Justia Contracts Opinion Summaries

After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law

Apple Leisure specializes in packaged travel sales and resort management. In 2011 Scott and Natasha Mueller purchased an Apple all-inclusive honeymoon trip to Secrets Resort in Punta Cana, Dominican Republic, through a Fond du Lac, Wisconsin travel agent. The contract attached to their travel vouchers explains in boldface type that “[t]he exclusive forum for the litigation of any claim or dispute arising out of … [this] trip shall be the Court of Common Pleas of Delaware County, Pennsylvania.” While on her honeymoon, Natasha became ill after Secrets Resort served her contaminated fish. She was diagnosed with Ciguatera poisoning, a foodborne illness caused by eating certain reef fish infected with Ciguatera neurotoxins. The Muellers sued in the Eastern District of Wisconsin. The district judge applied the doctrine of forum non conveniens and dismissed the case based on the forum-selection clause. The Seventh Circuit affirmed. The judge’s decision was procedurally and substantively sound. A forum-selection clause channeling litigation to a nonfederal forum is enforced through the doctrine of forum non conveniens; only an exceptional public-interest justification can displace a contractual choice of forum. The Muellers have not identified any public interest to justify overriding the forum-selection clause in their travel contract. View "Mueller v. Apple Leisure Corp." on Justia Law

The Supreme Court affirmed the judgment of the trial court, entered after a jury trial, in favor of Otoe County School District 66-0111 in this dispute over amounts owed under a contract between the School District and Facilities Cost Management Group (FCMG).In the first appeal in this case, the Supreme Court concluded that the jury had been erroneously instructed and remanded the cause for a new trial. On retrial, the jury rendered a verdict in favor of the School District. The Supreme Court affirmed, holding that the trial court did not err in (1) admitting certain evidence; (2) instructing the jury; and (3) ruling on FCMG’s posttrial motions. View "Facilities Cost Management Group v. Otoe County School District 66-0111" on Justia Law

In this second appeal regarding a contract dispute, the Supreme Court held that the circuit court did not err, on remand, in concluding that the contract created a right of first refusal and that the contract was void as an unreasonable restraint against alienation. The court held (1) the circuit court did not err when it held that the parties intended to create a right of first refusal; (2) the circuit court did not err when it ruled that the contract constituted an unreasonable restraint on alienation and repugnant to the interest created; and (3) the court did not err when it refused to narrow the scope of the alienation to comply with S.D. Codified Laws 43-5-1 or another reasonable limitation. View "Laska v. Barr" on Justia Law

In 2006, Warciak’s mother signed an agreement with T-Mobile to begin cell phone service. In 2012, she signed another agreement when she purchased a new phone. Each agreement contained an arbitration clause. Although Warciak uses a phone on his mother’s plan and is an authorized user who can make changes to the account, he never signed either agreement nor is he otherwise a party to them. In 2016, Warciak received a spam text message promoting a Subway sandwich. He sued Subway under federal and state consumer protection statutes. Subway moved to compel arbitration based on the agreements between T-Mobile and Warciak’s mother. In the district court, Subway argued that federal estoppel law required Warciak to arbitrate under his mother’s contracts. Warciak countered that under Illinois law he is not bound by his mother’s contracts. The district court applied federal law. The Seventh Circuit reversed, holding that state law applies and that Subway cannot claim estoppel because it cannot show detrimental reliance. View "Warciak v. Subway Restaurants, Inc." on Justia Law

Before marrying Claudia, Mathew downloaded a form and drafted a premarital agreement, describing Claudia's rights in real property owned by Matthew. Matthew retained attorney Chernick to represent Claudia. Chernick advised Matthew to seek independent legal counsel. Matthew stated he would represent himself. Chernick spoke to Claudia outside Matthew’s presence, revised the agreement and, on March 5, sent a red-lined version to both, containing additional provisions and stating that each party had had more than seven days to review the agreement before executing it. The parties signed a final version on March 6. Matthew executed a waiver of legal counsel. The parties separated. Claudia sought enforcement of the agreement. The court of appeal affirmed that the agreement was unenforceable under Family Code 1615(c)(2), because Matthew was not presented with the final version of the agreement at least seven days before its execution and, under Family Code 1615(c)(3), because Matthew had not been provided with a written advisement of the rights he was relinquishing and did not execute a waiver of those rights. When the evidence shows an unrepresented party to a premarital agreement was not provided with the seven-day review period, the agreement’s recitation that the review period was provided is not binding. Section 1615(c)(3) applies to an agreement that was initially generated by the unrepresented party. View "Marriage of Clarke & Akel" on Justia Law

Plaintiffs filed a putative class action against Saber, alleging that defendants failed to deliver contractually promised care and failed to comply with certain state law requirements. After removal to federal court, the district court granted plaintiffs' motion to remand to state court based on the forum selection clause in plaintiffs' contracts. The Fourth Circuit vacated and remanded for further proceedings and factual development on the question of whether all of the defendants were bound by the forum selection clause contained in the contracts executed by plaintiffs. In this case, although the plain language of the forum selection clause precluded removal, a question remains as to whether all of the defendants were alter egos or otherwise bound by the clause. View "Bartels v. Saber Healthcare Group, LLC" on Justia Law

A “pickle line” processes hot rolled steel coil through acid tanks to remove impurities. In 2006, Toll purchased a used pickle line, in need of repair. Kastalon had previously serviced the machine. In 2008, Kastalon agreed to move and store the machine, at no cost, until Toll could order reconditioning. Both parties believed that Toll would move the equipment within months; they did not discuss a specific timeframe. For two years, Kastalon stored the equipment indoors. Toll negotiated with various companies, to run or sell the equipment, but was not in communication with Kastalon. Kastalon eventually greased and wrapped the equipment before moving it to outside storage under tarps. Toll employees with whom Kastalon had communicated were laid off. Kastalon thought that Toll had gone out of business and that the equipment had been abandoned. Kastalon had the equipment scrapped, without inspecting it, and received $6,380.80. In June 2011, Toll requested a price for reconditioning and learned that they had been scrapped. Toll obtained quotes for replacement: the lowest was about $416,655. Toll sued. The Seventh Circuit reversed, in part, summary judgment entered in favor of Kastalon. A reasonable jury could conclude that Toll’s prolonged silence, alone, did not constitute unambiguous evidence of intent to abandon. The court did not consider whether Kastalon had an extra-contractual duty not to dispose of the equipment or Kastalon’s evidence that the loss was not due to Kastalon’s failure to exercise reasonable care. Affirming rejection of a contract claim, the court stated the parties’ oral agreement was not sufficiently definite as to duration. View "Toll Processing Services, LLC v. Kastalon, Inc." on Justia Law

Counce Energy BC #1, LLC, appealed the judgment entered on a jury verdict awarding Continental Resources, Inc., $153,666.50 plus costs and disbursements for breaching its contract with Continental by failing to pay its share of expenses to drill an oil and gas well, and dismissing with prejudice Counce's counterclaims. Because the district court lacked subject matter jurisdiction over Continental's breach of contract action and Counce's counterclaims, the North Dakota Supreme Court vacated the judgment. View "Continental Resources, Inc. v. Counce Energy BC #1, LLC" on Justia Law

P&P Industries, LLC, d/b/a United Oilfield Services, and Pauper Industries, Inc., appealed a judgment entered in favor of Continental Resources, Inc., after a jury returned a verdict finding United and Pauper's conduct constituted fraud but they did not breach their contracts with Continental. Continental was an oil producer; United and Pauper provided transportation, water hauling, and related services and materials to Continental in North Dakota. Pauper signed a Master Service Contract with Continental, and United signed a Master Service Contract. Continental sued United and Pauper, seeking damages for claims of breach of contract, tortious breach of contract, breach of fiduciary duty, fraud, and deceit. Continental alleged United and Pauper violated state and federal limits and regulations on the number of hours a truck driver may drive; they violated Continental's employee policies, and engaged in improper and fraudulent billing. After a hearing, the district court denied United's motion for summary judgment on Continental's claims; denied Continental's motion for summary judgment on United's breach of contract, promissory estoppel, and tortious breach of contract counterclaims; and denied Continental's motion for summary judgment on its fraud and breach of contract claims. The court granted Continental's motion for summary judgment against United's breach of fiduciary duty and constructive fraud counterclaims. The court also granted summary judgment on Continental's motion related to damages and ruled, if United prevailed at trial, its damages would be limited to the net profits it could have earned during the 30-day termination notice period, overall expenses of preparation, and its expenses in pursuit of reasonable efforts to avoid or minimize the damaging effects of the breach. United unsuccessfully moved for reconsideration of the damages issue. A jury trial was held. In deciding Continental's claims, the jury found neither United nor Pauper breached its contract obligations to Continental, both United and Pauper's conduct was fraudulent or accompanied by fraud, both United and Pauper's conduct was deceitful or accompanied by deceit, and the jury awarded Continental $2,415,000 in damages for its claims against United but did not award Continental any damages for its claims against Pauper. In deciding United's counterclaims, the jury found Continental breached its contract with United, but Continental was excused from performing based on United's prior material breach, United's failure to perform a condition precedent, United's fraud or deceit, and equitable estoppel. Judgment on the jury's findings was entered against Pauper. Continental was awarded its costs and disbursements against United and Pauper, jointly and severally. United and Pauper argued on appeal to the North Dakota Supreme Court that the verdicts were inconsistent and the district court erred in limiting the amount of damages United could seek on its counterclaim. The Supreme Court reversed, finding the "verdict is inconsistent and perverse and cannot be reconciled." The matter was remanded for a new trial. View "Continental Resources, Inc. v. P&P Industries, LLC I" on Justia Law