Justia Contracts Opinion Summaries

Plaintiffs are homeowners in centrally-planned neighborhoods in Thompson’s Station, Tennessee. The developers established and controlled owners’ associations for the neighborhoods but have transferred that control to third-party entities not controlled by either the developers or homeowners. While under the developers’ control, the associations each entered into agreements granting Crystal the right to provide telecommunications services to the neighborhoods for 25 years, with an option for Crystal to unilaterally renew for an additional 25 years. The Agreements make Crystal the exclusive agent for homeowners in procuring services from outside providers. Homeowners must pay the associations a monthly assessment fee, which the associations use to pay Crystal, regardless of whether the homeowner uses Crystal's service, and must pay Crystal $1,500 for the cost of constructing telecommunications infrastructure. Crystal uses service easements within the neighborhoods. Crystal had no prior experience in telecommunications-services and contracts with another provider, DirecTV, and charges homeowners a premium above the rate negotiated with DirecTV. Crystal does not provide services outside of the neighborhoods. The plaintiffs claimed that the Agreements constituted self-dealing, unjust enrichment, unconscionability, unlawful tying, and unlawful exclusivity. The Sixth Circuit reversed dismissal, in part, finding plaintiffs’ allegations plausible on their face with respect to the tying claim, but affirmed dismissal of the exclusivity claim. View "Cates v. Crystal Clear Technologies, LLC" on Justia Law

The Santa Cruz Operation, Inc. (Santa Cruz) entered into a business arrangement with International Business Machines Corp. (IBM) to develop a new operating system that would run on a more advanced processor manufactured by Intel Corporation (Intel). The parties signed an agreement memorializing this relationship, calling it “Project Monterey.” Another technology company, The SCO Group, Inc. (SCO), then acquired Santa Cruz’s intellectual property assets and filed this lawsuit for IBM’s alleged misconduct during and immediately after Project Monterey. SCO accused IBM of stealing and improperly using source code developed as part of the Project to strengthen its own operating system, thereby committing the tort of unfair competition by means of misappropriation. The district court awarded summary judgment to IBM on this claim based on the independent tort doctrine, which barred a separate tort action where there was no violation of a duty independent of a party’s contractual obligations. SCO also accused IBM of disclosing Santa Cruz’s proprietary materials to the computer programming community for inclusion in its Linux open-source operating system. In a separate order, finding insufficient evidence of actionable interference by IBM, the district court granted summary judgment in favor of IBM on these tortious interference claims. Finally, after the deadline for amended pleadings in this case, SCO sought leave to add a new claim for copyright infringement based on the allegedly stolen source code from Project Monterey. SCO claimed it had only discovered the essential facts to support this claim in IBM’s most recent discovery disclosures. The district court rejected SCO’s proposed amendment for failure to show good cause. SCO appealed. After review, the Tenth Circuit reversed the district court’s order awarding IBM summary judgment on the misappropriation claim, and affirmed as to all other issues. View "SCO Group v. IBM" on Justia Law

Plaintiff RES-GA McDonough LLC (“RES-GA”) brought a legal malpractice action against Taylor English Duma LLP and two of its attorneys (collectively, “Taylor English”). RES-GA contended that Taylor English failed to timely assert a Uniform Fraudulent Transfer Act claim, thus damaging RES-GA’s ability to satisfy its judgment against a debtor. Taylor English moved to dismiss the complaint, contending that RES-GA had failed to allege a viable underlying cause of action to support its malpractice claim. The trial court agreed and granted Taylor English’s motion to dismiss. Finding no reversible error, the Georgia Supreme Court affirmed. View "RES-GA McDonough, LLC v. Taylor English Duma, LLP" on Justia Law

In this ancillary statutory proceeding in aid of collection on a judgment, the Supreme Court affirmed the ruling of the circuit court awarding summary judgment in favor of Respondents. Respondents were previously awarded a judgment against Employer in a class action alleging violations of the West Virginia Wage Payment and Collection Act. Respondents later caused a suggestion a personal property to be served upon Petitioner in which they sought amounts, obligations, and things of value owed to Employer. Respondents then sought to make Petitioner liable for Respondents’ judgment. The circuit court granted, in part, the motion to make Petitioner liable for Respondents’ judgment and then directed Petitioner to pay Respondents the amount of their judgment against Employer. The Supreme Court affirmed, holding that summary judgment was proper where Petitioner’s contractual obligations to Employer were subject to Respondents’ suggestion and where West Virginia law provides for suggestion upon unmatured debts. View "IPacesetters, LLC v. Douglas" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment to Defendants in this case brought by an independent contractor who sued for damages when he purchased a used tractor from a John Deere implement dealer that proved to be a “lemon.” The contractor brought suit against several parties, including the implement dealer. The court of appeals affirmed the judgment of the district court in all respects but reversed the district court’s grant of summary judgment on the contractor’s express warranty claim against the implement dealer. The Supreme Court vacated in part the decision of the court of appeals, holding that the disclaimers contained in the purchase agreement negated any express warranties allegedly made by the implement dealer. View "Cannon v. Bodensteiner Implement Co." on Justia Law

Baxter sued her former employer, Genworth, for wrongful termination and related causes of action, based on discrimination and retaliation, arising out of her employment. Genworth moved to compel arbitration as part of Genworth’s Resolve Employee Issue Resolution Program, which consists four stages, The trial court concluded, and the court of appeal affirmed, that the arbitration agreement Baxter signed in 2006, as a condition of continued employment, is unconscionable, refusing to sever any provisions. Agreement as a condition of continued employment amounted to “modest procedural unconscionability.” The court concluded that several features of the agreement were substantively unconscionable: default discovery limitations, a prohibition against contacting witnesses, procedural deadlines that effectively shorten the statute of limitations and preclude a meaningful opportunity for a pre-litigation Fair Employment and Housing Act investigation, and accelerated hearing procedures that infringe upon an employee’s ability to adequately present his or her case. The severance of the offending provisions was not an option because the arbitration agreement is permeated by unconscionability. View "Baxter v. Genworth North America Corp." on Justia Law

This case arose out of competition in the market for software used to manage and analyze large and complex datasets. SAS filed suit against WPL, alleging that WPL breached a license agreement for SAS software and violated copyrights on that software. The Fourth Circuit affirmed the district court's judgment finding WPL liable for beach of the license agreement, holding that the contractual terms at issue were unambiguous and that SAS has shown that WPL violated those terms. The court vacated the portion of the district court's ruling on the copyright claim and remanded with instructions to dismiss it as moot. View "SAS Institute, Inc. v. World Programming Ltd." on Justia Law

This appeal stemmed from Brian Pedigo’s suit against Rent-A-Center, Inc., for actual and punitive damages, alleging claims of malicious prosecution, false imprisonment, and intentional infliction of emotional distress. Pedigo visited Rent-A-Center, Inc.’s (RAC) Booneville location, and decided to make the rental-purchase of a back-lit, LED television. He entered a Rental Purchase Agreement (RPA) for the lease. Under the RPA, Pedigo agreed to make specified payments over the course of twenty-three months, in an effort to own the television after all payments were remitted. Incorporated within the RPA was RAC’s standard Consumer Arbitration Agreement (CAA), which outlined those claims covered and those not covered in a dispute between the parties, and the process the parties would engage in should a dispute arise. Pedigo initialed and signed both documents, agreeing to the terms within. By February 2013, Pedigo had failed to fulfill his payment obligations under the RPA and was more than twenty days past-due under the agreement. Finding the contract had been breached, RAC manager Kristopher Robinson sought to recover the television from Pedigo. Through his attempts at recovery, Robinson discovered that the television was pawned shortly after it was leased. After discovering Pedigo had pawned the television, Robinson filed a complaint with the Booneville police in April 2013. Based on this information, an arrest warrant for the theft of rental property was issued for Pedigo on May 1, 2013. He was indicted on October 22, 2013, for defrauding RAC, and was arrested and incarcerated on December 11, 2013. On June 9, 2014, the State retired the October 2013 felony charge, ending the prosecution of the criminal matter. Following his release, Pedigo filed this civil action claiming that RAC filed a false report with the police which resulted in his incarceration–an act that he claims amounted to malicious prosecution. After a preliminary review of the matter, the Circuit Court found in favor of Rent-A-Center, ruling that the parties entered a valid and enforceable arbitration agreement which covered Pedigo’s claims. The Mississippi Supreme Court found, however, such ruling was made in error: though broad, the arbitration agreement did not contemplate Pedigo having to arbitrate his claim that Rent-A-Center maliciously swore out a criminal affidavit, causing his wrongful incarceration. Accordingly, the Court reversed the previous ruling and remanded the case to the circuit court for further proceedings. View "Pedigo v. Rent-A-Center, Inc." on Justia Law

Robbin Taylor filed a statement of charges seeking recall of Black Diamond City council member Patricia Pepper. In November 2015, Pepper defeated opponent Ron Taylor (husband of Robbin Taylor) in an election for Black Diamond City Council in King County. Beginning in January 2016, a chasm developed with Mayor Carol Benson and council members Tamie Deady and Janie Edelman on one side, and a majority of the city council - Pepper, Erika Morgan, and Brian Weber - on the other. After Pepper, Morgan, and Weber passed R-1069, they voted to fire city attorney Carol Morris. Upon passing R-1069, Pepper and a majority of the council made decisions to alter contracts regarding the Master Development Review Team (MDRT) contracts for two large development projects planned in Black Diamond that had been approved by Mayor Benson and former council members. Mayor Benson hired emergency interim city attorney Yvonne Ward. Ward submitted two memoranda to the council, concluding that R-1069 violated the Black Diamond Municipal Code (BDMC) and the Open Public Meetings Act (OPMA), chapter 42.30 RCW. The council had also received advice from prior city attorney Morris and from the city's risk management pool that the resolution could create liability for the city if council members violated the OPMA. Ultimately, the council's decision to enact R-1069 and revisit the MDRT contracts, among other actions, led to a lawsuit: MDRT contractor CCD Black Diamond Partners LLC (Oakpointe) filed suit against the city and council members Pepper, Morgan, and Weber, alleging violations of the OPMA, which has led to litigation and costs for the city. Pepper was a member of council standing committees; allegations were made that Pepper, Morgan, and Weber held secret council and standing committee meetings conducting city business in violation of the OPMA. After approximately a year and a half of tensions, Taylor filed a statement of charges with the King County Elections Division, requesting Pepper's recall. The superior court ruled that four of those charges were factually and legally sufficient to support a recall petition. Pepper appealed. After review, the Washington Supreme Court affirmed the trial court's decision with regard to the first three charges, but reversed with regard to the fourth charge. View "In re Recall of Pepper" on Justia Law

The Tennessee Uniform Trust Code is intended to give trustees broad authority to fulfill their duties as trustee and gives trustees the power to enter into predispute arbitration agreements, so long as doing so is not prohibited under the operative trust instrument.At issue in this interlocutory appeal was whether the signature of the trustee of a trust on an investment/brokerage account agreement that included a provision requiring the arbitration of disputes bound the beneficiary of the trust to the predispute arbitration provision. The Supreme Court held (1) under both the Tennessee Uniform Trust Code and the operative trust instrument, the trustee had authority to enter into the arbitration agreement contained within the account agreement; and (2) applying the principle that a third party who seeks the benefit of a contract must also bear its burdens, the trust beneficiary in this case may be bound to arbitrate claims against the investment broker that sought to enforce the account agreement. The court vacated the trial court order compelling arbitration of all claims and remanded the case to the trial court for a determination as to which, if any, of the claims asserted by the trust beneficiary seek to enforce the account agreement. View "Harvey ex rel. Gladden v. Cumberland Trust & Investment Co." on Justia Law