and moved for injunctive relief. Defendant filed a motion to dismiss pursuant to the TCPA, arguing that her actions were an exercise of her right to petition and her right of free speech. The trial court denied the motion to dismiss. The court of appeals reversed, concluding that EMTS established all the elements of a breach of contract claim with the exception of the damages element. The Supreme Court reversed, holding that EMTS established a prima facie case by clear and specific evidence of each essential element of a breach of contract cause of action. View "S&S Emergency Training Solutions, Inc. v. Elliott" on Justia Law

The Supreme Court reversed the judgment of the court of appeals and vacated the judgment of the trial court in this dispute over the enforceablility of exculpatory provisions of an agreement that released a medical transportation company from liability in transporting a patient to a doctor’s appointment, holding that the exculpatory language in the agreement did not, as a matter of law, bar the patient’s claim in this case.Before the patient was about to be transported, the medical transportation company’s driver required the patient to sign an agreement releasing the company from liability. After the appointment, the patient fell as he was getting into the company’s van. The patient sued the company, and the company filed a motion to dismiss based on the exculpatory provisions of the agreement. The lower courts held that the exculpatory provisions were enforceable and barred the patient’s claim. The Supreme Court reversed, holding (1) in determining the enforceability of an exculpatory agreement, a court should consider the totality of the circumstances and weigh three non-exclusive factors; (2) as a matter of law, the exculpatory provisions in the agreement at issue were unenforceable and did not bar the patient’s claim against the company. View "Copeland v. Healthsouth/Methodist Rehabilitation Hospital, LP" on Justia Law

Innovation sold 5-Hour Energy. In 2004, it contracted with CN to manufacture and package 5-Hour. Jones, CN's President and CEO, had previously manufactured an energy shot. When the business relationship ended, CN had extra ingredients and packaging, which Jones used to continue manufacturing 5-Hour, allegedly as mitigation of damages. The companies sued one another, asserting breach of contract, stolen trade secrets or intellectual property, and torts, then entered into the Settlement, which contains an admission that CN and Jones “wrongfully manufactured” 5-Hour products and forbids CN from manufacturing any new “Energy Liquid” that “contain[s] anything in the Choline Family.” CN received $1.85 million. CN was sold to a new corporation, NSL. Under the Purchase Agreement, NSL acquired CN's assets but is not “responsible for any liabilities ... obligations, or encumbrances” of CN except for bank debt. The Agreement includes one reference to the Settlement. NSL, with Jones representing himself as its President, took on CN’s orders and customers, selling energy shots containing substances listed in the Choline Family definition. Innovation sued. Innovation was awarded nominal damages for breach of contract. The Sixth Circuit affirmed the rejection of defendants’ antitrust counterclaim, that NSL is bound by the Settlement, and that reasonable royalty and disgorgement of profits are not appropriate measures of damages. Jones is not personally bound by the Agreement. Upon remand, Innovation may introduce testimony that uses market share to quantify its lost profits. The rule of reason provides the proper standard for evaluating the restrictive covenants; Defendants have the burden of showing an unreasonable restraint on trade. View "Innovation Ventures, LLC v. Nutrition Science Laboratories, LLC" on Justia Law

This appeal concerned a dispute over which party to a failed commercial real estate sale is entitled to the buyer’s deposit. The seller, 913 Market, LLC, claims that it was entitled to the deposit because the buyer failed to close the deal on the agreed date, and brought this action against the buyer claiming breach of contract and seeking a declaratory judgment regarding its rights under the purchase agreement. The buyer, Kamal Bathla, made two reasons why the deposit is rightfully his: (1) 913 Market could not convey title free and clear of all liens and encumbrances, as required by the purchase agreement, due to potential claims by a previous potential buyer of the building that had also failed to close; and (2) one of the conditions precedent was not satisfied because the title insurance commitment he received contained an exception, relating to litigation risk from the previous potential buyer, that did not exist in 913 Market’s existing title insurance policy. In either case, Bathla maintained, he was relieved of any obligation to close, and therefore had a right to get his money back. The Superior Court granted summary judgment for 913 Market. In rejecting Bathla’s first argument, the court reasoned that potential claims by the previous failed buyer did not cloud title because the previous buyer “had not perfected (nor did it seek to perfect) a lis pendens claim.” In rejecting Bathla’s second argument, the court read the purchase agreement as establishing a test based not on “what exceptions the Purchaser’s title insurance carrier might insist upon,” but rather on “whether Seller was able to convey satisfactory title, which it did.” The Delaware Supreme Court affirmed the Superior Court’s decision. "Contrary to Bathla’s exhortations, the mere possibility that a previous potential buyer who failed to close might later claim an interest in the building does not constitute a lien or encumbrance under the purchase agreement, and the condition precedent identified by Bathla does not require that he obtain a title commitment with exceptions that mirror those of 913 Market’s existing policy. And ultimately, the basic premise of Bathla’s case - that there was a genuine risk that the previous potential buyer would sue Bathla over the property - is implausible and does not provide a basis under the contract to avoid the obligation to close." View "Bathla v. 913 Market, LLC" on Justia Law

The Supreme Court answered two state-law questions from the Bankruptcy Appellate Panel for the United States Sixth Circuit Court of Appeals by holding that the failure to identify a person who has initialed, signed, and acknowledged a mortgage agreement by name in the body of the agreement does not render the agreement unenforceable as a matter of law against that signatory.The panel specifically asked whether a mortgage is invalid and unenforceable against a signatory who is not identified by name in the body of the mortgage agreement. The Supreme Court answered in the negative, holding that, as a matter of general contract interpretation, it is possible for a person who is not identified in the body of the mortgage, but who has signed and initiated the mortgage, to be a mortgagor of her interest. View "Bank of New York Mellon v. Rhiel" on Justia Law

At issue was the circuit court’s role in determining the proper forum of dispute resolution when a subsequent contract, if enforceable, does not contain an arbitration clause that is present in an initial contract.The Supreme Court reversed the decision of the court of appeals reversing the non-final order of the circuit court denying a motion to compel arbitration pursuant to the initial agreement in this case, as well as the circuit court’s granting of a motion for declaratory judgment that the subsequent agreement was a valid contract, holding that, if valid, the subsequent agreement released certain parties from the agreement to arbitrate contained in the initial agreement, and the cause must be remanded to determine whether the subsequent agreement was a valid contract.The circuit court concluded that even though the initial agreement required arbitration, it was superseded by the subsequent agreement, which did not require the parties to submit to arbitration. The court of appeals concluded that arbitration was required pursuant to the initial agreement. The Supreme Court reversed, holding that, under the circumstances of this case, the determination of arbitrability must be decided by the circuit court rather than an arbitrator and that genuine issues of material fact existed as to whether the subsequent agreement was a valid contract. View "Midwest Neurosciences Associates, LLC v. Great Lakes Neurosurgical Associates, LLC" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals denying Appellant’s complaint for writs of mandamus and prohibition against Richland County Court of Common Pleas Judge James DeWeese seeking to compel Judge DeWeese to enter a final, appealable order on prior rulings made by Judge James Henson, vacate several orders Judge DeWeese had entered in the underlying case, and bar Judge DeWeese from moving forward with a trial, holding that Appellant was not entitled to the relief it sought.Appellant filed a complaint for breach of contract. Judge Henson granted summary judgment in favor of Appellant as to certain defendants. The trial court then awarded Appellant attorney fees. While appeals that were ultimately dismissed for lack of a final, appealable order were pending Judge Henson retired, and the case was reassigned to Judge DeWeese. Judge DeWeese vacated the summary judgment orders and granted summary judgment for one defendant. Appellant then filed this action. The court of appeals denied relief, and the Supreme Court affirmed, holding (1) Judge DeWeese clearly exercised jurisdiction in the underlying case, and that exercise of jurisdiction was authorized; and (2) because Appellant could not show that it had clear legal right to relief, it was not entitled to a writ of mandamus. View "State ex rel. Technical Construction Specialties, Inc. v. DeWeese" on Justia Law

Husky Ventures, Inc. (“Husky”) sued B55 Investments Ltd. (“B55”) and its president, Christopher McArthur, for breach of contract and tortious interference under Oklahoma law. In response, B55 filed counterclaims against Husky. A jury reached a verdict in Husky’s favor, awarding $4 million in compensatory damages against both B55 and McArthur and $2 million in punitive damages against just McArthur; the jury also rejected the counterclaims. In further proceedings, the district court entered a permanent injunction and a declaratory judgment in Husky’s favor. After the court entered final judgment, B55 and McArthur appealed, and moved for a new trial under Federal Rule of Civil Procedure 59(a) or, in the alternative, to certify a question of state law to the Oklahoma Supreme Court. The court denied the motion in all respects. On appeal, B55 and McArthur contended the district court erred in denying their motion for a new trial and again moved to certify a question of state law to the Oklahoma Supreme Court. In addition, they appealed the permanent injunction and declaratory judgment and argue that the district court erred in refusing to grant leave to amend the counterclaims. The Tenth Circuit dismissed B55 and McArthur’s claims relating to the motion for a new trial for lack of appellate jurisdiction and denied their motion to certify the state law question as moot. The Court otherwise affirmed the district court’s judgment on the remaining issues. View "Husky Ventures v. B55 Investments" on Justia Law

Plaintiff filed suit for breach of an insurance contract and bad faith against State Farm, requesting punitive damages. The Court of Appeal affirmed the trial court's grant of summary adjudication in State Farm's favor, holding that plaintiff forfeited any contention of error regarding the breach of the insurance contract claim because she neither discussed the claim nor suggested that there were unpaid policy benefits. In regard to the bad faith claim, the court held that plaintiff raised no contention that State Farm improperly delayed arbitration under Insurance Code section 11580.2, subdivision (f). The court held that there were no triable issues regarding bad faith where State Farm acted reasonably in delaying payment of uninsured-underinsured motorist benefits. View "Case v. State Farm Mutual Automobile Insurance Co." on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment in favor of Defendants after determining that Defendants did not breach their contract with Plaintiffs, oil companies, but reversed for modification of the fees and costs awarded to Defendants, holding that the district court abused its discretion in fixing the amount of attorney fees and costs to which Defendants were entitled as the prevailing parties.Specifically, the Court held that the district court (1) did not err in determining on summary judgment that Defendants did not breach or repudiate the parties’ 2006 settlement agreement; but (2) erred in awarding Defendants’ fees generated in determining the amount of attorney fees and erred in allowing costs that fell outside of Mont. Code Ann. 25-10-201. View "Ferdig Oil Co., Inc. v. ROC Gathering, LLP" on Justia Law