Justia Contracts Opinion Summaries

In 1997, Crum, a small company near insolvency, agreed to service Martin’s light-duty vehicles. Martin was a subsidiary of Massey Coal, a publicly-traded corporation. The agreement allowed Crum to enter Martin’s property to pick up vehicles; Martin required Crum to enter into an indemnification agreement and Crum agreed to Martin’s terms. Crum obtained insurance coverage required by the agreement from Universal. Philip, a Crum employee, rode with a Martin employee to pick up a truck from Martin property. A boulder rolled down hill, hit the vehicle, severely injuring Philip. The U.S. Mine Safety and Health Administration cited Martin for having loose rock above the roadway. Philip and Crum sued Martin; Martin counterclaimed based on the indemnification. Universal declined to defend on the counterclaim. After mediation, Martin agreed, without admitting liability, to pay $3,650,000. The parties also entered an “agreed judgment” against Crum for $3,650,000, on Martin’s counterclaim. Martin agreed not to pursue Crum for that judgment and sued Universal. The Sixth Circuit agreed with the district court that Universal had no duty to indemnify Martin because there was enough evidence to show that Crum was not actually liable to Martin. The indemnification was unenforceable as against public policy; it was the product of a significant disparity in bargaining power and attempted to shift liability for compliance with at least one mining-safety statute. View "Martin Cnty. Coal Corp. v. Universal Underwriters Ins. Co." on Justia Law

Healix and HHI compete in the business of infusion therapy services: administration of substances such as pharmaceuticals intravenously or by any method other than ingestion. Some medical care providers offer these services to patients in their offices. Healix and HHI provide support. In 2007 Healix recruited the Clinic as a new customer. The Clinic had two members: Keller, a physician, and Porter, a nurse practitioner. Under their five-year contract, Healix would provide services after the Clinic built an in-office pharmacy and hired staff to work there. The Clinic was responsible for the cost of construction. Healix required Keller and Porter to execute personal guarantees and took a security interest in accounts receivable. Four months after signing the contract, the Clinic notified Healix that it would not fulfill its responsibilities. The Clinic was in breach, but Healix did not sue. One month later, the Clinic entered into a contract with HHI. Healix learned of the new contract and sued HHI for copyright and trademark infringement and for tortious interference with a contract. The intellectual property claims were dismissed. After a trial, the district judge rejected the tortious-interference claim. The Seventh Circuit affirmed, finding lack of causation because the evidence indicated that the Clinic would have “walked away” regardless of HHI’s actions. View "Healix Infusion Therapy, Inc. v. HHI Infusion Servs., Inc.." on Justia Law

Petitioner, which operated an animal crematory, filed an action against Respondent, a planning and engineering firm, alleging breach of contract and professional negligence. The complaint failed to attribute Respondent's alleged failings to a licensed engineer and was not accompanied by a certificate of a qualified expert. The circuit court dismissed the complaint for failure to file a certificate within the required time period. The Court of Appeals reversed, holding that where the allegations of Petitioner's complaint did not fault a licensed engineer, it was premature to conclude that an expert certificate was required, as the certificate requirement applies only to a cause of action based on a licensed engineer's negligent act or omission in rendering engineering services within the scope of the engineer's license. View "Heavenly Days Crematorium, LLC v. Harris, Smariga & Assocs." on Justia Law

Karl McGhee, a financial advisor at LPL Financial, acted as financial planner for Plaintiff. Plaintiff filed a complaint against McGhee and LPL, asserting claims for, inter alia, violations of Mass. Gen. Laws ch. 93A. Defendants moved for an order compelling the parties to proceed to arbitration due to an arbitration agreement signed by Plaintiff. The motion judge denied the motion, concluding that none of Plaintiff's claims could be compelled to arbitration because claimants under chapter 93A, section 9 are not required to submit to arbitration. The Supreme Court reversed, holding (1) claims alleging an unfair or deceptive trade practice in violation of chapter 93A, section 9 must be referred to arbitration where the contract involves interstate commerce and the agreement is enforceable under the Federal Arbitration Act (FAA); and (2) because Plaintiff and Defendants in this case entered into a valid contract whereby they agreed to settle all controversies related to Plaintiff's financial account by arbitration, and because the arbitration agreement was governed by the FAA, Defendants as a matter of law were entitled under the FAA to a stay of judicial proceedings and an order compelling arbitration. Remanded. View "McInnes v. LPL Fin., LLC" on Justia Law

Insureds purchased a homeowner's insurance policy from Insurer with a personal liability limit of $500,000. The policy contained an animal liability endorsement (endorsement) which limited coverage to $25,000 for claims arising from animal bites. Both Insurer's agent and Insureds mistakenly believed the policy did not contain the limitation of liability but neither conveyed their mistaken belief to the other. After Plaintiff was bitten by Insured's dog, he and his wife successfully brought an action against Insureds. Insurer paid only $25,000 of this judgment. Plaintiffs and Insureds reached a settlement regarding the balance of the judgment and Plaintiffs became assignees of Insureds' claims against Insurer. Plaintiffs sued Insurer, alleging that Insureds and Insurer were mutually mistaken as to the application of the endorsement, and therefore, the policy should be reformed by striking the endorsement. The superior court concluded Plaintiffs were entitled to summary judgment on the reformation claim. The Supreme Court vacated the judgment, holding that, absent full, clear, and decisive proof of some prior agreement between the parties as to coverage for animal bites different than that contained in the policy, there was no mutual mistake warranting reformation of the policy. View "Caron v. Horace Mann Ins. Co." on Justia Law

Plaintiffs bought a townhouse condominium unit from Defendant. After the sale, repairs of leaks in the other condominium units caused by poor construction required the condominium board to collect special assessments in the amount of $65,000 from each unit holder, including Plaintiffs. Recoupment from the builder offset the sum, but Plaintiffs remained out-of-pocket over $40,000. Plaintiffs sued Defendant, alleging fraud and equitable fraud due to Defendant's allegedly insufficient disclosures made to Plaintiffs before the sale. The Court of Chancery entered judgment in favor of Defendant, holding (1) Plaintiffs failed to prove Defendant committed common-law fraud because they failed to show Defendant misrepresented or omitted some material fact before the sale of the condominium; and (2) rescission was not warranted under the facts of this case, and therefore, equitable fraud was inappropriate. View "Grzybowski v. Tracy" on Justia Law

Whitney Schwan died in an automobile accident after Travis Turner, the driver, lost control of the vehicle. Whitney's parents sued Travis's estate and his parents (the Turners). The Turners had a homeowners policy with State Farm Fire and Casualty Company (State Farm). State Farm filed an action seeking a declaration that it owed no duty to defend or indemnify the Turners under the homeowners policy. Meanwhile, a mediation concluded with a settlement that included assignment of all of the Turners' rights and claims under the homeowners' policy to the Schwans, and the Schwans replaced the Turners in the declaratory action. The district court granted summary judgment to the Schwans on its counterclaim that State Farm had breached its duty to defend the Turners by not retaining separate counsel for the Turners in the underlying action. The Supreme Court reversed, holding that the district court erred by concluding that State Farm had breached its duty to defend under the policy, as State Farm did ensure a full defense was provided to the Turners even though its decisions regarding counsel did not include hiring additional counsel. View "State Farm Fire & Cas. Co. v. Schwan" on Justia Law

Leonard Landa was the sole managing member of a Montana limited liability corporation. Landa carried commercial general liability insurance through Assurance. After a former employee of Landa's filed a complaint alleging that Landa had committed various torts by inducing him to work for Landa under allegedly false pretenses, Landa tendered defense of the former employee's claim to Assurance. Assurance refused to defend Landa, stating that the complaint's allegations were not covered under Landa's policy. Landa filed a complaint seeking declaratory relief establishing that Assurance had a duty to defend and indemnify Landa and alleging violations of Montana's Unfair Trade Practices Act (UTPA), negligence, and other causes of action. The district court granted summary judgment for Assurance, finding that the complaint's allegations were not covered under Landa's policy and that Assurance was not liable under the UTPA because the denial of coverage was grounded on a legal conclusion. The Supreme Court affirmed, holding that Assurance correctly declined to provide a defense where the former employee's complaint did not allege an "occurrence" and, as a result, did not trigger a duty to defend under the policy. View "Landa v. Assurance Co. of Am." on Justia Law

Defendant constructed a home that it sold to its initial purchaser. The initial purchaser, in turn, sold the home to Plaintiffs. Plaintiffs later learned the home's hillside retaining wall and home site had been constructed in a dangerously defective manner. Plaintiffs requested that Defendant cover the cost of repair, but Defendant claimed it was no longer responsible for any construction defects. Plaintiffs then filed an action against Defendant to force Defendant to cover the cost of repair. The trial court dismissed all of the claims, concluding, among other things, that Plaintiffs' negligence claims were barred by Arizona's economic loss doctrine. The court of appeals remanded for resolution of Plaintiffs' various negligence claims, concluding that, because Plaintiffs had no contract with Defendant, the economic loss doctrine did not bar their tort claims. The Supreme Court affirmed, holding that the economic loss doctrine did not bar Plaintiffs' negligence claims to recover damages resulting from the construction defects. Remanded. View "Sullivan v. Pulte Home Corp." on Justia Law

This case involved a dispute between two construction companies, Plaintiff and Defendant. Defendant contracted with Plaintiff to build grain storage facilities at two locations. After beginning construction, Plaintiff stopped work for Defendant's alleged failure to make progress payments. Plaintiff then filed two lawsuits against Defendant seeking to foreclose liens on the property and asserting, ultimately, claims for breach of contract. Defendant counterclaimed for breach of contract, negligence, and other claims. The trial court dismissed the mechanic's liens claims, granted Defendant's motions for default judgment on the counterclaims, and granted Defendant's motions for summary judgment in both cases. The Supreme Court reversed the grant of the default judgments and summary judgments, holding that the trial court (1) abused its discretion in granting the motions for default judgment against Plaintiff on Defendant's counterclaims and in failing to grant Plaintiff's motions for enlargement of time; and (2) erred in granting the motions for summary judgment to Defendant on Plaintiff's claims of breach of contract. Remanded. View "Donald Bucklin Constr. v. McCormick Constr. Co." on Justia Law