Justia Contracts Opinion Summaries

The First Circuit affirmed the district court’s grant of summary judgment in this action filed by the Town of Westport against Monsanto Company, Solutia, Inc., and Pharmacia Corporation alleging that Phamacia was liable for “property damage” caused by polychlorinated biphenyls (PCBs) contamination at Westport Middle School (WMS). When WMS was built in 1969, the contractor used caulk that contained PCBs. Monsanto did not make the caulk but sold plasticizers, a component of caulk, to the third-party manufacturer who did. On appeal, Westport challenged the entry of judgment against its breach of warranty and negligent marketing claims. The First Circuit affirmed, holding (1) Monsanto did not breach the implied warranty of merchantability because it was not reasonably foreseeable in 1969 that there was a risk PCBs would volatilize from caulk at levels requiring premeditation; and (2) as a matter of Massachusetts state law, a negligent marketing claim cannot be maintained independent of a design defect claim on these facts. View "Town of Westport v. Monsanto Co." on Justia Law

Tension Envelope filed suit against JBM, its former supplier, for selling directly to its customers after promising not to do so. The court affirmed the district court's grant of summary judgment to JBM on the breach of contract claim because no enforceable requirements contract existed between the companies; on the promissory estoppel claim based on the statute of frauds; on the fraudulent misrepresentation claims; on the fraudulent nondisclosure claim where JBM had no duty to disclose its plans to market envelopes; on the tortious interference claim where there was no evidence Tension used improper means to sell to plaintiff's customers; the unfair competition claim; and the misappropriation of trade secrets claim under Missouri law. View "Tension Envelope Corp. v. JBM Envelope Co." on Justia Law

Dawn Osborne appealed a district court's order granting Brown & Saenger, Inc.'s motion to dismiss for improper venue. In 2011, Brown hired Osborne as a sales representative in its Fargo office to sell office supplies to businesses. Brown was headquartered in South Dakota, but operated as a foreign business corporation in North Dakota. Osborne signed yearly employment contracts with Brown. The parties agreed that the 2015 Employment Agreement was the controlling contract for this action, and it was the only one brought before the district court. The two clauses at issue in deciding the motion to dismiss were the "Agreement Not to Compete" ("non-compete clause") and the "Choice of Law/Forum" clauses. In January 2017, Brown terminated Osborne. Osborne sued Brown, alleging retaliation, improper deductions, and breach of contract. Osborne also sought a declaratory judgment declaring the non-compete clause to be void. Osborne moved for a preliminary injunction seeking to prevent Brown from enforcing the covenant-not-to-compete against her. Brown responded to that motion and moved to dismiss the action for improper venue. Brown argued the forum-selection clause in the employment agreement was valid and therefore a North Dakota court was an improper venue. Brown argued that the clause required the case to be heard by the South Dakota court specified in the agreement. The district court, without ruling on the motion for preliminary injunction, agreed with Brown and granted the motion to dismiss. Additionally, Brown sued Osborne in the state circuit court situated in Minnehaha County, South Dakota, seeking a preliminary injunction against Osborne restricting her actions under the non-compete clause. The North Dakota Supreme Court reversed under N.D.C.C. 28-04.1-03(5), concluding the forum-selection clause in the parties' employment agreement violated North Dakota's public policy against non-compete agreements. The non-compete clause was unenforceable under N.D.C.C. 9-08-06 to the extent it limited Osborne from exercising a lawful profession, trade, or business in North Dakota. View "Osborne v. Brown & Saenger, Inc." on Justia Law

ITV and the Company appealed the trial court's grant of a preliminary injunction for the Gurneys and Little Win, LLC. The Gurneys are the minority owners of the Company and formerly served as its CEOs. The Court of Appeal reversed the trial court's order to the extent that it reinstated the Gurneys to their positions managing the day-to-day operations of the Company. The court held that, under the terms of the employment agreements, the Company was entitled to terminate the Gurneys' employment at any time for good cause; the board may make decisions by majority vote, with the exception that some decisions require unanimity; the Gurneys' authority over the day-to-day operations of the Company was an exception to the exception; the exceptions to the exception did not grant the Gurneys lifetime jobs as managers of the Company; and the operating agreement, even when interpreted on its own, did not grant the Gurneys authority to manage the Company’s day-to-day operations indefinitely. Therefore, the court affirmed the portion of the preliminary injunction barring the Company from impinging on their rights as board members. View "ITV Gurney Holdings v. Gurney" on Justia Law

The Supreme Court affirmed the judgment of the circuit court dismissing Appellant’s petition seeking declaratory relief, injunctive relief, and damages against his former employer (Employer). After he was terminated, Appellant filed this action alleging that his employment agreement with Employer was void and seeking damages for allegedly wrongfully withheld commissions. Employer moved to dismiss on the ground that the agreement contained a forum selection clause providing that the sole proper jurisdiction and venue to interpret and enforce the terms of the agreement shall be the district court of Johnson County, Kansas. The circuit court dismissed the petition without prejudice. The Supreme Court affirmed, holding that the circuit court did not err in enforcing the forum selection clause in the agreement and dismissing the petition without prejudice. View "Reed v. Reilly Co., LLC" on Justia Law

Indiana law previously provided that, when school districts needed to reduce their teaching staffs, tenured teachers that were qualified for an available position had a right to be retained over non-tenured teachers. A 2012 amendment eliminated that right and orders school districts to base layoff choices on performance reviews without regard for tenure status. Madison Consolidated Schools relied on the new law to lay off Elliott, a teacher who earned tenure 14 years before the new law took effect, while it retained non-tenured teachers in positions for which Elliott was qualified. Elliott, who had been elected as president of his union, sued, claiming that the amendment violated the Contract Clause when applied to him. The Seventh Circuit affirmed summary judgment in Elliott’s favor. The statute, not the annual contracts, granted Elliott his contractual tenure rights, which became enforceable the year Elliott earned tenure. A decrease in job security necessarily impairs his rights under that contract. The change substantially disrupted teachers’ important and reasonable reliance interests. Improving teacher quality and public-education outcomes are important public interests of the highest order but even important goals and good intentions do not justify this substantial impairment of the tenure contract for already-tenured teachers. View "Elliott v. Board of School Trustees of Madison Consolidated Schools" on Justia Law

Plaintiff and Byron Financial filed suit against each other for breach of contract. The jury found that plaintiff had violated an agreement between the parties and owed Byron Financial $500,000.00. The district court then granted a remittitur, reducing the jury's verdict to $245,510.93 without offering Byron Financial the alternative of a new trial. The Eighth Circuit held that plaintiff failed to preserve for review his claim that defendant was seeking to recover damages for services that fell beyond the scope of the breach-of-contract claim; plaintiff did not object at trial that Byron Financial's evidence concerned matters beyond the scope of its pleadings; the jury's verdict was not motivated by passion and prejudice; the size of the verdict was not so monstrous, shocking, or plainly unjust as to require a new trial; but the district court erred when it ordered remittitur in the amount of $245,510.93. The court held that, under the maximum recovery rule, plaintiff owed Byron Financial $206,395.78 in base commissions, $5,209.80 in renewal commissions, and $39,115.18 in expenses, totaling $250,720.76. View "Wright v. Byron Financial, LLC" on Justia Law

The Liability Reform Act (LRA), Utah Code 78B-5-817 through 823, does not immunize retailers - whether “passive” or not - from products liability claims in cases where the manufacturer is a named party. In so holding, the Supreme Court overruled the court of appeals’ conclusion to the contrary in Sanns v. Butterfield Ford, 94 P.3d 301 (Utah Ct. App. 2004). The court further held that the LRA does not upend longstanding precedent that retailers are strictly liable for breaching their duty not to sell a dangerously defective product.Plaintiffs asserted claims for strict products liability, breach of warranty, and contract rescission against R.C. Willey. The district court dismissed the tort and warranty claims under the “passive retailer” doctrine articulated in Sanns. R.C. Willey stipulated to liability on the rescission claim. The Supreme Court rejected the passive retailer doctrine and thus reversed the dismissal of Plaintiffs’ claims against R.C. Willey for strict products liability and breach of warranty. The court also vacated the district court’s decision declining to award attorney fees to Plaintiffs. View "Bylsma v. R.C. Willey" on Justia Law

Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine ("HVCM"), one of the defendants in the underlying case, petitioned the Alabama Supreme Court for a writ of mandamus to direct the Marshall Circuit Court to vacate its order denying HVCM's motion to dismiss the claims filed against it by Mike Zak d/b/a Hometown Magazine ("Zak") and to direct that court to enter an order dismissing Zak's claims against it. HVCM was a Washington state based "print broker ... for direct mail advertising." Hometown Magazine was a coupon distributor; Mike Zak was its sole proprietor. In August 2013, Zak and HVCM entered into a "Print Brokerage Agreement" and related "Licensing Agreement" whereby Zak was to become an exclusive "Area Publisher" of HVCM's coupon magazine in three specified zones within Alabama. Zak obtained from the City of Arab ("the City") a business license to engage in "publishing industries." Zak ultimately published a single issue of a publication entitled Hometown Magazine. According to HVCM, "[i]nstead of publishing as [HVCM], Zak formed Hometown Magazine and used the [HVCM] trademark when he sold advertising to local business," i.e., allegedly, "Zak solicited ... clients as [HVCM], sold them advertising using the [HVCM] trademark ..., and never published a magazine as [HVCM]." This action resulted in a dispute between Zak and HCVM. As a result of a Facebook post, which Zak maintained "was entirely fallacious and possessed absolutely no truth," Zak allegedly began to receive queries from customers regarding the legality of his activities. Ultimately, according to Zak, his reputation was allegedly so "irreparably tarnished and damaged" that Zak was forced to close his business. Zak sued the City and various fictitiously named defendants. Specifically, Zak sought to recover both compensatory and punitive damages on various theories, including defamation, negligence, and "wantonness/gross negligence." After review of the trial court record, the Supreme Court held the trial court erred in denying HVCM's motion requesting dismissal of Zak's claims on statute-of-limitations grounds; therefore the Court granted HVCM's petition and issued a writ of mandamus directing the Marshall Circuit Court to vacate its January 3, 2017, order denying HVCM's motion and to enter an order dismissing HVCM as a defendant in the underlying action. View "Ex parte Profit Boost Marketing, Inc., d/b/a Hometown Values Coupon Magazine." on Justia Law

The Supreme Court reversed the judgment of the district court decreeing that a residence be repainted from a blue color to an earth tone after the homeowners association sued to enforce restrictive covenants. The Homeowners appealed, arguing that the plain language of the restrictive covenants did not control the color of repainting. The Supreme Court agreed, holding (1) the restrictive covenants at issue were not ambiguous and did not apply to the Homeowners’ repainting of their residence; and (2) the Homeowners did not, therefore, violate any restrictive covenants when they repainted their residence without first seeking and acquiring approval from the developer. View "Estates at Prairie Ridge Homeowners Ass’n v. Korth" on Justia Law