Justia Contracts Opinion Summaries

Microsoft asserted a total of eight claims, derivatively or directly, against defendants for breach of fiduciary duty, usurpation of corporate opportunity, rescission, conspiracy, and aiding and abetting. Defendants, various companies and an individual associated with the restructuring of Vadem, a computer technology company formed under the laws of the British Virgin Islands, contended that Microsoft lacked standing to bring derivative claims on behalf of Vadem. Defendants also argued, among other things, that the court lacked personal jurisdiction over defendants and that Microsoft's claims were untimely. The court concluded that Microsoft was required to, but did not, seek leave from the High Court of the British Virgin Islands before bringing a derivative suit on behalf of Vadem. As a result, Microsoft lacked standing as to the six derivative claims it asserted. The court also found that, as to the two remaining counts in the complaint, those claims were time-barred. Therefore, the court granted the motion to dismiss.

Petitioner Alohacare bid for a health and human services contract under Haw. Rev. Stat. 103F but was denied the contract by Respondent, the Department of Human Services. Petitioner protested and later appealed. The lower courts dismissed Petitioner's appeal for lack of jurisdiction, finding that Petitioner was not entitled to judicial review. The Supreme Court vacated the judgment of the lower courts, holding (1) Petitioner may not appeal the denial of a contract award by Respondent under the procedures set forth in Haw. Rev. Stat. 103D that afford judicial review for bidders denied protests; (2) however, chapter 103F does not prohibit judicial review of the administrative denial of such matters, and review may be afforded under Haw. Rev. Stat. 632; (3) review and denial of a bidder's protest by Respondent as the purchasing agency and subsequent denial of a request for reconsideration by the chief procurement officer housed in a different executive agency do not assuage separation of powers concerns because review is accomplished only in the executive branch of government; and (4) Petitioner was not denied due process or equal protection by chapter 103F, inasmuch as judicial review may be obtained by way of a declaratory judgment action. Remanded.

State Department of Education (DOE) issued a request for proposals to provide health and human services under contracts pursuant to Haw. Rev. Stat. 103F. After the DOE rejected the proposal of Petitioner Alaka'i Na Keiki, Inc., Petitioner brought an action against the DOE. The circuit court granted summary judgment in favor of the DOE. The intermediate court of appeals affirmed, concluding that chapter 103F does not allow for judicial review. The Supreme Court vacated the judgment of the lower courts, holding that the DOE's decisions to reject such proposals were subject to judicial review. The Court then held (1) as construed, chapter 103F was not unconstitutional for violating the separation of powers doctrine; (2) Petitioner's request for a declaratory judgment was moot to the extent the subject contracts had been awarded and their terms expired; (3) Petitioner's claim for negligence by the DOE was barred under the State Tort Liability Act; and (4) Petitioner's claim for injunctive relief, premised on the DOE's alleged faulty administration of the contract process, was moot inasmuch as the Court interpreted such process in chapter 103F as subject to judicial review. Remanded.

Respondent Liberty Mutual Fire Insurance Company appealed a superior court order that denied its motion for summary judgment and granted summary judgment in favor of Petitioner Rebecca Rivera. The court ruled that an automobile policy (policy) issued to Rivera’s parents excluded liability coverage but afforded uninsured motorist coverage for injuries Rivera sustained in a single-vehicle accident in Dracut, Massachusetts. Upon review, the Supreme Court affirmed the grant of summary judgment in Petitioner's favor: "the terms of the owned vehicle exclusion appear to remove [Petitioner's vehicle] from the definition of uninsured motor vehicle even though, as to Rivera, there [was] no insurance available. While Liberty Mutual is free to limit the extent of its liability through the use of an exclusion it cannot do so in contravention of statutory provisions or public policy."

Soon after Yale Preston was employed by Pennaco Energy, a wholly-owned subsidiary of Marathon Oil Company (collectively referred to as Marathon), Preston signed an employee agreement with a disclosure and assignment of intellectual property clause. The present dispute centered around allegations of patent infringement and questions of ownership of two patents that covered a baffle system that Preston invented. The district court found that Preston was the sole inventor of the patents and that the employee agreement was a valid contract, pursuant to which Preston was required to assign his ownership interest in the patents to Marathon. At issue on appeal was the validity of the assignment of intellectual property rights given to Marathon without an additional consideration other than continued at-will employment. The Supreme Court accepted certification and held that continuing the employment of an existing at-will employee constitutes adequate consideration to support an agreement containing an intellectual property-assignment provision.

In the early 1990s, Kevin Costner commissioned Peggy Detmers and Detmers Studios, Inc. (collectively, Detmers) to design several sculptures, intending to display them at the entrance of a luxury resort called The Dunbar that Costner had envisioned. Subsequently, Costner and The Dunber (collectively, Costner) and Detmers entered into a binding contract in which Costner would provide Detmers additional compensation. Paragraph three of the agreement provided that if The Dunbar was not built within ten years or the sculptures were not "agreeably displayed elsewhere," Costner would give Detmers fifty percent of the profits from the sale of the sculptures. The sculptures were later placed on Costner's project called Tatanka. Detmers later brought suit against Costners, seeking a declaratory judgment that she did not agree to the placement of the sculptures as required by paragraph three of the parties' contract. The trial court granted judgment in favor of Costner. The Supreme Court affirmed, holding that the circuit court did not err in (1) determining that the sculptures were "agreeably displayed elsewhere," in the absence of a guarantee from Costner that The Dunbar would be built; and (2) concluding that Tatanka was "elsewhere" under the language of the contract.

Two appeals are were consolidated from chancery-court cases. In the first case, Diamondhead Country Club and Property Owners Association, Inc. sued Thomas R. Alfonso, III, and Anne Scafidi Cordova,1 d/b/a Bay Jourdan Publishing Co. (BJP) for breach of a contract to publish "The Diamondhead News." In 1997, the chancery court entered a preliminary injunction order preventing BJP from publishing "The Diamondhead News," selling advertising, collecting or disposing of advertising revenues derived from the publication the paper, and interfering with the printing, publication, or distribution of "The Diamondhead News." The chancery court also found that an arbitration clause in the publishing contract was inapplicable to the lawsuit. The chancery court denied BJP’s two subsequent motions to compel arbitration of the breach-of-contract dispute. BJP appealed the chancery court’s latest denial of arbitration. In the second case, BJP sued Diamondhead and Gulf Publishing Co., Inc., d/b/a "The Sun Herald" (“Gulf Publishing”), for intentional interference with the publishing contract. Gulf Publishing filed a motion for summary judgment. The court granted summary judgment to Gulf Publishing and directed the entry of a final judgment as to Gulf Publishing pursuant to Mississippi Rule of Civil Procedure 54(b). BJP appealed the grant of summary judgment. Upon review, the Supreme Court affirmed the chancery court’s order denying BJP’s third motion to compel arbitration because the issue was ruled upon previously, and no appeal was taken. Finding genuine issues of material fact for trial, the Court reversed the chancery court’s order granting summary judgment to Diamondhead and Gulf Publishing, and remanded the second case for further proceedings.

This appeal and cross appeal concerned the authority of the named defendant, the city of Waterbury, under its city charter to offset the pension benefits of Plaintiffs, several individuals who had worked for the city, by the heart and hypertension benefits they received. The trial court rendered judgment in favor of Plaintiffs on their breach of contract claims. The Supreme Court reversed in part and directed judgment in favor of Defendants on all claims except Nicolas Russo's claim for breach of contract, and remanded the case for a new trial on that claim, holding (1) the trial court improperly concluded, with respect to all of Plaintiffs except Russo, their respective collective bargaining agreements conflicted with the Waterbury city charter, which allowed the city to offset Plaintiff's pension benefits based on their heart and hypertension benefits; and (2) although the trial court properly interpreted Russo's collective bargaining agreement to permit the city to offset his pension benefits by his heart and hypertension benefits, the court improperly failed to determine whether Russo's combined pension and heart and hypertension benefits exceeded the cap set forth in the agreement, thus permitting an offset.

David Caron purchased a majority membership in Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle, LLC without having obtained the written consent of Goodhall's, Inc. (Goodhall's), in violation of Goodhall's lease with Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle. The lease idenitified Goodhall's as the landlord and Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle as the tenant. After a dispute arose concerning the party responsible for remediating certain environmental conditions on the property, Plaintiffs, David Caron and David Caron Chrysler Motors, filed suit against Defendants, Goodhall's and others, claiming that Defendants had violated provisions of its lease regarding Goodhall's responsibility for preexisting environmental conditions and Goodhall's warranty of fitness and habitability. The trial court rendered judgment in favor of Defendants, concluding that no contract existed between the parties to this action because the assignment of the majority interest in the tenant to Caron was invalid. The appellate court affirmed. The Supreme Court reversed, holding (1) the appellate court improperly failed to consider Plaintiffs' claim that the trial court had improperly concluded that no contract existed between David Caron Chrysler Motors and Goodhall's; and (2) the trial court was incorrect in finding that, because Goodhall's did not consent to the assignment, there was no contract between David Caron Chrysler Motors and Goodhall's.

This insurance-coverage dispute arose after a driver of a leased vehicle struck and seriously injured a pedestrian. The vehicle, a BMW, was owned by BMW Financial Services. The pedestrian and her family sued the driver and BMW Financial for damages. Citizens Insurance Company provided a personal automobile policy listing the driver as an insured and BMW Financial as an additional insured lessor. A separate business auto insurance policy was issued by Empire Fire and Marine Insurance Companies to BMW Financial. The case settled, with Citizens and Empire paying their policy limits. Citizens reimbursed Empire for a portion of the costs Empire expended in legal expenses defending BMW Financial in the civil action but refused to provide Empire with any further reimbursement. Empire subsequently filed a complaint for declaratory judgment seeking a determination that Citizens was liable for reimbursement of all attorneys' fees it incurred. The superior court granted Empire's motion for summary judgment. Citizens appealed, arguing that Empire was entitled only to a pro-rata apportionment of defense costs. The Supreme Court affirmed, holding that it would be improper to resort to a pro-rata apportionment of liability.