Justia Contracts Opinion Summaries

Five companies entered into special contracts with the Toledo Edison Company for the sale of electricity. The Public Utilities Commission of Ohio (PUCO) established February 2008 as the termination date for the contracts, basing its finding on the language of the special contracts and its orders in earlier electric-deregulation cases. Appellants challenged the decision, contending (1) Toledo Edison agreed in 2001 that the contracts would not terminate until Toledo Edison stopped collecting regulatory-transition charges from its customers, and (2) December 31, 2008 was the date when Toledo Edison stopped collecting regulatory-transition charges. The Supreme Court reversed, holding that the PUCO ignored the plain language of the 2001 amendments to Appellants' special contracts, and accordingly, the PUCO unlawfully and unreasonably allowed Toledo Edison to terminate the special contracts in February 2008.

Five years after Homeowners contracted for the construction of their home, Homeonwers sued Elite Homes, the construction company that built their home, and Motorists Mutual Insurance, the insurance company that provided commercial general liability (CGL) insurance to the construction company while the home was under construction, claiming the house was so poorly built it was beyond repair. Motorists settled Homeonwers' claims against itself and Elite. Under the terms of the settlement, Homeowners and Elite assigned to Motorists all claims they may have had against Cincinnati Insurance, which was a successor to Motorists as Elite's CGL insurer. Motorists then filed a third-party complaint against Cincinnati. The trial court granted summary judgment to Cincinnati, holding that Homeowners' claims of intangible economic loss did not qualify as an "occurrence" causing property damage under Cincinnati's CGL policy. The court of appeals vacated the grant of summary judgment. At issue on appeal was whether faulty construction-related workmanship, standing alone, qualifies as an "occurrence" under a CGL policy. The Supreme Court reversed the court of appeals and reinstated the judgment of the trial court, holding that the trial court's conclusion that the claims were not an "occurrence" was correct.

This action for breach of contract and related tort claims had its origin in a February 9, 2006 Credit and Security Agreement, wherein defendant agreed inter alia to provide plaintiff with a revolving line of credit. Plaintiff subsequently appealed from a judgment of dismissal entered by the district court, contending that the district court erred in relying on releases executed in favor of defendant, most recently in a forbearance agreement to dismiss its claims because its complaint pleaded that these releases were induced by economic duress. The court held that plaintiff failed to plead plausibly that defendant made a "wrongful threat," an essential element of economic duress. Rather, the conduct alleged to have caused duress evidences only the exercise of defendant's legal rights under the parties' original contract and subsequent agreements. Therefore, to the extent that those rights included defendant's exercise of "reasonable discretion" in various areas, plaintiff's allegations failed as a matter of law to plead actions exceeding the scope of such discretion. Accordingly, the court affirmed the judgement of dismissal.

Plaintiff appealed the district court's grant of summary judgment to defendant on his claim of malicious prosecution under Arkansas law. The district court held that plaintiff failed to present evidence sufficient to withstand summary judgment on two of the five elements necessary to sustain his claim. The court held that the district court erred in holding that the evidence was insufficient as a matter of law to sustain plaintiff's claim that defendant brought suit against him on the guaranty without probable cause. The court also held that a jury must decide what was defendant's motive or purpose in suing plaintiff if it in fact understood it had no reasonable chance of prevailing on the merits of its claim against plaintiff.

Plaintiff was injured while driving his employer's tow truck. Plaintiff filed suit against the driver of the other car involved in the accident, and later sought to invoke his employer's uninsured motorist policy in an amount equal to the liability coverage for bodily injury. The employer's insurer filed a motion for partial summary judgment, seeking to limit uninsured motorist coverage to the amount listed in the policy rather than the amount fixed by statute. The trial court denied the motion. The court of appeals reversed, directing that the insurer's motion for partial summary judgment be granted. The Supreme Court affirmed, holding that when the insured signs an application indicating the selection of uninsured motorist coverage lower than the liability limits but neglects to initial a provision designed to confirm the selection of coverage less than the standard provided by statute, the requirement under Tenn. Code Ann. 56-7-1201(a)(2) that the selection be in writing has been satisfied.

Appellant appealed the district court's orders granting summary judgment in favor of the City of Lake Lotawana, and its mayor, and the subsequent dismissal of her wrongful termination and retaliation claims. On appeal, appellant contended that the city breached her employment contract and that she established triable issues of fact as to her retaliation claims. The court held that the city was entitled to summary judgment on appellant's wrongful termination claim where she did not have an enforceable contract or viable tort claim. The court also held that appellant was terminated because of her inappropriate activities and therefore, the dismissal of appellant's retaliation claims was affirmed because nothing in the record indicated that her opposition to unlawful discrimination was a contributing factor to her termination. The court further held, for the same reasons, that appellant could not succeed under the more stringent standard applied in the Title VII and Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621 et seq., claims. Accordingly, the court affirmed the judgement of the district court.

State Farm petitioned for review of the Third District's determination that the household exclusion in its policy issued to respondents was ambiguous and therefore could not be enforced to eliminate coverage for bodily injuries suffered by members of the household of a permissive-driver insured. The court held that the plain language of the household exclusion precluded coverage for bodily injuries suffered by members of the household of a permissive-driver insured, such as the parents in this case. Therefore, the court quashed the Third District's decision, approved Linehan v. Alkhabbaz, and remanded for further proceedings.

This case was remanded from the U.S. Supreme Court. Appellants Keith Litman and Robert Watchel asked the Third Circuit to reverse a district court order that compelled them to arbitrate their contract dispute with Cellco Partnership (d/b/a Verizon Wireless) on an individual rather than class-wide basis. In an unpublished opinion, the Third Circuit vacated the district court order because a recent Third Circuit precedent bound the Court to conclude that class arbitration should have been available to Appellants. Verizon responded by seeking a stay of the mandate and seeking review by the Supreme Court. Having reviewed the supplemental briefing and applicable legal authority, the Third Circuit concluded that the applicable law at issue that required the availability of classwide arbitration created a scheme inconsistent with the Federal Arbitration Act. Accordingly, the Court affirmed the district courtâs order compelling individual arbitration in accordance with the terms of the individual Appellantsâ contracts with Verizon.

Third-party defendant Providence Holdings, Inc. appealed a partial summary judgment that awarded Skilstaf, Inc. and Park Avenue Property & Casualty Insurance Company, Inc. (PACA) damages arising out of a loan dispute. Providence is an insurance holding company. Skilstaf and PACA loaned Providence $3.1 million under three âsurplus loan agreementsâ to help one of its subsidiaries carry out its insurance business and âmeet regulatory requirements as to capital and surplus.â Providence was required to repay Skilstaf and PACA âwhen and as interest and principal are received on the . . . surplus note[s],â In 2005, Providence canceled the surplus certificates and converted them to paid-in capital. In 2008, Providence sold its subsidiary. At some point thereafter, the subsidiary was placed into receivership and liquidated. Providence made interest payments under the surplus loan agreements to Skilstaf and PACA through November 2009, but failed to repay any principal. Skilstaf and PACA sued Providence, and moved for summary judgment, arguing that the surplus loan agreements mandated repayment of the loans when Providence converted the surplus certificates to paid-in capital. The district court agreed, stating that âthe indebtedness represented by the surplus notes was discharged by the conversion and that this discharge/conversion effected a repayment of the surplus notes within the meaning of the surplus loan agreements.â Upon review, the Tenth Circuit affirmed the lower court for substantially the same reasons.

Defendant manufactures medical goods and has distributors all over the U.S., including plaintiffs, which had exclusive distributorship agreements. When defendant terminated the agreements, plaintiffs were forced to shut down their businesses and sued for breach of contract, intentional misrepresentation, and negligent misrepresentation. The district court dismissed a negligent misrepresentation claim. A jury returned a verdict against defendant on remaining claims, awarding actual and punitive damages. The magistrate set aside the punitive damages awards. The Seventh Circuit vacated the awards of lost profits as not allowed by the contract and affirmed the decision to set aside punitive damages, but affirmed verdicts against defendant on intentional misrepresentation and negligent misrepresentation. The court vacated awards of actual damages, as supported by insufficient evidence.