Justia Contracts Opinion Summaries

SCA filed suit against Yahoo, alleging breach of contract because Yahoo failed to pay contractual cancellation fees. The court held that SCA's interpretation of the Cancellation Fees Provision of the Contingent Prize Contract was reasonable, and the Contract was not ambiguous because Yahoo failed to provide a reasonable alternate interpretation. Therefore, the court reversed the district court's grant of summary judgment to Yahoo and vacated its award to Yahoo; reversed the district court's denial of summary judgment to SCA and rendered judgment in favor of SCA; and dismissed as moot SCA's appeal of the district court's Federal Rule of Civil Procedure 60(a) order. The court affirmed the district court's judgment as to Yahoo's counterclaims regarding (1) breach of the confidentiality provision in a previous agreement; and (2) breach of the Contract's coverage requirement. View "SCA Promotions, Inc. v. Yahoo!, Inc." on Justia Law

Novae issued Cunningham an insurance policy. While insured by Novae, Cunningham entered into an agreement with AP to provide claims-handling services. In 2004 AP sued Cunningham in Texas state court, alleging misrepresentation and negligently-handled claims, resulting in unwarranted or underpriced policy renewals. While that litigation was ongoing, AP filed for bankruptcy. Novae then denied Cunningham’s request for coverage and remained largely uninvolved in the state litigation because the policy did not obligate it to defend. In 2012 Cunningham and AP’s bankruptcy trustee entered into a settlement, including a stipulation to the entry of a $5.12 million judgment against Cunningham; an assignment to AP of Cunningham’s purported right to recover against Novae; and a covenant not to execute on the judgment against Cunningham. The settlement stated that Illinois law would govern its interpretation. The Texas court entered judgment in accordance with the settlement. APs bankruptcy trustee then sued Novae in Illinois, asserting the assigned rights. The Seventh Circuit affirmed summary judgment for Novae. In Texas “assignments of choses in action that tend to increase and distort litigation” violate public policy and are invalid. The type of settlement at issue is collusive and distorts the adversarial process. View "Hendricks v. Novae Corporate Underwriting, Ltd." on Justia Law

The Supreme Court affirmed the court of appeals reversing the trial court’s order of dismissal that dismissed the attempts of Plaintiff, a former chief of police for the City of Greensboro, to obtain reimbursement from the City for costs he incurred in defending lawsuits brought against him for events that occurred during his tenure as chief of police. The trial judge granted the City’s motion to dismiss, concluding that the City was shielded by the doctrine of governmental immunity and that immunity was not waived. The court of appeals reversed, concluding that Plaintiff set forth allegations that the City waived governmental immunity. The Supreme Court affirmed, holding that Plaintiff’s complaint sufficiently presented allegations that were adequate to raise a waiver of governmental immunity and thus to survive the City’s motion to dismiss. View "Wray v. City of Greensboro" on Justia Law

In 1999, Plaintiff and Defendants entered into an agreement. Defendants never performed any of their obligations under the agreement. For more than a decade, Defendants allegedly continued to be in breach of the agreement. Despite having never received the benefit of its bargain, Plaintiff waited fourteen years before filing this action in 2014. Plaintiff’s complaint alleged breach of contract, fraud, unfair and deceptive trade practices, and unjust enrichment. The trial court granted Defendants’ motions to dismiss, finding that Defendants did not perform their obligations as early as 2000, and therefore, North Carolina’s statutes of limitations barred all of Plaintiff’s claims. The Supreme Court affirmed, holding that because Plaintiff failed to pursue its claims within the statute of limitations period, Plaintiff’s claims were time barred. View "Christenbury Eye Center, P.A. v. Medflow, Inc." on Justia Law

In 2011, Heartland Payment Systems, Inc. (“Heartland”), a credit card processing company, wanted to expand its school operations. To pursue this strategy, Heartland purchased some of the assets of School Link Technologies, Inc. (“SL-Tech”). SL-Tech marketed software products to schools to manage their foodservice operations. Through the purchase of SL-Tech, Heartland acquired WebSMARTT, a software program that allowed schools to monitor school meal nutrition through point of sale, free and reduced meal eligibility tracking, menu planning, nutrient analysis, and recordkeeping. It was intended that WebSMARTT and similar applications collect and use data collected through the programs to model the effect of menu plans on staffing, equipment, and other costs. The parties executed three contracts involving Heartland, SL-Tech, and SLTech’s CEO, Lawrence Goodman to create “inTEAM” the software to be built from the WebSMARTT technology. The contracts contained non-compete, non- solicitation, exclusivity, cross-marketing, and support obligations. The parties quickly lost sight of their post-closing contractual obligations: inTEAM developed the new software; Goodman tried to solicit one of Heartland’s customers. Heartland paired with one of inTEAM’s biggest competitors to submit a bid to provide software to the Texas Department of Agriculture. The disputes eventually found their way to the Court of Chancery through breach of contract claims and counterclaims. After trial, the Court of Chancery found inTEAM did not breach any of its contractual obligations, but Goodman and Heartland had breached certain of theirs. The Delaware Supreme Court reversed the Court of Chancery’s finding that Goodman and inTEAM did not breach their non-compete obligations under the various agreements, but otherwise affirmed the court’s decision. As for the remaining issues, the Court of Chancery properly found that Heartland breached its contractual obligations by collaborating with an inTEAM competitor, and Goodman breached by soliciting a customer of Heartland. The court also did not abuse its discretion when it required an extension of the non-competes and assessed damages against Goodman. The Supreme Court therefore affirmed in part and reversed the Court of Chancery’s decision. View "Heartland Payment Systems, LLC v. InTeam Associates LLC, et al." on Justia Law

Wine & Canvas (W&C) hosts “painting nights.” Patrons, following a teacher’s instructions, create a painting while enjoying wine. W&C operated in Indianapolis, Bloomington, and Oklahoma City. Muylle signed a license agreement, moved to San Francisco, and opened a W&C operation. W&C’s executives were present and taught the first class, worked with Muylle to approve paintings for use, gave Muylle company email addresses, and advertised the San Francisco operation on the W&C website. Disagreements arose. Muylle gave notice to terminate the agreement, changed the business name to “Art Uncorked,” and ceased using the W&C name and marks. W&C alleged trademark infringement, 15 U.S.C. 1051. Muylle’s counterclaims invoked California franchise law, federal trademark cancellation. and Indiana abuse of process law. Plaintiffs failed to meet discovery deadlines, despite being sanctioned three times. The Seventh Circuit affirmed: dismissal of the California law counterclaims; W&C's summary judgment on Muylle’s trademark cancellation counterclaim; Muylle's summary judgment on trademark dilution, sale of counterfeit items, unfair competition, bad faith, tortious conduct, abuse of process, breach of contract, fraud, and a claim under the Indiana Crime Victims Act; and Muylle's partial summary judgment on trademark infringement. Through November 18, 2011, W&C impliedly consented to Muylle’s using the marks. On claims of trademark infringement and false designation of origin (for any use after November 18, 2011), and Muylle’s abuse of process counterclaim, the court affirmed awards to Muylle of $270,000 on his counterclaim and $175,882.68 in fees. View "Wine & Canvas Development, LLC v. Muylle" on Justia Law

Moon performed at the Breathless Men’s Club in Rahway. She rented performance space in the Club and signed an Independent Dancer Rental Agreement, stating: Dancer understands and agrees that he/she is an independent contractor and not an employee of club. Dancer is renting the performance space for an agreed upon fee previously agreed to by Dancer and Club. … In a dispute between Dancer and Club under this Agreement, either may request to resolve the dispute by binding arbitration. THIS MEANS THAT NEITHER PARTY SHALL HAVE THE RIGHT TO LITIGATE SUCH CLAIM IN COURT OR TO HAVE A JURY TRIAL – DISCOVERY AND APPEAL RIGHTS ARE LIMITED IN ARBITRATION. ARBITRATION MUST BE ON AN INDIVIDUAL BASIS. THIS MEANS NEITHER YOU NOR WE MAY JOIN OR CONSOLIDATE CLAIMS IN ARBITRATION, OR LITIGATE IN COURT OR ARBITRATE ANY CLAIMS AS A REPRESENTATIVE OR MEMBER OF A CLASS. Moon sued under the Fair Labor Standards Act, 29 U.S.C. 201; the New Jersey Wage Payment Law; and the state Wage and Hour Law. The district court denied a motion to dismiss and ordered limited discovery on the arbitration issue. After discovery, the court granted the Club summary judgment. The Third Circuit reversed. Moon’s claims do not arise out of the contract itself; the arbitration clause does not cover Moon’s statutory wage-and-hour claims. View "Moon v. Breathless Inc" on Justia Law

The Oak Ridge, Tennessee uranium-enrichment facilities for the Manhattan Project, the World War II effort to build the first atomic bomb, have been inactive since the mid-1980s. The Department of Energy has worked to clean up the hazardous waste and hired Bechtel, a global engineering and construction firm. Bechtel hired Eagle to help decontaminate the complex, which required the demolition of buildings and equipment across the 2,200-acre complex and removal of radioactive nuclear waste, followed by decontamination of the soil and groundwater to make the site safe for redevelopment. Eagle’s work proved significantly more challenging and expensive than either party anticipated. Their contract allowed Bechtel to make changes; if those changes caused Eagle’s costs to increase, Bechtel was to make equitable adjustments in price and time for performance. Eight years after completing its work, Eagle filed suit, seeking compensation for its extra work and for excess waste that Eagle removed. The district court awarded Eagle the full amount of each request, plus interest and attorney’s fees. The Sixth Circuit affirmed the award of damages and attorney’s fees, but remanded so that the court can recalculate the interest to which Eagle is entitled under the Tennessee Prompt Pay Act. View "Eagle Supply & Manufacturing L.P. v. Bechtel Jacobs Co." on Justia Law

Plaintiff filed suit against defendants, alleging claims of breach of fiduciary duty, breach of contract, and negligence. The Eighth Circuit affirmed the district court's motion to dismiss the breach of contract and negligence claims because plaintiff failed to plead sufficient facts to state a plausible claim for breach of contract or negligence. In this case, the language of the policy was unambiguous in describing what the parties intended their contract to be—the policy itself and the written application for the policy. Because the loan forms plaintiff relied on to support the breach of contract claim were not part of the insurance policy, the claim failed. Likewise, the negligence claim failed because it relied on the loan forms being part of the insurance contract. View "Torti v. John Hancock Life Insurance Co." on Justia Law

The weekend before Defendant’s trial, Defendant and the State entered into a plea agreement. Before Defendant entered his plea, however, the State rescinded its offer because Defendant’s alleged victim disapproved of the agreement. At Defendant’s request, the court granted a continuance and rescheduled the jury trial. Defendant subsequently filed a motion to enforce the plea agreement, asserting that he had detrimentally relied on the State’s offer. The district court rejected the motion, and Defendant sought interlocutory review. The Supreme Court affirmed the district court’s order denying enforcement of the plea agreement, holding (1) the State may withdraw from a plea bargain agreement at any time prior to the actual entry of a defendant’s guilty plea or other action by a defendant constituting detrimental reliance on the agreement; and (2) Defendant did not perform under the terms of the plea agreement before the State rescinded its offer and failed to show that he detrimentally relied on the State’s offer. View "State v. Francis" on Justia Law