Justia Contracts Opinion Summaries

Plaintiffs received internet and cable services from TWC in Chardon, Ohio. The Bureau of Criminal Investigation (BCI), conducting an online investigation to identify individuals possessing and sharing child pornography, located a suspect using a public IP address of 173.88.218.170 and found images and movie files titled consistent with child pornography. The IP address of plaintiffs’ computers was 173.88.218.70. Responding to a subpoena for subscriber information for the .170 address, TWC indicated that it was assigned to plaintiffs. While executing a search warrant for plaintiffs’ residence, BCI agents determined that the IP address assigned to plaintiffs was the .70 address, not the .170 address. The search was terminated without discovery of any evidence of criminal activity. Plaintiffs alleged that the search was extensive, destructive, and in plain sight of neighbors; that TWC’s conduct was intentional and fraudulent; that disclosure of their subscriber information without authorization violated the Stored Communications Act, 18 U.S.C. 2707(a)); and state-law claims. The Sixth Circuit affirmed denial of TWC’s claim of immunity under section 2703(e), but found that 18 U.S.C. 2707(e)’s “good faith reliance” defense barred the claims and that the state-law claims failed because the factual allegations were insufficient to establish that TWC disclosed the information intentionally, wrongfully, or in breach of contract. View "Long v. Insight Commc'ns of Cent. Ohio, LLC" on Justia Law

Morady sold life insurance policies. Davis, a former lawyer, approached elderly African-Americans and paid them small amounts to become the nominal applicant-buyers of the policies, with Morady as the insurance agent, and to put the policies into an irrevocable trust, with Davis as trustee. The beneficial interest in the trust would be sold to an investor who would pay the remaining premiums and wait for the death of the insured. The insurer would not have sold the policies had it known that the premiums would be paid by an unrelated third party in the expectation that the policy would be transferred to him; its contracts with agents, including Morady, required them to conform to an “absolute prohibition against participation in any type of premium financing scheme involving an unrelated third party,” but the law allows an investor to purchase the beneficial interest in an existing life insurance policy. The net loss to Ohio National (beyond $120,000 commissions paid to Morady) was $605,000 in litigation expenses to void the policies. The total death benefits specified in the illegal policies amounted to $2.8 million. The Seventh Circuit agreed that Morady’s conduct constituted fraud and a breach of her contract and affirmed summary judgment, with damages of $726,000. View "Ohio Nat'l Life Assurance Corp. v. Davis" on Justia Law

Relator filed a qui tam action on behalf of the United States, twenty-five states, and the District of Columbia, naming his former employer as the defendant and asserting several claims under the False Claims Act (FCA) and analogous state statutes. Thereafter, Relator filed three amended complaints adding five defendants. Defendants filed motions to dismiss. Relator subsequently filed a fourth amended complaint, asserting that he had an absolute right to amend his complaint under Fed. R. Civ. P. 15(a)(1). The district court granted Defendants’ motion to strike the fourth amended complaint after construing Relator’s filings as a request for leave to amend, concluding that Relator had not established good cause for amending his complaint once again. The district court then dismissed the case with prejudice, concluding that the FCA’s public disclosure bar deprived it of jurisdiction over certain allegations and that, as to the remaining allegations, the third amended complaint failed to state a cognizable claim. The First Circuit vacated the judgment below and remanded, holding that the district court (1) did not err in concluding that Relator exhausted his one-time right to amend under Rule 15(a)(1); but (2) appraised Relator’s request for leave to amend under the wrong legal standard. View "D'Agostino v. ev3, Inc." on Justia Law

Plaintiffs, Keith Randall Sparkman and In-Depth Sanitary Service, Inc., filed a complaint against Defendants, CONSOL Energy Inc. and CONSOL of Kentucky, Inc. for breach of contract and tortious interference with contract. The contracts at issue in this dispute were entered into by In-Depth Sanitary Service Group, which was not named in the complaint. The jury found in favor of “Keith Randall Sparkman d/b/a In-Depth Service Group." Defendants appealed, and Plaintiffs cross-appealed. The Court of Appeals disposed of the matter sua sponte based on a perceived lack of jurisdiction, concluding that the wrong parties had filed suit, and the trial court’s judgment awarded damages to a “non-party.” The Supreme Court reversed, holding (1) the judgment of the trial court identified the correct party because the parties mutually consented to the amendment of the complaint to reflect Keith Randall Sparkman d/b/a In-Depth Sanitary Service Group; and (2) the naming of the parties in the notice of cross-appeal was sufficient to transfer jurisdiction to the court of appeals. View "Sparkman v. Consol Energy of Kentucky, Inc." on Justia Law

In 2005, Landmark Investment Group, LLC entered into a contract with Chung Family Realty Partnership, LLC (Chung, LLC) to purchase certain property. Chung, LLC repudiated the contract after receiving a more attractive offer from CALCO Construction & Development Company (Calco) and John Senese, Calco’s president and owner (together, Defendants). Landmark successfully sued for specific performance of the contract but was unable to purchase the property after it was sold at a foreclosure auction where a company controlled by Senese was the highest bidder. Landmark then filed suit against Defendants, alleging tortious interference with its contractual relations and a violation of the Connecticut Unfair Trade Practices Act (CUTPA). The jury returned a verdict in favor of Landmark on both counts. The trial court, however, granted Defendants’ motion for judgment notwithstanding the verdict (JNOV) and rendered judgment for Defendants. The Supreme Court reversed, holding that the trial court (1) improperly granted Defendants’ motion for JNOV because it failed to view the evidence in the light most favorable to sustaining the jury’s verdict; and (2) incorrectly concluded that Landmark presented insufficient evidence to support its claims. View "Landmark Inv. Group, LLC v. CALCO Constr. & Dev. Co." on Justia Law

This appeal arose from a failed land sale contract between Plaintiff and Defendant. Plaintiff filed a complaint against Defendant, asserting claims for, inter alia, breach of contract and recession based on mutual mistake. Defendant counterclaimed for, inter alia, breach of contract, abuse of process, and nuisance. After a trial, the jury returned a unanimous verdict for Defendant on its nuisance and abuse of process counterclaims. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in denying Plaintiff’s motion for summary judgment on its mutual mistake rescission claim, as a mutual mistake will not provide a ground for rescission where one of the parties bears the risk of mistake; (2) an abuse of process claim may not be supported by a complaint to an administrative agency instead of one involving a legal process, and therefore, Defendant failed to establish the elements of abuse of process; and (3) a nuisance claim seeking only emotional distress damages does not require proof of physical harm, and the facts in this case supported the damages award arising under Defendant’s nuisance counterclaim. View "Land Baron Invs., Inc. v. Bonnie Springs Family LP" on Justia Law

Defendant Cy Tapia, a teenager living with his aunt and grandmother, was driving a vehicle which crashed, inflicting severe and eventually fatal injuries on his passenger, Cory Driscoll. Before his death Driscoll and his mother filed an action for damages. The parties established that the vehicle driven by Tapia was owned by his grandfather and that Tapia was entitled to $100,000 in liability coverage under an auto policy issued to Melissa McGuire (Tapia’s sister), which listed the vehicle as an insured vehicle and listed Tapia as the driver of the vehicle. The policy was issued by petitioner-defendant 21st Century Insurance Company. 21st Century offered to settle the action for the policy limits of the McGuire policy ($100,000). However, plaintiff1 also believed that Tapia might be covered under policies issued to his aunt and grandmother, each offering $25,000 in coverage and also issued by 21st Century. Plaintiff communicated an offer to settle for $150,000 to Tapia’s counsel; 21st Century contended that it never received this offer (although there was certainly evidence to the contrary). Inferrably having realized the seriousness of its position, 21st Century affirmatively offered the “full” $150,000 to settle the case against Tapia. Plaintiff did not accept this offer, but a month later plaintiff’s counsel served a statutory offer to compromise seeking $3,000,000 for Cory Driscoll and $1,150,000 for his mother Jenny Driscoll. Shortly before the expiration of this offer, 21st Century sent Tapia a letter warning him that it would not agree to be bound if Tapia personally elected to accept the offer. Nonetheless, Tapia agreed to the entry of a stipulated judgment in the amounts demanded by plaintiff. 21st Century paid $150,000 plus interest to the plaintiff. Tapia then assigned any rights he had against 21st Century to plaintiff. This assignment and agreement included plaintiff’s promise not to execute on the judgment against Tapia so long as he complied with his obligations, e.g., to testify to certain facts concerning the original litigation and 21st Century’s actions. This bad faith action followed. Petitioner's unsuccessfully moved for summary judgment, and petitioned the Court of Appeal for a writ of mandate to overturn the trial court's denial. Upon review, the Court of Appeal found that plaintiff’s efforts to pursue essentially a “bad faith” action as assignee of the insured was misguided. Accordingly, petitioner was entitled to summary judgment. View "21st Century Ins. v. Super. Ct." on Justia Law

Brand developed Thermablaster, a vent-free heater, to be manufactured by a Chinese company, Reecon. Reecon suggested using Intertek testing to ensure the heaters met U.S. safety standards. Brand spoke with Intertek representatives and visited the company’s website to ensure that Intertek could test to American National Standards Institute (ANSI) standards. Satisfied that Intertek’s China facility had the necessary expertise, Brand allowed Reecon to use Intertek for testing against the most recent applicable ANSI standard. The $22,000 testing cost was part of the per-unit price. Ace Hardware agreed to pay Brand $467,000 for 3,980 Thermablasters. Brand visited China to monitor production. Reecon gave Brand an Intertek document signed by its engineers, showing that the heaters had passed all relevant tests. Brand bought 5,500 heaters and delivered them to Ace. Ace began selling the heaters in 2011 but halted sales permanently after learning from a competitor that they did not meet ANSI standards. Ace obtained a default judgment of $611,060 against Brand. Brand sued Intertek. Intertek countersued, alleging trademark infringement because Brand had placed Intertek’s testing certification mark on boxes before receiving permission. Intertek bought Ace’s judgment against Brand for $250,000 and aggressively tried to collect before trial. The Third Circuit affirmed a verdict finding Intertek liable to Brand for negligent misrepresentation and awarding Brand $1,045,000 in compensatory and $5 million in punitive damages. View "Brand Mktg. Grp. LLC v. Intertek Testing Servs. NA" on Justia Law

"For more than one hundred and thirty years," the Mississippi Supreme Court has held that an insurance company may void a policy when the insured made material misrepresentations during the application process. While driving his mother’s 2003 Chevy Silverado in Rankin County, sixteen-year-old William Busby crashed into Kenneth Tarlton’s car, which in turn collided with a car driven by Katrice Jones-Smith. When William’s mother, Michelle, applied to Safeway Insurance Company for an insurance policy on the Silverado, the application required her to warrant that she had provided the names of all regular frequent drivers of the covered vehicles, as well as all residents of her household fourteen years old or older. Michelle failed to disclose that fifteen-year-old William resided in her home, and Safeway issued her a policy on the Silverado at a premium that was lower than the premium would have been had Safeway known about William. When Safeway learned that Michelle made a material misrepresentation when she applied for the motor-vehicle-liability policy at issue here, it had the policy declared void. The Supreme Court found no reason to disturb the trial court's grant of summary judgment in this case in favor of Safeway, so it affirmed. View "Jones-Smith v. Safeway Insurance Company" on Justia Law

In 2011, 74-year-old Garnell Wilcoxon lived alone. He suffered a stroke, awoke on the floor of his bedroom covered in sweat, feeling sore and with no memory of how he got there. Wilcoxon was admitted to the Troy Regional Medical Center for analysis and treatment for approximately one year before he died. Following Wilcoxon's death, Brenda McFarland, one of Wilcoxon's daughters, filed a complaint as the personal representative for Wilcoxon's estate, asserting claims for : (1) medical malpractice; (2) negligence; (3) breach of contract; (4) negligent hiring, training, supervision, and retention; and (5) loss of consortium. In its answer, Troy Health asserted, in part, that McFarland's claims were barred from being litigated in a court of law "by virtue of an arbitration agreement entered into between plaintiff and defendant." Troy Health then moved to compel arbitration, asserting that forms signed by one of Wilcoxon's other daughters, acting as his attorney-in-fact, contained a valid and enforceable arbitration clause. McFarland argued that "Wilcoxon did not have the mental capacity to enter into the contract with [Troy Health,] and he did not have the mental capacity to give legal authority to enter into contracts on his behalf with" relatives who initially helped admit him to Troy Health facilities when he first fell ill. According to McFarland, "[t]he medical records document that Wilcoxon was habitually and/or permanently incompetent." Therefore, McFarland argued, both a 2011 arbitration agreement and a 2012 arbitration agreement were invalid. The circuit court denied Troy Health's motion to compel arbitration. The Supreme Court reversed, finding that McFarland failed to prove that Wilcoxon was mentally incompetent when he executed a 2012 durable power of attorney naming his other daughter as his attorney-in-fact, and also failed to demonstrate that Wilcoxon was "permanently incompetent" before that date, and because there was no other issue concerning the validity of the 2012 arbitration agreement. View "Troy Health and Rehabilitation Center v. McFarland" on Justia Law