Justia Contracts Opinion Summaries

In 2008, the legislature enacted legislation to establish the Idaho Education Network (IEN), which was to be a high-bandwidth telecommunications distribution system for distance learning in every public school in the state. Syringa Networks, LLC (Syringa), an Idaho telecommunications company, entered into a “teaming agreement” with ENA Services, LLC (ENA). Pursuant to their agreement, ENA submitted a proposal in response to a request-for-proposals (RFP) with the Department of Administration, although the cover letter stated that both ENA and Syringa were responding jointly to the proposal. Qwest Communications Company, LLC, and Verizon Business Network Services, Inc., also submitted responsive proposals. The proposals were then scored based upon specific criteria; the ENA and Qwest proposals received the highest scores. The Department issued a letter of intent to award contracts to Qwest and ENA. One month later, it issued amendments to the two purchase orders to alter the scope of work that each would perform. Qwest became "the general contractor for all IEN technical network services" (providing the “backbone”) and ENA became "the Service Provider." The effect of these amendments was to make Qwest the exclusive provider of the backbone, which was what Syringa intended to provide as a subcontractor of ENA. Syringa filed this lawsuit against the Department, its director, the chief technology officer, ENA and Qwest. The district court ultimately dismissed Syringa’s lawsuit against all of the Defendants on their respective motions for summary judgment. Syringa then appealed the grants of summary judgment, and the State Defendants cross-appealed the refusal to award them attorney fees. Upon review, the Supreme Court affirmed the judgment dismissing all counts of the complaint except count three seeking to set aside the State's contract with Qwest on the ground that it was awarded in violation of the applicable statutes. Furthermore, the Court reversed Qwest’s award of attorney fees against Syringa. We remand to the trial court the determination of whether any of the State Defendants were entitled to an award of attorney fees against Syringa for proceedings in the district court. The Court awarded costs and attorney fees on appeal to ENA. Because the State Defendants and Syringa both prevailed only in part on appeal, the Court did not award them either costs or attorney fees on appeal. View "Syringa Networks v. Idaho Dept of Admin" on Justia Law

K&D Enterprises, through its manager, Mid-America, contracted to purchase an apartment complex. Prior to the closing, K&D Enterprises created a new company, Euclid-Richmond Gardens, and assigned its rights under the purchase agreement to that new company. Euclid-Richmond Gardens hired K&D Group, Inc., a property-management company, to manage the apartment. K&D Group hired former employees of Mid-America and assumed the operations of the complex. The Bureau of Workers' Compensation later conducted an audit and determined K&D Group was the successor in interest to the business operations of Mid-America, a determination that authorized the Bureau to base K&D Group's experience rating, in part, on Mid-America's past experience, which included a large workers' compensation claim. After K&D Group's administrative appeal was denied, K&D Group unsuccessfully filed a mandamus action in the court of appeals. The Supreme Court reversed the judgment of the court of appeals and issued the writ of mandamus, holding that K&D Group was not a successor in interest for purposes of workers' compensation law, and thus, the Bureau abused its discretion when it transferred part of Mid-America's experience rating to K&D Group. View "State ex rel. K&D Group, Inc. v. Buehrer" on Justia Law

Margaret Hunt, a teacher, sued her former employer, the Richmond County Board of Education for breach of her employment contract. The parties stipulated to the amount of damages, and after a bench trial, the trial court entered judgment in the stipulated amount plus prejudgment interest. The Board cut two checks, one reflecting the interest and fees, and another intended to reflect the damages award. The award was treated as wage income, with various sums withheld to comply with state and federal tax laws. Hunt objected to that treatment of the damages award, contending that the second check prepared by the Board should have been for the full amount of the damages, and that the payment should be reported for tax purposes using an IRS Form 1099. The parties could not agree on the tax treatment of the damages award. As a result, the Board filed suit seeking an injunction against Hunt in the event she resorted to certain collection methods (such as garnishment of the Board's assets). The superior court grated a temporary restraining order. Hunt appealed to the Supreme Court, and the Supreme Court reversed: "the mere apprehension of injury does not support the grant of an injunction." View "Hunt v. Richmond County Bd. of Education" on Justia Law

Plaintiff-Appellant Richard J. Sternberg, M.D. brought an action against Defendants-Appellees Nanticoke Memorial Hospital, its CEO and members of the hospital's Medical Executive Committee (MEC) (collectively "Nanticoke") for tortious interference with existing business relationships, defamation, and breach of the Medical Staff Bylaws. The suit arose from a precautionary suspension of his clinical privileges imposed by Nanticoke under its professional review procedures. Nanticoke asserted immunity under federal and state law and sought attorneys fees, citing state law and a fee-shifting provision of Nanticoke's Medical Staff Bylaws Credentials Policy. After cross-motions for summary judgment, the Superior Court denied Sternberg's motion and granted Nanticoke's motion, awarding attorney's fees under state law without addressing Nanticoke's claim for costs and fees under the Credentials Policy. Sternberg appealed and the Supreme Court affirmed on the issue of immunity but reversed the award of attorney's fees under the applicable statute because Sternberg refuted the only fact supporting the requisite bad faith for an award under that law. Upon remand, the Superior Court awarded attorney's fees and costs based upon the Credentials Policy. Sternberg raised three claims on appeal: (1) he claimed that the Superior Court erred by granting Nanticoke's motion for summary judgment for attorney's fees under the Credentials Policy, because the bylaw violates public policy; (2) he claimed the Credentials Policy was unenforceable against him because Nanticoke materially breached the bylaws; and (3) he claimed that the Superior Court abused its discretion in determining the amount of attorney's fees and costs to be awarded. Finding no merit to any of his claims on appeal, the Supreme Court affirmed the Superior Court. View "Sternberg, M.D. v. Nanticoke Memorial Hospital, Inc., et al." on Justia Law

Appellant Altrua HealthShare appealed the district court's decision affirming the Idaho Department of Insurance's (Department) determination that Altrua transacted insurance without a certificate of authority. Altrua argued that both the Department and the Ada County district court erred in finding that Altrua was an insurer because Altrua never assumed the risk of paying its members' medical bills. The Department found, and the district court affirmed, that when members make their predetermined monthly payments into the escrow account Altrua operates, the risk of payment shifts from the individual members to the escrow account, and in turn to Altrua. Altrua also contended that the Department's determination that it is an insurer despite the disclaimers in its membership contract to the contrary is an unconstitutional interference with Altrua's right to contract. Upon review, the Supreme Court found that the Department's conclusion that Altrua's membership contract was an insurance contract was clearly erroneous, and reversed the findings. The case was remanded for further proceedings. View "Altrua Healthshare v. Deal" on Justia Law

Sharp, a federal supply contractor, submitted a termination compensation claim to the Department of the Army contracting officer, and later brought a Contracts Dispute Act claim before the Armed Services Board of Contract Appeals, claiming that, because the Army failed to exercise the entirety of the last option year under a delivery order, Sharp was entitled to premature discontinuance fees under its General Services Administration schedule contract. The ASBCA dismissed for lack of subject-matter jurisdiction, concluding that the Federal Acquisition Regulation, does not permit ordering agency contracting officers to decide disputes pertaining to schedule contracts. The Federal Circuit affirmed. Under FAR 8.406-6, only the GSA contracting office may resolve disputes that, in whole or in part, involve interpretation of disputed schedule contract provisions. View "Sharp Elec. Corp. v. McHugh" on Justia Law

These three cases stemmed from a residency policy that called for employees of the City of Niagara Falls School District hired or promoted after the policy's effective date to reside in the City and maintain residency there during their employment. Here the District's Administrator for Human Resources notified three employees that they were suspected of violating the residency policy. The Board then terminated the employees' employment for failure to comply with the policy. On appeal, the Appellate Court (1) found that the District did not meet its burden of proving by clear and convincing evidence that the employee had changed her domicile in the first case; (2) found the Board's determination was not arbitrary and capricious in the second case; and (3) determined that the third employee's termination was arbitrary and capricious. The Court of Appeals reversed in the first case, affirmed in the second case, and reversed and remanded in the third case, holding (1) the residency policy and its implementing regulations were clear and unambiguous; (2) the District's notice-and-hearing procedures easily complied with due process; and (3) in the majority of these cases, the Board's determinations were not arbitrary or an abuse of discretion. View "Beck-Nichols v. Bianco" on Justia Law

In 2001, U.S. Immigrations and Customs Enforcement awarded Northrop a contract for lease and support of Oakley network monitoring software for one base year and three option years at about $900,000 per year. To obtain Oakley’s software, Northrop was required to pay $2,899,710, so Northrup assigned its payment rights to ESCgov for $3,296,093. ESCgov assigned its rights to Citizens, but the government was not notified. In 2005, ICE decided not to exercise the first option. Northrop sent the contracting officer a “Contract Disputes Act Claim for not Exercising Option,” citing the Contract Disputes Act, 41 U.S.C. 601. The letter did not mention the two assignments. The CO denied Northrop’s claim. The Court of Federal Claims dismissed, holding that Northrop had not supplied the CO “adequate notice” because it failed to reference potential application of the Anti-Assignment Act and Severin doctrine. While the matter was pending, Northrop filed a second claim, including documents on the financing arrangements. The CO determined that Northrop’s second claim was the same claim and declined to issue a final decision. The Claims Court again held that it lacked jurisdiction. The Federal Circuit consolidated the cases and reversed, finding that the first letter constituted a valid claim. View "Northrop Grumman Computing Sys., Inc. v. United States" on Justia Law

Borrowers obtained secured loans from InBank. Their promissory notes established that InBank would calculate annual interest rates by adding a predetermined amount, usually one percent, to a variable index rate set by InBank at “its sole discretion,” which could change up to once per day. InBank stated that it would set the rate “at or around the U.S. prime rate.” Borrowers compared loan statements and found that the rate was neither consistent across customers nor close to the prime rate. After borrowers filed suit, the Illinois Department of Financial and Professional Regulation took control of InBank and appointed the Federal Deposit Insurance Corporation as receiver. MB Financial purchased InBank accounts. The borrowers filed an amended class action against MB, claiming violations of the Interest Act, 815 ILCS 205/1, and the Consumer Fraud and Deceptive Practices Act, 815 ILCS 505/1. The court granted a motion to substitute the FDIC as defendant, then dismissed. The Seventh Circuit held that dismissal was proper for failure to exhaust remedies under the Financial Institutions Reform, Recovery, and Enforcement Act, 12 U.S.C. 1821(d)(3)-(d)(13). The claims relate to InBank’s alleged acts and omissions, not MB’s, and there is no support for an assumption of liability argument.View "Farnik v. Fed. Deposit Ins. Corp" on Justia Law

This action stemmed from a contract for construction of a baseball stadium and home field for the Seattle Mariners baseball team. In its first trip to the Supreme Court, "Washington State Major League Baseball Stadium Public Facilities District v. Huber, Hunt & Nichols-Kiewit Construction Company," (202 P.3d 924 (2009) (PFD I)), the Court held that the statute of limitations did not bar the owner’s suit against the general contractor because the action was brought for the benefit of the State, and therefore the exemption from the statute of limitations set out in RCW 4.16.160 applied. This case raised questions about whether the construction statute of repose barred suit against the general contractor and, if not, whether the general contractor may pursue third party claims against two of its subcontractors. The trial court granted summary judgment of dismissal in favor of the general contractor and the subcontractors on statute of repose grounds. Upon review of the matter, the Supreme Court reversed the trial court: "the statute of repose does not bar suit against the general contractor. In accord with several provisions in the subcontracts, the subcontractors are subject to liability to the same extent that the general contractor may be liable for any defective materials or work under the subcontracts. Thus, the trial court erred in holding that the statute of repose bars Hunt Kiewit’s third party claims against the subcontractors." View "Wash. State Major League Baseball Stadium v. Huber, Hunt & Nichols-Kiewit Constr. Co." on Justia Law