Justia Contracts Opinion Summaries

Jang, a doctor and inventor, sued BSC, the company to which Jang assigned his coronary stent patents, for breach of the patent assignment agreement, which required BSC to share profits from the patents with Jang, including any damages it recovers from third-party infringers. In 2010, BSC settled a claim against Cordis for infringement in combination with anther claim that Cordis had against BSC. BSC made a payment to Cordis, and the parties exchanged several patent licenses. BSC then denied that it had recovered any damages that it was obligated to share with Jang. The Third Circuit reversed judgment on the pleadings in favor of BSC. Two of Jang’s claims are sufficient to survive judgment on the pleadings: that BSC breached the contract because the cash offset qualifies as a “recovery of damages” and that BSC violated the implied covenant of good faith and fair dealing by structuring a settlement to thwart the agreed purpose of the patent assignment. View "Jang v. Boston Scientific SciMed Inc." on Justia Law

Aleris supplied aluminum to Behr under a requirements contract until a labor dispute forced Aleris to close its Quebec factory in 2008. After learning of the closure, Behr took delivery of aluminum worth $2.6 million from Aleris without paying for it and scrambled to obtain aluminum from other suppliers, which Behr says increased its costs by $1.5 million. Behr filed suit in Michigan state court. That suit was stayed in 2009 when Aleris’s parent company filed for bankruptcy in the U.S. Aleris filed for bankruptcy in Canada. Aleris sued Behr in federal court seeking recovery of $2.6 million for the aluminum delivery. Behr asserted numerous defenses and counterclaims including a setoff for its increased costs after the factory closure. The district court abstained from adjudication of Behr’s counterclaim, characterizing it as “part and parcel of the stayed state-court proceedings,” then granted summary judgment to Aleris in the amount of $1.1 million and closed the case. Behr satisfied the judgment. The state court declined to lift the stay. The Sixth Circuit reversed, stating that the decision gave Behr full value for its untested counterclaim and has the impact of depriving the Canadian estate of monies to which it might be entitled. View "RSM Richter, Inc. v. Behr America, Inc." on Justia Law

The issue before the Court in this matter concerned interpretation of an errors-and-omissions policy. The policy excluded coverage for claims "arising out of" bankruptcy or insolvency. The dispute grew from a stop-loss policy issued by United Re to a company that had hired Plaintiff-Appellee C.L. Frates as a broker. After the policy was issued, United filed for bankruptcy protection. When Frates learned of the bankruptcy, it learned that United had been sued in Ohio, and filed for bankruptcy to stall the litigation. Ultimately, Frates recommended to its client that it move the stop-loss insurance to another insurer. The client agreed. However, Frates had to reimburse the client for what it lost through higher deductibles. Frates then sued Westchester Fire Insurance Company under its errors-and-omissions policy. In cross-motions for summary judgment, Westchester contended that Frates's claim "arose out of" United's bankruptcy or insolvency. Frates contended that the claim "arose out of" United's deception. The district court agreed with Frates and granted its motion for summary judgment. The Tenth Circuit disagreed with the district court. It held that a reasonable trier of fact could have concluded that Frates's claim arose out of United's bankruptcy or insolvency. Accordingly the Court reversed the award of summary judgment to Frates. View "CL Frates v. Westchester Fire" on Justia Law

This case arose when DocMagic, provider of mortgage loan document preparation software, filed various claims against Lenders One, provider of mortgage products and services, stemming from the parties' service contract (Agreement), and Lenders One filed various counterclaims. Per the Agreement, Lenders One agreed to supply DocMagic with a list of all Lenders One's current members and refer, market, and promote DocMagic's products and services to the members. On appeal, the parties dispute the district court's award of attorneys' fees, expenses, and costs. As a preliminary matter, the court used de novo review in order to determine which litigant was the prevailing party and the court applied an abuse of discretion standard regarding the district court's award of fees and costs. On the merits, the court concluded that the district court did not err in designating Lenders One as the prevailing party where the district court considered the totality of the case and reasonably determined the prevailing party for purposes of the parties' contract. Accordingly, the court affirmed the district court's award of fees and costs. View "DocMagic, Inc. v. The Mortgage Partnership" on Justia Law

Plaintiff, an Iowa citizen with a home health care business, merged his business with other home health care providers to form Auxi, Inc., a Delaware corporation. After the merger, ACS acquired control of Auxi and then sold Auxi to HHC. Auxi did not inform plaintiff of the sale and plaintiff received no compensation for his shares of Auxi stock. Plaintiff filed suit against ACS claiming breach of fiduciary duty and breach of contract. The court concluded that plaintiff pleaded insufficient facts to support a claim that ACS breached its fiduciary duties as a majority shareholder; although plaintiff's complaint alleged damages, it contained no facts identifying the existence of a contract between ACS and plaintiff or its terms; and plaintiff pleaded no facts suggesting that the alleged contract between ACS and HHC manifested an intent to benefit him. Accordingly, the court affirmed the district court's dismissal of both claims. The court also concluded that the district court did not abuse its "considerable discretion," in concluding that it was not required to allow plaintiff to amend the post-judgment complaint where plaintiff never sought to amend until after dismissal, despite being on notice of the need to amend. View "Horras v. American Capital Strategies, Ltd." on Justia Law

James Olis, a former officer of Dynegy, Inc., was indicted on multiple counts of securities fraud, wire fraud, and conspiracy. Olis hired attorney Terry Yates to defend him in the federal criminal investigation and a civil investigation conducted by the SEC. Olis told Yates that Dynegy would be paying his legal fees. Dynegy's legal department orally confirmed that Dynegy would pay Olis's legal fees. Yates later filed suit against Dynegy to recover his unpaid attorney's fees, asserting claims for breach of contract and fraudulent inducement. The jury returned a verdict for Yates. At issue on appeal was whether Dynegy was entitled to judgment in its favor based on its affirmative defense of statute of frauds. The court of appeals reversed. The Supreme Court reversed and rendered a take-nothing judgment in favor of Dynegy, holding (1) the statute of frauds rendered the oral agreement between Dynegy and Yates unenforceable, and therefore, Yates could not recover under his breach of contract claim; and (2) Yates's claim for benefit-of-the-bargain damages pursuant to his alternative fraudulent inducement action was barred. View "Dynegy, Inc. v. Yates " on Justia Law

Respondent was employed by the Canutillo Independent School District as executive director of facilities and transportation. After reporting alleged financial improprieties to the District authorities, Respondent was fired for allegedly making threatening personal phone calls to another man during work hours. Respondent subsequently sued the District for violation of the Texas Whistleblower Act and for breach of contract. The trial court granted Respondent's plea to the jurisdiction. The court of appeals held that the trial court erred in granting the plea as it related to Respondent's whistleblower claim but otherwise affirmed. The Supreme Court affirmed in part and reversed in part the court of appeals' judgment, holding that the trial court properly granted the plea to the jurisdiction, holding (1) Respondent's complaints to District authorities were not good-faith complaints of a violation of law to a "law enforcement authority" under the Whistleblower Act, and thus, the plea to the jurisdiction was well taken; and (2) Respondent's breach of contract claim failed because Respondent failed to exhaust his administrative remedies. View "Canutillo Indep. Sch. Dist. v. Farran" on Justia Law

A mother sued Ford Motor Company on behalf of her six-year-old son, whose spine was fractured in a car wreck, alleging that the defective design of the seatbelt in the vehicle caused her son's permanent paralysis and other injuries. The jury returned a $43.8 million verdict for compensatory damages. Ford's share of the verdict, based on its degree of fault, was $6,570,000. Ford filed a motion for a new trial, arguing that the verdict was excessive. The trial court denied the motion. The court of appeals, however, determined that the verdict was excessive and remanded the case with a suggestion of remittitur from $43.8 million to $12.9 million. The suggested remittitur would reduce Ford's share of the verdict to $1,935,000. The Supreme Court reversed the judgment of the court of appeals and reinstated the jury's verdict, holding (1) the court of appeals had the authority to suggest a remittitur even though Ford did not request it; but (2) the court of appeals erred in remitting the verdict to $12.9 million, as the jury's verdict was supported by material evidence and was within the range of reasonableness. Remanded. View "Meals ex rel. Meals v. Ford Motor Co." on Justia Law

Defendants, Nancy and Thomas Bernheim, appealed the trial court’s summary judgment decision granting plaintiff GEICO Insurance Company’s claim against them for reimbursement of $10,000 that GEICO had paid defendants under the medical-payments provision of their automobile insurance policy. Although the Supreme Court agreed with the trial court that defendants should have reimbursed GEICO, it reversed and remanded for a determination of the proper reimbursement amount. View "GEICO Insurance Co. v. Bernheim" on Justia Law

Tim Bloomquist appealed summary judgment entered in favor of Goose River Bank and Goose River Holding Company for breach of an alleged oral contract to loan money. The Supreme Court affirmed, concluding the alleged oral contract was barred by the statute of frauds. View "Bloomquist v. The Goose River Bank" on Justia Law