Justia Contracts Opinion Summaries

The case revolves around a dispute between Carmen Nicholas and Terry L. Bonnie, an attorney who negligently prepared the will of Carmen's mother. The will, which was not notarized and lacked an attestation clause, was denied probate, resulting in Carmen losing full ownership of a property she was supposed to inherit. Carmen filed a lawsuit against Bonnie, alleging that his negligence caused her loss. Bonnie, in a letter, admitted his mistake and expressed willingness to make financial amends. A consent judgment was signed, establishing Bonnie's liability for all damages caused by his negligence.The trial court denied Bonnie's exception of peremption, arguing that the matter was a legal malpractice suit and was perempted after three years from the act of malpractice under Louisiana Revised Statutes 9:5605. Carmen opposed this, arguing that the matter was not a legal malpractice action and that Bonnie had renounced prescription by voluntarily entering a consent judgment that acknowledged liability for all damages caused by his negligence. The trial court denied both the exception of peremption and the motion for summary judgment, leaving quantum as the only issue.The appellate court reversed the trial court's decision, finding Carmen’s petition was filed after the three-year peremptive period for a legal malpractice action. It held that the consent judgment could not revive the extinguished claim and dismissed Carmen’s claims with prejudice.The Supreme Court of Louisiana, however, reversed the appellate court's judgment and reinstated the trial court's decision. It held that the consent judgment formed a bilateral contract between the parties, with Bonnie conceding fault or liability and contractually assuming an obligation to pay damages. The court ruled that the action to enforce the consent judgment was based in contract, not legal malpractice, and was therefore enforceable. The case was remanded for further proceedings consistent with this opinion. View "Nicholas v. Bonnie" on Justia Law

VT Halter Marine (VTHM), a shipbuilder, contracted to build a barge and a tug for a client. During construction, over a thousand steel flange plates were incorrectly bent due to the use of an improperly sized die, leading to thinning and cracking of the plates. The faulty plates were installed onto the vessels, and the cracking was discovered later. The cost of replacing and repairing the cracked flange plates amounted to approximately $3,300,000. VTHM submitted a claim to their insurer, Certain Underwriters of Lloyd’s of London (Underwriters), for the cracked flange plates.The Underwriters denied VTHM's claim, asserting that the policy excluded coverage for faulty workmanship and the cost of replacing or repairing improper or defective materials. VTHM contested the denial, leading to a lawsuit for breach of contract. Both parties filed motions for summary judgment in the trial court. The trial court granted Underwriters' motion for summary judgment, ruling that the policy unambiguously excluded coverage for faulty workmanship and the cost of repairing, replacing, or renewing any improper or defective materials.In the Supreme Court of Mississippi, VTHM appealed the trial court's decision, arguing that the flanges were part of the vessel and coverage for faulty workmanship exists if it results in cracking of the vessel. The Supreme Court, however, affirmed the trial court's judgment. The court found that the insurance policy unambiguously excluded the cost of replacing or repairing improper or defective materials. The court concluded that the faulty workmanship directly resulted in improper materials being installed, and the only resulting damage was to the improper materials themselves. Therefore, VTHM's claim for the costs of repairing and/or replacing the improper materials installed was not covered under the policy. View "VT Halter Marine, Inc. v. Certain Underwriters of Lloyd's of London" on Justia Law

The case involves a contract dispute between Brands International Corporation, a Canadian manufacturer of hand sanitizer, and Reach Companies, LLC, a Minnesota retail distributor. In 2020, Reach contracted with Brands for 1,000,000 bottles of hand sanitizer to be delivered directly to Reach’s customer, Five Below. The parties agreed to “cash on delivery” terms. Brands began shipping hand sanitizer to individual Five Below stores. Brands made three deliveries, all of which were accepted by Five Below. Brands informed Reach of the deliveries, and Five Below paid Reach for the hand sanitizer, but Reach did not pay Brands. As a result of Reach’s failure to pay, Brands informed Reach that it would no longer deliver hand sanitizer to Five Below on Reach’s behalf. Brands then invoiced Reach for the contract price for the delivered hand sanitizer. Reach still did not pay and ceased communicating with Brands. Brands then filed suit against Reach for breach of contract, unjust enrichment, account stated, and unpaid goods and services. Reach counterclaimed for breach of contract.The parties cross-moved for summary judgment on their contract claims. They disagreed on the applicable law: Brands asserted that the U.N. Convention on Contracts for the International Sale of Goods (CISG) applied, while Reach asserted that Minnesota law applied. The district court determined that the CISG governed and that Reach had breached the contract. The district court granted summary judgment to Brands on the parties’ competing breach-of-contract claims, granted summary judgment to Reach on Brands’s unjust-enrichment and account-stated claims, dismissed all other claims, and awarded Brands the contract price for the delivered hand sanitizer. The district court also found that the CISG authorized the award of attorney’s fees and so awarded Brands attorney’s fees. Reach appealed.The United States Court of Appeals for the Eighth Circuit affirmed the grant of summary judgment but reversed the award of attorney’s fees. The court found that the CISG governed the dispute and that Reach had breached the contract by failing to pay Brands upon delivery of the hand sanitizer. The court also found that Brands was entitled to recover damages based on Reach’s breach of the contract. However, the court held that the CISG does not authorize an award of attorney’s fees, and thus, the district court erred in awarding those fees to Brands. View "Brands International Corp. v. Reach Companies, LLC" on Justia Law

The Portland Mint delivered truckloads of coins to a foundry designated by the United States Mint for redemption under a regulation that provided for the redemption of mutilated coins. The coins were melted down and used to make new coins. However, the U.S. Mint refused to pay for the shipment, claiming that a high percentage of the coins were counterfeit. Portland Mint, asserting that the coins were genuine, brought five claims against the United States in the Court of Federal Claims. The Claims Court dismissed all five claims, concluding that it lacked jurisdiction for the first two claims and that all five claims failed to state a claim upon which relief could be granted.The United States Court of Appeals for the Federal Circuit found that the Claims Court erred in dismissing the second claim for lack of jurisdiction and failure to state a claim. The court held that the regulation under which the coins were submitted created an implied-in-fact contract between Portland Mint and the U.S. Mint, and that the Claims Court had jurisdiction over this claim. The court also held that Portland Mint had sufficiently stated a claim for breach of this implied contract. The court affirmed the dismissal of the remaining three merits claims and did not reach the fifth claim concerning attorneys’ fees. The case was affirmed in part and reversed and remanded in part for further proceedings. View "The Portland Mint v. United States" on Justia Law

The case involves a dispute between James Snell, a landscaper, and his insurer, United Specialty Insurance Company. Snell was sued for negligence after a child was injured on a trampoline he had installed at a client's home. United refused to defend Snell in the lawsuit, arguing that the accident did not arise from Snell’s landscaping work as defined in his commercial general liability policy. Snell sued United, alleging breach of contract and bad faith denial of coverage.The United States District Court for the Southern District of Alabama granted summary judgment in favor of United. The court held that the accident did not arise from Snell's landscaping work within the meaning of his insurance policy. The court also found that Snell's bad faith claim failed because United had a lawful basis to deny the claim.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court's decision. The appellate court agreed that the allegations in the complaint did not trigger United’s duty to defend. The court also found that Snell's insurance application, which expressly stated that he did not do any recreational or playground equipment construction or erection, made clear that the policy did not cover his work in this case. The court further held that Alabama law does not preclude a decision on the duty to indemnify before judgment in the underlying case. Finally, the court concluded that Snell’s bad faith claim failed because he did not show that United wholly failed to investigate any part of his claim. View "Snell v. United Specialty Insurance Company" on Justia Law

The case involves NGL Energy Partners LP and NGL Energy Holdings LLC (collectively, "NGL") and LCT Capital, LLC ("LCT"). NGL, entities in the energy sector, engaged LCT, a financial advisory services provider, for services related to NGL's 2014 acquisition of TransMontaigne Inc. However, the parties failed to agree on payment terms, leading LCT to file a lawsuit in 2015. The Superior Court held a jury trial in July 2018, which resulted in a $36 million verdict in LCT's favor.NGL appealed the Superior Court's decision, challenging the $36 million final judgment and a set of evidentiary rulings. LCT cross-appealed, contesting the Superior Court's methodology for computing post-judgment interest. NGL argued that the Superior Court erred by admitting evidence and arguments about the value/benefit supposedly gained by NGL in the Transaction, asserting that such evidence is prejudicial and irrelevant to a quantum meruit claim. NGL also argued that the Superior Court erred by admitting evidence of benefit-of-the-bargain or expectancy damages when assessing the quantum meruit value of LCT’s services.The Supreme Court of the State of Delaware affirmed the Superior Court’s evidentiary rulings and rejected NGL's contention that the Superior Court incorrectly allowed LCT to recover benefit-of-the bargain/expectancy damages. However, the Supreme Court disagreed with the Superior Court’s post-judgment interest determination. The Supreme Court held that prejudgment interest is part of the judgment upon which post-judgment interest accrues under Section 2301(a). Therefore, the Supreme Court reversed the Superior Court as to this issue and remanded the case to the Superior Court for entry of judgment consistent with its opinion. View "NGL Energy Partners LP v. LCT Capital, LLC" on Justia Law

A teacher, who was involved in a car accident caused by a third party, sustained serious injuries. The teacher was covered under his employer’s self-insured healthcare plan, which stipulates that the employer has a right of reimbursement for medical expenses if a covered person receives a separate settlement. The employer paid for the teacher’s medical expenses and the teacher also received $500,000 in settlements from two separate insurers. The teacher requested that the employer waive its right to reimbursement twice, but the employer never agreed. Two years after the teacher notified the employer of his insurance settlements, the employer requested reimbursement and later sued him for breach of contract.The Superior Court of the State of Alaska granted summary judgment to the employer on the issue of whether the teacher breached the contract to reimburse the employer. The employer then moved for summary judgment on the amount of damages, providing an affidavit from its Plan Administrator and a claims ledger. The teacher opposed the motion, providing his own affidavit and a self-created spreadsheet in support of his argument that some of the medical costs paid by the employer were not associated with the accident. The court granted the employer’s motion for summary judgment on contract damages.The Supreme Court of the State of Alaska affirmed the lower court’s summary judgment order regarding breach of contract, but held that the teacher raised a genuine dispute of material fact regarding damages. Therefore, the Supreme Court reversed and remanded the lower court’s summary judgment order regarding contract damages. View "Fischer v. Kenai Peninsula Borough School District" on Justia Law

The case involves National Trust Insurance Company ("National Trust") and Whaley Construction Company, Inc. ("Whaley"). Whaley was a general contractor on a project at a Lockheed Martin facility. Smith's Inc. of Dothan ("Smith's of Dothan") was a subcontractor hired to install an HVAC system on the project, and Phoenix II Contracting, LLC ("Phoenix II"), was a subcontractor hired to install the roofing. Smith's of Dothan's subcontract with Whaley provided that Smith's of Dothan would name Whaley and Lockheed Martin as additional insureds on its liability policies. National Trust issued Smith's of Dothan a commercial-package policy and a commercial-liability umbrella policy ("the subject policies") through Harmon-DennisBradshaw, Inc. ("HDB"). Whaley and Lockheed Martin were additional insureds under the subject policies. Timothy L. Bozeman was working as a roof laborer on the Lockheed Martin project when he fell through an opening in the roof and was seriously injured. Bozeman sued Phoenix II and various fictitiously named defendants in the circuit court ("the state-court action").National Trust commenced a declaratory-judgment action in the Northern Division of the United States District Court for the Middle District of Alabama ("the federal-court action"). The complaint in the federal-court action named Smith's of Dothan, Whaley, Lockheed Martin, and the estate as respondents and included the following factual allegations: "25. A dispute has arisen as to whether Respondents Smith's [of Dothan], Whaley, and Lockheed [Martin] are entitled to a defense and indemnification as to the claims asserted in the Underlying Lawsuit. National Trust asserts that, based on the terms, conditions, and exclusions contained in the [subject] policies, Respondents Smith's [of Dothan], Whaley, and Lockheed [Martin] are not entitled to a defense in the underlying lawsuit or indemnification against settlement, award, or judgment therefrom.On April 14, 2023, Whaley filed a third-party complaint against National Trust and Continental Insurance Company ("Continental") in the state-court action. The third-party complaint alleged claims of breach of contract and bad-faith refusal to pay against National Trust and Continental. On May 4, 2023, National Trust filed a motion to dismiss in the state-court action. In the motion, National Trust asked the circuit court "to reconsider its previous Order … dated April 21, 2023, granting Whaley's motion for leave to file a third-party complaint against [National Trust] and further move[d] pursuant to Rule 12(b)(6) of the Alabama Rules of Civil Procedure to dismiss both of Whaley's claims asserted against [National Trust] in the Third-Party Complaint." In its motion, National Trust asserted that Whaley's claims against it were due to be dismissed "because they were compulsory counterclaims that Whaley was required to file in the federal[-court] action pursuant to § 65-440, Ala. Code 1975." On June 7, 2023, the circuit court entered an order denying National Trust's motion to dismiss the third-party complaint. National Trust subsequently filed a petition for a writ of mandamus asking this Court to direct the circuit court to enter an order dismissing National Trust from the state-court action.The Supreme Court of Alabama granted National Trust's mandamus petition in part and issued a writ directing the circuit court to enter an order dismissing Whaley's breach-of-contract and bad-faith claims in the state-court action that were based on National Trust's refusal to indemnify Whaley for the amount it had paid to settle Lockheed Martin's indemnity claim against it. However, the court denied the petition as to Whaley's contingent claims for a defense and indemnification. View "Ex parte National Trust Insurance Company" on Justia Law

In this case, plaintiffs Brandi Stiles and Abel Gorgita purchased a 2011 Kia Optima in April 2013. The car, manufactured and distributed by Kia Motors America, Inc., was sold with express warranties still in effect from the original sale. However, the car had serious defects, including issues with the transmission, electrical system, brakes, engine, suspension, and steering. Despite multiple attempts, Kia was unable to repair these defects. The plaintiffs argued that Kia failed to replace the car or make restitution as required under the Song-Beverly Consumer Warranty Act.The trial court sustained Kia's demurrer, arguing that the remedies sought by the plaintiffs under the Song-Beverly Act only apply to new motor vehicles. The court relied on a previous case, Rodriguez v. FCA US, LLC, which held that a used motor vehicle with an unexpired warranty is not a "new motor vehicle" under the Song-Beverly Act. The court rejected another case, Jensen v. BMW of North America, Inc., which held that a previously owned motor vehicle with an unexpired warranty qualifies as a "new motor vehicle" under the Song-Beverly Act.The Court of Appeal of the State of California Second Appellate District Division Six reversed the trial court's decision. The court held that a previously owned motor vehicle purchased with the manufacturer’s new car warranty still in effect is a “new motor vehicle” as defined by section 1793.22, subdivision (e)(2) of the Song-Beverly Act. Thus, the replace or refund remedy of section 1793.2, subdivision (d)(2) applies. The court rejected Kia's arguments and affirmed the interpretation of the Song-Beverly Act in Jensen v. BMW of North America, Inc. The court also modified the opinion to clarify the interpretation of the implied warranty provisions. View "Stiles v. Kia Motors America, Inc." on Justia Law

The case involves a dispute over a contract between a plaintiff, Pamela Phillips, and the defendant, Charlotte Metro Credit Union. In 2014, Phillips opened a checking account with the Credit Union and agreed to a standard membership agreement. This agreement included a "Notice of Amendments" provision, which allowed the Credit Union to change the terms of the agreement upon notice to Phillips. In 2021, the Credit Union amended its membership agreement to require arbitration for certain disputes and to waive members' right to file class actions. Phillips did not opt out of this amendment within the given 30-day window. Later that year, Phillips filed a class action complaint against the Credit Union for the collection of overdraft fees on accounts that were never overdrawn. The Credit Union responded by filing a motion to stay the action and compel arbitration.The trial court denied the Credit Union's motion to stay and compel arbitration, concluding that the "Notice of Amendments" provision did not permit the Credit Union to unilaterally add an arbitration provision. The Credit Union appealed this decision to the Court of Appeals, which reversed the trial court's determination and remanded the case to the trial court to stay the action pending arbitration.The Supreme Court of North Carolina affirmed the decision of the Court of Appeals. The court concluded that the Arbitration Amendment was within the universe of terms of the contract between the parties, and thus complies with the implied covenant of good faith and fair dealing and does not render the contract illusory. As such, the Arbitration Amendment is a binding and enforceable agreement between Phillips and the Credit Union. View "Canteen v. Charlotte Metro Credit Union" on Justia Law