Justia Contracts Opinion Summaries

The Texas Optometry Act prohibits commercial retailers of ophthalmic goods from attempting to control the practice of optometry; authorizes the Optometry Board and the Attorney General to sue a violator for a civil penalty; and provides that “[a] person injured as a result of a violation . . . is entitled to the remedies. In 1992, Wal-Mart opened “Vision Centers” in its Texas retail stores, selling ophthalmic goods. Wal-Mart leased office space to optometrists. A typical lease required the optometrist to keep the office open at least 45 hours per week or pay liquidated damages. In 1995, the Board advised Wal-Mart that the requirement violated the Act. Wal-Mart dropped the requirement and changed its lease form, allowing the optometrist to insert hours of operation. In 1998, the Board opined that any commercial lease referencing an optometrist’s hours violated the Act; in 2003, the Board notified Wal-Mart that it violated the Act by informing optometrists that customers were requesting longer hours. Optometrists sued, alleging that during lease negotiations, Wal-Mart indicated what hours they should include in the lease and that they were pressured to work longer hours. They did not claim actual harm. A jury awarded civil penalties and attorney fees. The Fifth Circuit certified the question of whether such civil penalties, when sought by a private person, are exemplary damages limited by the Texas Civil Practice and Remedies Code Chapter 41. The Texas Supreme Court responded in the affirmative, noting that “the certified questions assume, perhaps incorrectly, that the Act authorizes recovery of civil penalties by a private person, rather than only by the Board or the Attorney General.” View "Wal-Mart Stores, Inc. v. Forte" on Justia Law

USA Tire Management Systems Inc. entered into a contract with Great Western Bank to “take title to, remove, and transport” tires and casings from a foreclosed property that a bank was attempting to sell. After an audit, the South Dakota Department of Revenue issued an assessment on the gross receipts USA Tire received from Great Western under their contract. USA Tire contested the assessment. The circuit court affirmed the assessment. USA Tire appealed, arguing that it was entitled to a trucking services tax exemption. The Supreme Court affirmed, holding that USA Tire did not meet its burden of proving that its services were exempt trucking services under S.D. Codified Laws 10-45-12.1. View "In re Sales Tax Liability of USA Tire Mgmt. Sys., Inc." on Justia Law

GA entered into a blanket purchase agreement (BPA 218), with the Department of Veterans Affairs (VA) in June 2011, to furnish trained service dogs for disabled veterans. A year later, the contracting officer sent an email questioning GA's performance. On August 31, 2012, the officer sent notice terminating BPA 218 for default and suspending open orders, informing GA that it had the right to appeal under the disputes clause of the contract. On December 21, 2012, GA sent a letter to the VA’s Rehabilitation Research & Development Service, arguing that it had fulfilled its duties and that the default termination should be converted to a termination for the convenience of the government. On February 28, 2013, GA sent the contracting officer a “formal demand.” On March 21, the officer sent a letter stating that she had received the claim but needed supporting documentation. GA began compiling documentation, but on May 3, the officer sent another letter, stating that she would not reconsider her decision, but that GA could appeal under 41 U.S.C. 7104(b). On January 7, 2014, GA filed suit. The Court of Federal Claims dismissed, finding the claim time-barred because, while the February 2013 letter qualified as a request for reconsideration, the officer did not reconsider, so the statute of limitations never tolled. The Federal Circuit reversed. The 12-month statutory appeal period did not begin to run until the officer rejected the request for reconsideration on May 3. View "Guardian Angels Med. Serv. Dogs, Inc. v. United States" on Justia Law

The California Department of Transportation (CalTrans) and Papich Construction Company, Inc. appealed a trial court’s issuance of a writ of mandate to vacate the award of a public works contract to Papich. DeSilva Gates Construction submitted the second-lowest bid (the first bidder was disqualified for a non-responsive bid), and included the names and description of work by all subcontractors slated to perform work exceeding one-half of one percent of the bid amount. DeSilva later sent a letter to CalTrans noting DeSilva had inadvertently supplied CalTrans with additional information on the subcontractor list "above and beyond what was required." DeSilva explained it had not listed "All Steel Fence" as a subcontractor in its bid because the value of the bid items it would perform was less than one-half of one percent of the bid and the information for All Steel Fence (submitted within 24 hours of the bid) was additional information that was not required. Papich challenged DeSilva’s bid as having changed the subcontractor list. CalTrans rejected DeSilva’s bid as nonresponsive. DeSilva protested CalTrans’s determination that its bid was nonresponsive and protested Papich’s bid. The trial court granted the writ on grounds CalTrans erroneously rejected DeSilva's bid, and erred by awarding the contract to Papich despite Papich’s failure to comply with a material requirement of the information for bids. On appeal, CalTrans and Papich argued DeSilva’s bid was nonresponsive. Appellants also argued CalTrans had discretion to waive Papich’s mistake in failing to acknowledge the addendum to the information for bids. After review, the Court of Appeal concluded the trial court did not err. DeSilva’s disclosure of a subcontractor performing work amounting to only one-tenth of one percent of the total value of the contract was not required by the Public Contract Code or CalTrans’s information for bids. The additional information was accurate, albeit unnecessary, and did not render DeSilva’s bid nonresponsive. By contrast, CalTrans initially declared Papich’s bid to be nonresponsive and then waived Papich’s mistake and determined the bid to be responsive. The Court concluded CalTrans abused its discretion by awarding Papich the contract. Accordingly, the Court affirmed the trial court’s issuance of the writ of mandate. View "DeSilva Gates Construction, LP v. Dept. of Transportation" on Justia Law

The issue this case presented for the Pennsylvania Supreme Court’s review centered on review of a Commonwealth Court order Court interpreting a provision of a consent decree, negotiated by the Office of Attorney General of Pennsylvania ("OAG") and approved by the Commonwealth Court, between Appellant UPMC, a nonprofit health care corporation, and Appellee Highmark, a nonprofit medical insurance corporation, which established the obligations of both parties with respect to certain health care plans serving vulnerable populations. Specifically, the Court considered whether the Commonwealth Court erroneously interpreted this "vulnerable populations" provision as creating a contractual obligation for UPMC to treat all participants in Highmark’s "Medicare Advantage Plans" (for which Highmark and UPMC currently have provider contracts which UPMC has indicated it will terminate) as "in-network" for purposes of determining the rates it is permitted to charge these individuals for physician, hospital, and other medical services during the duration of the consent decree. After careful review, the Supreme Court affirmed the Commonwealth Court’s finding that the "vulnerable populations" clause of the consent decree required UPMC to "be in a contract" with Highmark for the duration of the consent decree, and, thus, that UPMC physicians, hospitals, and other services shall be treated as "in-network" for participants in Highmark Medicare Advantage plans which were subject to provider contracts between Highmark and UPMC set to be terminated by UPMC on December 31, 2015. The Court also affirmed the portion of the Commonwealth Court’s order requiring judicial approval for any further changes in business relationships between these parties which were governed by the consent decree, but quashed as not yet ripe for review the portion of the order which directed the OAG to file a request for supplemental relief to effectuate compliance with the consent decree. View "Pennsylvania v. UPMC" on Justia Law

Pilkington North America, Inc. entered into a social contract with Toledo Edison Company under which Toledo provided one of Pilkington’s facilities with discounted electric service. The Public Utilities Commission approved the special contract. Pilkington later filed a complaint alleging that Toledo Edison had unlawfully terminated the special contract. Five other companies that also had special contracts with the utility also filed complaints against Toledo Edison. The Commission consolidated the six complaints and dismissed them. With the exception of Pilkington, each of the industrial customers appealed the Commission’s decision. The Supreme Court reversed the Commission’s order, concluding that Toledo Edison had prematurely terminated the special contracts. Pilkington subsequently filed a Ohio R. Civ. P. 60(B) motion for relief from judgment with the Commission seeking relief from the Commission’s order dismissing its complaint and its order denying the application for rehearing that the other five complainants filed. The Commission denied Pilkington’s motion, concluding that Pilkington may not use Rule 60(B) as a substitute for appeal. The Supreme Court affirmed, holding that because Pilkington did not appeal the Commission’s adverse judgment, that judgment is final, and res judicata precludes the use of Rule 60(B) to obtain relief from that final judgment. View "In re Complaint of Pilkington N. Am., Inc." on Justia Law

Kleen Energy Systems, LLC, an electric generating facility, entered into a contract with Connecticut Light and Power Company, an electric distribution company. A dispute subsequently arose concerning the proper interpretation of the contract’s pricing provision. At the request of Waterside Power, LLC, which had entered into a similar contract with Connecticut Light and Power, the Commissioner of Energy and Environmental Protection, acting through the Public Utilities Regulatory Authority (the Authority), conducted proceedings to resolve the dispute. Kleen Energy was a participant in, but not a party to, those proceedings. Waterside subsequently filed a petition for a declaratory ruling challenging the decision. The Authority issued a declaratory ruling denying Waterside relief. Kleen Energy filed an administrative appeal from the Authority’s ruling, claiming that it had a contractual right to submit the dispute to arbitration and that the Authority lacked jurisdiction to issue a declaratory ruling to resolve the dispute. The trial court ultimately concluded (1) the Authority had jurisdiction to issue a declaratory ruling to resolve the dispute, (2) Kleen Energy had waived its contractual right to arbitration, and (3) the Authority had properly resolved the dispute. The Supreme Court reversed, holding that the trial court erred in determining that the Authority had jurisdiction to resolve the pricing dispute. View "Kleen Energy Sys., LLC v. Comm’r of Energy & Envtl. Prot." on Justia Law

Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law

The DeSoto County School District entered into a contract with a private entity called the Mississippi High School Activities Association (“MHSAA”). The terms of the contract allowed MHSAA to decide whether School District students were eligible to play high school sports. In making its decisions, MHSAA applied its own rules and regulations, and neither the School District nor its school board had input into the process. In 2012, R.T. was a star quarterback for Wynne Public School in Wynne, Arkansas. His parents, the Trails, decided that a change of school districts would be in R.T.’s best interests, so in January 2013 they bought a house in Olive Branch and enrolled R.T. in Olive Branch High School. Their daughter was to remain in Wynne until the school year ended. MHSAA determined that R.T. was eligible to compete in spring sports and allowed R.T. to play baseball. MHSAA conditioned R.T.’s continuing eligibility on the Trails’ daughter also enrolling in the School District at the start of the 2013-2014 school year. But, because the Trails’ daughter did not want to leave her friends behind in Arkansas, the family decided that one parent would stay in Arkansas with their daughter, as they had done during the spring semester, and the other parent would move to Mississippi and remain with R.T. On the eve of the 2013 football season, MHSAA notified the school and R.T. that, under its interpretation of its rules and regulations, R.T. was ineligible to play because it had determined that his family had not made a bona fide move to the School District. Neither the School District nor Olive Branch High School appealed through MHSAA’s internal procedure, so the Trails immediately filed a petition for a temporary restraining order (TRO) and preliminary injunction in the DeSoto County Chancery Court. The chancellor signed an ex-parte order granting the TRO and revoking MHSAA’s adverse eligibility determination. "While it generally is true that high school students have no legally protected right to participate in high school athletics,25 once a school decides to create a sports program and establish eligibility rules, the school—or as in this case, MHSAA—has a duty to follow those rules; and it may be held accountable when it does not do so. . . . And where, as here, the school delegates its authority to control student eligibility through a contract with a private entity, we hold that students directly affected by the contract are third-party beneficiaries of that contract. For us to say otherwise would run contrary to the very reason for extracurricular activities, which is to enrich the educational experience of the students." R.T. had standing to challenge MHSAA's eligibility decision that prevented him from playing high school sports. The Court affirmed the chancery court in this case, and remanded the case for further proceedings. View "Mississippi High School Activities Association, Inc. v. R.T." on Justia Law

In 1998, Glenn Johnson suffered serious work-related injuries. In separate administrative proceedings, the parties contested the details and amounts of the lifetime workers’ compensation benefits Johnson was entitled to. Johnson and his wife filed the instant suit against his employer’s workers’ compensation insurance provider and related individuals and entities (collectively, Crawford), alleging that Crawford engaged in a plan to delay and deny benefits that the Johnsons were entitled to receive. Crawford filed a plea to the jurisdiction and motion for summary judgment, arguing that the Texas Department of Insurance Division of Workers’ Compensation had exclusive jurisdiction over all of the Johnsons’ claims because they arose out of the workers’ compensation claims-handling process. The trial court dismissed the Johnsons’ claims for breach of the common law duty of good faith and fair dealing and for violations of the Texas Insurance Code but refused to dismiss any of the other claims. The Supreme Court conditionally granted mandamus relief, holding that all of the Johnsons’ claims arose out of Crawford’s investigation, handling, and settling of claims for workers’ compensation benefits, and therefore, the Division had exclusive jurisdiction over the Johnsons’ claims. View "In re Crawford & Co." on Justia Law