Justia Contracts Opinion Summaries

Phusion manufactures and distributes an alcoholic beverage called “Four Loko.” Its original formula contained energy stimulants, such as caffeine, guarana, taurine, and wormwood. Phusion purchased a commercial general liability insurance policy and a umbrella policy from members of the Liberty Mutual Group. The policies include identical provisions, excluding coverage for bodily injury or property damage when the insured may be held liable by reason of causing or contributing to intoxication. Plaintiffs sued Phusion in separate state court actions, alleging injuries caused by consumption of Four Loko. Two cases involved traffic accidents, one involved a shooting, another involved paranoid behavior resulting in accidental death, and a fifth claim involved a death from heart trouble. Phusion notified Liberty, which sought a declaratory judgment regarding the scope of coverage. The district court examined the underlying cases in the context of comparable automobile exclusions and ruled that four of the five cases fell within the Liquor Liability Exclusion. The Seventh Circuit affirmed. The Liquor Liability Exclusions in the policies are unambiguous and apply to Phusion. The allegations of simple negligence raised by the plaintiffs in the underlying complaints are not sufficiently independent from the allegations that Phusion caused or contributed to the intoxication of any person. View "Netherlands Ins.. Co. v. Phusion Projects, Inc." on Justia Law

The sellers own an island off St. Thomas, Virgin Islands, and a launch providing access to the island from St. Thomas. In 2004, the buyers signed land contracts and an escrow agreement to purchase the properties for $21 million and $2.5 million, respectively. Premier Title served as the escrow agent and was party to the escrow agreement. Unbeknownst to the buyers, D’Amour, the sellers’ attorney-in-fact, owned Premier. The contract required an initial deposit of $1 million. The buyers paid an additional $500,000 nonrefundable deposit to extend the closing date. The sellers were to deliver “Clear and Marketable” title and assignments of all permits, submerged land leases and other licenses necessary for occupancy of the dock and other improvements. At the scheduled closing, it was determined that dock permits had expired and that there were several exceptions to title. The sellers refused to refund the deposits. The buyers appealed district court orders, rejecting certain claims; the sellers cross-appealed other orders. D’Amour appealed some holdings. The Third Circuit affirmed in part and reversed in part, concluding that conclude that the buyers are entitled to recover the $1.5 million deposit in restitution, and that the tort claims are barred by the gist of the action doctrine. View "Addie v. Kjaer" on Justia Law

Steve Sangwin, a State employee, was a qualified subscriber and beneficiary of the State of Montana Employee Benefits Plan (Plan), which was administered by Blue Cross and Blue Shield of Montana (BCBS). Steve's daughter, McKinley, was also a beneficiary under the Plan. This case arose after BCBS denied a preauthorization request for a medical procedure for McKinley on the grounds that the procedure was "experimental for research." Steve and his wife (collectively, the Sangwins) initiated this action by filing an amended complaint setting forth five counts, including a request for certification of a class action. The Sangwins defined class members as other beneficiaries of the Plan who had their employee benefits denied by the State based on the experimental exclusion for research in the past eight years. The district court granted the Sangwins' motion for class certification. The State appealed. The Supreme Court (1) affirmed the district court's order defining the class; but (2) reversed and remanded with respect to the question certified for class treatment, holding that the district court abused its discretion in specifying for class treatment the question of whether the State breached its contract of insurance with the plaintiffs. View "Sangwin v. State" on Justia Law

The Supreme Court affirmed the trial court's judgment in this case to the extent that it concluded Parker Towing was not entitled to indemnity for $25,000 it paid landowners in settlement of landowners' claims against it. The landowners sued Parker Towing and Triangle Aggregates, Inc. stemming from their claims of breach of contract pertaining to properties they originally leased to Parker, which were subsequently purchased by Triangle. Parker argued it was not liable for the landowners' claims following its sale of the properties to Triangle. However, the Supreme Court reversed the trial court's judgment with respect to its conclusion that Triangle was not required to indemnify Parker Towing for its attorney fees and other litigation expenses incurred to defend against the claims asserted against Parker Towing for breaches of the agreements with the landowners. The fees and expenses incurred by Parker Towing as a result of those breaches were covered by the indemnification agreement between Parker Towing and Triangle. View "Parker Towing Company, Inc. v. Triangle Aggregates, Inc. " on Justia Law

Gambro Renal Products, Inc. hired The Facility Group, Inc. ("TFG"), as the general contractor for the construction of a facility designed to produce kidney dialysis filters in Opelika. TFG contracted with the Hardy Corporation for specialized piping work on the project. Absolute Welding Services, Inc. ("AWS"), is a subsidiary of Rayco Industrial, Inc., a subsubcontractor hired by Hardy. Although the negotiations on the subcontract at issue in these appeals were between AWS and Hardy, the subcontract was executed by Rayco and Hardy. A dispute arose over whether the exclusion of "passivation" and the installation of piping in Rayco's offer was incorporated into its subcontract. Rayco filed a complaint against Hardy, Gambro and 15 fictitiously named parties, seeking an accounting, a declaratory judgment, a reformation of the contract, and perfection of a lien. Rayco asserted claims for damages for breach of contract, unjust enrichment/quantum meruit, and "work and labor done." Both parties unhappy with the eventual trial court order resolving the dispute, appealed the order. After careful consideration of the contracts and the trial court record, the Supreme Court reversed in part, and affirmed in part. The case was remanded with instructions for further proceedings. View "Hardy Corporation v. Rayco Industrial, Inc. " on Justia Law

Safeway Insurance Company of Alabama, Inc. petitioned for a writ of mandamus to direct the Circuit Court to grant its Rule 12(b)(1) motion to dismiss a bad-faith claim against it for lack of subject-matter jurisdiction. Richard Kimbrough submitted a claim to Safeway for uninsured-motorist coverage when he was injured in an accident. A deer ran across the road, causing a truck in the southbound lane to swerve into the northbound lane, where Kimbrough was driving. According to Kimbrough, the truck struck his vehicle and ran him off the road and into a creek bed. The driver of the truck allegedly fled and was unknown. Kimbrough contended the driver of a "phantom vehicle" was an uninsured motorist. He sought the full policy limit of $50,000 because his expenses exceeded his coverage. The parties disputed whether Safeway denied the claim. After review of the matter, the Supreme Court disagreed with Safeway's argument that the Circuit Court lacked subject matter jurisdiction over the case. As such, Safeway did not demonstrate a clear legal right to the writ of mandamus. The Court therefore denied the petition. View "Kimbrough v. Safeway Insurance Company of Alabama, Inc." on Justia Law

Plaintiff Robert Foti sold most of his fuels business to defendant James Kurrle and agreed to sell gasoline to defendant through a retained wholesale distributorship. When the business relationship soured, plaintiff sued defendant for one month's nonpayment of gasoline and other claims. Defendant counterclaimed for breach of contract, breach of the covenant of good faith and fair dealing, and violation of the Vermont Consumer Fraud Act (CFA), all stemming from the original purchase of plaintiff's business. Defendant appealed the trial court's judgments as a matter of law on the counterclaims in favor of plaintiff, specifically the CFA counterclaim, arguing that the court should not have considered plaintiff’s motion because plaintiff did not raise the argument that the CFA did not cover the transaction until after trial, and that the court erred in holding that the transaction was not "in commerce." Furthermore, defendant appealed the court’s ruling on the breach of contract and breach of the covenant of good faith and fair dealing counterclaims arising from the non-competition provision. The Supreme Court affirmed in part and reversed in part. The Court concluded, as the trial court did, that the CFA did not apply to this transaction as a matter of law. The Court agreed with defendant that the trial court should have sent the case to the jury on the contract claims. View "Foti Fuels, Inc. v. Kurrle Corporation" on Justia Law

In 1994, Norem purchased a “Flexible Premium Variable Life Insurance Policy” from Lincoln Benefit. With variable life insurance, part of the premium is allocated to the insurer’s investment funds, called subaccounts. Policyholders may move their investments within the subaccounts and the death benefit, which is guaranteed not to fall below a certain amount. With variable universal life, the policyholder may easily invest and alter insurance coverage. The policy is comprised of the policy value, which represents the investment component, and its net amount at risk, which represents the insurance component. Norem purchased his policy because he wanted both life insurance and an investment vehicle for the proceeds from the sale of his ownership of a medical business. The policy has a “cost of insurance” (COI) charge deducted monthly from the policy. The policy explains how the COI rate is calculated. Norem filed a putative class action on behalf of himself and other similarly situated policyholders, claiming that Lincoln Benefit breached the terms of its policies in its method of calculating the COI rate.Before deciding on class certification, the district court granted summary judgment to Lincoln Benefit, concluding that its calculation of COI rates did not breach the contract. The Seventh Circuit affirmed. View "Norem v. Lincoln Benefit Life Co." on Justia Law

Egg Harbor Township authorized construction of a Community Center and, as required by N.J.S. 52:38-3 adopted a project labor agreement (PLA). All contractors working on the project were required to sign the PLA, which contained a “supremacy provision,” providing that the PLA, with the local Collective Bargaining Agreements, superseded any national agreement, local agreement or other collective bargaining agreement (CBA). Sambe, the general contractor, signed the PLA. Sambe subcontracted roofing work to Donnelly, which signed the PLA and agreed that any party it selected to perform work would also be required to sign the PLA. Donnelly selected the Carpenters Union to perform the work, even though it was not a signatory to the PLA, apparently because the two were parties to a CBA. Sheet Metal Workers protested. The NLRB assigned the work to Carpenters and later concluded that Sheet Metal violated the NLRA, 29 U.S.C. 185, by maintaining a section 301 suit against Donnelly and Sambe following that decision. In the parallel litigation district court granted summary judgment on Sheet Metal’s breach of contract claim. The Third Circuit granted the NLRB’s petition for enforcement of its order; vacated the breach of contract judgment against Donnelly and Sambe; and remanded the with directions to enter judgment in favor of Donnelly and to conduct further proceedings on the claim against Sambe. View "Sheet Metal Workers Int'l Ass'n v. E.P. Donnelly, Inc." on Justia Law

After Mary Lou Fox died, Plaintiff, Mary Lou's daughter and the administratrix of Mary Lou's estate, sued Mary Lou's former husband, Robert Fox. Plaintiff alleged that Mary Lou jointly owned 960 acres of farmland with Robert, that Robert deprived Mary Lou of her ownership interest in the land, and that Plaintiff was thereby deprived of an inheritance from Mary Lou. The circuit court granted summary judgment to Robert, concluding that Mary Lou had no ownership interest in the 960 acres. The Supreme Court affirmed, holding that each cause of action brought by Plaintiff failed because Mary Lou had no claim to a right of ownership in the 960 acres and Plaintiff had no authority supporting her claims. View "Niesche v. Wilkinson" on Justia Law