Justia Contracts Opinion Summaries

In 2003, the Coalition Provisional Authority (CPA) was established to rule Iraq pending transfer of authority to the Iraqi Interim Government (IIG). CPA awarded Agility a Contract to operate warehouses, providing that “[t]he obligation under this contract is made with Iraqi funds.” Agility acknowledged the impending transfer of authority and CPA’s scheduled dissolution. CPA authorized the IIG Minister of Finance to delegate contract administration to CPA’s Program Management Office (PMO). CPA administered Development Fund for Iraq (DFI), composed of various sources, including revenue from sales of Iraqi petroleum and natural gas. The IIG Minister delegated contract-administration responsibility concerning DFI-funded contracts to the PMO but did not give PMO contracting authority. Subsequent Contract task orders obligated U.S. funds. A U.S. contracting officer (CO) determined that Agility owed the government $81 million due to overpayment. Separately, Agility unsuccessfully sought $47 million for unpaid fees. The Armed Services Board of Contract Appeals dismissed Agility's appeals for lack of jurisdiction under the Contract Disputes Act (CDA), 41 U.S.C. 7101–7109. The Federal Circuit affirmed. The Board’s CDA jurisdiction is limited to contracts “made by an ‘executive agency.’” CPA was not an executive agency under the CDA. CPA awarded the Contract and there was no evidence that it was novated or assigned to an executive agency. The government acted as a contract administrator, not as a contracting party. View "Agility Logistics Services Co., KSC v. Mattis" on Justia Law

The terms of the insurance policy at issue in this coverage dispute required a written contract between the named insured and an additional insured if coverage was to be extended to an additional insured, and therefore, Liberty Insurance Underwriters was entitled to summary judgment.Gilbane Building Co. and TDX Construction Corporation (collectively, Gilbane JV) was the construction manager for a new forensic laboratory, and Samson Construction Co. was the general contractor. Samson obtained general liability insurance coverage from Liberty Insurance Underwriters. When disputes arose over the construction, Gilbane JV commerced this lawsuit arguing that it qualified for coverage under the Liberty policy as an additional insured. Gilbane JV had no written contract with Samson denominating it as an additional insured but argued that no such contract was necessary. Supreme Court denied Liberty’s motion for summary judgment, determining that Gilbane JV was an additional insured under the policy. The Appellate Division reversed and granted Liberty’s motion. The Court of Appeals affirmed based on the terms of the policy at issue. View "Gilbane Building Co./TDX Construction Corp. v St. Paul Fire & Marine Insurance Co." on Justia Law

The terms of the insurance policy at issue in this coverage dispute required a written contract between the named insured and an additional insured if coverage was to be extended to an additional insured, and therefore, Liberty Insurance Underwriters was entitled to summary judgment.Gilbane Building Co. and TDX Construction Corporation (collectively, Gilbane JV) was the construction manager for a new forensic laboratory, and Samson Construction Co. was the general contractor. Samson obtained general liability insurance coverage from Liberty Insurance Underwriters. When disputes arose over the construction, Gilbane JV commerced this lawsuit arguing that it qualified for coverage under the Liberty policy as an additional insured. Gilbane JV had no written contract with Samson denominating it as an additional insured but argued that no such contract was necessary. Supreme Court denied Liberty’s motion for summary judgment, determining that Gilbane JV was an additional insured under the policy. The Appellate Division reversed and granted Liberty’s motion. The Court of Appeals affirmed based on the terms of the policy at issue. View "Gilbane Building Co./TDX Construction Corp. v St. Paul Fire & Marine Insurance Co." on Justia Law

Meridian contracted to construct the Chula Vista Project flood control project, including construction of concrete channels, relocation of a sewer line, and dewatering and water diversion. After commencing work, Meridian encountered problems relating to “a layer of dripping saturated dark clay material under which a clean layer of sand is producing water” with “the potential for serious structural damage.” The government issued contract modifications, including an increase in funds for larger pipe, addition of a reinforced concrete access ramp, investigation of soil properties, remediation of saturated soils, and additional sheet piling. The government directed Meridian to suspend work following structural failures and terminated the project following a final inspection. Meridian sued for breach of contract, breach of the duty of good faith and fair dealing, and violation of the Contract Disputes Act, 41 U.S.C. 601−613. The government conceded liability for certain costs relating to suspension of work, channel fill, and interim protection. With respect to other claims, the Federal Circuit affirmed in part. Meridian’s interpretation of the contract was not reasonable; the existence of subsurface saturated soil conditions was “reasonably foreseeable.” The Trade Court did not impose an improper requirement for investigation of site conditions beyond what a reasonable contractor would undertake. The court remanded for consideration of whether the parties reached a meeting of the minds on flood event claims and held that the Trade Court erred dismissing Meridian’s unpaid contract quantities claim, in light of conflicting information. View "Meridian Engineering Co. v. United States" on Justia Law

Meridian contracted to construct the Chula Vista Project flood control project, including construction of concrete channels, relocation of a sewer line, and dewatering and water diversion. After commencing work, Meridian encountered problems relating to “a layer of dripping saturated dark clay material under which a clean layer of sand is producing water” with “the potential for serious structural damage.” The government issued contract modifications, including an increase in funds for larger pipe, addition of a reinforced concrete access ramp, investigation of soil properties, remediation of saturated soils, and additional sheet piling. The government directed Meridian to suspend work following structural failures and terminated the project following a final inspection. Meridian sued for breach of contract, breach of the duty of good faith and fair dealing, and violation of the Contract Disputes Act, 41 U.S.C. 601−613. The government conceded liability for certain costs relating to suspension of work, channel fill, and interim protection. With respect to other claims, the Federal Circuit affirmed in part. Meridian’s interpretation of the contract was not reasonable; the existence of subsurface saturated soil conditions was “reasonably foreseeable.” The Trade Court did not impose an improper requirement for investigation of site conditions beyond what a reasonable contractor would undertake. The court remanded for consideration of whether the parties reached a meeting of the minds on flood event claims and held that the Trade Court erred dismissing Meridian’s unpaid contract quantities claim, in light of conflicting information. View "Meridian Engineering Co. v. United States" on Justia Law

Area 51 used Alameda city property for events it planned for third-party companies. PM assisted the city with managing the license arrangements. Due to problems connected with Area 51 events, the city ceased doing business with it. Area 51 had committed to third-party entities based on PM’s previous confirmation of the city’s willingness to license space. Area 51 sued. Defendants (city, PM, and individuals) filed a demurrer and a motion to strike under Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuit against public participation) statute. The court denied that motion and granted the demurrer. The court of appeal reversed in part. While the thrust of the claims against the city is breach of contract, the individual defendants were not contracting parties; the sole basis for asserting liability against them is what they did on behalf of the city. That conduct is expressive in nature (emails confirming dates, and announcing termination of the leasing relationship), which qualify as “written or oral statement[s] . . . made in connection with an issue under consideration . . . by a[n] . . . executive . . . body,” under the anti-SLAPP law. Area 51 could not show a probability of prevailing on the merits. The case was remanded for consideration of an award of attorneys’ fees and costs. View "Area 51 Productions, Inc. v. City of Alameda" on Justia Law

Oklahoma and the Citizen Potawatomi Nation (the “Nation”) entered into a Tribal-State gaming compact; Part 12 of which contained a dispute-resolution procedure that called for arbitration of disagreements “arising under” the Compact’s provisions. The terms of the Compact indicated either party could, “[n]otwithstanding any provision of law,” “bring an action against the other in a federal district court for the de novo review of any arbitration award.” In Hall Street Associates, LLC. v. Mattel, Inc., 552 U.S. 576, (2008), the Supreme Court held that the Federal Arbitration Act (“FAA”) precluded parties to an arbitration agreement from contracting for de novo review of the legal determinations in an arbitration award. At issue before the Tenth Circuit Court of Appeals was how to treat the Compact’s de novo review provision given the Supreme Court’s decision in Hall Street Associates. The Nation argued the appropriate course was to excise from the Compact the de novo review provision, leaving intact the parties’ binding obligation to engage in arbitration, subject only to limited judicial review under 9 U.S.C. sections 9 and 10. Oklahoma argued the de novo review provision was integral to the parties’ agreement to arbitrate disputes arising under the Compact and, therefore, the Tenth Circuit should sever the entire arbitration provision from the Compact. The Tenth Circuit found the language of the Compact demonstrated that the de novo review provision was a material aspect of the parties’ agreement to arbitrate disputes arising thereunder. Because Hall Street Associates clearly indicated the Compact’s de novo review provision was legally invalid, and because the obligation to arbitrate was contingent on the availability of de novo review, the Tenth Circuit concluded the obligation to arbitrate set out in Compact Part 12 was unenforceable. Thus, the matter was remanded to the district court to enter an order vacating the arbitration award. View "Citizen Potawatomi Nation v. State of Oklahoma" on Justia Law

Securiforce entered into a requirements contract with the government to deliver fuel to eight sites in Iraq. The government terminated the contract for convenience with respect to two sites because Securiforce intended to supply fuel from Kuwait, reasoning that delivery to those sites would violate the Trade Agreements Act, 19 U.S.C. 2501, and that obtaining a waiver would take too long. Weeks later, the government ordered small deliveries to two sites, to occur by October 24. Securiforce indicated that it could not deliver until November. The government notified Securiforce that it should offer justifiable excuses or risk termination. Securiforce responded that the late deliveries were excused by improper termination for convenience, failure to provide required security escorts, small orders, and other alleged irregularities. The government terminated the contract for default. Securiforce filed suit (Tucker Act, 28 U.S.C. 1491; Contract Disputes Act, 41 U.S.C. 7101-09). The Claims Court found that it had jurisdiction to review both terminations; that the Contracting Officer abused her discretion in partially terminating the contract for convenience; and that the termination for default was proper. The Federal Circuit affirmed in part. The court lacked jurisdiction over the termination for convenience; a contractor’s request for a declaratory judgment that the government materially breached a contract violates the rule that courts will not grant equitable relief when money damages are adequate. The government did not breach the contract by terminating for convenience or with respect to providing security. View "Securiforce International America, LLC v. United States" on Justia Law

California-American, a water utility, and Marina and Monterey, public water agencies, entered into contracts to collaborate on a water desalination project, stating that the prevailing party of “any action or proceeding in any way arising from [their a]greement” would be entitled to an award of attorney fees and costs. After learning that a member of Monterey’s board of directors had a conflict of interest, having been paid for consulting work to advocate on behalf of Marina, California-American sued to have the contracts declared void under Government Code section 1090. Monterey agreed that the contracts were void. Marina filed cross-claims seeking a declaration that the contracts were “valid and enforceable.” Years of litigation culminated in a holding declaring the agreements void. Marina challenged post-judgment orders that California-American and Monterey were entitled to costs as prevailing parties under Code of Civil Procedure sections 1032 and 1717 and granting them specific attorney fees awards. The court of appeal affirmed, rejecting Marina’s argument that they were not entitled to awards because the underlying contracts were declared void. The illegality exception to the rule of mutuality of remedies applies when the contract's subject matter is illegal but does not apply when the litigation involves the “invalidity” or “unenforceability” of an otherwise legal contract. View "California-American Water Co. v. Marina Coast Water District" on Justia Law

At issue was whether, during the sale of JB&A, Inc., a government contracting firm, to MCR Federal, LLC, another government contractor, MCR’s false statement of that a representation and warranty in the contract remained true was a fraudulent act independent of the contractual relationship such that JB&A properly brought actions for both fraud and breach of contract. The trial court held MCR liable for breach of contract and constructive fraud and awarded $12 million in compensatory damages. The Supreme Court affirmed in part and reversed in part, holding (1) JB&A did not bring proper claims for actual or constructive fraud; (2) the evidence presented at trial established that MCR’s breach of contract caused JB&A substantial damages; (3) the trial court properly granted compensatory damages of $12 million and pre-judgment interest of $3.5 million; and (4) the trial court erred in awarding JB&A attorney’s fees in the amount of $1.9 million for prevailing on its claim of constructive fraud. View "MCR Federal, LLC v. JB&A, Inc." on Justia Law