Justia Contracts Opinion Summaries

The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals reversing the judgment of the trial court in this action arising from a construction dispute.Two subcontractors - the steel fabricator and the steel erector and installer - on a condominium project brought suit against the project owner, developer, and general contractor after the subcontractors proceeded with extra work outside the scope of the original bid documents but were never paid for either that work or the retainage amount owed under the steel fabricator’s contract with the general contractor. The circuit court entered judgment in favor of Plaintiff for the cost of the extra work and unpaid retainage. The general contractor prevailed on its indemnification cross-claim against the other two defendants and on the negligence cross-claim asserted against it by the other two defendants. The court of appeals reversed. The Supreme Court held that the court of appeals (1) erred by reversing the trial court’s judgment against the owner for unjust enrichment; (2) properly reversed the trial court’s judgment against the general contractor for breach of contract; and (3) properly found that the trial court should have instructed the jury on the owner and developer’s breach of contract claim but erred in finding the negligence instruction deficient. View "Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC" on Justia Law

At issue was whether, during the sale of JB&A, Inc., a government contracting firm, to MCR Federal, LLC, another government contractor, MCR’s false statement of that a representation and warranty in the contract remained true was a fraudulent act independent of the contractual relationship such that JB&A properly brought actions for both fraud and breach of contract. The trial court held MCR liable for breach of contract and constructive fraud and awarded $12 million in compensatory damages. The Supreme Court affirmed in part and reversed in part, holding (1) JB&A did not bring proper claims for actual or constructive fraud; (2) the evidence presented at trial established that MCR’s breach of contract caused JB&A substantial damages; (3) the trial court properly granted compensatory damages of $12 million and pre-judgment interest of $3.5 million; and (4) the trial court erred in awarding JB&A attorney’s fees in the amount of $1.9 million for prevailing on its claim of constructive fraud. View "MCR Federal, LLC v. JB&A, Inc." on Justia Law

Plaintiff Simply Wireless, Inc. appealed a district court order dismissing its complaint against Defendants T-Mobile US, Inc. and T-Mobile USA, Inc. (collectively, “T-Mobile”). Upon determining that the parties’ business relationship was governed by a written agreement containing a mandatory arbitration clause, the district court went on to determine that the scope of that arbitration clause included all of Simply Wireless’s claims against T-Mobile. After review, the Fourth Circuit concluded the district court erred in determining the scope of the parties’ arbitration clause, as the parties "clearly and unmistakably" intended for an arbitrator to resolve all arbitrability disputes. Nonetheless, because the parties intended for an arbitrator to resolve all arbitrability disputes, the district court’s ultimate dismissal of Simply Wireless’s complaint in favor of arbitration was proper. Accordingly, the Fourth Circuit affirmed the district court’s dismissal, but on alternate grounds. View "Simply Wireless, Inc. v. T-Mobile US, Inc." on Justia Law

The Supreme Court affirmed the order of the district court compelling arbitration and its judgment confirming the arbitration award.A few months after beginning work for Home Savings of America (HSOA), Plaintiff signed an employment agreement containing a provision that required the parties to submit any disputes to binding arbitration. After HSOA terminated Plaintiff’s employment, Plaintiff sued HSOA, its CEO and Board chair Dirk Adams, and Home Savings Bancorp (HSBC), which owned all of HSOA’s stock, alleging breach of contract, wrongful discharge, and fraud. The district court ordered the parties to proceed to binding arbitration. The arbitrator issued an award in favor of HSBC and Adams. The district court confirmed the award. The Supreme Court affirmed both orders, holding (1) the parties had a valid agreement to arbitrate, and therefore, the district court properly referred Plaintiff’s claims to arbitration; and (2) the district court did not abuse its discretion in confirming the arbitration award because the court had jurisdiction to hear Plaintiff’s motion to vacate the arbitration award, and the arbitrator did not manifestly disregard the law. View "Tedesco v. Home Savings Bancorp, Inc." on Justia Law

The insurance policy in question in this case was issued by petitioner Admiral Insurance Company (Admiral) to the real party in interest, A Perfect Match, Incorporated (Perfect Match), a company that "match[es] surrogates and egg donors with infertile families." On the first page of the policy Admiral promised to provide coverage for potential claims that Perfect Match knew or reasonably should have known about, but failed to disclose. In this case, prior to purchasing the Admiral policy, there was no question Perfect Match knew about a potential claim former clients Monica Ghersi and Carlos Arango intended to file arising from the birth of their daughter with a rare form of eye cancer. A lawyer representing Ghersi and Arango sent a letter to Perfect Match in June 2012 giving notice of their intent to file a complaint alleging professional negligence. After consulting with its insurance broker, Perfect Match made the decision not to disclose the potential Ghersi/Arango claim to its current insurer out of concern it would result in a higher premium. When it applied for the Admiral policy in October 2012, Perfect Match likewise did not mention the potential Ghersi/Arango claim. But once the Ghersi/Arango complaint was filed and ultimately served in March 2013, Perfect Match claimed potential coverage under the Admiral policy based on a "professional incident" and asserted its right to a defense. Admiral denied coverage and refused to defend, citing the policy language that excluded coverage for claims the insured reasonably should have foreseen prior to inception of the policy. Perfect Match then sued alleging breach of contract and bad faith. The Court of Appeal found no material factual disputes in this case: Admiral was entitled to insist that Perfect Match disclose all potential claims of which it was, or should have been, aware; it could and did exclude from coverage any such claim that was not disclosed. The superior court erred in failing to grant summary judgment in favor of Admiral. Accordingly, the Court issued a writ of mandate directing the superior court to vacate its order denying Admiral's motion for summary judgment and instead enter an order granting the motion. View "Admiral Ins. Co. v. Superior Court" on Justia Law

In these appeals stemming from four residential mortgage-backed securities transactions, the Court of Appeals held that claims for general contract damages based on alleged breaches of a “no untrue statement” provision in mortgage loan purchase agreements cannot withstand a motion to dismiss based on a contract provision mandating cure of the breaches or repurchase of the loans as the sole remedy for breaches of mortgage loan-specific representations and warranties. Specifically, the court held that, inasmuch as the claims for general contract damages at issue were grounded in alleged breaches of the mortgage loan-specific representations and warranties to which the limited remedy fashioned by the sophisticated parties applies, Plaintiffs’ claims for general contract damages should be dismissed. View "Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc." on Justia Law

The First Circuit affirmed the district court’s grant of summary judgment in this action filed by the Town of Westport against Monsanto Company, Solutia, Inc., and Pharmacia Corporation alleging that Phamacia was liable for “property damage” caused by polychlorinated biphenyls (PCBs) contamination at Westport Middle School (WMS). When WMS was built in 1969, the contractor used caulk that contained PCBs. Monsanto did not make the caulk but sold plasticizers, a component of caulk, to the third-party manufacturer who did. On appeal, Westport challenged the entry of judgment against its breach of warranty and negligent marketing claims. The First Circuit affirmed, holding (1) Monsanto did not breach the implied warranty of merchantability because it was not reasonably foreseeable in 1969 that there was a risk PCBs would volatilize from caulk at levels requiring premeditation; and (2) as a matter of Massachusetts state law, a negligent marketing claim cannot be maintained independent of a design defect claim on these facts. View "Town of Westport v. Monsanto Co." on Justia Law

Tension Envelope filed suit against JBM, its former supplier, for selling directly to its customers after promising not to do so. The court affirmed the district court's grant of summary judgment to JBM on the breach of contract claim because no enforceable requirements contract existed between the companies; on the promissory estoppel claim based on the statute of frauds; on the fraudulent misrepresentation claims; on the fraudulent nondisclosure claim where JBM had no duty to disclose its plans to market envelopes; on the tortious interference claim where there was no evidence Tension used improper means to sell to plaintiff's customers; the unfair competition claim; and the misappropriation of trade secrets claim under Missouri law. View "Tension Envelope Corp. v. JBM Envelope Co." on Justia Law

Dawn Osborne appealed a district court's order granting Brown & Saenger, Inc.'s motion to dismiss for improper venue. In 2011, Brown hired Osborne as a sales representative in its Fargo office to sell office supplies to businesses. Brown was headquartered in South Dakota, but operated as a foreign business corporation in North Dakota. Osborne signed yearly employment contracts with Brown. The parties agreed that the 2015 Employment Agreement was the controlling contract for this action, and it was the only one brought before the district court. The two clauses at issue in deciding the motion to dismiss were the "Agreement Not to Compete" ("non-compete clause") and the "Choice of Law/Forum" clauses. In January 2017, Brown terminated Osborne. Osborne sued Brown, alleging retaliation, improper deductions, and breach of contract. Osborne also sought a declaratory judgment declaring the non-compete clause to be void. Osborne moved for a preliminary injunction seeking to prevent Brown from enforcing the covenant-not-to-compete against her. Brown responded to that motion and moved to dismiss the action for improper venue. Brown argued the forum-selection clause in the employment agreement was valid and therefore a North Dakota court was an improper venue. Brown argued that the clause required the case to be heard by the South Dakota court specified in the agreement. The district court, without ruling on the motion for preliminary injunction, agreed with Brown and granted the motion to dismiss. Additionally, Brown sued Osborne in the state circuit court situated in Minnehaha County, South Dakota, seeking a preliminary injunction against Osborne restricting her actions under the non-compete clause. The North Dakota Supreme Court reversed under N.D.C.C. 28-04.1-03(5), concluding the forum-selection clause in the parties' employment agreement violated North Dakota's public policy against non-compete agreements. The non-compete clause was unenforceable under N.D.C.C. 9-08-06 to the extent it limited Osborne from exercising a lawful profession, trade, or business in North Dakota. View "Osborne v. Brown & Saenger, Inc." on Justia Law

ITV and the Company appealed the trial court's grant of a preliminary injunction for the Gurneys and Little Win, LLC. The Gurneys are the minority owners of the Company and formerly served as its CEOs. The Court of Appeal reversed the trial court's order to the extent that it reinstated the Gurneys to their positions managing the day-to-day operations of the Company. The court held that, under the terms of the employment agreements, the Company was entitled to terminate the Gurneys' employment at any time for good cause; the board may make decisions by majority vote, with the exception that some decisions require unanimity; the Gurneys' authority over the day-to-day operations of the Company was an exception to the exception; the exceptions to the exception did not grant the Gurneys lifetime jobs as managers of the Company; and the operating agreement, even when interpreted on its own, did not grant the Gurneys authority to manage the Company’s day-to-day operations indefinitely. Therefore, the court affirmed the portion of the preliminary injunction barring the Company from impinging on their rights as board members. View "ITV Gurney Holdings v. Gurney" on Justia Law