Justia Contracts Opinion Summaries

Defendant AIA Services Corporation entered into a stock redemption agreement with Appellant Reed Taylor to purchase all of his shares in AIA Services for a $1.5 million down payment promissory note and a $6 million promissory note, plus other consideration. When AIA failed to pay the $1.5 million when it became due, Appellant and AIA agreed to modify the stock redemption agreement. AIA was a still unable to make payments under the new terms. Appellant then filed suit to recover the amounts owed on the two promissory notes. The district court granted partial summary judgment in favor of AIA and dismissed six of Appellant's causes of action after finding the revised stock redemption agreement was unenforceable. On appeal, Appellant argued the redemption agreement complied with state law and was still enforceable. Upon review, the Supreme Court affirmed the district court's holding that the agreement was illegal and unenforceable and affirmed the court's dismissal of Appellant's six causes of action.

Appellants, PNH Inc. and Ronald Creatore, filed an action against Alfa Laval Flow, Inc., which manufactures equipment for sanitary processing of food and beverages, for abuse of process and tortious interference with a contract. Appellants asserted that Alfa Laval Flow misused an involuntary-bankruptcy case it filed against its distributor in an effort to eliminate Creatore as a competitor in the sale of equipment for sanitary processing of food and beverages. The trial court dismissed the claims. The Seventh District affirmed, holding that federal law preempts state-law causes of action alleging the abuse of bankruptcy proceedings. The Supreme Court affirmed, holding that the United States Bankruptcy Code preempts state-law claims that allow the recovery of damages for misconduct committed by a litigant during bankruptcy proceedings.

Several purchasers of condominium units sued developer Harborage Cottages-Stuart, LLLP (Harborage), alleging that Harborage violated the Interstate Land Sales Full Disclosure Act (ILSFDA), 15 U.S.C. 1701 et seq., and several Florida statutes. Central to this appeal was whether Harborage violated section 1703(a)(1)(B) by failing to provide the purchasers with a property report prior to their signing the purchase agreements. The court held that Harborage failed to prove that it was entitled to an exemption from the ILFSDA and its admitted failure to provide the report violated the ILFSDA. Therefore, the court affirmed the district court's grant of summary judgment in favor of plaintiffs on their claim under section 1703(a)(1)(B) and (C). The court also affirmed the district court's award of damages and attorney's fees under section 1709; affirmed the grant of summary judgment in favor of Gentry-Hunt on the claim that Harborage violated Fla. Stat. 718.506 and vacated the judgment in favor of the Stones on the section 718.506 claim; and vacated the grant of summary judgment in favor of plaintiffs on the claim that Harborage violated the anti-fraud provision of the ILSFDA and the claim asserted under Fla. Stat. 501.204(1).

This case stemmed from an Excess Disability Income Reinsurance Agreement (Treaty). At issue was whether a reinsurance agreement between plaintiff and defendant contained a follow-the-settlements provision. The court held that there was no ambiguity in the Treaty and that it contained a follow-the-settlements provision. The court also held that the statute of limitations barred plaintiff's challenges to several claims submitted by defendant and defendant's conduct did not give rise to tolling under Connecticut law. The court further held that the district court properly granted summary judgment on defendant's counterclaims for breach of contract and for breach of the implied covenant of good faith and fair dealing.

Defendant appealed the district court's order denying its motion to compel plaintiff to submit her claims to arbitration pursuant to an arbitration agreement governed by the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The district court held that defendant had, by participating in the litigation for nine months prior to requesting that the case be submitted to arbitration, waived its contractual right to compel arbitration. The court found that defendant's right to compel arbitration, even if waived with respect to the claims in the Original Complaint, was revived by plaintiff's filing of the Amended Complaint. Therefore, the court vacated the district court's order denying defendant's motion to compel arbitration and stay the proceedings, remanding for further proceedings.

In this appeal, accounting firm Bryan Brothers sought coverage under a professional liability insurance policy issued by Continental Casualty Company for liability arising from illegal acts of a former Bryan Brother's employee. Under the policy, it was a condition precedent to coverage that no insured had knowledge, prior to the inception of the policy, of an act that was reasonably likely to become the basis for a claim. The court held that because Bryan Brothers had such knowledge, the claims at issue were not covered. Therefore, the court affirmed the district court's grant of summary judgment to Continental Casualty Company.

Plaintiff sued her employer under the Minnesota Human Rights Act (MHRA), Minn. Stat. 363A.01-43, and the Family Medical Leave Act (FMLA), 29 U.S.C. 2601-54, and asserted other state common law claims including breach of employment contract. Plaintiff subsequently appealed the dismissal of her breach of contract claim with prejudice, the denials of her motions for leave to amend her complaint, the denial of her motion for consideration, and the adverse grant of her MHRA and FMLA claims by the district court. The court did not reach the merits of plaintiff's arguments because any error with respect to the dismissal of the breach of employment contract claim was harmless where plaintiff resigned from her employment with the county and failed to generate a genuine issue of fact as to constructive discharge in the context of her MHRA reprisal claim. The court also held that because plaintiff failed to generate an issue of fact as to whether she suffered a materially adverse employment action, summary judgment was appropriate as to her MHRA retaliation claim. The court further held that summary judgment was properly granted on plaintiff's FMLA interference claim where plaintiff did not contest the district court's finding that she received the full twelve weeks of FMLA leave to which she was entitled each year she requested it. The court finally held that summary judgment was properly granted on plaintiff's FMLA retaliation claim where she failed to generate an issue of fact as to whether she suffered an adverse employment action.

The company terminated plaintiff's employment in 2008 because he failed to meet his sales quota. A suit for unpaid wages under Wisconsin's wage-claim statute, alternatively seeking recovery under equitable contract doctrines, was rejected and the district court denied leave to amend. The Seventh Circuit affirmed. Although plaintiff was an at-will employee, his commission-based compensation was the subject of an express contract, which, under Wisconsin law, precludes quasi-contractual relief. The district court did not abuse its discretion in denying leave to amend because the motion came unjustifiably late.

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees.

This case involved a fallout of a $3.65 billion Ponzi scheme perpetrated by Minnesota businessman Thomas J. Petters. Appellants, investment funds (collectively, Ritchie), incurred substantial losses as a result of participating in Petters' investment scheme. Ritchie subsequently sued two officers of Petters' companies, alleging that they assisted Petters in getting Ritchie to loan over $100 million to Petters' company. Ritchie's five-count complaint alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(a), (c)-(d), common law fraud, and tortious inference with the contract. The court held that the district court erred in concluding that Ritchie's action was barred by a Receivership Order. The court also rejected arguments challenging the sufficiency of Ritchie's pleadings in the common law fraud count and did not to address other arguments related to abstention, lack of causation, and absolute privilege. Accordingly, the court reversed the judgment of the district court and remanded for further proceedings.