Justia Contracts Opinion Summaries

Plaintiffs, seeking to represent a class, alleged failure to compensate them for work performed during their meal break and before and after shifts, and for time spent attending training sessions, in violation of the Fair Labor Standards Act, 29 U.S.C. 206-207; the Employee Retirement Income Security Act, 29 U.S.C. 1059(a)(1), 1104(a)(1); and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962, 1964(c). The district court held that the FLSA claim was deficiently pled, and that this was fatal to the complaint because the ERISA and RICO claims were derivative of the FLSA claim. The court found the allegation of under-compensation insufficient, given the lack of any information on plaintiffs' approximate weekly wages and hours worked, or even an allegation that they had worked in excess of 40 hours in any workweek. The First Circuit vacated. The allegations were insufficient under the FLSA, but plaintiffs should be permitted to amend.

In 2003, Shaw Construction obtained a line of credit from Rocky Mountain Hardware (RMH). Over the years, RMH supplied hardware for several jobs on which Shaw was the general contractor. In 2007, Shaw began work on a project for Snake River Sporting Club in which it acted as construction manager rather than general contractor. Although RMH was chosen as the hardware supplier, no separate contract was executed between RMH and either Shaw or Snake River. After none of the balance due was paid, RMH filed the instant action against Shaw, claiming Shaw was obligated to pay the outstanding balance and that RMH had a written contract with Shaw by virtue of the 2003 credit agreement. Shaw claimed Snake River was responsible for all payments to suppliers. The district court ordered Shaw to pay for the hardware furnished by RMH on the project as well as contractual interest and attorney fees. The Supreme Court affirmed, holding that the district court properly ruled the credit agreement applied in this case and, pursuant to its terms, Shaw was responsible for the principal balance due on the hardware contract, together with contractual interest and attorney fees.

In this appeal, Defendants sought a review of the trial court's decision to award Plaintiff compensatory and punitive damages based on the tort of intentional infliction of emotional distress arising out of inadequate maintenance of the cemetery where Plaintiff's son was buried. The court of appeals reversed, holding that Plaintiff had failed to present sufficient proof establishing that she had suffered a serious mental injury, which was a required element of her claim. The Supreme Court affirmed the judgment of the court of appeals and reversed the judgment of the trial court awarding Plaintiff compensatory damages, punitive damages, and attorneys fees, holding that Plaintiff failed to prove intentional infliction of emotional distress because she provided no evidence that she or anyone else suffered serious mental injuries as a result of Defendants' conduct.

Appellants, three licensed clinic psychologists, were former partners of Great Falls Clinic, LLP, a general limited liability partnership comprised of medical professionals. The Clinic partners, including Appellants, signed a partnership agreement stating that a partner who separates from the partnership in compliance with the agreement's terms will receive a partnership interest subject to reduction for competing after withdrawal or retirement. Appellants subsequently separated from the Clinic and filed a declaratory judgment action when the Clinic refused to pay them their full partnership interest payments. At issue was whether the agreement's restriction, which applied to those engaged in the "practice of medicine," included partners who practiced psychology after separating from the Clinic. The district court granted summary judgment for the Clinic. The Supreme Court affirmed, holding that the district court did not err by (1) holding that the Appellants engage in the "practice of medicine" as used in the partnership agreement; and (2) concluding that the parties' intention regarding the term "practice of medicine" in the language of the agreement was to include the psychologists.

After a dispute over the purchase of a motor coach, Plaintiff brought suit against Defendants, a used car salesman, a used car dealership, and a bank, asserting claims of, inter alia, breach of contract, fraud, and negligent misrepresentation. Plaintiff subsequently filed a motion to compel discovery, which the district court granted. Defendants did not meet their discovery deadlines, and Defendants' counsel failed to attend several status conferences. The district court then entered a default judgment for Plaintiff as a discovery sanction and later and awarded Plaintiff $74,154 in damages. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) did not abuse its discretion when it entered a default judgment for Plaintiff as a discovery sanction under Mont. R. Civ. P. 37(b); (2) did not abuse its discretion when it refused to set aside the sanction orders; (3) did not err as a matter of law in calculating damages; but (4) failed to property calculate and award prejudgment interest. Remanded.

The Supreme Court reviewed a district court order that upheld a county court's decision that a six-year stattue of limitations did not bar Respondent Account Brokers of Larimer County, Inc.'s claim against Pettiioner Daniel Hassler. Petitioner financed the purchase of a vehicle by entering into a security agreement with Account Broker's predecessor-in-interest in which the vehicle served as collateral. Petitioner defaulted on the loan, and the predecessor repossessed the vehicle and later sold it at auction. The precedessor applied the proceeds of the auction to the balance of the loan. The proceeds were insufficient to cover the balance; thus Petitioner was still held responsible for the deficiency. The debt was eventually transferred to Account Brokers who sued Petitioner to recover the deficiency less than six years after the vehicle was sold. The county and district courts ruled in favor of Account Brokers, determining that the statute of limitations did not bar Account Brokers' claim. Upon review, the Supreme Court reversed, holding that the controlling issue was not the date that the debt was made liquidated or determinable but the date the debt accrued. "[U]nder Colorado law and the express terms of the parties' agreement, the present debt became due when it was accelerated following [the predecessor's] repossession of the vehicle and demand for full payment on the debt, which occurred more than six years before the initiation of the present suit. Accordingly, the action [was] barred by the statute of limitations."

In 1983, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. 10101-10270, authorizing the Department of Energy to enter into contracts with nuclear facilities for the disposal of spent nuclear fuel (SNF) and high-level radioactive waste (HLW). Congress mandated that, under the Standard Contract, DOE dispose of SNF and HLW beginning not later than January 31, 1998. In 1983, DOE entered into a Standard Contract with Consolidated Edison under which DOE agreed to accept SNF stored at the Indian Point facility. Following DOE’s breach, the Claims Court awarded two categories of damages: wet storage costs for continued operation of its Unit 1 spent fuel pool and regulatory fees paid to the U.S. Nuclear Regulatory Commission. The Federal Circuit reversed the awards, affirmed denial of damages for the cost of financing mitigation activities, but reversed denial of damages for indirect overhead costs associated with mitigation. The company had chosen to prioritize removal of Unit 2 SNF and Unit 1 material would not have been removed by the time at issue; the company did not establish that the breach caused an increase in fees to the NRC.

The county district court entered a decree of dissolution of the marriage of Kevin and Valara Mamot. The court determined that the premarital agreement entered into by the parties, although unconscionable, was valid and enforceable. The court then divided the assets and entered an order regarding child support. The Supreme Court reversed the judgment of the district court finding that the premarital agreement was enforceable, holding that because Valara did not sign the agreement voluntarily, the agreement was unenforceable under the Uniform Premarital Agreement Act adopted by Nebraska, and therefore, the Court did not need to further address whether the agreement was unconscionable.

Precious Martin and Associates, PLLC (Martin) contracted with T. Jackson Lyons & Associates, P.A. (Lyons) to handle appeal work on several of Martin's cases. After Martin stopped paying for the work, Lyons filed a complaint in the County Court alleging breach of contract and claiming $14,543.19 owed on open account. The county court awarded Lyons $14,543.19 in damages and $4,847.73 in attorney's fees. Martin appealed to the Circuit Court claiming that the trial court erred in awarding attorney's fees. The circuit court reversed the county court judgment on the basis that the agreement between the law firms was an oral contract, not an open account, such that attorney's fees should not have been awarded. Aggrieved, Lyons appealed to the Supreme Court. Upon review, the Court found that the circuit court's reversal of the award of attorney's fees was not supported by the evidence. The county court's award of attorney’s fees was supported by the credible evidence and was not an abuse of discretion. The judgment of the Circuit Court was reversed, and the judgment for attorney's fees entered by the County Court was reinstated and affirmed.

In 1998 Ryerson sold subsidiaries to EMC for $29 million. The following year EMC sought rescission, claiming that Ryerson concealed that a subsidiary’s largest customer had declared that unless it slashed prices, the customer would stop buying from the subsidiary. Three years later, the parties settled, with Ryerson making a $8.5 million "price adjustment." Federal refused to indemnify Ryerson under an “Executive Protection Policy.” The policy covers loss for which the insured becomes legally obligated to pay on account of any claim for a wrongful act [defined to include a "misleading statement" or "omission"] allegedly committed by the insured. Federal denied that "loss: includes restitution paid by an insured, as distinct from damages. The Seventh Circuit affirmed summary judgment in favor of Federal, stating that reimbursement of disgorgement of the profits of fraud would “encourage fraud.” Having to surrender those profits was not a loss within the meaning of the policy. The court also rejected an argument that Federal's change of position on why it denied the claim violated the doctrine of "mend the hold." In Illinois that doctrine does not forbid the defendant to add a defense after being sued.