Justia Contracts Opinion Summaries

The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court concerning premises liability. Shannon Adamson, an employee of the Alaska Marine Highway System (AMHS), fell approximately 15 feet when the passenger ramp at the Port of Bellingham's (Port) Bellingham Cruise Terminal (BCT) collapsed. The accident caused severe, life-changing injuries. The State of Alaska leased the BCT from the Port, allowing ferries to dock at the BCT and load and unload passengers and their vehicles. The Port elected to not implement an interlock device; when Adamson was operating the passenger ramp, slack was created in some attached cables. When she removed the locking pins, the ramp collapsed, snapped the cables, and Adamson and the ramp fell approximately 15 feet until the ramp caught on the ferry. Adamson and her husband sued the Port in federal court, alleging negligence and seeking damages for medical expenses, loss of wages, pain and suffering and loss of consortium. The federal court determined Adamson was the Port's business invitee; the jury returned a verdict in favor of Adamson and awarded over $16 million in damages. The court found the Port under three separate theories of liability: duty to a business invitee, duty as a landlord, and a promise to perform repairs under the lease contract. The issue presented to the Washington Supreme Court centered on whether a property owner-landlord was liable for injuries that occur on its property when the lessee has exclusive possession at the time of the accident but only priority use under the lease and the landlord has contracted to maintain and repair the premises. The Supreme Court answered the first certified question in the affirmative and consequently, did not address the second question. View "Adamson v. Port of Bellingham" on Justia Law

The Supreme Court vacated the September 20, 2016 judgment of the superior court entering judgment against Family Dollar Stores of Rhode Island, Inc. and affirmed the November 9, 2016 order of the superior court granting Family Dollar's emergency motion for a thirty-day extension of time within which to file its notice of appeal, holding that the hearing justice erred in dismissing Family Dollar's declaratory judgment action.Family Dollar filed this action against Justin B. Araujo seeking a declaratory judgment that the parties had entered into an enforceable settlement agreement releasing Family Dollar from claims that Araujo asserted against it in his charge before the Rhode Island Commission for Human Rights and also alleging breach of contract. The Commission was added as an additional party to the case. The hearing justice granted Defendants' motions to dismiss on the basis that the proper forum for this action was before the Commission. Family Dollar later filed an emergency motion for a thirty-day time extension, which the hearing justice granted. The Supreme Court affirmed in part and vacated in part, holding (1) the hearing justice did not abuse his discretion in finding excusable neglect in this case; and (2) Family Dollar's declaratory judgment action may proceed in superior court on remand. View "Family Dollar Stores of Rhode Island, Inc. v. Araujo" on Justia Law

The Supreme Court accepted certification of a question of law in a proceeding pending before the United States District Court for the District of Connecticut and answered that Virginia law recognizes that the collateral source rule can apply to breach of contract cases.Specifically at issue was whether Virginia law applies the collateral source rule to a breach of contract action where the plaintiff has been reimbursed by an insurer for the full amount it seeks in damages from the defendant. The Supreme Court answered that the same rationales supporting the recognition of the collateral source rule in tort cases also supports the rule's application in certain breach of contract actions. The Court further explained that whether the rule applies to a given case requires a case by case analysis as to whether the parties' expectations, in light of those rationales, support the rule's application. View "Dominion Resources, Inc. v. Alstom Power, Inc." on Justia Law

Sanchelima contracted to serve as Walker’s exclusive distributor of silos in 13 Latin American countries. Walker agreed not to sell silos directly to third parties in those countries. The contract contained a limited remedies provision and a damages disclaimer and was subject to Wisconsin law. Walker assigned a representative to work with Sanchelima, but otherwise did not market its products in the relevant countries. In 2014, Walker nonetheless sold silos for a factory in Mexico and to a Nicaraguan company. In 2015, Walker sold silos to a Mexican plant; in 2017, Walker sold tanks to a Mexican company. Sanchelima notified Walker that it considered the sales a breach of the agreement, then filed suit. Walker terminated the agreement without cause. Sanchelima sought lost profits of more than $600,000. Walker cited the limited remedies provision as an affirmative defense. It explicitly precludes recovery of “any lost profits … arising out of or in connection with the Distributor Agreement.” The district court held that provision violates Wisconsin’s version of the UCC 2‐719, Wis. Stat. 402.719: Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in chs. 401 to 411... Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Because the limited remedy provision provided no relief for Walker’s breach of the exclusivity provision, the court held it failed of its essential purpose and awarded Sanchelima $778,306.70. The Seventh Circuit affirmed. The Wisconsin Supreme Court has interpreted UCC's limited remedy provisions; other states have interpreted those provisions differently. The Seventh Circuit declined to overturn state precedent as inconsistent with modern trends, “until and unless the Wisconsin Supreme Court decides to overturn it.” View "Sanchelima International, Inc. v. Walker Stainless Equipment Co., KKC" on Justia Law

This appeal arose from fourteen lawsuits brought by various plaintiffs against (1) Laura Willis, an insurance agent; (2) Jesse Dantice, the insurance broker who hired Willis and made her the agent in charge of the insurance office; (3) their insurance agency, Southern Risk Insurance Services, LLC (Southern Risk), and (4) six insurance companies for which their office sold policies (the Insurers). The plaintiffs in the lawsuits were Willis's customers (the Insureds) and other insurance agents (the Agents) in competition with Willis and Southern Risk. The Insureds filed twelve of the lawsuits, asserting claims against Willis, Dantice, and Southern Risk for, inter alia, violations of the Unfair Trade Practices Act (UTPA), common law unfair trade practices, fraud, and conversion. They also named the Insurers as defendants on a respondeat superior theory of liability for failing to adequately supervise or audit Willis and Southern Risk. The question before the South Carolina Supreme Court was whether arbitration should have been enforced against nonsignatories to a contract containing an arbitration clause. The circuit court denied the motion to compel arbitration. The court of appeals reversed and remanded, holding equitable estoppel was applicable to enforce arbitration against the nonsignatories. The Supreme Court reversed and remanded, finding the circuit court properly denied the motion to compel arbitration. View "Wilson v. Willis" on Justia Law

In this case concerning a boundary realignment agreement entered into between the parties in this case, the Supreme Court affirmed the order of the district court granting specific performance of a contract to Plaintiff, holding that the district court correctly determined that the cause of action was timely prosecuted by Plaintiff and that Plaintiff was entitled to specific performance of a contract.The district court ruled that Plaintiff was entitled to specific performance and dismissed Defendants' trespass claim. The Supreme Court affirmed, holding that the district court (1) did not err by concluding that Plaintiff's breach of contract claim was not barred by the relevant statute of limitation; (2) did not err by determining that Plaintiff was entitled to specific performance of the contract; and (3) properly dismissed Defendants' trespass claim. View "Miller v. Kleppen" on Justia Law

After a jury found that Westcoast was liable for breaching a contract it entered with RCS, Westcoast raised claims of error regarding the finding of a bad-faith breach, the language of the verdict form, and the award of attorney fees. In this case, the jury had awarded RCS $304,189 on the bad faith breach of contract claim, $66,450 under the state Prompt Payment Act, $130,517.60 in attorney fees, and $400 in costs.The Fifth Circuit vacated and remanded the penalty amount determined under the Louisiana Prompt Payment Act, holding that the jury awarded damages exceeding those permitted under the clear language of the Act. The court also vacated and remanded the award of attorney fees for reconsideration of the amount after the statutory penalty was reconsidered. View "Alonso v. Westcoast Corp." on Justia Law

David Calvert was disbarred for various ethical violations, including entering into an oral agreement with a client without complying with the requisite safeguards of Colorado Rule of Professional Conduct 1.8(a). After being disbarred, Calvert sued his former client, Diane Mayberry, for breach of that same oral agreement, claiming that there was a contract between them. The trial court granted Mayberry’s motion for summary judgment, and the court of appeals affirmed. On appeal to the Colorado Supreme Court, Calvert challenged: (1) whether an attorney who was found to have violated Rule 1.8(a) in a disciplinary proceeding was estopped from relitigating the same factual issues in a civil proceeding; (2) whether a contract between an attorney and a client entered into in violation of Rule 1.8(a) was enforceable; and (3) whether the trial court abused its discretion in awarding attorney’s fees against Calvert after finding his lawsuit groundless and frivolous. The Colorado Supreme Court declined the issue preclusion issue raised because Calvert conceded he could not relitigate whether he entered into an agreement with a client without meeting Rule 1.8(a)’s requirements. The Court held that when an attorney enters into a contract without complying with Rule 1.8(a), the contract was presumptively void as against public policy; however, a lawyer may rebut that presumption by showing that, under the circumstances, the contract does not contravene the public policy underlying Rule 1.8(a). Further, the Court held the trial court did not abuse its discretion in awarding attorney’s fees at the trial level because the record supported the finding that the case was groundless, frivolous, and brought in bad faith. But as to attorney’s fees at the appellate level, because the questions of whether issue preclusion applied in this proceeding and whether a contract made in violation of Rule 1.8(a) is void as against public policy were legitimately appealable issues, thereby making a grant of appellate attorney’s fees inappropriate. Therefore, the Supreme Court affirmed the court of appeals as to the merits on other grounds, affirmed the award of attorney’s fees at the trial level, and reversed the court of appeals’ order remanding for a determination of appellate attorney’s fees. View "Calvert v. Mayberry" on Justia Law

Alfa Insurance Corporation, Alfa Mutual General Insurance Corporation, Alfa Life Insurance Corporation, and Alfa Specialty Insurance Corporation (collectively, "Alfa") petitioned the Alabama Supreme Court for a writ of mandamus requiring the Montgomery Circuit Court to vacate its May 23, 2018, orders: (1) denying Alfa's motion for a protective order as to materials Alfa contended were protected by the attorney-client privilege; and (2) compelling Alfa to produce such materials for in camera inspection and for discovery. The underlying suit arose out of a policy dispute in which one side invoked an arbitration clause in the policy at issue. The insured claimed Alfa breached the policy by refusing to provide a defense and/or indemnity coverage. After review, the Supreme Court was satisfied Alfa established the trial court exceeded its discretion when it disregarded the attorney-client privilege and entered the May 2018 orders denying Alfa's motion for a protective order and compelling Alfa to produce the materials sought for in camera inspection or for discovery. Accordingly, the Supreme Court granted Alfa's petition for the writ of mandamus and directed the trial court to vacate the May 2018 orders denying Alfa's motion for a protective order and compelling Alfa to produce the materials at issue. View "Ex parte Alfa Insurance Corporation et al." on Justia Law

The Supreme Court reversed the judgment of the court of appeals that the parol evidence rule barred evidence and enforcement of an agreement through which Plaintiff claims to have satisfied his debt to Defendant, holding that the parol evidence rule did not preclude enforcement of the agreement, and therefore, Plaintiff met his burden to establish a prima facie case for the falsity of Defendant's liens.Plaintiff brought this action claiming that after he fully satisfied his debt to Defendant, Defendant filed fraudulent liens and knowingly and intentionally slandered Plaintiff's title to mineral interests that secured that debt. Defendant filed a motion to dismiss the claims, arguing that Plaintiff could not establish prima facie support for his slander-of-title and fraudulent-lien claims because the parol evidence rule applied and precluded Plaintiff from establishing any enforceable agreement that satisfied his debt. The trial court denied the motion. The court of appeals affirmed. The Supreme Court reversed, holding that the parol evidence rule did not preclude enforcement of the agreement through which Plaintiff claimed to have satisfied his debt to Defendant, and that Plaintiff thus met his burden to establish a prima facie case for the falsity of Defendant's liens. View "West v. Quintanilla" on Justia Law