Justia Contracts Opinion Summaries

Brett Jens resigned from his position at Wilbur-Ellis Company, LLC, and subsequently joined a competitor, J.R. Simplot Company. Wilbur-Ellis filed a lawsuit against Jens and Simplot, seeking a preliminary injunction to enforce restrictive covenants in Jens’s employment agreement and to prevent Simplot’s alleged tortious interference with the agreement. The district court denied the motion for a preliminary injunction, concluding that the restrictive covenants were no longer enforceable.The United States District Court for the District of South Dakota reviewed the case and determined that Wilbur-Ellis was unlikely to succeed on the merits of its breach of contract claim against Jens. The court found that the restrictive covenants in Jens’s employment agreement did not survive past the agreement’s expiration date of February 28, 2010. Wilbur-Ellis appealed the denial of the preliminary injunction, arguing that the restrictive covenants were intended to begin when Jens’s employment ended. Simplot cross-appealed, contending that Wilbur-Ellis could not enforce the restrictive covenants because the employer in the agreement was Wilbur-Ellis Air, LLC, not Wilbur-Ellis Company, LLC.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision for abuse of discretion. The appellate court affirmed the district court’s denial of the preliminary injunction, agreeing that the restrictive covenants did not survive the expiration of the employment agreement. The court emphasized that the agreement did not contain a survival clause or any language indicating that the restrictive covenants were intended to extend beyond the termination of the agreement. Consequently, the court concluded that Wilbur-Ellis was unlikely to succeed on the merits, which is the most significant factor in determining whether to issue a preliminary injunction. View "Wilbur-Ellis Company LLC v. Jens" on Justia Law

Under Wild Skies, Inc. (UWS) owned a television show called Under Wild Skies, which was sponsored by the National Rifle Association (NRA). In January 2018, UWS and the NRA entered into agreements for the production and sponsorship of the show, effective through 2025. The NRA was required to make quarterly payments. In July 2019, the NRA requested information about the show as part of an internal review. UWS initially resisted but eventually provided the information. The NRA did not respond and failed to make the September 1, 2019 payment. UWS then sued the NRA for breach of contract and anticipatory breach.The trial court rejected UWS's proposed Jury Instruction 21 on the doctrine of adequate assurance, stating it would cause the court to comment on the evidence. The jury found in favor of UWS on the breach of contract claims but in favor of the NRA on the anticipatory breach claims. UWS's motion to set aside the verdict was denied. The Court of Appeals affirmed the trial court's decision, concluding that the doctrine of adequate assurance is not recognized in Virginia law.The Supreme Court of Virginia reviewed the case and affirmed the Court of Appeals' decision. The court held that the doctrine of adequate assurance, as outlined in the Restatement (Second) of Contracts § 251, is not part of Virginia's common law. The court emphasized that the doctrine is a modern innovation and has not been adopted by Virginia appellate courts or the General Assembly, except in limited circumstances. Consequently, the trial court did not err in refusing Jury Instruction 21, as it was not an accurate statement of Virginia law. The judgment of the Court of Appeals was affirmed. View "Under Wild Skies v. NRA" on Justia Law

A contractor, Flintco, LLC, entered into a subcontract with Total Installation Management Specialists, Inc. (Total) for flooring work on a construction project at Oklahoma State University. Total was required to secure a performance bond from Oklahoma Surety Company (OSC). Flintco later supplemented Total's workforce due to delays and performance issues but did not notify OSC until five weeks after taking over the work.The Tulsa County District Court ruled in favor of Flintco, awarding damages against Total and OSC. OSC appealed, arguing that Flintco failed to meet the performance bond's conditions requiring a declaration of default and reasonable notice before assuming control of the work. The Court of Civil Appeals reversed the district court's judgment, finding that the notice requirement was a mandatory condition precedent, and Flintco's failure to provide timely notice relieved OSC of liability.The Supreme Court of the State of Oklahoma reviewed the case and agreed with the Court of Civil Appeals. The court held that the performance bond's notice requirement constituted a mandatory condition precedent. Flintco's failure to provide timely notice to OSC so it could exercise its performance options under the bond relieved OSC from liability. The court vacated the Court of Civil Appeals' opinion, reversed the district court's judgment, and remanded the case with instructions to enter judgment consistent with this decision. The trial court's judgments against Total were not affected by this decision. View "Flintco, LLC v Total Installation Management Specialists, Inc." on Justia Law

The case involves Billings County and its commissioners, who appealed a district court's decision to grant a preliminary injunction preventing them from entering the property of Sandra Short, David Short, Donald Short, and Sarah Sarbacker. The dispute centers on the County's attempt to use eminent domain to construct a bridge over the Little Missouri River, known as the Little Missouri River Crossing (LMRC). The Shorts had previously settled a lawsuit with the County in 2021, where the County agreed not to pursue eminent domain for the LMRC project. Despite this, a newly elected Board of Commissioners decided to proceed with the project in 2023, leading the Shorts to file a new lawsuit.The United States District Court for the District of North Dakota granted a preliminary injunction in favor of the Shorts, finding that they were likely to succeed on their breach-of-contract claim based on the Settlement Agreement. The court refrained from deciding on the validity of the Settlement Agreement, leaving that issue for the state court to address. The district court also stayed its proceedings, pending the outcome of the state court case, and denied the County's motion to dismiss without prejudice.The United States Court of Appeals for the Eighth Circuit reviewed the case and vacated the preliminary injunction. The appellate court held that the County could not lawfully contract away its power of eminent domain, as it is an essential attribute of sovereignty. The court concluded that the Settlement Agreement was contrary to law and that the Shorts were not likely to succeed on their breach-of-contract claim. The case was remanded for further proceedings consistent with this opinion. View "Short v. Billings County" on Justia Law

Rick Holloway and John Hoskin entered into a Commercial Sales Agreement to purchase the UXU Resort Ranch from Hidden Creek Outfitters, LLC. The sale included a special use permit from the U.S.D.A. Forest Service, which required a bridge inspection and load test before transfer. Due to the inspection's delay, the parties postponed closing and placed $200,000 in escrow for bridge-related expenses. After inspections, Park County Title released the escrow funds to Hidden Creek without H&H's consent, despite unresolved bridge issues.The District Court of Park County found that Hidden Creek and H&H each breached the implied covenant of good faith and fair dealing, and Park County Title breached the escrow agreement by releasing funds without H&H's approval. However, the court determined H&H failed to prove actual damages with sufficient certainty, awarding only nominal damages. The court also denied attorney’s fees to all parties.The Supreme Court of Wyoming reviewed the case and affirmed the district court's findings. The court held that H&H did not prove actual damages because the inspections did not conclusively identify necessary or required repairs. The court also upheld the denial of attorney’s fees, finding no abuse of discretion, as both parties bore some fault in the litigation. The Supreme Court denied any attorney’s fees associated with the appeal. View "Holloway v. Hidden Creek Outfitters, LLC" on Justia Law

Docs of CT and Biotek Services entered into arbitration over a contract dispute in April 2018. The arbitrator found Docs of CT in default regarding liability, and a hearing was scheduled to determine damages. Docs of CT failed to provide required discovery, leading the arbitrator to prohibit them from presenting evidence at the damages hearing. Docs of CT's counsel withdrew, and no new counsel appeared. The arbitrator communicated directly with Docs of CT's representative, Dr. Sidana, who was not allowed to present evidence at the hearing. The arbitrator awarded Biotek over $1.7 million in damages and fees.Docs of CT moved to vacate the arbitration award in superior court, citing arbitrator partiality and misconduct, supported by emails between the arbitrator and Biotek's attorneys. The trial court denied the motion, finding no demonstrated misconduct or partiality. The Court of Appeals affirmed, noting that while the ex parte emails were improper, Docs of CT failed to show resulting prejudice.The Supreme Court of Georgia reviewed the case to determine the standard for assessing prejudice due to ex parte communications in arbitration. The court held that to vacate an arbitral award under OCGA § 9-9-13 (b), the party must show that the conduct in question affected or influenced the arbitration's outcome. Docs of CT did not demonstrate how the ex parte communications prejudiced the outcome, failing to provide evidence or arguments that the arbitrator's decisions would have been different without the ex parte communications. Consequently, the Supreme Court of Georgia affirmed the Court of Appeals' decision, upholding the arbitration award. View "DOCS OF CT, LLC v. BIOTEK SERVICES, LLC" on Justia Law

M.G. received health care coverage through Medi-Cal and was treated by Dameron Hospital Association (Dameron) after an automobile accident. Dameron required M.G. or her representative to sign a conditions of admissions (COA) form, which included an assignment of benefits (AOB) clause. This clause assigned to Dameron the right to direct payment of uninsured and underinsured motorist (UM) benefits from M.G.'s automobile insurance policy with Progressive Casualty Insurance Company (Progressive). Dameron sought payment from Progressive for M.G.'s treatment at rates higher than Medi-Cal would pay. Progressive settled a UM claim with M.G. but did not pay Dameron, leading Dameron to sue Progressive for damages, an injunction, and declaratory relief.The Superior Court of San Joaquin County sustained a demurrer to Dameron's complaint without leave to amend, citing collateral estoppel based on a prior decision in Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (Dameron v. AAA). The court found the COA forms to be contracts of adhesion and the AOBs unenforceable, as it was not within the reasonable expectations of patients that a hospital would collect payments for emergency care directly from their UM benefits.The California Court of Appeal, Third Appellate District, affirmed the trial court's decision. The appellate court held that the COAs were contracts of adhesion and that it was not within the reasonable expectations of Medi-Cal patients that their UM benefits would be assigned to the hospital for payment of medical bills at rates higher than Medi-Cal would pay. The court concluded that the AOBs were unenforceable and did not need to address arguments regarding collateral estoppel or the Knox-Keene Health Care Service Plan Act. The court also denied Progressive's motion to strike exhibits from Dameron's reply brief. View "Dameron Hospital Assn. v. Progressive Casualty Insurance Co." on Justia Law

Carroll Shelby Licensing, Inc. and Carroll Hall Shelby Trust filed a lawsuit against Denice Halicki and her associated entities, alleging that Halicki's copyright claims over the "Eleanor" Ford Mustangs were invalid. Halicki counterclaimed, asserting that Shelby's "GT-500CR" Mustangs infringed her copyright in Eleanor, a collection of Mustangs featured in four films. The dispute also involved claims of breach of a prior settlement agreement between the parties.The United States District Court for the Central District of California held that Eleanor was not entitled to character copyright protection and dismissed Halicki’s breach of contract claim based on the settlement agreement. The court also denied Shelby’s request for a declaration that the GT-500CR did not infringe any of Halicki’s rights.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s summary judgment that Eleanor was not entitled to character copyright protection. The Ninth Circuit applied the Towle test and concluded that Eleanor did not have conceptual qualities, consistent traits, or distinctive elements necessary for character copyright protection. The court also affirmed the district court’s judgment that Shelby did not violate the settlement agreement, which prohibited Shelby from copying only Eleanor’s distinctive hood and inset lights.However, the Ninth Circuit reversed the district court’s denial of declaratory relief and remanded the case for the purpose of issuing the appropriate declaration. The appellate court held that a declaration would clarify and settle the legal relations between Shelby and Halicki and provide Shelby relief from the uncertainty that led to the proceedings. View "CARROLL SHELBY LICENSING, INC. V. HALICKI" on Justia Law

Brian Thomas sued Corbyn Restaurant Development Corp and its employees for personal injuries sustained during an altercation. The parties settled the lawsuit for $475,000, with the payment to be made to Thomas's attorney's client trust account. However, an unknown third party impersonated Thomas's counsel and sent fraudulent wire instructions to the defendants' counsel, who then wired the settlement funds to the imposter's account. When the fraud was discovered, Thomas requested the settlement money, but the defendants refused to pay again.The Superior Court of San Diego County reviewed the case and granted Thomas's application to enforce the settlement agreement. The court applied federal case law, which shifts the risk of loss to the party in the best position to prevent the fraud. The court found that the defendants were in the best position to prevent the fraud and that Thomas bore no comparative fault. Consequently, the court entered judgment in favor of Thomas for $475,000.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. The appellate court affirmed the lower court's judgment, agreeing that the defendants were in the best position to prevent the fraud. The court noted several red flags that should have alerted the defendants to the fraudulent scheme, including conflicting payment instructions, inoperable phone numbers, and spoofed email addresses. The appellate court held that the risk of loss from the imposter's fraudulent diversion of the wire transfer should be borne by the party in the best position to prevent the fraud, which in this case was the defendants. View "Thomas v. Corbyn Restaurant Development Corp." on Justia Law

The plaintiff, Joshua Naranjo, filed a class action lawsuit against Doctors Medical Center of Modesto, Inc., alleging violations of the unfair competition law (UCL) and the Consumers Legal Remedies Act (CLRA) due to the hospital's practice of charging an undisclosed "Evaluation and Management Services Fee" (EMS Fee) to emergency room patients. Naranjo claimed that the fee was charged without prior notification or agreement, making it an unfair, deceptive, and unlawful practice.The Superior Court of Stanislaus County sustained the hospital's demurrer to each cause of action in Naranjo's first amended complaint (FAC) without leave to amend and entered a judgment of dismissal. Naranjo appealed, and the Court of Appeal initially reversed the judgment, finding that Naranjo had stated valid causes of action under the UCL and CLRA and for declaratory relief. The court also directed the trial court to consider any future motion by Naranjo to amend his FAC to state a breach of contract cause of action.The California Supreme Court granted review and subsequently transferred the case back to the Court of Appeal, directing it to reconsider the matter in light of its ruling in Capito v. San Jose Healthcare System, LP. In Capito, the Supreme Court held that hospitals do not have a duty under the UCL or CLRA to disclose EMS fees to emergency room patients prior to treatment beyond what is required by the statutory and regulatory scheme.Upon reconsideration, the Court of Appeal concluded that Naranjo's claims are barred to the extent they are based on an alleged duty to disclose EMS fees prior to treatment. However, the court found that Naranjo had stated a valid contract-based cause of action for declaratory relief and should be allowed to amend his FAC to state causes of action for breach of contract and violations of the UCL and CLRA, subject to specific parameters. The judgment of dismissal was reversed, and the case was remanded for further proceedings. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law