Justia Contracts Opinion Summaries

Synoran and e-Pin (appellants) appealed from the district court's confirmation of an arbitration award in favor of Wells Fargo, which had prevailed on its claims for breach of contract and for misappropriation of trade secrets. Appellants maintained that the district court lacked jurisdiction to confirm the award, erred in confirming the award, and abused its discretion in denying their motion to amend or terminate a permanent injunction issued as part of the award. The court rejected appellants' claim that Wells Fargo was a citizen of both South Dakota and California and concluded that the district court did not err in determining that it had subject-matter jurisdiction over the action. The court also held that the district court did not err in determining that appellants had waived their right to challenge the award of injunctive relief; in declining to vacate the award on the grounds that the arbitration panel exceeded the scope of its arbitral mandate; and in confirming the award of attorneys' fees against e-Pin. The court further held that the district court did not abuse its discretion in denying the motion to terminate or amend the permanent injunction. Accordingly, the judgment was affirmed.

This dispute emerged from state and federal litigation over liability for damages and defense costs in certain environmental tort suits. At issue was an action for damages that appellants brought in federal court and a declaratory judgment action that appellee brought in state court, which appellants later removed to federal court. The district court dismissed the former and remanded the latter in light of a related third action that had been pending for several years in state court. The court held that the district court did not abuse its discretion by deciding that the parties' claims should be resolved in a more comprehensive action (Vulcan Action). The court also held that the district court had discretion under Wilton v. Seven Falls Co. and Brillhart v. Excess Ins. Co. of Am. to remand the removed action. The court further held that the district court's concerns about piecemeal litigation and interfering with the progress made in the Vulcan Action supported dismissal under Colorado River Water Conservation Dist. v. United States. Therefore, the court affirmed the judgment of the district court.

This matter involved the interpretation of a limited liability company operating agreement. Petitioner (Showell) was a member of an accounting firm (Hoyt) and respondents (Pusey and Hatter) were the remaining members of the LLC at the time. In early 2007, Showell "retired" from Hoyt. Showell subsequently asked the court to construe the provisions of the Hoyt Operating Agreement to determine what value, if any, Showell was due for his interest in Hoyt as a consequence of his departure from the company. The court held that Showell was entitled to receive his share of the liquidation value of Hoyt as of the date of his "retirement" from the company.

Claimant Patrick Williams appealed the Industrial Commission's determination that I.C. 72-802 does not prohibit Respondent Blue cross of Idaho from seeking to exercise its contractual right of subrogation against his lump sum settlement proceeds. Claimant's insurance contract with Blue Cross contained several subrogation and reimbursement provisions. In addition to seeking payment from Blue Cross, Williams filed a complaint with the Industrial Commission seeking workersâ compensation for the medical expenses incurred as a result of two shoulder surgeries, as well as benefits for temporary and permanent disability as a result of such injuries. Claimant entered into a lump sum settlement agreement with the State Insurance Fund. After the agreement was finalized before the Commission, Blue Cross sent a letter to counsel for Williams demanding that, pursuant to Blue Crossâ right of subrogation, he withhold money from the workersâ compensation proceeds for payment to Blue Cross. The Commission ultimately concluded that I.C. 72-802 did not prohibit Blue Cross from seeking to exercise a contractual right of subrogation because Blue Cross is a subrogee, and not a creditor, within the meaning of the statute. However, the Commission found it did not have jurisdiction to consider a breach of contract claim by Blue Cross against Williams and, therefore, determined that Blue Cross must pursue its remedy in district court. Upon review of the applicable legal authority and the Commission's record, the Supreme Court affirmed the Commissionâs determination that Blue Cross was a subrogee under I.C. 72-802.

K & L Homes appealed a district court judgment based upon a jury verdict in favor of Neal Leno and Susan Leno ("the Lenos"). On appeal, K & L Homes argued: (1) the district court erred by deciding K & L Homes had not sufficiently raised the defense of fault by the Lenos in its answer; (2) the court erred by refusing to instruct the jury on comparative fault, the court erred by denying K & L Homes' request for inspection and not allowing a defendant to testify on his observations during a jury viewing; and (3) the court erred by ruling K & L Homes had not disclaimed any implied warranties as a matter of law. The Lenos purchased a newly-constructed house from K & L Homes. The Lenos alleged they noticed cracks, unevenness, and shifting due to improper construction not long after purchasing the house from K & L Homes. Initially, the Lenos claimed K & L Homes was negligent, breached the parties' contract, and breached implied warranties. The Lenos claimed the parties' contract implied warranties that the house would be built according to the applicable codes, that it would fit its purpose as a residence, and that it would be constructed according to engineering standards and in a workmanlike condition. K & L Homes requested the jury be instructed on comparative fault, but the district court denied the proposed comparative fault instruction. The district court decided K & L Homes had not adequately pled fault, and comparative fault did not apply to Lenos' cause of action. The district court also found, as a matter of law, that K & L Homes had not disclaimed any implied warranties in a Homeowners' Guide given to the Lenos at the closing on the house. Upon review, the Supreme Court agreed with the findings made by the district court and affirmed its decisions as to all issues raised on appeal.

In 2004 HD contracted with plaintiff, to develop an inventory classification system, called a taxonomy,for HDâs database. Plaintiff would own the intellectual-property rights and would license HD to use it at no-cost as long as plaintiff remained HD's data-pool vendor and HD continued paying for services. In 2008 HD began to develop an in-house database, incorporating the taxonomy that plaintiff had created. Plaintiff learned of the plan and registered a copyright. HD sent notice terminating the relationship, with a check for $100,000 to purchase a perpetual license, pursuant to the contract. HD notified suppliers to transmit their product data to its in-house system rather than to plaintiff, which returned the check and filed suit. The district judge dismissed. The Seventh Circuit affirmed, concluding that HD did not violate copyright law and that the case did not belong in federal court. HD acted in accordance with its contract rights.

Plaintiff and his wife (the Kaplans) filed suit against Mayo Clinic Rochester, Inc., other Mayo entities (collectively, Mayo), and Mayo doctors David Nagorney and Lawrence Burgart, making a number of claims arising out of plaintiff's erroneous diagnosis of pancreatic cancer and plaintiff's surgery based on that diagnosis. The Kaplans subsequently appealed the judgments in favor of Mayo and Dr. Burgart on their negligent-failure-to-diagnose and contract claims. The court held that the error, if any, in admitting a certain medical file, which included insurance documents, into evidence did not affect the Kaplans' substantial rights and the Kaplans were not prejudiced by the district court's decision not to give a limiting instruction. The court agreed with the district court that the Kaplans' assertion that the biopsy slides might have been tampered with was based on rank speculation where they failed to present evidence that the slides had been changed in any way. The court also held that the Kaplans have shown no basis for granting them a new trial on their claim for negligent failure to diagnose. The court held, however, that the district court erred in granting judgment as a matter of law where the Kaplans have offered sufficient evidence in their case-in-chief to support a breach-of-contract claim. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings.

The South Dakota Public Assurance Alliance (SDPAA), a local government risk pool, negotiated with Aurora County to provide what was essentially insurance coverage. After coverage was finalized, a local dairy farm sued the County over a pre-existing zoning dispute. The County was found liable for damages. SDPAA then sought a declaration that it did not have a duty to defend or indemnify, arguing, inter alia, that the County failed to disclose material facts relating to the claim. In a jury trial, the circuit court excluded as parol evidence the parties' pre-contract communications regarding coverage for zoning issues, including communications that could be interpreted as having disclosed the dairy farm zoning dispute. The jury found for SDPAA. The Supreme Court reversed and remanded for a new trial, holding that because the excluded coverage communications were not offered to alter or contradict any written terms of the agreement, their admission would not have violated the parol evidence rule.

In 2000 the conservancy purchased property, but allowed the farmer to remain as a tenant through 2003. The farmer/seller was required to perform removal of specified substances and warranted that there were no undisclosed underground tanks. The conservancy withheld funds pending clean-up. In 2006 the conservancy sued for breach of the warranty and failure to complete the clean-up. The district court allowed the conservancy to amend and claim damages with respect to newly-discovered contamination and entered judgment in favor of the conservancy. The Seventh Circuit affirmed. The claim is within the Illinois 10-year limitations period for actions and written contracts; the doctrine of laches does not apply.

Plaintiffs brought an action against defendant, seeking a refund of two cruise tickets they purchased and cancelled, and damages under G.L.c. 93A for unfair and deceptive trade practices. The court concluded that the evidence at trial plainly established that defendant violated the Attorney General's travel service regulations in two respects: fist, it failed to disclose the refund policy; and second, having violated the disclosure statement, it failed to refund the payments made by a cancelling customer within thirty days. These violations qualified as unfair or deceptive acts, and they caused plaintiffs a loss: the lack of a prompt refund of the ticket price. The court also concluded that plaintiffs' demand letter satisfied the requirements of G.L.c. 93A, section 9(3). The purposes of the demand letter were sufficiently fulfilled where it constituted fair notice of the claim and enabled defendant to make a reasonable tender of settlement. Accordingly, the judgment for defendant on plaintiffs' claims was reversed and the case remanded for the entry of judgment for plaintiffs and for determination of their damages, reasonable attorneys' fees, and costs.