Justia Contracts Opinion Summaries

Warrior Met Coal, LLC sued Eickhoff Corporation alleging certain pieces of heavy mining equipment Eickhoff had manufactured and sold to Warrior Coal were defective. Eickhoff subsequently moved the trial court to compel Warrior Coal to arbitrate its claims pursuant to an arbitration provision in contracts executed after the sale of the equipment, not the original purchase-order contracts associated with the allegedly defective equipment. The trial court denied the motion to compel arbitration and Eickhoff appeals. The Alabama Supreme Court determined the breach-of-warranty, breach-of-contract, and products-liability claims asserted by Warrior Coal in its action against Eickhoff were at least arguably connected to the master service agreements inasmuch as those contracts addressed Eickhoff's obligation to provide an employee to assist with the maintenance and operation of the longwall shearers (the allegedly defective equipment). Accordingly, because the parties also agreed in the master service agreements that the AAA commercial arbitration rules would govern any arbitration, and because those rules empowered the arbitrator to decide questions of arbitrability, the trial court erred when it instead at least implicitly resolved the arbitrability issue in favor of Warrior Coal in its order denying Eickhoff's motion to compel. That order was accordingly reversed and the case remanded for the trial court to enter an order granting Eickhoff's motion to compel arbitration and staying proceedings in the trial court during the pendency of the arbitration proceedings. View "Eickhoff Corporation v. Warrior Met Coal, LLC" on Justia Law

Plaintiffs filed suit against Cadrillion, Legacy North Carolina, and James Yuhas, alleging claims for breach of contract, conversion, abuse of process, and unfair and deceptive trade practices. The Fourth Circuit held that, by failing to pay the Call Price owed under the Agreement, Cadrillion breached a duty it assumed only as a result of that contract. Therefore, the economic loss rule applied and Cadrillion and Yuhas were entitled to judgment as a matter of law on plaintiffs' conversion claim. Because the court reversed as to the conversion claim, leaving plaintiffs with only a breach of contract claim, the court must also reverse the punitive damages award. Because the court reversed on the conversion claim and remanded for a new trial on contract damages, the results obtained and extent to which plaintiffs prevailed may substantially change. Therefore, the court vacated the district court's grant of attorneys' fees and remanded for the district court to reassess the proper amount of fees. The court also held that the district court did not err in granting judgment as a matter of law in favor of Cadrillion and Yuhas on the abuse of process claim. Finally, the court affirmed the district court's judgment on the abuse of process and unfair and deceptive trade practices claim. View "Legacy Data Access, Inc. v. Cadrillion, LLC" on Justia Law

Nielsen Contracting, Inc. and T&M Framing, Inc. (collectively Nielsen) sued several entities (defendants) alleging these entities fraudulently provided workers' compensation policies to Nielsen that were illegal and contained unconscionable terms. Defendants moved to compel arbitration and stay the litigation under an arbitration provision in one defendant's contract, titled Reinsurance Participation Agreement (RPA). Nielsen opposed the motion, asserting the arbitration provision and the provision's delegation clause were unlawful and void. After briefing and a hearing, the trial court agreed and denied defendants' motion. Defendants appealed, arguing: (1) the arbitrator, and not the court, should decide the validity of the RPA's arbitration agreement under the agreement's delegation clause; and (2) if the court properly determined it was the appropriate entity to decide the validity of the delegation and arbitration provisions, the court erred in concluding these provisions are not enforceable. The Court of Appeal rejected these contentions and affirmed. View "Nielsen Contracting, Inc. v. Applied Underwriters, Inc." on Justia Law

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