Justia Contracts Opinion Summaries

In 2001, Union Oil Company of California entered into a contract to sell its oil to Tesoro Alaska Company. Under the contract the Tesoro took title at the North Slope, but agreed to use a pipeline company associated with Union to transport oil through the Trans-Alaska Pipeline. The price per barrel was calculated as the West Coast market price less marine transport and pipeline tariff. The contract made no mention of whether the pipeline tariff was tied to the ultimate destination of the oil. At the time, the interstate and intrastate pipeline tariffs were the same. Tesoro shipped the oil to an in-state refinery and paid the tariff to the pipeline company. Union subtracted the tariff amount from the market price of the oil less marine transport and sent invoices to the buyer. Meanwhile, Tesoro successfully challenged the intrastate tariff as unjust and unreasonable and the pipeline company issued a refund, including 10.5% interest. Union claimed that it was entitled to the tariff refund under the contract. The superior court, on motions for summary judgment, awarded the principal amount of the refund to Union and the interest to Tesoro. Both parties appealed. Upon review of the dispute, the Supreme Court held that the contract's pricing term was a netback price to the Los Angeles market referencing the interstate tariff. Accordingly, the Court reversed the superior court's grant of summary judgment to Union and remanded for entry of judgment in favor of Tesoro. View "Tesoro Alaska Company v. Union Oil Company of California" on Justia Law

The Rineharts contracted with Morton Buildings for a preengineered building to serve as their personal residence and business location for their business, Midwest Slitting. Upon disputes regarding the structure's quality, the Rineharts and Midwest Slitting sued. A jury found for the Rineharts on several of their claims and for Midwest Slitting on its negligent misrepresentation claim. The court of appeals affirmed and granted the Rineharts appellate attorney fees. Morton appealed, arguing that the economic loss doctrine, which originated with product liability litigation to prohibit tort claims when the only damages were to the product itself, should extend to bar the negligent misrepresentation claim in this case. The Supreme Court (1) affirmed the judgment in favor of Midwest Slitting on its negligent misrepresentation claims, holding that the economic loss doctrine does not bar negligent misrepresentation claims because the duty at issue arises by operation of law, and the doctrine's purposes would not be further by extending it to such claims; and (2) reversed the appellate attorney fee award because the Court could not determine from the record whether the court of appeals included time and expenses in the award not reimbursable under the applicable statute. Remanded. View "Rinehart v. Morton Bldgs., Inc." on Justia Law

In a contract dispute related to the funding of the development of the Fountainebleau Resort in Las Vegas (the Project), Term Lenders appealed the district court's grant of summary judgment in favor of the Bank. The court concluded that under the Disbursement Agreement the Bank was permitted to rely on the Borrowers' certifications that the conditions precedent were satisfied unless it had actual knowledge to the contrary. The court also concluded that there remained genuine issues of material fact about whether the Bank had such knowledge and whether its actions amounted to gross negligence. The court affirmed the district court's denial of the Term Lenders' Motion for Partial Summary Judgment and the district court's interpretation of the Bank's obligations under the Disbursement Agreement. The court reversed, however, the district court's grant of summary judgment in favor of the Bank and the court remanded the case for further proceedings. View "Avenue CLO Fund, Ltd., et al. v. Bank of America, NA" on Justia Law

This case stemmed from a dispute between the parties over license agreements which allowed Myriad access to Oracle's Java programming language. On appeal, Myriad challenged the district court's partial denial of its motion to compel arbitration. The court concluded that the incorporation of the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules into the parties' commercial contract constituted clear and unmistakable evidence that the parties agreed to arbitrate arbitrability. Accordingly, the court reversed and remanded for further proceedings. View "Oracle America, Inc. v. Myriad Group A.G." on Justia Law

Plaintiffs Dorothy Harris and Tedeen Holbert were injured in separate automobile accidents caused by third-party tortfeasors. Plaintiffs were treated at Billings Clinic and St. Vincent Healthcare (Providers) for their injuries. Both Harris and Holbert were members of health plans administered by Blue Cross Blue Shield (BCBS), which entered into a preferred provider agreement (PPA) with the Providers pursuant to which Providers accepted payment from BCBS at a discounted reimbursement rate for certain medical services for BCBS insureds. Plaintiffs subsequently filed a complaint against Billings Clinic, asserting breach of contract and constructive fraud claims and requesting compensatory damages equal to the difference between the amount the third-party insurers paid to the Providers and the reduced reimbursement rates under the PPA with BCBS. Harris also filed similar claims against St. Vincent Healthcare. The district courts dismissed the claims for failure to state a claim upon which relief can be granted. The Supreme Court affirmed, holding that the district court did not err in determining that the Providers were entitled to collect from third-party insurers payment for the full amount of the billed charges for the medical treatment provided to Plaintiffs. View "Harris v. St Vincent Healthcare" on Justia Law

A construction company (Constructor) retained Defendant to arrange insurance for a new housing development. Defendant procured insurance from two insurance companies (Peerless and Hartford). Peerless denied coverage for a house destroyed by fire that was built on a lot not listed in Peerless's policy. Haynes claimed against Defendant for its negligent omission of the lot. Defendant gave notice of the loss to Plaintiff, from whom Defendant had purchased errors and omissions coverage. Defendant and Plaintiff settled with Constructor for $354,000. Constructor assigned its rights against Peerless and Hartford to Plaintiff and Defendant collectively. Defendant and Plaintiff then proceeded against the insurers for the $354,000. After the parties settled, $208,000 was deposited in an escrow account. Plaintiff sought a declaration that it was entitled to all of the escrow funds. Defendant counterclaimed for a declaration that, under Connecticut's make whole doctrine, it was entitled to recover the $150,000 deductible it contributed to the $354,000. The district court granted summary judgment for Plaintiff. The Supreme Court accepted certification from the appellate court and answered its questions by holding (1) the make whole doctrine is the default rule under Connecticut law; and (2) the make whole doctrine does not apply to insurance policy deductibles. View "Fireman's Fund Ins. Co. v. TD Banknorth Ins. Agency, Inc." on Justia Law

Defendant and his company (Defendants) borrowed money from Trust by executing promissory notes in favor of Trust. One note said it was governed by Massachusetts law, and the others said they were governed by New York law. The Trust's trustees (Plaintiffs) subsequently sued Defendants in New York state court for breach of contract. The New York trial court eventually granted Defendants' motion to dismiss based on the expiration of the New York statute of limitations. Plaintiffs subsequently sued Defendant in Massachusetts federal court to recover on the note controlled by Massachusetts law. Although Plaintiffs filed suit within the Massachusetts statute of limitations, the district judge concluded that the dismissal of the New York lawsuit barred Plaintiffs' current claim because the dismissal was on the merits and claim preclusive. The First Circuit Court of Appeals affirmed, holding that the limitations dismissal under New York law was a judgment on the merits, and thus, the current claim was barred. View "Newman v. Krintzman" on Justia Law

Fox filed suit against Dish Network for copyright infringement and breach of contract, seeking a preliminary injunction. At issue were two Dish products: (1) "PrimeTime Anytime," which allowed a cable subscriber to set a single timer to record any and all primetime programming on four major networks; and (2) "AutoHop," which allowed users to automatically skip commercials. The court held that the district court did not abuse its discretion in holding that Fox did not establish a likelihood of success on its direct infringement claim. In this case, Dish's PrimeTime Anytime program created the copied program only in response to the user's command and the district court did not err in concluding that the user, not Dish, made the copy. Operating a system used to make copies at the user's command did not mean that the system operator, rather than the user, caused copies to be made. Although Fox established a prima facie case of direct infringement by Dish customers, Dish met its burden of demonstrating that it was likely to succeed on its affirmative defense that its customers' copying was a "fair use." Accordingly, the district court did not abuse its discretion in concluding that Fox was unlikely to succeed on its claim of secondary infringement. Applying a very deferential standard of review, the court concluded that the district court did not abuse its discretion in denying a preliminary injunction based on alleged contract breaches. Finally, even if Fox was likely to succeed on its claims that Dish directly infringed Fox's copyrights and breached the no-copying clause of the contract at issue by making "quality assurance" copies, the court agreed with the district court that Fox did not demonstrate a likelihood of irreparable harm resulting from these copies. Therefore, the court affirmed the judgment of the district court. View "Fox Broadcasting Co. v. Dish Network" on Justia Law

In an insurance coverage dispute with a policyholder, Cincinnati appealed the district court's adverse summary judgment rulings. The policyholder sought a claim of total loss for a vertical lathe that it purchased from a manufacturer in Taiwan and that was destroyed in Los Angeles. Cincinnati denied coverage, claiming that the coverage extension for newly acquired property did not apply. The court concluded that the extension of coverage to "any location you acquire" was ambiguous and, under Iowa law, the court construed that ambiguity in the policyholder's favor. The court also concluded that the district court did not err in awarding prejudgment interest under Iowa law. Accordingly, the court affirmed the judgment of the district court. View "Amera-Seiki Corp. v. The Cincinnati Ins. Co." on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law