Justia Contracts Opinion Summaries

After the Mississippi Department of Public Safety (MDPS) reinterpreted a provision in a contract between it and the Mann Agency, LLC, the MDPS refused to pay more than $700,000 in invoices submitted by the Mann Agency. The Mann Agency filed suit against the MDPS for breach of contract. The trial court dismissed each party’s breach-of-contract claim, found that the case involved a bona fide dispute, and denied the Mann Agency’s claim for interest and attorneys’ fees. The Mann Agency appealed the trial court’s decision to deny its claim for interest and attorneys’ fees, arguing that the MDPS acted in bad faith. The MDPS cross-appealed, arguing the trial court erred by dismissing as moot its breach-of-contract claim. Finding no reversible error, the Mississippi Supreme Court affirmed the trial court's decisions. View "Mann Agency, LLC v. Mississippi Department of Public Safety" on Justia Law

In 2003, the government awarded Parsons a $2.1 billion indefinite-delivery, indefinite-quantity contract for planning and construction work to be described in subsequent task orders. In 2005, the government issued a $34 million task order to complete an existing, concept-level design and construct the Temporary Lodging Facility and Visiting Quarters, at the McGuire Air Force Base. Design and construction were completed. The Air Force accepted the completed facilities for “beneficial use” in September 2008. In 2012, Parsons submitted a claim for approximately $34 million in additional costs that Parsons allegedly incurred in the design and construction process. The Armed Services Board of Contract Appeals awarded Parsons about $10.5 million plus interest.The Federal Circuit reversed in part after holding that the Board had Contracts Dispute Act jurisdiction 41 U.S.C. 7102(a)(1), (3). The court dismissed Parsons’ appeal as to its payroll claim and reversed the Board’s denial of recovery to Parsons for its claim to construction costs. On remand, the Board must award Parsons the difference between its cost in constructing a substituted design compared to the cost Parsons would have incurred in constructing a structural brick design. The court affirmed the Board’s conclusion that Parsons’ costs awarded by the Board were reasonable. View "Parsons Evergreene, LLC v. Secretary of the Air Force" on Justia Law

The Supreme Court held that a provision in the Office of the State Public Defender's contract with private attorneys specifying that hourly compensation rates can unilaterally be changed by the State permits prospective changes in a contract attorney's compensation rate for existing cases.Appellants, private attorneys who contract with OPD to provide legal services for indigent clients, filed a class action complaint against the State, the Governor, and the Director of the Office of the State Public Defender (OPD) alleging that Defendants were liable for breach of contract or in violation of the Contract Clause stemming from the OPD's act of reducing rates for all contracted services and reducing pay for case-related travel. The district court granted the State's motion for summary judgment, ruling that the OPD did not breach its contract with Appellants because the contract specifically identified that the fee arrangement was subject to change by the Director. The Supreme Court affirmed, holding that summary judgment was properly granted for the State. View "Brooke v. State" on Justia Law

The Council handles contracts for over 200 New Jersey municipalities, police departments, and school districts. Mid-American sells bulk road salt. The Council's members estimated their salt needs for the 2016-17 winter. The Council issued a comprehensive bid package, anticipating the need for 115,000 tons of rock salt. MidAmerican won the contract, which stated: There is no obligation to purchase [the estimated] quantity. As required by the contract, Mid-American obtained a performance bond costing $93,016; imported $4,800,000 worth of salt from Morocco; and paid $31,250 per month to store the salt and another $58,962.26 to cover it. Mid-American incurred at least another $220,000 in finance costs and additional transportation costs. Council members purchased less than five percent of the estimated tonnage. Mid-American claims “several” Council members purchased salt from MidAmerican’s competitors, who lowered their prices after MidAmerican won the contract.Mid-American sued the Council and 49 of its members, alleging breach of contract, breach of the covenant of good faith and fair dealing, and bad faith under UCC Article 2. The Third Circuit affirmed the denial of relief. No valid requirements contract existed here because the contract was illusory. These sophisticated parties were capable of entering into precisely the contract they desired. Neither the Council nor its members ever promised to purchase from Mid-American all the salt they required View "Mid-American Salt LLC v. Morris County Cooperative Pricing Council" on Justia Law

ACC, the subcontractor on a Corps flood protection project, filed suit against the prime contractor, Hirani, for breach of contract and the providers of Hirani's payment bond, Colonial, under the Miller Act for unpaid labor and materials. The district court entered judgment in favor of ACC and awarded damages against both defendants.The DC Circuit remanded the case to the district court to make findings of fact as to when the Prime Contract was terminated and whether ACC performed labor or supplied material on April 29 and/or April 30. In the event that Colonial and Hirani cannot meet their burden to show that ACC's Miller Act claim was untimely, then this court can resolve the parties' other Miller Act contentions. If Hirani and Colonial show that termination occurred before April 29 or that ACC performed no labor or supplied no material on April 29 or 30, the court can then address the Miller Act statute of limitations issue. The court affirmed the restitution damages award against Hirani on ACC's contract claim where ACC has not provided the court with any basis to deviate from the principle of D.C. law that restitution, not quantum meruit, is the proper remedy where there is an express contract between the parties. The court deferred addressing other issues raised by the parties. View "United States v. Hirani Engineering & Land Surveying, PC" on Justia Law

The Supreme Court held that the Expedited Declaratory Judgment Act (EDJA), Tex. Gov't Code ch. 1205, gave the trial court jurisdiction to declare whether contracts executed by the San Jacinto River Authority were legal and valid but not whether the Authority complied with the contracts in setting specific water rates.The Authority, which has contracts to sell water to cities and other customers and uses the revenue to pay off its bonds, filed suit seeking declarations under the EDJA regarding the contracts and the water rates set under those contracts. Several participants, including three cities (Cities) opted in as interested parties. The Cities filed pleas to the jurisdiction, arguing that the trial court lacked subject matter jurisdiction to adjudicate the Authority's claims. The trial court denied the pleas to the jurisdiction. The court of appeals held primarily for the Authority. The Supreme Court held (2) the EDJA permits the trial court to exercise jurisdiction over the Authority's claims as to the valid execution of the contracts, but it does not confer jurisdiction over whether the Authority complied with the contracts in setting specific water rates; and (2) the Cities' governmental immunity does not bar an EDJA claim, which is brought in rem to adjudicate interests in property. View "City of Conroe, Texas v. San Jacinto River Authority" on Justia Law

In 2015, CPA’s predecessor was awarded Defense contracts to provide stevedoring and terminal services along the Eastern Seaboard, including Charleston. The contracts incorporated a Federal Acquisition Regulation provision that gave the government options to extend the term of the agreement for up to four one-year periods by giving “preliminary written notice of its intent to extend at least 60 days before the contract expire[d].” Such notice did not obligate the government to exercise the option. After the preliminary notice, the government was required to exercise the option itself within 15 days of the expiration date. On June 15, 2016, the government exercised the first-year option.During the extension period, CPA purchased its predecessor and began seeking revised pricings, asserting that it might default because the contracts were not profitable. On January 31, 2017, the government’s contracting officer sent an email to CPA, stating: The Government intends to exercise options at awarded rates … expects [CPA] to continue performing per the terms. A May 3, 2017, formal letter to CPA, stated the government's intent to extend the contract through 30 June 2018. CPA responded that the notice was untimely. The government pointed to the January 31 email as the preliminary written notice. In July 2017, CPA sought a declaration that the contract had expired and additional money for its performance under protest. A contracting officer denied the claims. The Board of Contracts Appeals and the Federal Circuit affirmed. The government satisfied the preliminary notice requirement; the email unambiguously provided preliminary written notice of the government’s intent to extend at least 60 days before the contract expired on May 1, 2017. View "Cooper/Ports America, LLC v. Secretary of Defense" on Justia Law

Dustin Irwin died in 2014, in the Ward County, North Dakota jail. The circumstances of his death led to an investigation and criminal charges against Ward County Sheriff Steven Kukowski. Initially, Divide County State’s Attorney Seymour Jordan was appointed to handle the criminal proceeding. Jordan determined the circumstances justified a petition for removal of Sheriff Kukowski from office. Governor Jack Dalrymple appointed Jordan as the special prosecutor for the removal. Ultimately, Jordan requested to withdraw and Governor Burgum appointed attorney Daniel Traynor as the special prosecutor. After completion of the removal proceedings, Traynor submitted his bill to the State on May 1, 2017. The State forwarded the bill to Ward County. Ward County refused to pay the bill. Traynor sued the State and Ward County to recover the unpaid fees. The State responded to Traynor’s complaint by filing a motion to dismiss. Ward County answered Traynor’s complaint and cross-claimed against the State. The State moved to dismiss Ward County’s cross-claim. Traynor moved for judgment on the pleadings. The district court entered judgment in Traynor’s favor against the State, and awarded interest at 6% per annum. The State argued Ward County had to pay Traynor’s bill because Chapter 44-11, N.D.C.C., failed to address who should pay for the special prosecutor fees in a county official’s removal proceeding, and therefore the catch-all provision in N.D.C.C. 54-12-03 applied. Ward County argues neither Chapter 44-11, N.D.C.C., nor Chapter 54- 12, N.D.C.C., imposes an obligation upon a county to pay the fees of an attorney appointed by the Governor for proceedings for the removal of a public official. The North Dakota Supreme Court concurred with the district court that Chapter 44-11, N.D.C.C., was silent regarding the payment of special prosecutor fees in a removal proceeding, and it was not necessary or required to import N.D.C.C. 54-12-03 into Chapter 44-11. Based on these facts, the Supreme Court concluded the district court did not err in finding a contract existed for legal services between Traynor and the State. The Court agreed with Traynor that the district court erred by awarding 6% per annum interest instead of the 1.5% monthly interest rate stated on its bill. The Supreme Court therefore affirmed in part, reversed in part and remanded for further proceedings. View "Traynor Law Firm v. North Dakota, et al." on Justia Law

In 2014, Cook Medical entered a five-year agreement for Acheron to serve as the distributor of Cook medical devices and products to VA and Department of Defense Medical Centers. Sales to Defense are primarily made through a Distribution and Pricing Agreement (DAPA); sales to the VA require a Federal Supply Schedule (FSS). Cook already had a DAPA, but not an FSS; the agreement required Acheron to obtain an FSS. Cook refused to submit to a required audit of its commercial sales records as required by 48 CFR 515.408(b)(5) to obtain an FSS and refused to deactivate its DAPA, preventing Acheron from selling Cook products to Defense through Acheron’s own DAPA. Cook sent notice that Acheron was in material breach and terminated the agreement 30 days later due to Acheron’s failure to cure. Acheron filed suit.The district court granted Cook summary judgment; Acheron materially breached its obligation to obtain an FSS but owed no damages because the breach was excused by the force majeure clause. The Seventh Circuit affirmed. The Agreement does not expressly obligate Cook to submit to the VA audit or to deactivate its DAPA. The duty of good faith requires that a party perform its obligations under the contract in good faith but does not require a party to undertake a new, affirmative obligation. Neither party actively sought to sabotage the other party’s performance to escape its own obligations or obtain an unfair advantage. View "Acheron Medical Supply, LLC v. Cook Medical Inc." on Justia Law

In August 2013 the Alaska Department of Transportation and Public Facilities (DOT) entered into a contract with Osborne Construction Company to upgrade the Aircraft Rescue and Fire Fighting building at the Fairbanks International Airport to withstand damage in the event of an earthquake. The DOT appealed a superior court decision reversing the agency's decision in an administrative appeal. The agency denied a contractor’s claim for additional compensation because the claim was filed outside the filing period allowed by the contract. After applying its independent judgment to interpret the contract, the Alaska Supreme Court agreed with the DOT that the contractor failed to file its claim within the period allowed. The Supreme Court therefore reversed the superior court’s decision and reinstated the agency’s. View "Alaska, Dept. of Transportation & Public Facilities v. Osborne Construction Co." on Justia Law