Justia Contracts Opinion Summaries

Plaintiffs worked as detention officers for Glynn County under Sheriff Jump’s supervision. Although it is unclear from the record whether the Officers are formally deputy sheriffs, it is undisputed that they are, at minimum, direct employees of Sheriff Jump, in his official capacity, akin to deputies. The Officers brought a Fair Labor Standards Act (FLSA) collective action alleging that the County “illegally calculated their and other detention officers’ overtime wages.” The County moved to dismiss for failure to state a claim. In response, the Officers amended their complaint to include Sheriff Jump in his individual capacity. The County and Sheriff Jump then moved to dismiss the amended complaint for lack of subject-matter jurisdiction and for failure to state a claim, arguing that neither defendant was the Officers’ employer under the FLSA.   The Eleventh Circuit affirmed both the district court’s denial of the Officers’ motion for leave to amend and its ultimate dismissal of the amended complaint. The court held that the district court correctly dismissed the Officers’ complaint against Sheriff Jump in his individual capacity because he is not an “employer” under the FLSA. Further, the court agreed with the district court that Sheriff Jump would be entitled to Eleventh Amendment immunity when making compensation decisions for his employees. Further, the court held that Georgia “retained its Eleventh Amendment immunity” from suits in federal court for breach-of-contract claims because no statute or constitutional provision “expressly consents to suits in federal court. View "Langston Austin, et al. v. Glynn County, Georgia, et al." on Justia Law

Guaranteed Rate, Inc., a mortgage lender, purchased two types of insurance policies from ACE American Insurance Company: management liability and professional liability. Guaranteed Rate sought coverage under the policies for an investigation and eventual settlement of claims brought by the federal government under the False Claims Act. ACE denied coverage under both policies. According to ACE, the Professional Liability Policy expressly excluded False Claims Act charges. ACE also contended that the False Claims Act charges arose from Guaranteed Rate’s professional services, which were excluded under the Management Liability Policy. Only the Management Liability Policy was at issue in this appeal. In Guaranteed Rate’s suit against ACE, a Delaware superior court held that the False Claims Act investigation and settlement did not arise out of Guaranteed Rate’s professional services. Instead, it arose out of false certifications made to the government. Thus, the Management Liability Policy covered the loss. To this, the Delaware Supreme Court agreed with the superior court. View "ACE American Insurance Company v. Guaranteed Rate, Inc." on Justia Law

Plaintiff sued defendants Jeff Jenkins, Jeff Jenkins Productions, LLC, and Bongo, LLC, for breach of contract and eight other causes of action. Plaintiff’s complaint alleged she conceived the idea for and worked to develop and coproduce a popular television program that came to be known as Bling Empire on Netflix. In the spring of 2018, Plaintiff presented the idea for the program to Defendant Jenkins during a series of discussions, and she gave Jenkins written development material concerning the program. Plaintiff alleged causes of action for breach of the implied covenant of good faith and fair dealing, intentional and negligent misrepresentation, fraudulent inducement, and other claims. Defendants responded with an anti-SLAPP motion.   The Second Appellate District affirmed the trial court’s order denying Defendants’ anti-SLAPP motion to strike Plaintiff’s complaint. The court concluded that adhering to the two-part test announced in FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133 (FilmOn), that while the creation of a television show is an exercise of constitutionally protected expression, in this case, there is no “functional relationship” between the activity challenged in the complaint and the issue of public interest, as required by FilmOn.  Further, the court wrote that the conduct challenged, while it “implicates” a public issue, does not “contribute to public discussion of that issue” Consequently, Defendants’ activity excluding Plaintiff and failing to compensate her was not undertaken “in furtherance of free speech ‘in connection with’ an issue of public interest.” View "Li v. Jenkins" on Justia Law

In 2002, the Defendant-appellee Carmela Hill (Hill) pursued counterclaims against U.S. Bank and its mortgage servicer Nationstar following bank's dismissal of its foreclosure action against Hill. A jury returned a verdict against bank on borrower's wrongful foreclosure claim and a verdict against the mortgage servicer on multiple claims including violations of the Oklahoma Consumer Protection Act (OCPA) and the Fair Debt Collection Practices Act (FDCPA). The trial court awarded attorney's fees and costs to Hill. The Bank and mortgage servicer appealed and Hill counter-appealed. The Oklahoma Court of Civil Appeals dismissed in part borrower's appeal and found neither the OCPA or the FDCPA was applicable. It reversed the attorney's fee award and reduced the amount of awarded costs. In addition, it reversed the wrongful foreclosure judgment against bank and affirmed the remainder of the judgment which concerned breach of contract and tort claims against the mortgage servicer. The Oklahoma Supreme Court dismissed that portion of Hill's appeal seeking review of the trial court's Category II punitive damages ruling; reversed Hill's wrongful foreclosure judgment against U.S. Bank; reversed the OCPA portion of the judgment against Nationstar; affirmed the FDCPA portion of the judgment against Nationstar, including the $1,000.00 award under the FDCPA; reversed the award of attorney's fees and remanded the matter to the trial court to determine a reasonable attorney's fee consistent with the Court's opinion; and reversed $1,223.39 of the costs awarded to Hill. The remainder of the judgment was affirmed. View "U.S. Bank National Assoc. v. Hill" on Justia Law

Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

United Aeronautical Corporation and Blue Aerospace, LLC (collectively, Aero) filed suit against the United States Air Force and Air National Guard (collectively, USAF) in the U.S. District Court for the Central District of California. Aero alleges that USAF has for some time violated federal procurement regulations and the Trade Secrets Act by improperly using Aero’s intellectual property. The district court dismissed for lack of subject matter jurisdiction, concluding that the Contract Disputes Act (CDA), precludes jurisdiction over Aero’s action by vesting exclusive jurisdiction over federal-contractor disputes in the Court of Federal Claims.   The Ninth Circuit affirmed. The panel agreed with the district court that the Contract Disputes Act “impliedly forbids” jurisdiction over Aero’s claims by vesting exclusive jurisdiction over federal-contractor disputes in the Court of Federal Claims. A claim falls within the scope of the CDA’s exclusive grant of jurisdiction if (1) the plaintiff’s action relates to (2) a procurement contract and (3) to which the plaintiff was a party. Here, Aero’s claims that USAF improperly received and used MAFFS data (1) relate to the DRA, (2) the DRA is a procurement contract, and (3) Aero is a contractor for purposes of the DRA. The panel held that the test set forth in Megapulse, Inc. v. Lewis, 672 F.2d 959 (D.C. Cir. 1982), is limited to determining whether the Tucker Act—which grants exclusive jurisdiction to the Court of Federal Claims over breach-of-contract actions for money damages—“impliedly forbids” an ADA action because Megapulse addressed implied preclusion only pursuant to the Tucker Act, not pursuant to the CDA. View "UNITED AERONAUTICAL CORP., ET AL V. USAF, ET AL" on Justia Law

Saloojas, Inc. (“Saloojas”) filed five actions against Aetna Health of California, Inc. (“Aetna”), seeking to recover the difference in cost between its posted cash price for COVID-19 testing and the amount of reimbursement it received from Aetna. Saloojas argues that Section 3202 of the CARES Act requires Aetna to reimburse out-of-network providers like Saloojas for the cash price of diagnostic tests listed on their websites. The district court dismissed this action on the ground that the CARES Act does not provide a private right of action to enforce violations of Section 3202.   The Ninth Circuit affirmed. The panel held that the CARES Act does not provide a private right of action to enforce violations of Section 3202. Saloojas correctly conceded that the CARES Act did not create an express private right of action. The panel held that there is not an implied private right of action for providers to sue insurers. The use of mandatory language requiring reimbursement at the cash price does not demonstrate Congress’s intent to create such a right. The statute does not use “rights-creating language” that places “an unmistakable focus” on the individuals protected as opposed to the party regulated. View "SALOOJAS, INC. V. AETNA HEALTH OF CALIFORNIA, INC." on Justia Law

Plaintiff NexPoint holds $7.5 million in subordinated notes issued by Acis CLO-2015-6 Ltd. (the “Issuer”), as part of a CLO. The Issuer acquired the CLO collateral and conveyed it to a trust under an indenture between the Issuer and U.S. Bank National Association as Trustee (the “Indenture”). Defendant-appellee Acis Capital Management, L.P. (“Acis”) was engaged as the CLO’s portfolio manager pursuant to a Portfolio Management Agreement between the Issuer and Acis (the “PMA”). NexPoint claims that Acis, Terry, and Brigade (together, the “Advisers”) maximized their own profits at the expense of the CLO in violation of fiduciary duties imposed by Section 206 of the IAA. The district court concluded that NexPoint failed to state a claim under Section 215(b). NexPoint appealed, arguing that the District Court erred in limiting Section 215(b)’s application to contracts that require illegal performance, as opposed to lawful contracts performed in an unlawful manner.   The Second Circuit affirmed. The court held that under Section 215(b), a contract’s performance involves the violation of the IAA only if performing a contractual duty requires conduct prohibited by the IAA. No such unlawful conduct is required by the contracts NexPoint seeks to rescind. The court further explained that the text and structure of the IAA, interpreted with the benefit of TAMA, Oxford, and other precedent, make clear that a contract’s performance “involves” the violation of the IAA only if performing a contractual duty requires a party to engage in conduct prohibited by the IAA. NexPoint does not seek rescission of any contract requiring a party to engage in conduct prohibited by the IAA. View "NexPoint Diversified Real Est. Tr. v. Acis Cap. Mgmt., L.P." on Justia Law

The Estate of Josiah Wheeler and Josiah’s parents, Keith and Rhetta Wheeler (collectively, “the Wheelers”) appealed the district court’s grant of summary judgment in favor of Garrison Property and Casualty Insurance Company (“Garrison”).   The Ninth Circuit explained that because this case involves an issue of first impression under Alaska law, it respectfully asks the Alaska Supreme Court to exercise its discretion to decide the following certified question: Does a total pollution exclusion in a homeowners’ insurance policy exclude coverage of claims arising from carbon monoxide exposure? View "THE ESTATE OF JOSIAH WHEELER, ET AL V. GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY" on Justia Law

This action concerns loans issued by Plaintiff, EMA Financial, LLC, to a group of companies that were controlled by Defendants. The loan agreements contained so-called “floating-price conversion option” provisions, which gave EMA the right to exercise an option to receive company stock in lieu of cash repayment on the loans. When EMA initially sought partial repayment of the loans through the stock repayment option in 2017, the companies delivered the shares to EMA at the agreed-upon discount rate. EMA sought to exercise the conversion option again. This time, the companies failed to deliver the stock. EMA then brought suit, claiming breach of contract and breach of guaranty as to the loan agreements, and fraudulent conveyance and fraudulent inducement. Defendants asserted as an affirmative defense that the loan agreements were void because the conversion option provisions rendered the agreements criminally usurious under New York law. The district court dismissed this defense and entered judgment in favor of EMA for some of its claims and in favor of Defendants for other. Two Defendants appealed, arguing that the district court’s dismissal of the usury defense at summary judgment should be vacated in light of an intervening change in New York law.   The Second Circuit vacated. The court reasoned that it is also clear that Adar Bays II materially altered the Defendants’ rights by providing them with a newly viable avenue by which they could seek to void the Notes and avoid liability for breaching them. Therefore, even assuming the other necessary conditions for collateral estoppel are met, the Defendants are not precluded from raising a usury defense notwithstanding the Corporate Defendants’ default. View "EMA Financial, LLC v. Chancis" on Justia Law