Justia Contracts Opinion Summaries

Lincoln Park’s dire financial condition led Michigan officials to place the city under the purview of an Emergency Manager pursuant to the Local Financial Stability and Choice Act, Mich. Comp. Laws 141.1541. Emergency Manager Coulter, with the approval of Michigan’s Treasurer, issued 10 orders that temporarily replaced Lincoln Park retiree health-care benefits with monthly stipends that retirees could use to purchase individual health-care coverage. Retirees filed sui under 42 U.S.C. 1983, asserting violations of the Contracts Clause, the Due Process Clause, and the Takings Clause. The district court rejected the Treasurer’s motion to dismiss, arguing qualified immunity and Eleventh Amendment immunity. The Sixth Circuit reversed. The court held, as a matter of first impression, that an alleged Contracts Clause violation cannot give rise to a cause of action under section 1983. With respect to other constitutional claims, the claimed property right derives from contract; a state contract action would be sufficient to safeguard the retirees’ contractual property rights. Because the state contract action is available as a remedy for any uncompensated taking the challenges to the constitutionality of Coulter’s orders are not ripe for resolution. As the claims fail on the merits, there is no need to evaluate the alleged immunity defenses. View "Kaminski v. Coulter" on Justia Law

The First Circuit vacated the judgment of the district court granting summary judgment for Defendant on Plaintiff’s breach of contract claim. Plaintiff, a South Carolina resident, brought this diversity suit against Defendant, a Puerto Rico company, alleging that Defendant breached his employment agreement by unilaterally terminating it early. Plaintiff sought damages for unpaid base salary and anticipated commissions on real estate sales. The district court found that Plaintiff’s employment was void because Plaintiff was effecting real estate broker duties without a license under Puerto Rico law. The First Circuit remanded the case for further proceedings, holding that summary judgment was inappropriate where it was disputed whether Defendant was aware that Plaintiff did not have a broker’s license at any relevant time and whether some of the work Plaintiff performed and intended to perform was permissible without a broker’s license. View "Farthing v. Coco Beach Resort Management, LLC" on Justia Law

In this employment dispute, Employee filed an action in superior court alleging an unjust enrichment claim against Employee. Employee moved to compel arbitration under the parties’ employment contract’s arbitration provision and brought a claim for severance pay. The superior court granted the motion. Employer asserted various counterclaims. The arbitrator ruled in favor of Employer, finding that Employer properly rescinded the contract based on Employee’s underlying misrepresentations and omissions. The final arbitration award fully settled all claims and counterclaims submitted. The superior court confirmed the award but also granted Employer leave to amend its complaint to reassert its counterclaims. The superior court granted Employer’s motion to amend its complaint. The Supreme Court reversed, holding that Employer, having not specifically challenged the contract’s arbitration provision, may not amend its complaint and litigate its various claims against Employee in this action. View "Hamblen v. Honorable Ralph Hatch" on Justia Law

The Supreme Court affirmed the dismissal of Plaintiffs’ breach of contract against Defendant but on different grounds than those found by the district court. The district court dismissed the action for lack of personal jurisdiction over Defendant under Nebraska’s long-arm statute and alternatively found that Nebraska was an inconvenient forum. Defendant was a New York corporation with its principal place of business in New York. The Supreme Court held (1) Plaintiffs’ claim that Defendant failed to pay amounts due under a promissory note was moot; and (2) Plaintiffs lacked standing to bring the claim for breach of the reinsurance participation agreement (RPA), which Defendant was alleged to have breached, because Plaintiffs were not parties to the RPA. View "Applied Underwriters, Inc. v. S.E.B. Services of New York, Inc." on Justia Law

In this construction contract dispute, White Flint express Realty Group Limited Partnership, LLLP (White Flint) was entitled to recover attorney’s fees in connection with an action to enforce the contract between White Flint and Bainbridge St. Elmo Bethesda Apartments, LLC (Bainbridge). The court of special appeals affirmed the fee award in favor of White Flint, ruling that the contract provided expressly for attorney’s fees to be recovered in a first-party indemnification action. The Court of Appeals affirmed, holding that the contract contained express provisions that authorized first-party fee shifting, and therefore, White Flint was entitled to attorney’s fees. View "Bainbridge St. Elmo Bethesda Apartments, LLC v. White Flint Express Realty Group Limited Partnership, LLLP" on Justia Law

In 2013, Scheurer applied to work at Richelieu which outsourced its staffing needs to Remedy, a temporary staffing agency. The application form she signed with Remedy for placement with Richelieu contained an arbitration agreement. She was assigned to work for Richelieu, but that assignment ended after some months. About a year later, Remedy placed Scheurer with Fromm. Scheurer alleges that while working at Fromm, her supervisor sexually harassed her and that Fromm took no serious action to address the sexual harassment and instead fired her. Fromm tried to arrange a work situation that would have separated Scheurer from the supervisor, but when that proved “impossible,” Fromm asked Remedy to assign Scheurer to another client. Scheurer filed suit against Fromm, but not Remedy, alleging sexual harassment and retaliation, 42 U.S.C. 2000e‐2(a)(1) & 2000e‐3(a). Fromm argued that arbitration should be compelled under the contract law principle of equitable estoppel and because Fromm was a third‐party beneficiary of the Remedy agreement. The district court denied Fromm’s motion. The Seventh Circuit affirmed. There was no basis for finding that Fromm relied on Scheurer’s arbitration agreement since Fromm did not even know about it and Fromm was not a third‐party beneficiary of Remedy’s agreement with Scheurer. View "Scheurer v. Fromm Family Foods, LLC" on Justia Law

The Supreme Court affirmed its decision in Narayan I, in which the court held that Plaintiffs, a group of individual condominium owners, could not be compelled to arbitrate claims arising from the financial breakdown of a condominium project. Specifically, the court held in Narayan I that the arbitration clause was unenforceable because the terms of the documents at issue were ambiguous with respect to Plaintiffs’ intent to arbitrate and that portions of the arbitration clause were unconscionable. The United States Supreme Court vacated and remanded Narayan I for further consideration in light of its recent decision in DIRECTV, Inc. v. Imburgia, 577 U.S. __ (2015), which held that state law must place arbitration agreements on equal footing with all other contracts. After recognizing this principle, the Hawaii Supreme Court held that that the arbitration clause at issue in the present case was unconscionable under common law contract principles. View "Narayan v. Ritz-Carlton Development Co." on Justia Law

Plaintiff filed suit challenging the constitutionality of Arizona's revocation-on-divorce (ROD) statute after she remained the beneficiary of her ex-husband's IRA account when he died. The Ninth Circuit held that the district court correctly determined that an Arizona state court would disregard the choice-of-law provision in the Plan and instead apply Arizona's ROD statute; the application of the ROD statute was not preempted by federal statutes and regulations governing IRAs; the district courts erred when they denied plaintiff standing; and the California district court did not abuse its discretion in transferring the case to Arizona under 28 U.S.C. 1406(a) on the grounds that it lacked personal jurisdiction over the Estate. Although it disagreed with the district court's holding that plaintiff lacked standing, the panel affirmed the dismissal of the constitutional challenge to the application of Arizona's ROD statute in the allocation of the proceeds of the ex-husband's IRA. View "Lazar v. Kroncke" on Justia Law

Plaintiffs Lenny and Tracy Chapman filed suit against Hiland after an explosion seriously injured Lenny, alleging negligence and loss of consortium. Hiland then filed a third-party complaint against Missouri Basin and B&B, seeking indemnification. In this appeal, Missouri Basin challenged the district court's grant of summary judgment to plaintiffs and the district court's ruling on post-judgment motions. The Eighth Circuit held that honoring the Oklahoma choice-of-law provision in the Hiland Master Service Contract did not violate a fundamental public policy of North Dakota because it was not a motor carrier transportation contract under North Dakota law. The court also held that the district court did not abuse its discretion by granting plaintiffs' Fed. R. Civ. P. 59(e) motion where the district court clarified that by using the language "all amounts that have been paid or will be paid," Missouri Basin intended that it indemnify plaintiffs for the full amount of the settlement, including those amounts paid by Hiland's insurers. Furthermore, the district court did not abuse its discretion by denying Missouri Basin's Rule 59(e) motion. View "Chapman v. Missouri Basin Well Service" on Justia Law

The arbitrator did not manifestly disregard the law and did not exceed his powers in concluding that the dispute in this case could not be arbitrated as a matter of law.Plaintiff Mountain Valley Property, Inc. (MVP) purchased a comprehensive insurance package (the program) from Applied Underwriters, Inc. (AU). As part of the program, MVP entered into a reinsurance participation agreement with Applied Underwriters Captive Risk Assurance Co., Inc. (AUCRA) that contained a mandatory arbitration clause and a Nebraska choice-of-law clause. MVP later filed a complaint against AU, AUCRA, and Applied Risk Services, Inc. (collectively, Applied) alleging breach of contract and various tort claims arising from its participation in the program. The district court referred the claims against AUCRA to arbitration. The arbitrator concluded that the dispute could not be arbitrated as a matter of law due to the McCarran-Ferguson Act and the Nebraska Uniform Arbitration Act. AUCRA unsuccessfully moved to vacate the arbitration award under the FAA and to transfer the case to the District of Nebraska. Applied appealed from the denial of the motion to vacate. The First Circuit affirmed, holding that the arbitrator did not manifestly disregard the law and did not exceed his powers. View "Mountain Valley Property, Inc. v. Applied Risk Services, Inc." on Justia Law