Justia Contracts Opinion Summaries

At issue in this case were two provisions of a title insurance policy underwritten by Fidelity National Title Insurance Company. One provision insured against unmarketability of title, and the other insured against a lack of access to property. The owner of the policy, Woody Creek Ventures, LLC, contended that both provisions covered losses it sustained when it learned, after purchasing two parcels of land, that one parcel lacked permanent access. And although Fidelity obtained a 30-year right-of-way grant to that parcel, Woody Creek argued Fidelity failed to cure the lack of access and the title remained unmarketable. After review, the Tenth Circuit agreed with the district court’s conclusions that: (1) the policy did not insure a permanent right of access; (2) the right-of-way cured the lack of access to the parcel; and (3) the lack of permanent access did not render Woody Creek’s title unmarketable. View "Fidelity National Title v. Woody Creek Ventures" on Justia Law

Illumina’s 794 patent, covering DNA assay optimization techniques, issued in 2011. In 2010-2011, Ariosa provided Illumina, as a prospective investor, with information on its efforts to develop a noninvasive prenatal diagnostic test. Seven months after the 794 patent issued, Illumina agreed to supply consumables, hardware, and software to Ariosa for three years, providing Ariosa with a non-exclusive license to Illumina’s “Core IP Rights in Goods,” specifically excluding “Secondary IP Rights … that pertain to the Goods (and use thereof) only with regard to particular field(s) or application(s), and are not common to the Goods in all applications and fields.” The agreement’s arbitration clause excluded “disputes relating to issues of scope, infringement, validity and/or enforceability of any Intellectual Property Rights.” Illumina never indicated that Ariosa needed to license the 794 patent . Ariosa launched the Harmony Prenatal Test, using materials supplied by Illumina. Verinata and Stanford sued, alleging that the Test infringed other patents. Illumina later acquired Verinata and accused Ariosa of breaching the supply agreement by failing to license Secondary Rights. Ariosa filed counterclaims, asserting invalidity and non-infringement; breach of contract; and breach of the covenant of good faith and fair dealing. The district court concluded that the counterclaims were not subject to compulsory arbitration. The Federal Circuit affirmed. The counterclaims depend on the scope determination of licensed intellectual property rights, which is expressly exempt from arbitration. View "Verinata Health, Inc. v. Ariosa Diagnostics, Inc." on Justia Law

Barkley filed suit against Gabriel Brothers, alleging breach of a master services agreement. In the alternative, Barkley alleged that Gabriel Brothers breached a subsequent agreement to pay "actual costs" and Gabriel Brothers was unjustly enriched. The court concluded that the district court did not err in granting summary judgment to Gabriel Brothers on Barkley’s breach-of-the-agreement claim because the alleged February 21, 2013, draft 2013 statement of work was not part of a written contract and the document did not contain the agreement’s incorporation clause. The court also concluded that Barkley’s damages claim was liquidated and that the district court should have awarded prejudgment interest; assuming that the district court’s statement constituted a sua sponte summary judgment on the actual-costs contract claim, the court concluded that Gabriel Brothers was given adequate notice and that the district court therefore did not err in granting partial summary judgment in Barkley's favor on that claim; the court rejected Gabriel Brothers's evidentiary challenges; the district court did not abuse its discretion by denying Gabriel Brothers's motion for judgment as a matter of law where a reasonable jury could find from the evidence that the parties had formed a contract for Gabriel Brothers to pay Barkley's actual costs; a jury could reasonably find that Barkley was entitled to $138,223.52; and, in regard to attorney's fees, the court agreed with the district court that neither party was the prevailing party. Accordingly, the court affirmed in part, reversed in part, and remanded for entry of an award of prejudgment interest. View "Barkley, Inc. v. Gabriel Brothers, Inc." on Justia Law

The Weitz Company, LLC, a general contractor, submitted a bid on a planned nursing facility. Weitz’s bid incorporated the amount of a bid submitted to Weitz by H&S Plumbing and Heating for the plumbing work and the heating, ventilation, and air conditioning parts of the job. The project owner awarded the project to Weitz, but H&S reneged on its bid. Weitz used other subcontractors to complete the project at greater expense. Weitz later sued H&S, claiming breach of contract and promissory estoppel. The court determined that the parties had not formed a contract but enforced H&S’s bid under promissory estoppel, awarding Weitz damages of $292,492. The Supreme Court affirmed the judgment and the amount of damages, holding that the district court did not err by entering a judgment for Weitz on its promissory estoppel claim and correctly measured Weitz’s damages. View "Weitz Co., LLC v. Hands, Inc." on Justia Law

Plaintiffs owned two convertible notes issued by SBAC. After converting the notes into equity and/or cash, plaintiffs filed a breach of contract claim, alleging that SBAC failed to pay the interest owed on the underlying notes following the conversion. Plaintiffs assert two identical causes of action: a breach of contract claim for each set of notes. The district court dismissed the claim with prejudice, holding that there was no reasonable interpretation of the underlying contract that entitled plaintiffs to both the benefits of the conversion and the final interest payment. The court held that SBAC’s refusal to pay plaintiffs the final interest payment did not constitute a failure to perform under the indentures. Accordingly, the court affirmed the district court's judgment. View "Orchard Hill Master Fund v. SBAC Corp." on Justia Law

Sumona Islam entered into an agreement with her employer, Atlantis Casino Resort Spa (Atlantis), to refrain from employment or association with any other gaming establishment within 150 miles for one year following the end of her employment. After Islam resigned from Atlantis and began working as a casino host at Grand Sierra Resort (GSR), she entered altered and copied gaming customers’ information from Atlantis’ computer management system into GSR’s computer management system. GSR used this and other information conveyed by Islam to market to those customers without knowing the information was wrongfully obtained. Atlantis filed a complaint against both Islam and GSR, alleging tort and contract claims. All three parties appealed the district court’s decision. The Supreme Court affirmed, holding that the district court (1) correctly found that the noncompete agreement was unreasonable and unenforceable; (2) properly denied Atlantis’ conversion claim based on Islam’s alteration of the electronic information; and (3) properly found that GSR did not misappropriate Atlantis’s trade secrets. View "Golden Road Motor Inn v. Islam" on Justia Law

In 2001, EQT sold or leased to Journey several oil- and natural-gas-producing properties in Kentucky. Both parties continued to conduct oil and natural-gas operations in the state, but Journey later concluded that EQT was operating on some of the lands that had been conveyed to Journey. Journey sought a declaration that it owned or controlled those properties and that EQT was liable for the oil and natural gas that EQT had removed from those properties. The district court concluded on summary judgment that the parties’ 2001 contract had unambiguously conveyed the disputed properties to Journey. A jury found that EQT’s trespasses on Journey’s lands were not in good faith. The court subsequently required EQT to pay $14,288,432 in damages and transfer certain oil and natural-gas wells to Journey. The Sixth Circuit affirmed, rejecting arguments that the district court erred in construing the parties’ contract, in excluding portions of EQT’s proffered evidence, and in crafting the remedy for EQT’s trespasses. EQT carried out its drilling despite obvious indicators that its ownership of the underlying property was doubtful, establishing an ample basis to conclude that EQT’s trespasses were not in good faith. View "Journey Acquisition-II, L.P. v. EQT Prod.Co." on Justia Law

Kern was injured in a rear-end collision in which the other driver was at fault. Kern filed an underinsured motorist (UIM) claim with Progressive Northern Insurance Company, his insurance provider. Months of settlement negotiations ended in a stalemate. Thereafter, Kern brought an action against Progressive for bad faith, alleging that Progressive’s settlement offers had been intentionally inadequate. Kern also sought unpaid UIM benefits. After a trial, the jury awarded Kern $18,650 in unpaid UIM damages and found that Progressive had not acted in bad faith. Kern appealed, alleging several errors. The Supreme Court affirmed, holding that none of Kern’s alleged errors required reversal and that the trial court did not clearly err by refusing to award attorney’s fees. View "Kern v. Progressive Northern Ins. Co." on Justia Law

CEEG (Shanghai) Solar Science & Technology Co., Ltd. (“CEEG”), a Chinese company, agreed to sell solar energy products to LUMOS, LLC, a U.S. company. After receiving certain shipments, LUMOS filed a warranty claim alleging workmanship defects, and refused to remit the balance due. After two years of "fitful" negotiations, CEEG filed an arbitration proceeding pursuant to the parties’ agreements. Although the parties had communicated exclusively in English to that point, CEEG served LUMOS with a Chinese-language notice of the proceedings, and LUMOS did not immediately realize what the notice was. After the arbitration panel ruled in its favor, CEEG moved for the district court to confirm the award. LUMOS filed a motion to dismiss, arguing that the Chinese-language notice caused it to miss the deadline to participate in appointing the arbitration panel. The district court granted the motion, finding that the notice was not reasonably calculated to apprise LUMOS of the arbitration proceedings. The Tenth Circuit agreed and affirmed. View "CEEG (Shanghai) Solar Science v. Lumos" on Justia Law

Appellant City of Allentown (City) contracted with appellee A. Scott Enterprises, Inc. (ASE), to construct a new public road. After arsenic-contaminated soil was discovered at the worksite, the City suspended work on the project. Following testing, it was determined construction could resume if precautions were taken. Accordingly, the City instructed ASE to obtain revised permits and proceed with the project. However, the existing contract did not include terms regarding the potential for contaminated soil, despite the fact the City was aware there might be contamination prior to entering into the contract, and ASE declined to proceed, explaining it would incur substantial additional costs due to the contaminated soil. The parties made several attempts to reach an agreement in which ASE would continue the construction, but to no avail. Consequently, ASE sued the City to recover its losses on the project, alleged breach of contract, and sought compensation under theories of quantum meruit and unjust enrichment, as well as interest and a statutory penalty and fee award for violations of the prompt pay provisions of the Procurement Code. After a trial, a jury found the City breached its contract with ASE and also withheld payments in bad faith. In this discretionary appeal, the issue this case presented for the Supreme Court's review was whether an award of a statutory penalty and attorney fees under the prompt payment provisions of the Commonwealth’s Procurement Code was mandatory upon a finding of bad faith, irrespective of the statute’s permissive phrasing. The Court held such an award was not mandatory, and therefore reversed the order of the Commonwealth Court and remanded the case to the trial court for further proceedings. View "A. Scott Enterprises v. City of Allentown" on Justia Law