Justia Contracts Opinion Summaries

Thompson founded a consulting firm (WREG) to advise clients in a niche internet infrastructure industry called “colocation.” WREG sometimes, but not always, performed services that required a real estate broker’s license. Because Thompson did not have a broker’s license when he founded WREG, he decided to collaborate with Asimos. Thompson and Asimos adapted a standard form independent contractor agreement typically used by real estate brokers and agents, which turned out to be a poor fit. Disputes arose concerning alleged underpayment of commissions and alleged failure to comply with regulatory requirements governing real estate brokerage. They sued each other on various breach of contract and business tort theories. Thompson obtained a substantial damages award, plus an award of attorney fees. The court of appeal affirmed court’s rejection of all of Asimos’s claims against Thompson and its determination of liability against Asimos for breach of contract, unfair competition, and trademark infringement, but vacated the damages award and remanded for recalculation against Asimos on Thompson’s claims for unfair competition and trademark infringement. View "Thompson v. Asimos" on Justia Law

Keeneland Association, Inc. entered into a contract with Appalachian Racing, LLC to preserve its interest in purchasing Appalachian Racing’s ownership of the racing track Thunder Ridge. Floyd County held bonds that were to be paid upon Keeneland’s purchase of Thunder Ridge. While the contract was pending, Keeneland applied for a license with the Kentucky Horse Racing Commission on behalf of Cumberland Run, LLC to operate another racing track. The Commission issued a public notice that it would review and consider the application. Appalachian Racing, joined by Floyd County, sued the Commission on a theory of aiding and abetting fraud and tortious interference with a prospective advantage. The circuit court issued a restraining order prohibiting the Commission from considering or taking any action on the license application. The Commission then sought a writ of prohibition to prevent the circuit court from enforcing its restraining order. The court of appeals granted the Commission’s request determining that the circuit court violated Kentucky’s separation of powers doctrine in issuing the order. The Supreme Court affirmed, holding that there was nothing in the present suit that authorized the circuit court to prevent the Commission from considering Keeneland’s application. View "Appalachian Racing, LLC v. Commonwealth" on Justia Law

Developer intended to develop real property into single-family residential lots and secured financing through Bank. Insurer provided a surety bond to the Planning and Zoning Commission. Insurer executed three Bond Agreements as surety for Developer. Developer later defaulted in its loan. In lieu of foreclosure, Developer deed the property to Bank’s property management company. Bank transferred the property to another internal holding company. The Commission subsequently complied with Bank’s request for the Commission to call Developer’s bonds and place the proceeds in escrow for the purpose of reimbursing Bank for completion of the necessary infrastructure projects required by Developer’s approved plat. Developer filed a declaratory judgment action alleging that the bonds were not callable and that payment on the bonds would result in Bank receiving an unjust enrichment. The trial court granted summary judgment for Defendants. The Supreme Court affirmed, holding (1) Developer was liable under the bond; and (2) Developer’s claims of error during discovery were unavailing. View "Furlong Development Co. v. Georgetown-Scott County Planning & Zoning Commission" on Justia Law

In 2010, plaintiffs, former employees of establishments that operate in “Fourth Street Live,” a Louisville entertainment district, sued, alleging violations of the Kentucky Wage and Hour Act, KRS 337.385, based on policies regarding off-the-clock work and mandatory tip-pooling. In 2012, the district court granted class certification under Rules 23(a) and 23(b). In 2013, the defendants unsuccessfully moved for reconsideration, citing the Supreme Court’s 2013 "Comcast" decision. In 2014, the parties reached a financial settlement. It took almost another year to reach an agreement regarding non-monetary terms. In March 2015, the parties filed a joint status report declaring that they had reached a settlement agreement and anticipated filing formal settlement documents in April. The defendants then became aware of a February 2015 Kentucky Court of Appeals holding that KRS 337.385 could not support class-action claims. Defendants unsuccessfully moved to stay approval of the settlement. The court granted preliminary approval of the settlement. The Sixth Circuit denied an appeal as untimely because the defendants had not challenged an appealable class-certification order under Rule 23(f). Defendants filed another unsuccessful decertification motion with the district court. The court granted final approval of the settlement as “a binding contract under Kentucky law.” The Sixth Circuit affirmed. A post-settlement change in the law does not alter the binding nature of the parties’ agreement. View "Whitlock v. FSL Management, LLC" on Justia Law

Aventine bought ethanol from Glacial. In 2009, the parties executed “termination agreements” that required Aventine to pay Glacial $898,000 for ethanol received before the specified termination date and required Glacial to pay Aventine $1,250,000 for commissions it would have owed for marketing the ethanol that Aventine had agreed to buy. Glacial agreed to assume Aventine’s leases and began using 473 Union Tank railcars for transporting ethanol. When Aventine declared bankruptcy, Glacial owed it $1,600,000 for commissions and railcar leases; Aventine owed Glacial $900,000 for ethanol purchased from Glacial before the termination date. Glacial refused to pay Aventine anything, while continuing to use the railcars. Bypassing Aventine, Glacial made a deal with Union Tank, without securing a release of Aventine, as required by the termination agreements. Consequently, Aventine was required by its bankruptcy plan to settle the Union Tank debt, using $2.3 million worth of Aventine stock. After the bankruptcy, Aventine sued Glacial. The district court granted Glacial summary judgment, stating that while it would be “unjust” to allow Glacial “to avoid any liability” to Aventine, the latter’s failure to make payments doomed Aventine’s claims because “performance is an essential element of its claim for breach of contract.” The Seventh Circuit reversed, holding that it was error to place all the onus on Glacial, as both parties had defaulted. View "Aventine Renewable Energy, Inc v. Aberdeen Energy, LLC" on Justia Law

Plaintiffs-Appellants James and Karen Feggestad appealed the district court’s order dismissing their complaint against defendants-appellees, Kerzner International Bahamas Limited, Kerzner International Limited, Island Hotel Company Limited, Paradise Island Limited, and Brookfield Asset Management Inc. (collectively, "Kerzner"), on the basis of a valid forum selection clause. The Feggestads made reservations at the Atlantis Resort on Paradise Island, Bahamas (Atlantis) and received a reservation confirmation via their email address. The confirmation contained a section titled "Terms and Conditions" and included a hyperlink advising guests to view the other terms and conditions. This link provided advance notification that any dispute between the guest and the hotel or any affiliated company must be litigated exclusively in the Bahamas and that upon arrival at the Atlantis, the guest would be required to sign a registration form that included a Bahamian forum selection clause. When the Feggestads checked into the hotel, the resort asked them to sign a registration card, which also included an "acknowledgement, agreement and release," which also listed the clause at issue here. Several days after their arrival at the Atlantis, Mr. Feggestad slipped and fell on a wet sidewalk and sustained severe personal injuries. He later sued, and the forum-selection clause became an issue. After reviewing the record, reading the parties briefs and having the benefit of oral argument, the Fifth Circuit affirmed the district court’s dismissal. View "Feggestad v. Kerzner International Bahamas Limited, et al." on Justia Law

S&P Brake Supply, Inc. and STEMCO LP entered into an alleged oral contract for a five-year arrangement to produce and sell remanufactured brakes. S&P later sued STEMCO for breach of contract, among other claims, arguing that STEMCO violated the terms of the parties’ alleged oral contract. STEMCO filed a motion for summary judgment and, when that motion was unsuccessful, a motion for judgment as a matter of law, claiming that the statute of frauds barred the oral contract and that the parol evidence rule precluded evidence of its formation. The district court denied the motions. A jury found for S&P and awarded it damages on the oral agreement. The Supreme Court affirmed, holding that the district court (1) did not err in denying STEMCO’s motion for summary judgment; (2) improperly submitted the question of part performance to the jury but properly submitted S&P’s promissory estoppel claim to the jury; (3) did not prejudicially err in excluding evidence proffered by STEMCO to rebut S&P’s breach of contract and damages claims; and (4) correctly denied costs to STEMCO. View "S & P Brake Supply, Inc. v. Stemco LP" on Justia Law

Prather, age 31, tore his left Achilles tendon playing basketball. He scheduled surgery for July 22. On July 21, he called the surgeon’s office complaining of swelling and that an area of the left calf was sensitive and warm to the touch. The surgery was uneventful and he was discharged from the hospital the same day. He returned to work and was doing well in a follow-up visit to his surgeon on August 2. Four days later he collapsed, went into cardiopulmonary arrest, and died as a result of a blood clot in the injured leg that had traveled to a lung. Prather’s widow applied for benefits under his Sun Life group life insurance policy (29 U.S.C. 1132(a)(1)), which limited coverage to “bodily injuries ... that result directly from an accident and independently of all other causes.” The district court granted Sun Life summary judgment. The Seventh Circuit reversed, noting that deep vein thrombosis and pulmonary embolism are risks of surgery, but that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot. The forensic pathologist who conducted a post-mortem examination of Prather did not attribute his death to the surgery. View "Prather v. Sun Life & Health Insurance Co." on Justia Law

Ryan sued his former employer, NextG, alleging that NextG had breached a promise to grant him lucrative stock options as a condition of his employment. The case went to the jury with an “unclear special verdict form and unhelpful instructions.” The jury sustained two contract-based causes of action, but failed to find the value of the promised options, despite a directive on the verdict form that it do so. Instead it made a finding of the income plaintiff lost by entering the employment relationship, despite a directive obviating such a finding in light of the jury’s rejection of plaintiff’s tort causes of action. The trial court denied a motion for a new trial, and suggesting that declarations were necessary to determine “what the jury actually did.” The court of appeal reversed with instructions to grant a new trial. The court was fully empowered and obligated to make an independent assessment of the adequacy of the verdict, which was unmistakably unsound. If viewed as an award of tort damages, it had no foundation in law. If viewed as an award of contract damages, it had no foundation in fact. View "Ryan v. Crown Castle NG Networks, Inc." on Justia Law

Jackman Construction, Inc. (Jackman) was the successful bidder on a project to install new water lines and a pump station for the City of Green River. Rock Springs Winnelson Co. (Winnelson) supplied materials for the project. Jackman eventually stopped paying Winnelson’s invoices, and Winnelson refused to provide any more materials. Winnelson filed suit against Jackman for its failure to pay invoices totaling $21,705, which included principal and service charges. Jackman counterclaimed for, inter alia, breach of contract and promissory estoppel. The district court granted judgment in favor of Winnelson on the outstanding principal, denied Winnelson’s claim for unpaid service charges, and denied Jackman’s counterclaims. The Supreme Court affirmed, holding (1) the district court erred in refusing to accept the parties’ stipulation as to the amount Jackman paid Winnelson, but the error was harmless; (2) the district court did not err in the remainder of its judgment; and (3) sanctions were not warranted. View "Jackman Construction, Inc. v. Rock Springs Winnelson Co." on Justia Law