Justia Contracts Opinion Summaries

Devon acquired the rights to distribute robotic medical devices, CytoCare and i.v. Station, from Robotics. DeViedma, Robotics's general counsel, negotiated the contracts. Each contained an arbitration clause. Robotics later agreed to provide management consulting services through DeViedma. DeViedma allegedly obstructed a possible sub-licensing contract with McKesson; Devon failed to make franchise payments, leading Robotics to draw down a $5 million line of credit from Itochu, guaranteed by Devon. Itochu eventually sued Devon. The parties terminated the management consulting services. Robotics terminated Devon's CytoCare contract and entered into an agreement with McKesson. Robotics also alleged breaches of the i.v. Station agreement. DeViedma e-mailed hospital customers telling them that Devon faced financial difficulties and lacked staff qualified to manage i.v. Station installations. Devon sued DeViedma and McKesson, claiming breach of fiduciary duty, tortious interference with current and prospective contractual relations, defamation, and conspiracy. The court rejected a motion to dismiss in favor of arbitration. DeViedma did not appeal that order. Extensive litigation followed. DeViedma later moved for summary judgment on the remaining claims for breach of fiduciary duty and tortious interference with contractual relations. The court rejected his arguments in favor of arbitration. The Third Circuit dismissed DeViedma’s interlocutory appeal, rejecting an argument that the denial of summary judgment was an appealable order under the Federal Arbitration Act, 9 U.S.C. 16(a)(1)(C). View "Devon Robotics LLC v. DeViedma" on Justia Law

Best designs and markets exit signs and emergency lighting. Pace manufactured products to Best’s specifications. Best’s founder taught Pace how to manufacture the necessary tooling. There was no contract prohibiting Pace from competing with Best. By 2004, Best was aware that Pace was selling products identical to those it made for Best to Best’s established customers. Several other problems arose between the companies. When they ended the relationship, Pace was in possession of all of the tooling used to manufacture Best’s products and the cloned products, and Best owed Pace almost $900,000 for products delivered. Pace filed a breach of contract suit. Best requested a setoff of damages for breach of warranty and counterclaimed for breach of contract, tortious interference, misappropriation of trade secrets, conversion, and fraud. Pace claimed that Best had misappropriated Pace’s trade secrets and had tortiously interfered with Pace’s contracts. The district court found that Best had breached its contractual obligations by failing to pay, but that Pace was liable for breach of warranties, breach of contract, tortious interference, misappropriation of trade secrets, conversion, and false designation of origin and false advertising under the Lanham Act. The Sixth Circuit affirmed that Pace is liable for breach of contract and tortious interference, but reversed or vacated as to the trade secrets, Lanham Act, conversion, and warranties claims. View "Kehoe Component Sales Inc. v. Best Lighting Prods., Inc." on Justia Law

In 2009, Carol McClue was involved in a serious car accident. At the time of the accident, Carol had underinsured motorist (UIM) insurance coverage through Safeco Insurance Company of Illinois. In 2011, Carol was diagnosed with bulbar ALS. In 2013, Carol died from the illness. After the diagnosis, Dan McClue, Carol’s husband, submitted claims to Safeco for UIM benefits for damages associated with Carol’s ALS. Safeco denied the claims. Dan subsequently filed suit against Safeco, asserting that Safeco breached the insurance contract by failing to provide UIM benefits for Carol’s ALS. Before trial, the district court granted Safeco’s motions in limine to exclude expert testimony from two doctors - Dr. John Sabow and Dr. Decontee Jimmeh-Fletcher. The district court subsequently granted summary judgment to Safeco on the grounds that, without the expert testimony, Dan did not have admissible evidence to establish that the car accident caused Carol’s ALS. The Supreme Court (1) affirmed the district court’s ruling barring Dan from using Dr. Jimmeh-Fletcher’s testimony to establish causation in this case; but (2) reversed the district court’s ruling that Dr. Sabow was not qualified to present expert testimony during trial. View "McClue v. Safeco Ins. Co. of Ill." on Justia Law

At dispute in this case was a home inspection Don Hall performed of a home purchased by Gregory Hall. Gregory brought this action against Don, the seller of the home, and two real estate brokers, alleging that Defendants failed to disclose material defects in the property. The district court entered summary judgment in favor of all defendants with the exception of Don on the grounds that Gregory received a disclosure statement and had imputed knowledge of the defects. The district court entered default judgment against Don after determining that Don had not filed a sufficient answer to the complaint. After a writ of execution was issued, Don requested that the default judgment be set aside and later sought to claim exemptions. The district court denied the requests. The Supreme Court reversed the order of the district court striking Don’s motion to set aside default judgment, holding that, under the circumstances of this case and in the interests of justice, Don was entitled to relief from judgment. Remanded. View "Hall v. Hall" on Justia Law

The predecessor in interest to dck Worldwide Holdings, Inc. (together, Worldwide) entered into a contract with Spanish Peaks Lodge, LLC to serve as the general contractor for for a construction project. Spanish Peaks procured financing with the predecessor in interest to CH SP Acquisition LLC (together, CHSP), and CHSP took a mortgage against Spanish Peaks’ development property. When Spanish Peaks breached the parties’ contract Worldwide filed a construction lien claiming the unpaid portion of the contractor’s fee and the amount Worldwide owed to a subcontractor, Allied Steel, Inc. Allied Steel also filed a construction lien for unpaid services and materials. Allied Steel, Spanish Peaks, and Worldwide entered into a settlement agreement, and CHSP and Worldwide reached a partial settlement under which Worldwide released all of its claims against CHSP except for those at issue on appeal. The district court concluded that the unpaid portion of the contractor’s fee and the subcontractor’s fee were both secured by Worldwide in the amount of $5,476,277 and $661,767, respectively, and lienable as a matter of law. The Supreme Court reversed, holding that the district court (1) erred by concluding that the unpaid portion of the contractor’s fee was lienable; and (2) erred by concluding that the subcontractor’s fee remained alienable after Allied Steel settled its claim. View "dck Worldwide Holdings Inc. v. CH SP Acquisition LLC" on Justia Law

Before he died, John Markey entered into a contract with his second wife, Frances, to make and not revoke a mutual will providing that, upon the death of whomever died later, the couple’s estate would be divided equally between John’s son, David, and Frances’s granddaughter. After John died, Frances breached the contract, instead leaving everything to her own children. Approximately nine months after Frances’s death, David filed suit to enforce the contract. The trial court granted summary judgment in favor of Defendants, concluding that a breach of contract regarding mutual wills is neither a “claim” in probate nor a will contest and is therefore subject to the three-month statute of limitations for suits challenging the distribution pursuant to a probated will. The Supreme Court reversed, holding that the plain language of the statutory definition of “claim” under the Probate Code includes an action for breach of a contract to make and not revoke a will. Remanded to consider the timeliness of David’s claim, considered under the Probate Code. View "Markey v. Estate of Markey" on Justia Law

Libby O’Brien Kingsley & Champion, LLC (LOKC) filed a complaint for breach of contract against Sharon Blanchard and simultaneously filed a motion for approval of attachment and trustee process against Blanchard’s property. Blanchard objected to LOKC’s motion but did include a supporting affidavit or other supporting documentation. The district court determined that Blanchard had waived her objection to the motion and considered the merits of the attachment motion without a hearing. The court then ordered attachment and trustee process against Blanchard’s real and personal property. The Supreme Judicial Court affirmed, holding that the district court’s findings in support of attachment and trustee process were supported by competent evidence in the motion record. View "Kingsley v. Blanchard" on Justia Law

Falco sold insurance for Farmers, under a 1990 Agent Agreement, which provided that Falco would be paid Contract Value upon termination of the Agreement. As a Farmers agent, Falco was entitled to borrow money from the Credit Union. In 2006, Falco obtained a $28,578.00 business loan and assigned his interest in his Agreement receivables—including Contract Value—as security. The loan document gave the Credit Union authority to demand payments that Farmers owed Falco; it could tender Falco’s resignation to levy on Falco’s Contract Value. Falco failed to make payments and filed a Chapter 7 bankruptcy petition, listing the loan on his schedules. Falco received a discharge in February 2011, covering his liability under his Credit Union loan. In April 2011, the Credit Union notified Farmers that Falco had defaulted and exercised the power of attorney to terminate his Agent Agreement. Farmers notified Falco that the resignation had been accepted, calculated Contract Value as $104,323.30, paid the Credit Union $29,180.92, and paid the balance to Falco. The Eighth Circuit affirmed summary judgment in favor of defendants, finding that the Credit Union’s secured interest survived bankruptcy; it did not tortuously interfere with Falco’s Agreement because it had a legal right to terminate the Agreement; and Falco failed to show an underlying wrongful act or intentional tort as required under civil conspiracy. View "Falco v. Farmers Ins. Grp." on Justia Law

Falco sold insurance for Farmers, under a 1990 Agent Agreement, which provided that Falco would be paid Contract Value upon termination of the Agreement. As a Farmers agent, Falco was entitled to borrow money from the Credit Union. In 2006, Falco obtained a $28,578.00 business loan and assigned his interest in his Agreement receivables—including Contract Value—as security. The loan document gave the Credit Union authority to demand payments that Farmers owed Falco; it could tender Falco’s resignation to levy on Falco’s Contract Value. Falco failed to make payments and filed a Chapter 7 bankruptcy petition, listing the loan on his schedules. Falco received a discharge in February 2011, covering his liability under his Credit Union loan. In April 2011, the Credit Union notified Farmers that Falco had defaulted and exercised the power of attorney to terminate his Agent Agreement. Farmers notified Falco that the resignation had been accepted, calculated Contract Value as $104,323.30, paid the Credit Union $29,180.92, and paid the balance to Falco. The Eighth Circuit affirmed summary judgment in favor of defendants, finding that the Credit Union’s secured interest survived bankruptcy; it did not tortuously interfere with Falco’s Agreement because it had a legal right to terminate the Agreement; and Falco failed to show an underlying wrongful act or intentional tort as required under civil conspiracy. View "Falco v. Farmers Ins. Grp." on Justia Law

Labonte Drywall Company signed a statewide agreement with Union, which allowed Labonte Drywall to hire Union carpenters for its business. The agreement required Labonte Drywall to allow an audit of its records. After Labonte Drywall did not respond to certain audit requests, Plaintiffs, the trustees for a group of Union-related benefits funds and their collection agency, filed this action against Labonte Drywall under ERISA and the Labor Management Relations Act, seeking enforcement of the agreement. After a bench trial, the district court found that Labonte Drywall had terminated the agreement, and therefore, Plaintiffs had no legal right to conduct the requested audit. The First Circuit affirmed, holding (1) the district court did not clearly err in finding that the Union had actual notice of Labonte Drywall’s letter terminating its obligations under the agreement; and (2) Labonte Drywall had no duty to submit to Plaintiffs’ audit requests. View "New England Carpenters Central v. Labonte Drywall Co., Inc." on Justia Law