Justia Contracts Opinion Summaries

In 2010, GM sold its subsidiary Saab to Spyker: Spyker acquired a majority interest in Saab, and GM retained a minority interest through preferred shares. The parties entered into an agreement under which GM granted Saab a license to make certain Saab models using GM intellectual property. It prohibited Saab from assigning or transferring its rights without GM’s prior written consent until 2024. In 2010-2011, Saab faced financial hardship and attempted to enter into investment arrangements with Youngman, a Chinese automobile manufacturer. GM refused to approve any agreements that involved Chinese ownership or control of its licensed technology. Saab filed for voluntary reorganization under Swedish law. Saab and Youngman negotiated an agreement and circulated an unexecuted copy: Youngman would provide Saab an immediate cash infusion as a loan, which would be converted into an equity interest in Saab after Saab ceased using GM technology. A GM spokesperson made statements indicating that the agreement was not materially different than what was previously proposed. Based on GM’s position, Youngman backed out; Saab went into bankruptcy. Saab sued for tortious interference with economic expectancy. The district court dismissed, finding that Plaintiffs failed to establish a valid business expectancy and intentional interference by GM. The Sixth Circuit affirmed.View "Saab Automobile AB v. General Motors Co." on Justia Law

Jeffrey Wright and Myron Allenstein filed separate complaints against A-1 Exterminating Company, Inc.; Terry Buchanan; Edward Wrenn; and David Wrenn (collectively, "A-1"). In the complaints, plaintiffs alleged that, on the date of the initial termite bonds they were issued, A-1 Exterminating promised to identify and recommend the appropriate services to protect the plaintiffs' houses or property from termites. Plaintiffs stated that in their contract with A-1, plaintiffs had paid for the initial service, the issuance of the termite bond, and annual renewal premiums. During subsequent periodic visits to the subject properties, A-1 sprayed liquids and either represented to plaintiffs or led plaintiffs to believe that those applications were treatments for termites. But in the last two years, A-1 had admitted that the periodic sprays were not to prevent or control termites; and that Buchanan, a State-licensed pest-control operator who worked for A-1 Exterminating, had admitted that the spray was a regular, watered-down pesticide that might only be strong enough to kill ants and possibly spiders. The two complaints included counts alleging fraud, including promissory fraud; breach of warranty; negligence, including negligence per se, and wantonness; breach of contract; and negligent training, supervision, and retention. It also included a request for "equitable relief, including unjust enrichment." The trial court entered an amended protective order in both cases. Plaintiffs then filed petitions for the writ of mandamus with the Supreme Court seeking a rescission. The Supreme Court found the protective orders overbroad: "the trial court should balance its interest in protecting A-1's right to a fair trial against the First Amendment rights of the plaintiffs and their attorneys. Further, any protective order in this regard must be narrowly tailored so that it uses the least restrictive means necessary to protect A-1's right to a fair trial." The Court granted plaintiffs' petitions for mandamus relief, and remanded the cases for further proceedings.View "Wright v. A-1 Exterminating Company, Inc., et al." on Justia Law

Beaverhead County selected Coleman Construction to complete a stream rehabilitation and bridge replacement project. Coleman was unable to finish the project on time or for the amount of money it had estimated. Coleman subsequently sued for damages, asserting ten claims for relief. The Montana Association of Counties Joint Powers Insurance Authority (MACo), which had issued an insurance policy to the County, denied coverage, finding that the claims against the County were excluded from coverage based upon two exclusions in the policy. The district court granted summary judgment for MACo, ruling that the two exclusions each provided sufficient independent bases for denying coverage. The Supreme Court affirmed, holding that the claims against the County were not covered by its insurance policy with MACo.View "Beaverhead County v. Mont. Ass’n of Counties Joint Powers Ins. Auth." on Justia Law

Mid-Continent Casualty Company brought a declaratory judgment action to settle an issue with its commercial commercial general liability (CGL) policy issued to Pennant Service Company. In 2001, True Oil Company, an owner and operator of oil and gas wells, entered into a master service contract (MSC) with Pennant for work on a well in Wyoming. The MSC included a provision whereby Pennant agreed to indemnify True Oil resulting from either Pennant or True Oil's negligence. In July 2001, Christopher Van Norman, a Pennant employee, was injured in an accident at True Oil's well. Van Norman sued True Oil in Wyoming state court for negligence. In accordance with the MSC's indemnity provision, counsel for True Oil wrote to Pennant requesting indemnification for its defense costs, attorney fees, and any award that Van Norman might recover against it. Mid-Continent refused to defend or indemnify True Oil based on Wyoming's Anti-Indemnity Statute, which invalidates agreements related to oil or gas wells that "indemnify the indemnitee against loss or liability for damages for . . . bodily injury to persons." In May 2002, True Oil brought a federal action against Mid-Continent for declaratory relief, breach of contract (CGL policy), and other related claims. In February 2005, the district court granted Mid-Continent summary judgment, determining that the MSC's indemnity provision, when invoked with respect to claims of the indemnitee's own negligence was unenforceable as a matter of public policy. The court held that Mid-Continent was not required to defend or indemnify True Oil in the underlying suit as it then existed because "where an indemnification provision in a MSC is void and unenforceable, the insurer never actually assumed any of the indemnitee's liabilities under the policy." The district court granted summary judgment to True Oil, determining Mid-Continent breached its duty to defend and indemnify True Oil. As damages, the court awarded True Oil the amount it paid to settle the underlying suit and the attorney fees and costs incurred in defending itself. Mid-Continent appealed the district court's judgment. Finding no reversible error, the Tenth Circuit affirmed.View "Mid-Continent v. True Oil Company" on Justia Law

A Chester, Illinois grain bin exploded, injuring three workers. A jury awarded almost $180 million in compensatory and punitive damages against ConAgra, which owned the facility, part of a flour mill, and West Side, which ConAgra had hired about a month before the explosion to address problems in the bin. The injured workers were working on the bin’s problems. On appeal, West Side did not contest liability to the workers but claimed that it did not have to reimburse ConAgra for the cost of repairing the facility. Both maintained that damages were excessive. The Seventh Circuit reversed the judgment against ConAgra and the award of punitive damages against West Side, but affirmed awards of compensatory damages against West Side and remanded for consideration of indemnification and contribution. West Side was an independent contractor in a commercial relation with ConAgra and normal rules of contract and tort law apply. Having hired an expert in hot bins, ConAgra was entitled to assume that West Side would ask for whatever information it needed. Admission of evidence that referred to insurance was harmless; the verdicts so far exceeded $3 million that the jury’s belief that West Side carried that much insurance cannot have played a material role.View "Jentz v. Conagra Foods, Inc." on Justia Law

Rose’s Bidwell, Ohio home was insured by State Farm. Rose also had a Personal Articles Policy that covered two Rolex watches. In 2009, a fire destroyed the house. Later that day, Rose made a claim of $696,373.30 for the dwelling, $512,765.57 for damage to personal property, $30,000 for living expenses, and $29,850 for one Rolex watch. State Farm’s investigator took a recorded statement from Rose and his wife and spoke with Rose’s ex-wife; gathered information by searching public records; and retained a fire investigator, who issued a report, finding that the fire originated in the kitchen, that electrical items did not appear to be the source of the fire, and that neither smoking nor cooking was suspected as a cause. The report indicated that non-reported human action could not be eliminated as a cause, but did not specify that the fire was deliberately ignited. State Farm denied Rose’s claims, alleging that Rose violated “Intentional Acts” and “Concealment or Fraud” conditions of his policies. Rose sued, alleging breach of contract and bad faith. The district court declined to grant summary judgment on the “Intentional Acts” clause, but found that some answers Rose gave, failing to identify multiple tax liens and judgments, in statements to State Farm were misleading and material, and granted summary judgment on the other claim. The Sixth Circuit reversed, finding material questions of fact concerning whether Rose misled investigators.View "Rose v. State Farm Fire & Cas. Co." on Justia Law

Plaintiff filed suit against Sammy Hagar after he published an autobiography in which he alleged that plaintiff had extorted him by claiming she was pregnant with his child. The district court granted summary judgment for Hagar on all of plaintiff's claims. Applying Iowa law, the court concluded that the district court erred by granting summary judgment on the libel per se claim where Hagar's statements are defamatory as a matter of law, plaintiff has shown the existence of a fact issue regarding whether the challenged statements were "of and concerning" her, and the evidence was sufficient to submit the question of substantial truth to the jury. The court also concluded that the district court erred in granting summary judgment on the false light invasion of privacy claim where questions of fact exist as to whether the challenged statements were sufficiently publicized. The court agreed with the district court's ruling that, with respect to evidence of emotional distress, plaintiff put forth conclusory statements; the court reversed the district court's grant of summary judgment on the breach-of-contract claim where a jury must decide the ultimate issue of breach; and the district court did not err in granting summary judgment on plaintiff's claim for breach of the covenant of good faith and fair dealing because Hagar's statement's did not deprive plaintiff of the benefits under a negotiated agreement between the parties.View "Doe v. Hagar" on Justia Law

Plaintiffs, the third-party insurers of a shipping service for coins and special metals, invoked their subrogation rights and alleged that several of the service’s shipments, worth a total of $150,000, were lost or stolen by United Parcel Service of America, Inc. (UPS) or its employees. Plaintiffs brought state law claims against UPS in federal district court, alleging true and fraudulent conversion, among other claims, premising subject matter jurisdiction solely upon the complete diversity of the parties. The district court dismissed the complaint for failure to state a claim, holding (1) the Carmack Amendment preempted all of Plaintiffs’ state law claims, and (2) the exception recognized by some courts when the common carrier has committed a “true conversion” of goods does not permit an action based on state law but rather abrogates the limitation of liability for causes of action brought under the Amendment itself. The Third Circuit affirmed, holding (1) the Carmack Amendment preempts all state law claims for compensation for the loss of or damage to goods shipped by a ground carrier in interstate commerce; and (2) the “true conversion” exception vitiates the liability limiting features in the Amendment and is not an exception to the Amendment’s preemptive scope. View "Certain Underwriters at Interest at Lloyds of London v. United Parcel Serv. of Am., Inc." on Justia Law

Gamesa contracted with Minnesota-based Outland Renewable Energy to provide maintenance for Gamesa wind turbines. Iberdrola operated Gamesa-made turbines at the Cayuga Wind Farm in Illinois. While servicing a Cayuga urbine, Outland employee McCoy was electrocuted when the turbine unexpectedly reenergized. McCoy filed a personal injury case in state court against Iberdro and Gamesa. The case was removed to federal court on diversity of citizenship grounds. Iberdro impleaded Outland to seek indemnification based on contract and the Illinois Joint Tortfeasor Contribution Act. Outland raised 22 counterclaims: including indemnification; federal and state antitrust claims (Illinois, Minnesota, and Texas law); and other state law claims. Outland unsuccessfully sought a preliminary injunction against Gamesa’s allegedly unfair competitive practices. The district court dismissed all but one of Outland’s counterclaims. Only the indemnification claim survived. McCoy, Gamesa, and Outland settled. The district court accepted the settlement, protecting Outland and Gamesa from further contribution claims under the Illinois JTCA; all claims arising from the accident among those parties were dismissed. Only the original personal injury dispute between McCoy and Iberdrola remained, but the court had not issued a final judgment. About six months after the dismissal, Outland sought leave to amend, arguing for the first time that the substantive law of Minnesota should apply. The district court determined that Outland had waived that issue and denied leave to amend based on futility and undue delay. The proposed amended counterclaims arose from Gamesa’s 2011 attempt to acquire Outland. The Seventh Circuit affirmed. Outland’s third-party counterclaims are not part of the original case, so Outland needed an independent basis for federal subject matter jurisdiction to assert them in this lawsuit. The court characterized Outland’s arguments as “desperate.” View "McCoy v. Iberdrola Renewables, Inc." on Justia Law

Plaintiff, the former president and chief operating officer of PortfolioScope, Inc., brought suit against Portfolio and two individual defendants alleging, among other claims, breach of contract, violation of Mass. Gen. Laws ch. 93A, tortious interference with Plaintiff’s contractual rights, and fraudulent transfers pursuant to the Uniform Fraudulent Transfer Act. After a bench trial, the judge rendered judgment in favor of Plaintiff. Defendants argued on appeal that the judge erred in her interpretation of an agreement and an amendment, as well as in her analysis of secured transaction principles, and that the errors affected the entire disposition of the case. The Supreme Judicial Court affirmed the judgment of the superior court in almost all respects, holding that any error in the judge’s interpretation of the amendment affected only Plaintiff’s claim for conversion. View "Weiler v. PortfolioScope, Inc." on Justia Law