Justia Contracts Opinion Summaries

Covil Corporation, through its receiver, sued Pennsylvania National Mutual Insurance Company for breaching their insurance contract by not contributing to a settlement in an asbestos case. David Rollins had sued Covil and others, alleging negligent asbestos exposure caused his mesothelioma. Penn National insured Covil during part of the exposure period. Covil settled the case and sought $50,000 from Penn National, which the insurer refused to pay.The circuit court granted summary judgment for Covil, requiring Penn National to indemnify Covil for the settlement. The court rejected Penn National's arguments about untimely notice, premature summary judgment, and policy exclusions. The court of appeals affirmed the decision.The South Carolina Supreme Court reviewed the case and affirmed the court of appeals' decision with modifications. The court held that the notice-prejudice rule did not apply because the underlying plaintiff, Rollins, had already been fully compensated. The court also found that Covil's untimely notice was not a material breach of the insurance contract, as Covil's interests were adequately protected by other insurers' counsel. Additionally, the court ruled that Penn National did not waive its right to timely notice by attending mediation.The court further held that the policy's "Products Hazard" and "Completed Operations Hazard" exclusions did not apply. The Products Hazard exclusion was inapplicable because Covil's liability was based on installation, not supplying asbestos. The Completed Operations Hazard exclusion did not apply because Rollins's exposure occurred before Covil's work was completed. Thus, the court affirmed the lower court's summary judgment in favor of Covil. View "Covil Corporation v. Pennsylvania National Mutual Casualty Insurance Company" on Justia Law

Dr. Joseph Papin, a medical resident at the University of Mississippi Medical Center (UMMC), was terminated following a series of complaints about his workplace behavior, culminating in a serious incident involving patient care. Dr. Papin alleged that his troubles began in December 2016, but UMMC presented evidence of issues from the start of his residency. Dr. Papin entered into a "Remediation Agreement" with Dr. T. Mark Earl, the residency program director, which was supposed to give him sixty days to improve. However, UMMC terminated his employment before the remediation period ended, leading Dr. Papin to sue for breach of contract.The United States District Court for the Southern District of Mississippi held an eight-day trial, where a jury found that UMMC breached the Remediation Agreement, awarding Dr. Papin over $6.5 million in damages, including punitive damages. However, the trial court set aside the jury's verdict, granting UMMC's motion for judgment as a matter of law (JMOL). The court ruled that Dr. Earl did not have the authority to enter into a binding contract on behalf of UMMC, as required by Mississippi law for public institutions.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the Remediation Agreement was not a valid contract because Dr. Earl lacked the actual authority to bind UMMC. Mississippi law requires strict adherence to prescribed contracting procedures for public institutions, and only specific officials, such as the Vice Chancellor for Health Affairs or the Associate Dean for Graduate Medical Education, had the authority to enter into employment contracts. The court also found that the ACGME guidelines cited by Dr. Papin did not override Mississippi's legal requirements for public contracts. Thus, the appellate court upheld the JMOL in favor of UMMC. View "Papin v. University of Mississippi Medical Center" on Justia Law

Farzam Salami received emergency services at Los Robles Regional Medical Center on three occasions in 2020. He signed a conditions of admission contract agreeing to pay for services rendered, as listed in the hospital's chargemaster. Los Robles billed him for these services, including a significant emergency services fee (EMS fee). Salami paid part of the discounted bill but disputed the EMS fee, claiming it covered general operating costs rather than services actually rendered. He argued that had he known about the EMS fee, he would have sought treatment elsewhere.Salami sued Los Robles in December 2021 for breach of contract and declaratory relief. The trial court sustained Los Robles's demurrer to the first amended complaint (FAC), finding that Salami did not allege he performed his duties under the contract or that Los Robles failed to perform its duties. The court also found that the breach of contract claim could not be cured by amendment. Salami was granted leave to amend to assert claims under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). In his third amended complaint (TAC), Salami alleged that Los Robles failed to disclose the EMS fee adequately.The Court of Appeal of the State of California, Second Appellate District, Division Six, reviewed the case. The court affirmed the trial court's decision, holding that Los Robles had no duty to disclose the EMS fee beyond including it in the chargemaster. The court referenced recent cases, including Moran v. Prime Healthcare Management, Inc., which held that hospitals are not required to provide additional signage or warnings about EMS fees. The court concluded that Los Robles complied with its statutory and regulatory obligations, and Salami's claims under the UCL and CLRA failed as a result. The judgment in favor of Los Robles was affirmed. View "Salami v. Los Robles Regional Medical Center" on Justia Law

The case involves a dispute over a Surface Use Agreement (SUA) between Mikkelson Land, LLLP, and Continental Resources, Inc. The disagreement centers on whether the SUA authorized Continental to install water pipelines on Mikkelson's property. Mikkelson claimed that the SUA did not permit such installations and filed a lawsuit alleging breach of contract, trespass, and seeking injunctive relief. Continental argued that the SUA explicitly allowed for the installation of water pipelines and moved forward with the project, compensating Mikkelson as per the SUA terms.The United States District Court for the District of North Dakota reviewed the case and granted summary judgment in favor of Continental. The court found that the SUA was unambiguous and explicitly authorized Continental to install water pipelines. The court also noted that the SUA included provisions for compensation related to the installation of such pipelines. Additionally, the court considered an addendum to the SUA, which expanded Continental's rights and further supported the installation of the pipelines. The district court concluded that Continental's actions were within the scope of the SUA and dismissed Mikkelson's claims.The United States Court of Appeals for the Eighth Circuit reviewed the appeal and affirmed the district court's decision. The appellate court agreed that the SUA's language was clear and unambiguous, granting Continental the right to install water pipelines. The court emphasized that the SUA specifically contemplated future installations of water pipelines and provided a payment structure for them. The court also found that the addendum to the SUA expanded Continental's rights, allowing for necessary operations, including the installation of water pipelines. Consequently, the appellate court upheld the summary judgment in favor of Continental, rejecting Mikkelson's arguments. View "Mikkelson Land, LLLP v. Continental Resources, Inc." on Justia Law

Davidson Oil Company entered into a fixed-price requirements contract with the City of Albuquerque to supply all of the city's fuel needs for a year. Shortly after the contract was signed, fuel market prices dropped significantly. The city requested a price reduction, which Davidson Oil refused, citing potential losses due to hedge contracts it had entered into to protect against market fluctuations. The city then terminated the contract using a termination for convenience clause, prompting Davidson Oil to sue for breach of contract.The United States District Court for the District of New Mexico granted summary judgment in favor of Davidson Oil, awarding damages for the value of the hedge contracts. The court found that while the city did not breach the explicit terms of the contract, it violated an implied covenant by terminating the contract in bad faith to secure a better bargain elsewhere.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court's decision. The Tenth Circuit held that the City of Albuquerque breached the contract by exercising the termination for convenience clause solely to obtain a better deal from another supplier. The court emphasized that such an action violated the implied covenant of good faith and fair dealing inherent in the contract. The court also upheld the district court's award of damages, including the hedge contract losses, as incidental damages under the Uniform Commercial Code, finding them to be commercially reasonable and directly resulting from the breach. View "Davidson Oil Company v. City of Albuquerque" on Justia Law

AGK Sierra De Montserrat, L.P. (AGK) entered into a Purchase and Sale Agreement (PSA) with Comerica Bank (Comerica) for the purchase of lots in a residential subdivision. The PSA included an indemnity provision requiring Comerica to indemnify AGK against claims arising from Comerica's position as the declarant. After the sale, Westwood Montserrat, Ltd. (Westwood) initiated several lawsuits against AGK, claiming declarant rights. Comerica refused to indemnify AGK, leading AGK to sue Comerica for breach of the indemnity provision.The United States District Court for the Eastern District of California found that Comerica breached the indemnity agreement and awarded AGK attorney fees incurred in the underlying lawsuits with Westwood. Additionally, the district court, relying on the Ninth Circuit's decision in DeWitt v. Western Pacific Railroad Co., awarded AGK attorney fees for the present breach of contract suit against Comerica. Comerica appealed the award of attorney fees for the present litigation.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's award of attorney fees for the present litigation. The Ninth Circuit held that DeWitt was only binding in the absence of subsequent indications from California courts that the interpretation was incorrect. Since DeWitt, California appellate courts have uniformly indicated that first-party attorney fees are not recoverable under an indemnity provision unless explicitly stated. The Ninth Circuit remanded the case for the district court to determine whether the attorney fees were otherwise recoverable under the PSA's attorney fees provision. The court emphasized that indemnity provisions generally cover third-party claims, not first-party litigation costs, unless specific language indicates otherwise. View "AGK SIERRA DE MONTSERRAT, L.P. V. COMERICA BANK" on Justia Law

Yorktown Systems Group Inc. and Threat Tec LLC, both defense contractors, entered into a mentor-protégé relationship under the Small Business Administration’s program to jointly pursue government contracts. They formed a joint venture (JV) and were awarded a $165 million contract with the U.S. Army. The JV agreement allocated specific work shares to each company. However, the relationship soured, and Threat Tec attempted to terminate Yorktown’s subcontract, effectively cutting Yorktown out of its share of the contract.The United States District Court for the Northern District of Alabama granted Yorktown a preliminary injunction, preventing Threat Tec from terminating the subcontract and depriving Yorktown of its rights under the JV agreement. The court found that Yorktown had shown a substantial likelihood of success on its breach of contract and breach of fiduciary duty claims and faced irreparable harm. The court noted that Threat Tec’s CEO had made false statements and lacked candor, leading to the belief that Threat Tec’s motives were unethical.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court’s decision. The appellate court found no clear error in the district court’s factfindings and concluded that the district court acted within its discretion. The court held that Threat Tec, as the managing member of the JV, owed fiduciary duties of loyalty and care to Yorktown and likely breached those duties by attempting to cut Yorktown out of its contractually specified workshare. The court also agreed that Yorktown faced irreparable harm, including potential damage to its business reputation and the loss of highly skilled employees, which could not be remedied by monetary damages alone. View "Yorktown Systems Group Inc. v. Threat TEC LLC" on Justia Law

Shawn Slezak, a mechanic for Lancaster County, Nebraska, filed a grievance after his performance evaluation for 2021 was completed late and by higher-level supervisors rather than his direct supervisor. The evaluation, which was below the threshold for a merit increase, was delayed due to discrepancies between numerical ratings and written comments. Slezak argued that the late evaluation violated the collective bargaining agreement (CBA) and sought a merit increase.The Lancaster County Personnel Policy Board found that the late evaluation constituted a breach of contract and awarded Slezak a retroactive merit increase. The County challenged this decision, arguing that the remedy was improper since Slezak's evaluation score did not warrant a merit increase. The District Court for Lancaster County agreed with the County, reversing the Board's decision on the grounds that the remedy made Slezak "more than whole" and was inconsistent with the objective of a damages award in a breach of contract case.The Nebraska Supreme Court reviewed the case and affirmed the District Court's decision. The Court held that the Board's remedy was inappropriate because it exceeded the scope of a damages award in a breach of contract case. The Court emphasized that the objective of such an award is to make the injured party whole, not to provide a benefit they would not have received if the contract had been performed. The Court also noted that Slezak's score on the late evaluation was below the threshold required for a merit increase, and thus, the delay in the evaluation did not cause his injury. The Court concluded that the District Court did not err in reversing the Board's decision and affirmed the order. View "Lancaster County v. Slezak" on Justia Law

In 2006, David and Jill Landrum, along with Michael and Marna Sharpe, purchased land in Madison County to develop a mixed-use project called the Town of Livingston. The project stalled due to the 2008 financial crisis and legal issues. In 2010, Jill and Marna formed Livingston Holdings, LLC, which owned the development properties. Marna contributed more financially than Jill, leading to a disparity in ownership interests. In 2014, Marna sold her interest to B&S Mississippi Holdings, LLC, managed by Michael Bollenbacher. Jill stopped making her required monthly contributions in December 2018.The Madison County Chancery Court disqualified Jill as a derivative plaintiff, realigned Livingston Holdings as a defendant, and dismissed several claims. The court found that Jill did not fairly and adequately represent the interests of the company due to personal interests and economic antagonisms. The court also granted summary judgment in favor of several defendants and denied the Landrums' remaining claims after a bench trial.The Supreme Court of Mississippi reviewed the case and affirmed the lower court's decision to disqualify Jill as a derivative plaintiff and exclude the Landrums' expert witness. The court found that Jill's personal interests and actions, such as failing to make required contributions and attempting to gain control of the company, justified her disqualification. The court also affirmed the dismissal of claims for negligent omission, misstatement of material facts, civil conspiracy, fraud, and fraudulent concealment due to the Landrums' failure to cite legal authority.However, the Supreme Court reversed and remanded the case on the issues of remedies and attorneys' fees under the Second Memorandum of Understanding (MOU) and the alleged breach of fiduciary duty between B&S and Jill. The court found that the chancellor erred in interpreting the Second MOU as providing an exclusive remedy and remanded for further proceedings to determine if Livingston is entitled to additional remedies and attorneys' fees. The court also remanded for factual findings on whether B&S breached its fiduciary duty to Jill regarding property distribution and tax loss allocation. View "Landrum v. Livingston Holdings, LLC" on Justia Law

In this case, a law firm (HFM) appealed a trial court's judgment denying its third-party claim to $585,000 held in its client trust account. The funds were received from HFM's client, Mann, under a flat fee agreement for future legal services. Mann's judgment creditor, Dickson, served HFM with a notice of levy, asserting that the funds belonged to Mann. HFM contended that the funds belonged to it under the flat fee agreement.The Superior Court of San Diego County denied HFM's third-party claim, concluding that the funds belonged to Mann because HFM had not yet earned the fee by providing legal services. The court also denied HFM's motion for reconsideration, which sought to retain $53,457.95 of the funds based on a prior agreement with Mann. The court found that HFM failed to present this evidence initially and did not act with reasonable diligence.The Court of Appeal, Fourth Appellate District, Division One, State of California, affirmed the trial court's judgment. The appellate court held that under the Rules of Professional Conduct, a flat fee is not earned until legal services are provided, and HFM presented no evidence that it had performed any services under the agreement. The court also found that the location of the funds in the client trust account was not dispositive of ownership. Additionally, the appellate court upheld the trial court's denial of the motion for reconsideration, noting that HFM failed to provide a satisfactory explanation for not presenting the evidence earlier.The main holding is that a flat fee paid in advance for legal services is not earned until the services are provided, and funds in a client trust account are presumed to belong to the client unless the law firm can prove otherwise. The judgment denying HFM's third-party claim was affirmed. View "Dickson v. Mann" on Justia Law