Justia Contracts Opinion Summaries

In 2009, Sirius SM Radio Inc. negotiated a capital infusion (the investment agreement) from Liberty Media Corporation in return for Liberty Media receiving preferred stock in Sirius. Under the investment agreement, Liberty Media secured the ability to take control of Sirius in 2012 without paying a premium to Sirius stockholders by purchasing additional shares needed to obtain control in the market. When Liberty Media announced in 2012 that it intended to acquire majority control, Plaintiffs sued, contending that the Sirius board had breached its fiduciary duties by adhering to the provisions of the investment agreement and that Liberty Media breached its fiduciary duties by purchasing shares on the open market to acquire majority control of Sirius without paying a premium. The Court of Chancery granted Defendants' motion to dismiss, holding (1) Plaintiffs' challenge to the investment agreement was time-barred, as it was filed after the three-year limitations period expired; and (2) Liberty Media's decision to give valuable consideration in exchange for the right to make open market purchases after the standstill period expired provided no basis for a cause of action against it. View "In Re Sirius XM S'holder Litig." on Justia Law

Plaintiff sued the servicer of his loan (Bank) in a putative class action, asserting that the Bank's requirement that he maintain flood insurance coverage in an amount sufficient to cover the replacement value of his home breached the terms of his mortgage contract. The mortgage was insured by the Federal Housing Administration (FHA). Specifically, Defendant contended that the Bank, under a covenant of the mortgage contract, could not require more than the federally mandated minimum flood insurance. The covenant was a standard uniform covenant prescribed by the FHA pursuant to federal law. The district court dismissed the complaint for failure to state a claim. The judgment of dismissal was affirmed by an equally divided en banc First Circuit Court of Appeals, holding that Plaintiff failed to state a claim for breach of contract, as (1) the Bank's reading of the contract was correct and Plaintiff's was incorrect; (2) Plaintiff could not avoid dismissal on the grounds that his specific understanding or the actions of the parties created an ambiguity; and (3) the United States' position articulated in its amicus brief, which stated that Plaintiff's interpretation of the contract was incorrect, reinforced the Court's conclusion. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law

Plaintiffs were owners of the surface of a thirty-acre tract of land. Defendant, an oil and gas corporation, claimed that, in 1949, it leased the rights to the gas under the tract. In 2006, the parties entered into a contract allowing Defendant to build a 200-foot access road. Defendant later constructed a roadway approximately 1300 feet long on Plaintiffs' surface tract, erected an above-ground pipeline across the tract, and drilled a natural gas well. Plaintiffs sued Defendant alleging breach of contract. Defendant asserted it was entitled to summary judgment because of an exculpatory clause within a 1941 deed that severed the surface of the tract of property from the minerals below. Defendant contended that, as a lessee of the oil and gas under the property, it was a beneficiary of the exculpatory clause and entitled to operate on Plaintiffs' tract without liability for any injury to the surface by reason of removing minerals. The circuit court granted Defendant's motion. The Supreme Court reversed, holding that genuine issues of material fact remained on whether Defendant breached the contract. View "Thornsbury v. Cabot Oil & Gas Corp." on Justia Law

Plaintiff was a Pennsylvania resident who was injured in Kentucky. Plaintiff's daughter, with whom Plaintiff resided, was driving the vehicle involved in the accident. Plaintiff brought suit against her insurance carrier, State Farm Mutual Automobile Insurance Company, for underinsured motorist (UIM) coverage under a policy issued in Pennsylvania and covering a vehicle that Plaintiff registered and used exclusively in Pennsylvania. The trial court and court of appeals concluded that Pennsylvania law governed the dispute between Plaintiff and State Farm, but the two courts reached different results. The trial court concluded that Plaintiff was not entitled to UIM coverage because her policy disallowed coverage when she was injured in an underinsured vehicle owned or regularly used by a "resident relative." The court of appeals found Kentucky public policy would prohibit enforcement of the policy provision and concluded Plaintiff was entitled to UIM coverage despite the plain language of her policy. The Supreme Court reversed, holding (1) Pennsylvania law applied to this dispute; and (2) there was no prohibition on the type of UIM exclusion at issue in this case. View "State Farm Mut. Ins. Co. v. Hodgkiss-Warrick" on Justia Law

Mother and Father were married in 1992 and had two children. The parties later divorced. In 2009, Mother and Father agreed to recalculate their support obligation annually using the Child Support Rules and Guidelines. However, the agreement's terms were silent about which version of the Guidelines applied. Importantly, the Guidelines were amended in 2010, and the changes significantly increased support obligations for high-income parents like Father. Father used the 2009 Guidelines when calculating his 2010 distribution clause payment, and Mother objected. The trial court interpreted the agreement as incorporating the version of the Guidelines that applied to a particular's income, and therefore, concluded that Father should have used the 2010 Guidelines for the 2010 calculation, though he correctly applied the 2009 Guidelines to his 2009 income. Both parties appealed. The Supreme Court affirmed the trial court, concluding that the agreement incorporated each year's version of the Guidelines as to that year's income. View "Schwartz v. Heeter" on Justia Law

This case stemmed from a dispute among the owners of an oil-drilling rig. Donald Buffington owned 62.5 percent of the rig. Newton Dorsett, through his company, Diamond Transport & Drilling, owned the remaining 37.5 percent of the rig. Two lawsuits brought by the owners were resolved when the parties entered into a compromise agreement. The third case was brought by Buffington against Diamond and Dorsett in the Lafayette County circuit court and alleged causes of action for breach of contract and conversion arising out of the agreement. The fourth case was filed by Diamond in Louisiana seeking an order enforcing the agreement. Thereafter, Louisiana court found, inter alia, that the compromise agreement remained in effect. Subsequently, the Lafayette County circuit court found that, in light of the Louisiana judgment, res judicata applied to a majority of the issues brought by Buffington in the Lafayette County circuit court. The case proceeded to trial, and the circuit court entered judgment against Dorsett. The Supreme Court affirmed in part and reversed in part, holding (1) res judicata did not bar Buffington's action in Arkansas court; and (2) there was substantial evidence to support the jury's award of damages. View "Dorsett v. Buffington" on Justia Law

Plaintiff filed suit against North American after the moving company severely damaged or loss some of plaintiff's items. Because plaintiff's claims arose out of the interstate shipment of her possessions, the Carmack Amendment, 29 U.S.C. 14706 et seq., provided the sole and exclusive remedy. The district court granted summary judgment for North America, determining that her claim for damages did not satisfy regulatory requirements. The court concluded that plaintiff's demand letter unequivocally requested that North American remit payment totaling $182,750.00 and constituted a written communication containing facts sufficient to identify the shipment, asserting liability, and making claims for the payment of a specified amount under 49 C.F.R. 1005.2(b). The plain language of the regulation's minimum filing requirements required nothing more. Accordingly, the court reversed the district court's grant of summary judgment for North America and remanded for further proceedings. View "Williams v. N. Amer. Van Lines of Texas, Inc., et al." on Justia Law

Bennett was walking her dog in Garfield Heights, Ohio when she was struck on the left knee by a vehicle driven by Pastel. The accident threw Bennett onto the car’s hood. Bennett sued Pastel’s insurer, State Farm, which characterized as “ridiculous” her assertion that she was an “occupant” of the car, as that term is defined by State Farm’s policy, at the time she was on the vehicle’s hood. The district court granted summary judgment to State Farm. The Sixth Circuit reversed. The policy defines “occupying” as “in, on, entering or alighting from.” The court stated that “we have no reason to explore Bennett’s relationship with the car… the policy marks out its zone of coverage in primary colors.” View "Bennett v. State Farm Mut. Auto. Ins." on Justia Law

Claimant suffered a lower back injury during the course of his employment and filed notice of a workers' compensation claim. Employer later informed Claimant he would be discharged from his employment. Claimant signed a termination agreement in order not to forfeit his severance pay. The agreement stipulated that Claimant released his previously accepted workers' compensation claim. The Workers' Compensation Commissioner refused to approve the termination agreement, finding there was no consideration offered by Employer to Claimant in exchange for Plaintiff's release of the workers' compensation clim. The Workers' Compensation Review Board affirmed. The Supreme Court affirmed, holding that the Board properly affirmed the Commissioner's decision not to approve the agreement as a "voluntary agreement" or stipulation in light of its finding that Claimant's release of his workers' compensation claim was not supported by consideration. View "Leonetti v. MacDermid, Inc." on Justia Law

John Lanier appealed the denial of his motion to alter, amend, or vacate a judgment, and for relief from the judgment. Lanier's motion was filed after plaintiff McMath Construction, Inc. filed a "Notice of Filing of Foreign Judgment" pursuant to the Uniform Enforcement of Foreign Judgments Act ("the UEFJA"). After careful consideration, the Alabama Supreme Court concluded that under Louisiana law (the foreign jurisdiction), McMath did not properly serve Lanier. Therefore, a preliminary default judgment and the Louisiana judgment were void. Because the Louisiana judgment was void, the trial court erred when it denied Lanier's motion for relief from judgment. Accordingly, the Supreme Court reversed the trial court and remanded this case for further proceedings. View "Lanier v. McMath Construction, Inc. " on Justia Law