Justia Contracts Opinion Summaries

Under New York law, a plaintiff asserting claims of misappropriation of a trade secret, unfair competition, and unjust enrichment may not recover damages that are measured by the costs the defendant avoided due to its unlawful activity because, under the common law, compensatory damages must return the plaintiff, as nearly as possible, to the position it would have been in had the wrongdoing not occurred, but no more.This case was tried in federal court on three theories of trade secret theft, unfair competition and unjust enrichment. The jury returned a verdict for Plaintiff. The United States Court of Appeals for the Second Circuit asked the Court of Appeals to resolve three questions of New York’s law relating to damages, specifically, whether, as a matter of law, any plaintiff may recover a defendant’s avoided costs on one or another of these three theories of liability. The Court of Appeals held that, in any of these three actions, a plaintiff may not elect to measure its damages by the defendant’s avoided costs in lieu of its own losses. View "E.J. Brooks Co. v. Cambridge Security Seals" on Justia Law

At issue was the proper construction of the termination for convenience clause in a contract between the Massachusetts Bay Transportation Authority (MBTA) and A.L. Prime Energy Consultant, Inc. (Prime).The Supreme Judicial court held (1) a State or municipal entity may terminate a procurement contract for its convenience in order to achieve costs savings where, as in this case, the contractual language permits and in the absence of contrary applicable law; and (2) the superior court judge erred in denying MBTA’s motion to dismiss Prime’s complaint on the ground that a public entity may not invoke a termination for convenience clause in a State or municipal public procurement contract in order to secure a lower price. View "A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Transportation Authority" on Justia Law

Smoky II filed a breach of contract suit against the city when it did not receive payment from the city on invoices related to curtailed energy (wind energy that was not actually produced because the producer was directed to reduce production). The Eighth Circuit affirmed the district court's judgment and held that the parties' contract provided that the city could be billed for economic curtailments; the district court did not err in holding the city liable for certain charges that it found to be "timely-billed;" the plain language of the Renewable Energy Purchase Agreement (REPA) supported the district court's interpretation of the meaning of "Emergency Curtailment;" the trial evidence clearly supported the district court's rejection of the city's theory regarding over-allocation of energy; and Smoky II waived the issue of substantial performance. View "Smoky Hills Wind Project II v. Independence, Missouri" on Justia Law

The Supreme Court affirmed in part and reversed and remanded in part the decision of the district court granting summary judgment to Anethesiology Consultants of Cheyenne, LLC (ACC) on its breach of fiduciary duty claim and on Dr. Ronald Stevens’ defamation counterclaim.ACC filed suit against Dr. Stevens and Cassandra Rivers alleging nine causes of action. Dr. Stevens counterclaimed against the members of ACC, alleging several causes of action, including defamation. The district court granted summary judgment for ACC on its first three causes of action and granted summary judgment for the counterclaims defendants on all of Dr. Stevens’ counterclaims. On appeal, the Supreme Court held (1) summary judgment was improperly granted on the fiduciary duties claims; (2) summary judgment was properly granted on the defamation counterclaim; and (3) the trial court erred in excluding certain email evidence. View "Stevens v. Anesthesiology Consultants of Cheyenne, LLC" on Justia Law

TAOS and Intersil were both developing ambient light sensors for electronic devices. Ambient light sensors use a silicon- or other semiconductor-based photodiode that absorbs light and conducts a current. The resulting photocurrent is detected by a sensor, and measurements of the current, a function of the ambient light, are used to adjust the brightness of an electronic screen display. One benefit is better visibility; another is improved battery efficiency. In 2004, the parties confidentially shared technical and financial information during negotiations regarding a possible merger that did not occur. Soon after, Intersil released new sensors with the technical design TAOS had disclosed in the confidential negotiations. TAOS sued for infringement of its patent, and for trade secret misappropriation, breach of contract, and tortious interference with prospective business relations under Texas state law. A jury returned a verdict for TAOS and awarded damages on all four claims. The Federal Circuit affirmed liability for trade secret misappropriation, though on a more limited basis than TAOS presented to the jury, and affirmed liability for infringement of the asserted apparatus claims of the patent, but vacated the monetary awards. The court noted that there was no evidence of Intersil’s independent design of the photodiode array structure. View "Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc." on Justia Law

Plaintiff Slania Enterprises, Inc. appealed a superior court decision to grant defendant Appledore Medical Group, Inc.’s motion to dismiss as time-barred a petition to recover damages stemming from an alleged breach of a commercial real estate lease. In October 2012, Slania, as the lessor, and Appledore, as the lessee, entered into a commercial real estate lease for an initial fixed term that ended on April 30, 2015. However, Appledore never took possession of the premises. Appledore paid rent due through January 2013, but then stopped doing so. In March 2013, Appledore communicated to Slania that it wished to terminate the lease. On April 12, 2013, Slania notified Appledore that it was in default on its rental payments. Appledore did not pay. On April 22, 2013, at the expiration of a 10-day cure period, Slania notified Appledore that, pursuant to Section 13.1(b) of the lease, it was electing, as its remedy upon default, to “keep the lease in effect and recover rent and other charges due [from Appledore] less the amount [Slania] may recover by re[-]letting the premises.” Slania re-let the premises from February 2015 through the end of the initial term of the lease, April 2015, for a lesser monthly amount. Approximately one year later, Slania filed a breach of contract action against Appledore for $82,527.87 in damages, which included rent, late fees, and utility costs due from May 2013 through April 2015. Appledore moved to dismiss, asserting that because the lease was breached no later than April 22, 2013, the claim was barred by a three-year statute of limitations. Slania objected, arguing that the lease was an installment contract, and, therefore, the statute of limitations did not bar a suit to recover payments due within three years of the date the complaint was filed. The trial court granted Appledore’s motion to dismiss, ruling that, because “a real estate lease of the type involved here is not an installment contract as that term is contemplated in the statute of limitations context,” the so-called “installment contract rule,” under which the statute of limitations runs only against each installment when it becomes due, did not apply. The New Hampshire Supreme Court concluded commercial real estate leases did not fall outside the bounds of the installment contract rule, and reversed the trial court’s contrary ruling. In rejecting Slania’s assertion that it could elect to keep the lease in place and sue for breaches that occurred within three years of the date it filed suit, the trial court did not mention anticipatory repudiation or material breach. The Supreme Court found this case raised issues of first impression regarding the interplay of the installment contract rule, a party’s election of contractual remedies, and anticipatory repudiation or anticipatory breach. It did not appear that these issues were fully explored by the trial court; accordingly, the Supreme Court vacated the trial court’s ruling with respect to Slania’s argument that, under the terms of the lease, it could keep the lease in effect and bring an action to recover for breaches that occurred no more than three years before the date it filed this suit. The case was remanded for such further proceedings, as the trial court deemed necessary. View "Slania Enterprises, Inc. v. Appledore Medical Group, Inc." on Justia Law

The Court of Appeals correctly applied the principles of Cincinnati Insurance Co. v. Motorist Mutual Insurance Co., 306 S.W.3d 69 (Ky. 2010), to hold that a contractor’s faulty workmanship on the basement and foundation of an existing structure, which resulted in extensive damage to the entire building, was not an accident triggering coverage as an occurrence under the contractor’s commercial general liability (CGL) insurance policy.The policy provided that the insurer (Insurer) would pay for property damage if it resulted from an “occurrence.” The trial court ruled that Plaintiff could recover from Insurer under the policy for the damage to the structure above the basement level because the damage was an unexpected and unintended consequence of the contractor’s faulty work on the basement. The court of appeals reversed, ruling that none of the structural damage qualified as an accident triggering coverage as an occurrence under Insurer’s CGL policy. The Supreme Court affirmed, holding that the trial court failed to focus on the proper elements from Cincinnati. View "Martin/Elias Properties, LLC v. Acuity, a Mutual Insurance Co." on Justia Law

Plaintiff Rae Weiler sought a declaration that defendants Marcus & Millichap Real Estate Investment Services, Inc., et al., had to either: (1) pay plaintiff’s share of the costs in the previously ordered arbitration; or (2) waive their contractual right to arbitrate the underlying claims and allow them to be tried in the superior court. Plaintiff and her husband allegedly lost more than $2 million at the hands of defendants. She sued for breach of fiduciary duty, negligence and elder abuse claims. After being ordered to arbitration and pursuing her claims in that forum for years, plaintiff asserted she could no longer afford to arbitrate. According to plaintiff, if she had to remain in arbitration and pay half of the arbitration costs (upwards of $100,000) she would be unable to pursue her claims at all. Plaintiff initially sought relief from the arbitrators (pursuant to Roldan v. Callahan & Blaine 219 Cal.App.4th 87 (2013)); they ruled it was outside their jurisdiction, and directed her to the superior court. So, plaintiff filed this declaratory relief action in the superior court, again seeking relief under Roldan. The Court of Appeal concluded, based primarily on Roldan, plaintiff may be entitled to the relief she seeks. However, the superior court granted summary judgment to defendants on the grounds the arbitration provisions were valid and enforceable, and that plaintiff’s claimed inability to pay the anticipated arbitration costs was irrelevant. This, the Court found, was error: “Though the law has great respect for the enforcement of valid arbitration provisions, in some situations those interests must cede to an even greater, unwavering interest on which our country was founded - justice for all.” Consistent with Roldan, and federal and California arbitration statutes, a party’s fundamental right to a forum she or he can afford may outweigh another party’s contractual right to arbitrate. In this case, the Court found triable issues of material fact regarding plaintiff’s present ability to pay her agreed share of the anticipated costs to complete the arbitration. The trial court therefore erred in granting defendants’ motion for summary judgment. View "Weiler v. Marcus & Millichap Real Estate Investment Services" on Justia Law

R.E.E. & C. Capital Management Services, Inc. (buyer) appealed a trial court order granting People’s United Bank’s motion to compel buyer to complete the purchase of a foreclosed commercial property. Buyer raised three arguments: (1) it was not a party to the foreclosure sale, and the court therefore lacked jurisdiction to compel it to purchase the property; (2) the trial court erred in declining to apply the statutory remedy; and, (3) the trial court erred in ordering specific performance because an adequate remedy at law exists. After review, the Vermont Supreme Court determined a high bidder’s successful bid in a judicial sale, and the court’s subsequent confirmation of the foreclosure sale pursuant to 12 V.S.A. 4954(a), renders a buyer a limited party such that the court is authorized to issue orders directing the buyer’s action relative to the property’s purchase. The Court found 12 V.S.A. 4954 (e) did not limit the Bank’s remedies: “the legal right to an agreement’s completion does not arise exclusively from Vermont’s foreclosure statutes.” However, the Supreme Court found that while specific performance was a permissible remedy in some instances, the trial court did not engage in the analysis of whether this case was one of those instances. Therefore, the trial court’s order of specific performance was an abuse of its discretion, leading the Supreme Court to reverse and remand this case for the trial court to perform that analysis. View "People's United Bank, NA v. Alana Provencale, Inc., et al." on Justia Law

R.E.E. & C. Capital Management Services, Inc. (buyer) appealed a trial court order granting People’s United Bank’s motion to compel buyer to complete the purchase of a foreclosed commercial property. Buyer raised three arguments: (1) it was not a party to the foreclosure sale, and the court therefore lacked jurisdiction to compel it to purchase the property; (2) the trial court erred in declining to apply the statutory remedy; and, (3) the trial court erred in ordering specific performance because an adequate remedy at law exists. After review, the Vermont Supreme Court determined a high bidder’s successful bid in a judicial sale, and the court’s subsequent confirmation of the foreclosure sale pursuant to 12 V.S.A. 4954(a), renders a buyer a limited party such that the court is authorized to issue orders directing the buyer’s action relative to the property’s purchase. The Court found 12 V.S.A. 4954 (e) did not limit the Bank’s remedies: “the legal right to an agreement’s completion does not arise exclusively from Vermont’s foreclosure statutes.” However, the Supreme Court found that while specific performance was a permissible remedy in some instances, the trial court did not engage in the analysis of whether this case was one of those instances. Therefore, the trial court’s order of specific performance was an abuse of its discretion, leading the Supreme Court to reverse and remand this case for the trial court to perform that analysis. View "People's United Bank, NA v. Alana Provencale, Inc., et al." on Justia Law