Justia Contracts Opinion Summaries

In 2010, Idaho Power entered into two Firm Energy Sales Agreements, one with New Energy Two, LLC, and the other with New Energy Three, LLC, under which Idaho Power agreed to purchase electricity from them that was to be generated by the use of biogas. The agreement with New Energy Two stated that the project would be operational on October 1, 2012, and the agreement with New Energy Three stated that the project would be operational on December 1, 2012. Both contracts were submitted for approval to the Idaho Public Utilities Commission, and were both approved on July 1, 2010. Each of the agreements contained a force majeure clause. By written notice, New Energy Two and New Energy Three informed Idaho Power that they were claiming the occurrence of a force majeure event, which was ongoing proceedings before the Public Utilities Commission. New Energy asserted that until those proceedings were finally resolved "the entire circumstance of continued viability of all renewable energy projects in Idaho is undecided"and that as a consequence "renewable energy project lenders are unwilling to lend in Idaho pending the outcome of these proceedings."Idaho Power filed petitions with the Commission against New Energy Two and New Energy Three seeking declaratory judgments that no force majeure event, as that term was defined in the agreements, had occurred and that Idaho Power could terminate both agreements for the failure of the projects to be operational by the specified dates. New Energy filed a motion to dismiss both petitions on the ground that the Commission lacked subject matter jurisdiction to interpret or enforce contracts. After briefing from both parties, the Commission denied New Energy's motion to dismiss. The Commission's order was an interlocutory order that is not appealable as a matter of right. New Energy filed a motion with the Supreme Court requesting a permissive appeal pursuant to Idaho Appellate Rule 12, and the Court granted the motion. New Energy then appealed. Finding no reversible error, the Supreme Court affirmed the Commission's order.View "Idaho Power v. New Energy Two" on Justia Law

Kohl’s Illinois, Inc. filed a valuation complaint challenging the tax year 2010 valuation of a Kohl’s store in Marion County. The Board of Revision (BOR) dismissed the case, finding that the complaint was void because the property was subject to a tax-increment-financing (TIF) agreement that contained a covenant prohibiting the filing of a complaint against the value. The Board of Tax Appeals (BTA) affirmed the decision of the BOR. The Supreme Court vacated the decision of the BTA, holding (1) any bar to the complaint that arises from the TIF agreement is not a jurisdictional restriction, and therefore, the complaint was not void; (2) the beneficiaries of the covenant had the burden to assert the covenant as a defense against Kohl’s complaint; and (3) because the beneficiaries did not shoulder the burden to prove their entitlement to a dismissal of Kohl’s complaint, the decision of the BTA must be vacated. Remanded.View "Kohl’s Ill., Inc. v. Bd. of Revision" on Justia Law

Plaintiffs, a class of firefighters whose pension contribution rate was raised from 6% to 8.5%, filed suit alleging that the City's actions impaired the terms of their employment contracts in violation of the United States Constitution and the Alabama Constitution. The district court dismissed the complaint for failure to demonstrate that any contractual right had been impaired. The court concluded that plaintiffs have no basis upon which to challenge a violation of the Contract Clause where, without passing any law, the City, at bottom, was doing nothing different from what a private party does. The City was free to amend the employee contribution rate without constitutional consequence. Even assuming the existence of a contractual provision not to raise the employee contribution rate, plaintiffs still cannot succeed on their Contract Clause challenge because, at most, the City has breached a contract, not impaired one. Accordingly, the court affirmed the judgment of the district court.View "Taylor, et al. v. City of Gadsden, et al." on Justia Law

Plaintiff filed suit against Kenya in district court for breach of contract based on Kenya's underpayment of rewards owed to him. The court affirmed the district court's conclusion that the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1604, barred plaintiff's suit. In this case, Kenya did not waive its immunity in U.S. courts and Kenya's alleged breach of contract lacks the connection to the United States required by the commercial activity exception to the FSIA.View "Odhiambo v. Republic of Kenya, et al." on Justia Law

Plaintiffs, active and retired Baltimore police officers and firefighters who participate in a public pension plan, challenged the City's decision changing the manner in which annual increases to pension benefits are calculated. Plaintiffs claimed that the substitution of a cost-of-living adjustment for a "variable benefit" violates the members' rights under the Contract Clause and the Takings Clause. The court concluded that the members' rights under the Contract Clause were not impaired because the members retained a state law remedy for breach of contract. Accordingly, the court vacated the district court's judgment with respect to the City's elimination of the variable benefit. The court affirmed the district court's decision upholding the remaining portions of the ordinance at issue, and vacated the district court's order dismissing the Takings Clause claim. The court remanded for further proceedings. View "Cherry, Jr. v. Mayor and City Council of Baltimore City" on Justia Law

In 2003, local districts established for the promotion of tourism were legislatively dissolved to make way for larger regional districts serving that same purpose. Plaintiff, a Massachusetts corporation, filed suit against one of the regional districts (Defendant) seeking to hold Defendant liable for damages under a contract that Plaintiff had executed with one of the local districts (Local District). The district court certified questions of law to the Supreme Court regarding the satisfaction of contingent liabilities of the legislatively dissolved local districts. The Supreme Court answered (1) Defendant is not the legal successor to the Local District, as the legislature did not intend to make the regional districts the legal successors to the local districts; and (2) if the Local District transferred any of its assets to another entity and Plaintiff can establish that the assets were fraudulently conveyed, that entity may be responsible for the Local District’s obligations to the extent of the value of the assets received. View "Single Source, Inc. v. Cent. Reg'l Tourism Dist., Inc." on Justia Law

Expedia (and several other hotel booking websites, collectively, "Petitioners") has been subject to approximately 80 underlying lawsuits by states, counties, and municipalities (collectively, taxing authorities) for purportedly failing to collect the right amount of local occupancy taxes from its hotel customers. Expedia tendered most of the suits to its insurer, Zurich, although some were tendered late. Zurich refused to defend Expedia on a number of grounds, including late tender and that the underlying suits may be excluded from the policies' coverage. The trial court declined to make a determination of Zurich's duty to defend Expedia, instead ordering discovery that Expedia claimed was prejudicial to the underlying actions. Petitioners sought adjudication of their summary judgment motion concerning their respective insurers' duty to defend them in cases brought by local taxing authorities. They further requested a stay of discovery in the coverage action that could prejudice them in the underlying litigation. Upon review of the matter, the Washington Supreme Court held that the trial court erred by delaying adjudication of Zurich's duty to defend Expedia. Accordingly, the Court vacated the trial court's order. The case was remanded to the trial court to determine Zurich's duty to defend Expedia in each of the 54 underlying cases subject to Expedia's motion. The trial court was furthermore ordered to stay discovery in the coverage action until it could make a factual determination as to which parts of discovery are potentially prejudicial to Expedia in the underlying actions. View "Expedia, Inc. v. Steadfast Ins. Co." on Justia Law

A former teacher, Terum Hopper, filed a wrongful termination action against the Jefferson County Board of Education. The Board moved for summary judgment, arguing that Hopper’s tort claims were barred by governmental immunity and that Hopper was required to pursue the administrative remedies set forth in Ky. Rev. Stat. 161.790 to challenge the termination of his employment contract. The trial court granted the summary judgment motion as to the governmental immunity claims but denied the motion as to the breach of contract claims, declaring that Hopper was entitled to file suit on these claims rather than pursue administrative remedies. The Board sought a writ prohibiting the lower court from trying Hopper’s breach of contract claims. The court of appeals denied the writ, concluding that the circuit court had subject matter jurisdiction over the claims and that the Board had an adequate remedy. The Supreme Court reversed and granted the writ, holding that because Hopper filed an action in the circuit court without first exhausting the administrative remedies provided in section 161.790, the circuit court did not have subject matter jurisdiction to hear his claim. View "Jefferson County Bd. of Educ. v. Hon. Brian C. Edwards" on Justia Law

Plaintiff sought insurance coverage for gastric lap band surgery. Defendant, a health-care insurer that covered Plaintiff by virtue of Plaintiff’s husband’s employment with the federal government, refused to cover the full cost of the surgery. Plaintiff brought tort and breach of contract claims against Defendant in the Puerto Rico Court of First Instance. Defendant removed the action to the federal district court, asserting, inter alia, that the Federal Employees Health Benefits Act of 1959 (FEHBA) completely preempted Plaintiff’s local-law claims, thus conferring original jurisdiction on the federal court. Defendant then moved to dismiss the case, arguing that the FEHBA demanded exhaustion of administrative remedies. Plaintiff, in the meantime, requested that the district court remand the case to the Court of First Instance. The district court (1) denied Plaintiff’s motion to remand, holding that the FEHBA completely preempted Plaintiff’s claims and, thus, federal jurisdiction attached; and (2) dismissed the action for Plaintiff’s failure to exhaust administrative remedies. The First Circuit Court of Appeals reversed the district court’s judgment of dismissal and its order denying remand, holding that the court erred in concluding that the FEHBA afforded complete preemption. View "Lopez-Munoz v. Triple-S Salud, Inc. " on Justia Law

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law